Another financial year has ended! Have your company's books been audited?
A private limited company is a company incorporated under the Companies Act, 1956 with a minimum paid-up share capital of Rupees One Lakh or such higher capital as may be prescribed and its Articles shall prohibit invitation or acceptance of deposits from the public. It must comply with the legal provisions laid down by the Companies Act, Income Tax Act and various other statues. One of the important legal obligations of private limited companies is to get their accounts audited and to file the Income Tax (IT) and Registrar of Companies (RoC) returns for every financial year ending March 31st
Obligations of private limited companies
In detail the obligations of private limited companies are listed below, with regard to accounting, auditing, statutory audit and ROC filing:
Accounting or Maintenance of books of accounts for the financial year 2011-12:
– Books of accounts need to be prepared for the period April 2011 to March 2012
– The books of accounts need to be audited by a Chartered Accountant appointed as the auditor of the company
– Income Tax liability needs to be computed and the income tax due needs to be remitted
– On remittance of the income tax liability, the Income Returns need to be filed with the IT department on or before 30th September 2012
– The audited accounts need to be filed with the RoC through appropriate forms within 30 days from the date of the company’s Annual General Meeting (AGM)
– The annual returns need to be filed with the RoC through the appropriate form within 60 days from the date of AGM
Audit of books of accounts:
Statutory Audit is an Audit of Books of Accounts to comply with statutes such as Companies Act, 1956 and Income tax Act, 1961. Every company incorporated under the Companies Act, 1956 is required to get its accounts audited by a Chartered Accountant in Practice to ensure true and fair view of the accounts. Statutory Audit is a legal review of the accuracy of the company’s financial records.
– Statutory Audit is a mandatory and legal requirement for all private limited companies registered under the Companies Act, 1956
– Statutory Audit is done to get a fair and accurate representation of the financial position by examining information such as bank balances, bookkeeping records and financial transactions.
– Statutory Audit ensures reliability of annual accounts of the company for various users of the books of accounts of the company like government, debtors, creditors and bankers etc..
Registrar of Companies appointed under Section 609 of the Companies Act, ensures whether the companies are complied with the statutory requirements. All the companies registered under the Companies Act are required to file the financial statements and annual return every year with the RoC. Default in filing and complying with these statutory requirements will lead to many complications in the future. Continuous default in complying with the statutory requirements may result in striking off of the name of the company by the Registrar of Companies.