The process of managing a company comprises several intertwined elements by which the goals and objectives of the organization are achieved. These elements or functions include managing the accounts and finances of the firm;

By on 13-11-2018

LEGAL AND REGULATORY COMPLIANCE REQUIREMENTS FOR COMPANIES INCORPORATED IN INDIA

The process of managing a company comprises several intertwined elements by which the goals and objectives of the organization are achieved. These elements or functions include managing the accounts and finances of the firm; protecting its intellectual property, legal compliances etc. it is important to have an understanding of the subsequent compliance issues, as these may vary depending on capital structure you decide to incorporate. Below we outline the main compliance regulations which companies will encounter when operating in India.

•  MANDATORY COMPLIANCES TO START THE ANNUAL PROCESS:

 a.Getting minutes

b.Getting the seals and registers for the Company

c.Preparing and printing Share certificates

d.Updating the statutory registers

• QUARTERLY COMPLIANCES (EVERY 90 DAYS):

 a.Drafting the notice, minutes and attendance sheets of the board meetings

b.Updating the statutory registers, if required

• ANNUAL COMPLIANCES:

 a.Drafting and filing director's disclosures of interest in other concerns

b.Drafting and filing the approval of Financials and Directors

c.Drafting and filing the minutes for appointing auditor

d.Preparing and filing your Annual Return

e.Drafting and filing the notice and financials of your Company

f.Drafting the notice, minutes and attendance sheets for the Annual General Meeting

•  CORPORATE TAX RETURNS:

 a.Companies must file annual corporate tax returns with the Income Tax Department.
b.Companies that maintain international transactions as well as domestic transactions with related parties must also file an annual transfer pricing audit.

• WITHHOLDING TAX RETURNS:

a.Companies that make payments to entities outside of India for certain types of services (royalties, technical work, etc) are required to withhold the requisite taxes and also file a corresponding withholding tax form on the relevant payments.

b.Companies are also required to deduct a special type of withholding tax called the Tax Deducted at Source on payments made to entities in India.
c.Companies are required to file a withholding tax return every quarter.
d. Withholding tax deductions for foreign payments must be certified by a Chartered Accountant.

•  EXCISE DUTY FOR MANUFACTURERS:

a.Companies that are involved in the production and manufacturing of goods must comply with the Central Excise Act. This requires companies to pay duties at a specific rate on the manufactured goods that are removed from their premises.

•  SERVICE TAX FOR SERVICE PROVIDERS:

a.Service providing companies are required to file biannual tax returns and make monthly payments towards service tax on the value of services that they provide (not charged on services rendered outside of India).

•  OTHER TAXES:

 a.A customs duty is also levied on all imports. This duty is to be paid when the relevant items are brought over for clearance at Indian Customs.
b.Companies are required to pay value-added tax and file returns.
c. Companies are required to register and pay a profession tax for the trade or profession they are working on in a particular state. This tax is levied on a company and their employees. The company pays the tax on behalf of their employees, which is then deducted from the employee’s salary.

•  RBI COMPLIANCE

a.The Reserve Bank of India (RBI) recently introduced something called the Annual Return of Foreign Assets and Liabilities to account for profits that companies make in connection to foreign direct investment
b.All liaison offices and/or project offices are required to report their activities to the RBI as necessary.