Once you register a private limited company, you must meet the basic compliance requirements to guarantee the smooth operations of your business. In this article, we will elaborate on the accounting and auditing guidelines prescribed by the MCA.
Despite the size or nature of a business, every Pvt Ltd Company must get its accounts audited by chartered accountants before the end of the financial year. This task of ensuring compliance also includes the selection of an auditor. The auditor must assess the records of the business and produce the audit report and the audited financial reports which they must also furnish to the Registrar of Companies. We have outlined below how MCA for Accounts and Audit for Private Limited Company performs certain compliances
Appointment of Auditor in Pvt Ltd Company
An auditor must be assigned for five years via form ADT-1. The initial Auditor must be named within one month from the date of incorporation of the company.
Statutory Audit of Accounts
Every corporation must compulsorily prepare its accounts and get them reviewed by a chartered accountant towards the end of the fiscal year. The auditor must prepare the audit report and the assessed financial statements and also document them with the Registrar.
Filing of Annual Return (Form MGT-7)
All private limited companies are compulsorily required to document their annual return within 60 days of organising the annual general meeting (AGM). Yearly return spans the period from 1st of April to 31st March.
Documenting of Financial Statements (Form AOC-4)
The organisation must record its balance sheet alongside the declaration of profit and loss account and the director report in Form AOC-4 within 30 days of conducting the AGM.
Organising Annual General Meeting
Each pvt ltd company must organise an AGM every scheduled year. All organisations are required to hold their AGM within six months before the financial year ends.
Arranging Directors’ Report
Directors’ Reports must be set up with a notice of all the data required under Section 134.
Annual RoC Filings for Pvt ltd company
It is obligatory for private limited companies to file annual accounts and returns with details of their executives, shareholders, and so on with the Registrar of Companies. Such compliances are to be made once a year. As a part of the annual filing, the accompanying forms are to be documented with the RoC:
- Form MGT-7 (Annual Return): All private limited companies must compulsorily file their annual returns within 60 days of having the annual general meeting. yearly return will be for the time frame 1st April to 31st March.
- Form AOC-4 (Financial Statements): All private limited companies must compulsorily provide details of the Profit and Loss Account and Director Report in form AOC-4 within 30 days of having the annual general meeting.
Directors’ Report
A Director’s report is a financial document that needs to be filed before the financial year ends. If applicable directors need to reveal details of their position as directors in different organisations as well. Moreover, all other relevant details must be submitted in hard copy in a precise director’s report.
Income Tax Compliances
The following is the required income tax compliances that must be adhered to:
- Computation and quarterly payment of advance tax are a must
- Documentation of income tax returns (tax has to be paid at a rate of 30% in addition to cess)
- Tax audit (compulsory if business turnover or gross revenue of a business surpasses ₹1 crore in the year prior to the evaluation year.)
- Tax audit report filing is also a necessary requirement
Maintenance of Statutory Registers and Records
A Pvt ltd company needs to keep up different statutory registers and records as required by the company law, for example, register of shares, register of directors, register of members and so forth. Besides, merger documents of the company, resolutions of the meetings of the board of directors, minutes of the board meetings, and annual general meetings, etc are also required to be preserved by the company.
Such records are to be kept at the registered office and they must be available for scrutiny by its members during business hours. Additionally, the books of account of the organisation of at least the last eight fiscal years ought to be safeguarded and maintained.
Non-Compliance
If a company does not adhere to the standards and guidelines of the Companies Act, at that point the company and each official who is in default will be culpable. They can be sentenced to pay a fine and be imprisoned. In case there is a delay in any filing, penalties may be levied by the MCA: https://www.mca.gov.in/content/mca/global/en/home.html
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FAQs
Yes, it is mandatory for all private limited companies in India to conduct a statutory audit every year. This is required by Section 139 of the Companies Act, 2013.
Only a chartered accountant (CA) who is a member of the Institute of Chartered Accountants of India (ICAI) can be appointed as an auditor for auditing limited companies.
The Ministry of Corporate Affairs (MCA) is the government body responsible for regulating and overseeing the functioning of companies in India. The MCA plays a significant role in company audits by issuing guidelines and regulations that auditors must follow. The MCA also has the power to investigate companies and their auditors for any irregularities.
Private limited companies must maintain their accounts in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI). These accounting standards provide guidance on how to record, summarise, and report financial transactions.
Yes, there are specific audit rules and guidelines that private limited companies need to follow. These rules and guidelines are issued by the Institute of Chartered Accountants of India (ICAI). Some of the important audit rules and guidelines that Pvt Ltd companies need to follow include: The audit must be conducted in accordance with the generally accepted auditing standards (GAAS) The auditor must obtain sufficient and appropriate audit evidence to support their opinion on the financial statements The auditor must report any irregularities found during the audit to the management and the board of directors of the company.
The cost of auditing a limited company varies depending on the size and complexity of the company's operations. For more information get in touch with our experts right away.
There are two main types of MCA: MCA Form 23AC: This form is required to be filed by all private limited companies that have a turnover of more than ₹5 crores. The form contains information about the company's financial performance, including its turnover, profit/loss, and taxes paid. MCA Form 23ACA: This form is required to be filed by all private limited companies that have a turnover of more than ₹20 crores. The form contains more detailed information about the company's financial performance, including its balance sheet, profit and loss statement, and cash flow statement. Both MCA Form 23AC and MCA Form 23ACA are required to be audited by a chartered accountant.
A tax audit is required for all private limited companies that have a turnover of more than ₹1 crore. The tax audit must be conducted by a chartered accountant who is registered with the Income Tax Department.
MCA 21 provides a number of features that can help companies to improve their compliance with the Companies Act, 2013. MCA 21 allows companies to file their annual returns and other documents electronically. MCA 21 also provides companies with access to various government services, such as e-stamping and e-payment of taxes.
MCA is a continuous process. This means that companies are required to comply with the Companies Act, 2013 on an ongoing basis. The auditing process for Pvt Ltd companies is also affected by the duration of MCA. For example, auditors are required to review the company's compliance with the Companies Act, 2013 as part of the audit process. Is it mandatory to conduct an audit for a Pvt Ltd company?
Who is eligible to be appointed as an auditor for a Pvt Ltd company?
What is the role of MCA (Ministry of Corporate Affairs) in company audits?
How should one maintain the accounts of a private limited company in compliance with MCA regulations?
Are there specific audit rules and guidelines that Pvt Ltd companies need to follow?
What is the typical cost associated with auditing a Pvt Ltd company?
Can you explain the different types of MCA, and how do they relate to company audits?
What is the turnover limit that triggers the need for a tax audit in a Pvt Ltd company?
What is the significance of MCA 21 in corporate governance?
What is the duration of MCA, and how does it affect the auditing process for Pvt Ltd companies?
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