Accounting & Compliance

Bookkeeping and accounting is keeping track of financial and other business transactions with business owners and management. Every income or expense and every asset or obligation is recorded in the books of accounts. The accounts are finalised at the end of every financial year ending on 31st March. Then comes the compliance part after end of financial year for recording business transactions with regulatory authority. The companies and LLPs are required to file the financial statement with MCA for every financial year with assistance of company secretaries. Where accounting is mandatory for the most of businesses, annual compliance is compulsory only for the companies and LLPs.

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Common Questions

Yes, bookkeeping is mandatory for all businesses except the sole proprietorship firm. Even the proprietorship firm has to maintain accounts after crossing a certain turnover. Additionally, the companies have to maintain accounts as per the accounting standards prescribed.

Accounting & bookkeeping helps every business by providing the sufficient data for its submission to respective authorities (MCA, IT Department, GSTN, etc.). It additionally helps owners to keep track of inflow and outflow of money which is helpful to make strategic decisions for product development and business growth.

Annual Compliance is mandatory for all companies and LLPs registered with MCA. Irrespective of their turnover and capital, the annual filing must be complied with. Late filing or non-filing result in additional fee and penalties.

Yes, annual compliance is mandatory even after the closure of the first financial year. Although the closure of the financial year depends on the date of incorporation, the annual filing would be mandatory for said year.

For the annual compliance, the company/ LLP has to provide the financial statements (audited, if required) along with the details of the directors and partners for the concerned financial year.

Audit of statements is mandatory for all the companies, but not in case of LLP. The financial statements of LLP must be audited if its turnover exceeds INR 40 Lakh or the partners’ contribution exceeds INR 25 Lakh.