TaxUdyogCompliances

WHAT IS COMPLIANCE?
The work of the compliances is to make sure that the financial matters of the organisation or company are handled according to the given rules and regulations. A company needs to work by the laws otherwise there will be consequences that a company might not want to face. Compliance is all about following rules and regulations that are made by several legal authorities. Although, sometimes it gets very difficult to obey every rule and chances are high that opportunities might be missed due to that so that is where the role of an accounting firm comes in. An accounting firm makes sure that all the legal requirements are met. At TaxUdyog, we help you build your business by making sure all the formalities that involve laws, rules & regulations duly comply.
Accounting and Book-keeping
Liquidation of Company
RoC Filing

What is the importance of Compliance?

1. Employee Retention

Compliance helps in employee retention as employees tend to switch their workplace often if there is any difficulty they are facing due to its current work environment. If there is effective compliance that is taking place where employees are feeling safe, they have compensation for any mishappening, have various employees benefits and most importantly there is a positive work environment then it results in higher employee retention.

2. Competitive Advantage

A business model that follows a strict policy of complying with all the rules and regulations has a competitive advantage over the business that does not follow or follow fewer rules and regulations set by the governments. A customer, stakeholders and government are all attracted towards business that follows the rules and regulations. It also helps in establishing trust among all the parties and brings harmony and peace for a longer duration.

3. Reduced Legal Charges

The business has follows all the regulations also have fewer chances of paying any legal fee in form of penalties, fines, lawsuits or shutdowns. This, in turn, helps in reducing legal charges. Regulations that businesses have to follow are how products should be manufactured, how to manage employees, buying and selling of products and how to manage corporate social responsibility. These are all that helps in reduced legal charges as these activities are often rewarded in form of reduced penalties or fines and larger market share.

4. Better Relations with The Public

If you are doing business then the image of your business in the eyes of the public has a lot to do with its success. If any rules are not being followed by the enterprise and it regularly involves court cases and government interventions, the people start losing their trust and it can impact their finance. Eg- People had a lot of faith in Subrata Roy of Sahara but as soon as the SEBI intervened and it asked about the funding of the company, people started losing their trust. A regular intervention from the SEBI has also resulted in doubts amongst people. So, it's extremely important for a company to have better relations with the public.
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What are the types of Compliance?

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External Compliance 

These are the types of compliance that refer to rules, standards and laws that are set by the government authorities. It is done in order to protect the goodwill of the company by eliminating any negative impact it can cause on it. These laws are made to help the organisation build trust, maintain public relations and bring transparency to the business. Complying ensures that duplication of resources and efforts are not done. Eg- When the company get its statutory audit done by the due date that is important according to the Companies act. Here are a few categories under External Compliance:- 

  • Company Law
  • Labour Law
  • Environment Law
  • Tax Law

Internal Compliance 

It is the type of compliance that refers to internally designed rules and regulations that employees, owners, traders and customers follow. It helps in maintaining the quality of the products or service that is provided by the organisation. An organisation can comply with external needs only when it is fulfilling the requirements of the internal rules and regulations. Eg- When the company follows internal compliance by reporting to the internal auditor by the end of every month to tell about the cash & bank accounts of a company. Here are a few categories under Internal Compliance:- 

  • Corrective Procedures
  • Directive Controls
  • Preventive Policies

Accounting & Book-Keeping

What is Accounting & Book-Keeping?
Accounting and Book-keeping are both important for a business. While both of these terms might mean the same to the common people but they are not really the same. For instance, Book-keepers are the people who record financial transactions of day-to-day business. Whereas, when it comes to accountants, they focus more on the bigger picture. it is the responsibility of the business owners whether you are a big or small businessman or woman to have a proper record of your financial data in order to comply with legal requirements. In case you don't show the records, the Income-tax department may intervene. At TaxUdyog, we help you gather all the business-related transactions so that it can help you in data collection.
What is Accounting?

In layman terms, it can be described as the process where the accountant records the financial transactions of the business that takes place. It includes everything from summarizing to analyzing to finally reporting these transactions to regulators and tax collection entities. The data that has been recorded in the books showcase the concise summary of financial transactions that are recorded over an accounting period. It contains the company’s day to day operations, cash flows and financial position.

What is Book-Keeping?

It is a process wherein the company’s financials are recorded on daily basis in an organised manner. It also contains the different recording techniques a business uses or can use. It is a part of accounting. The records of the book-keeping come in handy during an audit. When the transactions are up to date, it can also show financial reports of the company and help to gather information about its performance. There are various ways in which book-keeping can be done.

What are the benefits of Accounting & Book-Keeping?

  • Detailed Recording
  • Instant Reporting
  • Audits are Easy
  • Tax Prediction
  • Better Relations with Banks & Investors

If you have just started your company, it’s always in the best interest of you and your company that you regularly update your books of accounts. It helps in keeping a detailed record of the business transactions that your company is doing. Not only it will help you supervise your business accounts but will also help you when you want to generate financial statements. This process will be much cheaper and faster once your company will be audited. It comes in handy while you are filing for taxes.

It is like an updated balance sheet that will help you with instant reporting of your funds and business transactions. The auditors and accountants can take their time to conclude official statements but books of accounts will help you first-hand information about it. You can present this data to any interested party or investor to showcase your business activities and give additional confidence to them in your work. It will help you as a manager and it will be ultimately beneficial for the company. AtTaxUdyog, we help you maintain those books to help you with Instant reporting.

When you have a better data recording tool then the production of financial statements is much cheaper and faster. It will also help in conducting audits for the company easily. Book-keeping and accounting help against messy, disorganised and outdated ways of recording data. It makes the work of the auditor slightly easy as he or she will just have to access the detailed balance sheets and then compare them with the statements to know about the business activities. At TaxUdyog, we help you by making sure your demands of the business are met on regular basis.

Tax prediction can be done using the book-keeping and accounting. It helps give the idea about how much tax can the company expect on its business activities. While IRS officially demands a financial statement that the company especially curate for the taxing purpose, but having books of accounts helps in predicting the outcome of the taxes. A look at the detailed balance sheet makes the work easy. It also helps you keep up with the trends that your business is following and be more confident about the amount of taxes that your business is required to pay at the end of the financial year.

When you have a detailed recording of the transactions of your business, you tend to have better relations with Banks & Investors as you have nothing to hide. It also generates confidence amongst both the parties that the company they have invested in is doing good. Further, Banks can actually help you in the growth of your business by giving you loans at affordable rates. An investor also wants to see the company grow and a detailed book of accounts is a great way to show that your company is making a major success.

ROC Filing

WHAT IS ROC?
ROC is also known as the Register of Companies is an that is under the MCA or also known as the Ministry of Corporate Affairs. Ministry of Corporate Affairs is responsible for the entire administration of all the companies and LLP (also known as Limited Liability Partnership) in India. Under the Companies Act, 1956 and Companies Act, 2013 the Ministry of Corporate Affairs controls and regulates all the LLPs and entities and ROC is also responsible for incorporation or registration of a company in India. In our country, every company that requires incorporation approval comes from ROC. At TaxUdyog, we help you file for ROC with ease.

WHAT IS ROC FILING?
The filing of audited financial statements and annual returns by the company to the ROC is called ROC filing. According to the Companies Act, 2013 section 129 & 137, every company should file its audited financial statements with the ROC. Similarly, section 92 of the Companies Act, 2013 says that the annual return of the company must be submitted to the ROC. Within 30 to 60 days, the above-mentioned documents should be filed from the date of the conclusion of the annual general meeting.

What are the benefits of ROC Filing?

Proof of Existence

To file for ROC helps in keeping the track of the company, its whereabouts and the finances. The government keeps the record of the company and its existence on the basis of regular filings. Each and every company is required to file on regular basis or else it will be considered fake. A company needs to show up on regular basis and show it’s working by filing ROC. At TaxUdyog, we help you keep a track of your ROC Filings and make sure that you don’t miss any date of doing so. It is an extremely important step to show the legitimacy of your company.

Protection Against a Penalty

The term penalty means punishment for doing something that is against the law. The company can be protected against a penalty by filing ROC regularly as the company that fails to file the annual filling may be charged with the penalties. legal complications may also arise if the company is not appropriately complying with the annual filings. We at TaxUdyog, encourage the timely submission of what is required from the company so any legal suit can be prevented. It is not in the best interest of either company or owner to get into legal fights in the initial years of its business.

Financial Position of a Company

When a company file for annual returns, it consists of the total accounts of the company for an entire year. It contains all the business activities of the company and helps to determine the financial position of the company. A lot of information like assets, profits and losses, etc can be seen by the annual returns. One of the advantages of ROC Filing is to determine the financial position of a company. It also helps in verifying the legitimacy of the company.

Aid to Other Objectives

Updated annual filings come in handy in case the company wants to raise funds, want to contribute or apply for any other registrations for any other venture. To check the reliability and validity of the company, updated annual filings are very important. Before that, Form MGT-7 must be filed within 60 days after the annual general meeting and Form AOC-4 is to be filed by a private limited company in 30 days with the statement of profit and loss account, balance sheet and the Director report.

What are the functions of ROC?

*The ROC takes care of the registration of a company which is also referred to as incorporation of the company in India

*It completes reporting & regulation of companies and their directors & shareholders. It also administers government reporting of various matters which includes the annual filing of several documents.

*It's important to note that the Registrar of Companies plays an essential role in facilitating & fostering business culture.

*Every company in our country needs the approval of the ROC to come into existence. The ROC provides an incorporation certificate that is evidence of the existence of any company. A company that is once incorporated, cannot cease unless the name of the company is struck off from the register of companies.

*It is important to note that the Registrar of Companies could also ask for supplementary information from any of the companies. It could seize the books of accounts and search its premises with the prior approval of the court. It is one of many other functions.
It is also allowed to the Registrar of Companies to file a petition for the winding-up of a company.

Liquidation of a Company

WHAT IS THE LIQUIDATION OF A COMPANY?
The process of Liquidation involves bringing the activities of a business to an end and to distribute its assets to people who claim for it. It occurs only when the company is insolvent which means that it can not pay its obligations when they are due. When the company is no longer functional, its assets are used to pay shareholders and creditors based on the priority of their claim. The term liquidation can also be used to refer to the selling of goods that have poor performance and are sold at a much lower cost than what they usually cost. A company is usually liquidated when it is not in a state to continue.

What are the benefits of Liquidation?

Minimise Debt Repayments

When you liquidate your company, it can help in minimising the debt repayments. Although, it is still required to cover the cost of the company’s Statement of Affairs and creditors. However, all the other liquidation costs like debt or outstanding creditors will b met through the sale of assets of the company. This process makes liquidation a cost-effective option. The other costs of restriction and redundancy will be further met by an insolvency practitioner. The responsibility of the insolvency practitioner is staff redundancies and the payment related to it as well as cancellation of any leases or other long-term liabilities. Unless there is no personal guarantee given by the owner or it is a director’s loan then it need not be settled by your shareholders.

Staff Can Claim Redundancy Pay

Your staff can claim redundancy pay or any uncollected wages and outstanding holiday pay if you decide to liquidate your company. Your insolvency partner will go ahead and lead in terms of making staff redundant. Your staff members can claim their redundancy pay when the assets of the company are being sold. If the assets are not enough, the staff can claim their pay from the National Insurance Fund. Even as a director, you can claim for your redundancy through the government if the amount is huge and you paid yourself via PAYE at a very reasonable rate.

Cancel Lease Arrangements

Companies that opt for liquidation not only just minimise their payments but also prevent any further payments going forward. According to law, it is allowed that any lease or hire purchase agreements will be withdrawn once you decide to liquidate your company. It also means that you no longer have to pay any further payments that were initially a part of your original arrangement. IF there is any amount due to your leasing company creditor then it will be taken care of by your appointed insolvency partner. At Taxudyog, we help you cancel lease arrangements by providing you with the industry experience that we have. It can sometimes be challenging to withdraw these arrangements but with the right help, it is easy to do so.

Avoid Court Processes

when you voluntarily choose to liquidate the company, you avoid court processes. The process may include petitions from the courts and it can help you develop a good image in the eyes of the public. It will give the impression that the liquidation was a company choice rather than a hostile takeover from the result of creditor action. When the legal obligation kicks in, it gets very difficult for the business as a lot of time and investments drain out in the legal proceedings. Further, the image of the owner and company is tarnished in front of the public and it comes in the way of starting again or starting another business.

Alleviated Pressure From The Creditors

When you are running your business, you might often feel pressure from the creditor’s side. Liquidation helps in alleviating pressure from the Creditors.  One of the main parts of the job description of the Insolvency Practitioner involves communicating directly with the creditors on behalf of the company’s estate. This can be a huge relief for directors who have been receiving angry phone calls and threatening letters from creditors’ side. At Taxudyog, we make sure that you get legal protection if the need arises.

Focus on what can help you to solve your problems

Let’s build the future together

Are you worried that you’re not meeting the legal requirements to run a company? or it's hard for you to keep up with a dynamic environment? Don’t worry, we got you covered. Contact Taxudyog to get a seamless experience for your business needs.

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