Our accounting and tax consulting solutions provide the expertise and guidance you need to take on large-scale projects with confidence.

As your trusted partner, we can assist you on your finance transformation journey, support your ERP localization projects, provide complex international accounting advice, or offer ad hoc tax guidance.

❖Submission of IT return – Individual & companies

We are India's most trusted tax-filing platform. Our team goes through in-depth training to help you plan and minimize your tax liability. We are propelled by our expertise in simplifying online ITR filing for you.

❖TDS payments & returns as per provision

You might have heard the term "TDS" thrown around a lot, especially when talking about expenses. TDS stands for Tax Deducted at Source. Primarily, this is how the government collects taxes in India.

When specific expenditures are incurred, a particular percentage of the amount must be deducted by the paying party before transferring the remaining sum to the recipient. The deducted portion is then remitted directly to the government, ensuring timely tax collection. This practice serves as a preventive measure to discourage tax evasion. By deducting taxes at the source, the government sets aside a portion of the tax before it is even due. This process is typically applied to significant expenses such as salary, commissions, interest, and rent. Essentially, it is a more methodical and effective tax collection mechanism.

❖Preparation of Accounts – Tax Audit

Different types of audits are prescribed under various laws, like company audits under company law, cost audits under cost accounting law, etc. Certain taxpayers must get the books of accounts of their business or profession audited under the Income Tax Act, 1961, known as a tax audit. A tax audit means a chartered accountant reviews a business's accounts and checks their compliance with the income tax laws.

The chartered accountant conducts a tax audit of the taxpayer’s accounts under Section 44AB. Certain businesses and professionals are legally required to mandatorily carry out regular audits under Section 44AB of the Income Tax Act.

❏Latest Update

The threshold limit of Rs. 1 crore for a tax audit is increased to Rs. 5 crore from AY 2021–22 and further to Rs. 10 crore with effect from AY 2022–23 (FY 2021-22) if the taxpayer’s cash receipts are limited to 5% of the gross receipts or turnover and if the taxpayer’s cash payments are limited to 5% of the aggregate payments.

The reporting under clause 30C and clause 44 of the tax audit report (form 3CD) was suspended until March 31, 2022.

❏Tax Audit

A tax audit is a cross-examination of the books of accounts of the taxpayer by a chartered accountant (holding a full-time certificate of practice) under the Income Tax Act of 1961. The auditor has to furnish the audit report in the specified audit form along with the detailed particulars.

Section 44AB deals with the conditions under which tax audits become mandatory for some taxpayers. The main purpose of a tax audit is to verify the accuracy of the financial records and avoid any fraud or tax evasion.

❏Tax Audit Report

The person conducting a tax audit has to provide the findings in a report using specified ‘Audit Forms’ prescribed by the income tax department. Section 44AB prescribes Forms 3CA and 3CB. Along with these two forms, the auditor has to furnish Form 3CD. Let us discuss these forms in detail.

The chartered accountant will file the tax audit report electronically with the Income Tax Department. After the filing of the report by the Chartered Accountant, the taxpayer must approve the tax audit report from his or her Income Tax e-fling account. 

❚Applicability of Tax Audits Under Section 44AB

A tax audit is applicable for the following businesses and professionals:

• Businesses where the total sales, turnover, or gross receipts exceeded Rs. 1 crore in the previous year. This limit has been increased to Rs. 5 crore from AY 2021–22 and further to Rs. 10 crore with effect from AY 2022–23 (FY 2021-22) provided.
• Cash receipts are below 5% of the gross receipts or turnover.
• Cash payments are below 5% of the aggregate payments.
• Professionals whose gross receipts from their profession exceeded Rs. 50 lakh in the previous year.

❏As a new company in India, it is essential to register and obtain all necessary documents from the registrar before starting your business operations.

India is a nation of 1.3 billion people, making it the second-most populous country globally. In recent years, India has emerged as one of the fastest-growing economies globally. As the country’s economy grows, so does its population and its demand for goods and services. And as India’s economy grows, so does its ability to provide for its people.

The first step to increasing financial strength is to provide services to people. Sankalp Q is providing the most reliable and cost-effective company registration services in India.

The company registration services in India offer a range of services. It provides a one-stop solution for company registration, incorporation, registration of share capital, incorporation, filing of the return, etc. It simplifies the process of starting the business, reduces legal and administrative formalities, and minimizes the initial investment by the entrepreneurs in terms of time and money.

❖Benefits

It saves the time team members spend in the process of registering the company. It makes the business more visible to the public and has a positive impact on the company as a whole.

Company registration is the fastest way to start your company. Registration with your company provides you with several benefits, such as 

• It increases your credibility in the community and provides you with a level of protection from litigation.
• The liability of the members of the company is limited regarding the company's debts. 
• It also increases your borrowing capacity, and you can borrow funds.
• The company is the only entity that can help promoters raise equity funding.

❖Registration of Private Limited, Public Limited, LLP, and Partnership Firms 

❏ Private Limited Company

A private limited company is the most popular business structure for small and medium-sized businesses in India. It offers limited liability protection to shareholders and requires:

• two shareholders,
• two directors (one must be a resident of India), and
• a registered office address in India

The registration process involves obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for the promoters, choosing a unique name for the company, and filing incorporation documents with the Registrar of Companies (ROC).

Once registered, a private limited company is required to comply with various regulations, including filing annual returns and financial statements with the ROC, holding board meetings and annual general meetings, and maintaining proper books of accounts for the company.

Additionally, a private limited company is considered a separate legal entity from its shareholders, so it can enter into contracts, borrow money, sue, and be sued in its own name. It also has a perpetual succession, which means the company continues to exist even if the shareholders or directors change.

Sankalp Q, a leading legal services provider for startups and entrepreneurs, offers an easy and affordable company registration service in India. We handle the legal paperwork and comply with all the Ministry of Corporate Affairs (MCA) requirements. Upon successful registration of your company, you will be issued an incorporation certificate (CoI), along with the PAN card and TAN of the company. Now you can open a current bank account and start your business.

❖Why choose a Private Limited Company?

❏ You can enjoy several advantages by registering a private limited company, including:

• Limited liability: Shareholders are only liable to the extent of their share capital, which means their personal assets are protected in the event of the company's failure.
• Most loved business structure: A private limited company is the most loved business structure in India. They are easy to register, and almost 93% of the companies in India are registered as private limited companies. 
• Separate legal entity: A private limited company is considered a separate legal entity from its shareholders, which allows it to enter into contracts, borrow money, sue, and be sued in its own name.
• Easier to raise capital: A Private Limited Company can raise capital through the sale of shares to the public, which can be more efficient than borrowing money from banks.
• Professional management: Private Limited Companies are required to have a board of directors who are responsible for managing the business, which can lead to more professional management and decision-making.
• Perpetual succession: A Private Limited Company has perpetual succession, which means the company continues to exist even if the shareholders or directors change.
• Brand image: A Private Limited Company creates a better brand image and reputation than a sole proprietorship or partnership.
• Separation of ownership and management: Shareholders can be different from the management, which allows them to focus on their own business while the management runs the company.
• Compliance: Private limited companies have to comply with various regulations, which can be beneficial in terms of building a strong reputation and gaining credibility with customers and suppliers.
• Taxation: private limited companies are subject to corporate tax, which in many cases is less than individual tax.

❏What are the documents required?

❏Without valid identity and address proof, a Private Limited Company cannot be registered in India. The documents that the Ministry of Corporate Affairs (MCA) accepts for online company registration are listed below:

❏Passport size photo of both the promoters

❏PAN card of both the promoters

❏Proof of identity of both the promoters (any one of the below)

• Aadhaar Card
• Passport
• Voter ID
• Driving License

❏Proof of residential address of both the promoters (any one of the below)

• Bank Statement
• Electricity Bill
• Mobile Bill

❏Utility bill of office address (any one of the below)

• Electricity Bill
• Gass Bill
• Mobile Bill

❏Rent agreement, if the office premises is rented

Please Note: All the scanned documents must be clear, and the text in the documents must be legible.

❏Public Limited Company Registration

In India, a Public Limited Company (PLC) is a business structure suited for large-scale operations. Entrepreneurs who are planning for large-scale business operations can start a Public Limited Company registration in India. Unlike private companies, PLCs can raise funds from the general public by offering shares on stock exchanges. This allows them to access a wider pool of capital for growth. A Public Limited Company in India enjoys all the privileges of a corporate entity, along with the features of limited liability.

Sankalp Q can help you start your public limited company in India with ease and efficiency. Our comprehensive services cover everything from company registration to compliance management, ensuring a smooth and hassle-free setup process for your business.

❏Start your public limited company registration today with Sankalp Q.

❖What is Public Limited Company?

A public limited company is a form of corporate entity that permits the general public to hold ownership stakes through publicly traded shares. These shares are commonly exchanged on established stock markets, enabling a diverse group of brokers, investors, and traders to buy and sell equity. This structure allows individuals from various backgrounds to invest and hold shares in the company.

Unlike private companies, public limited companies are governed by stricter regulatory and reporting standards. In India, the law governing public limited companies is primarily outlined in the Companies Act of 2013. The minimum number of members in a public company is 7, and there is no limit on the maximum number of members or shareholders for starting a public limited company.

❖Key Characteristics of a Public Limited Company

Below are the fundamental characteristics of a public limited company:

✸ Board of Directors: According to the Companies Act, a public limited company must appoint at least three directors, with no upper limit on the number. The board of directors plays a crucial role in governing the company's management and strategic decision-making.

✸Company Name: It is a legal requirement for all public limited companies to include the word "Limited" in their company name. This designation indicates that the company is legally a public entity, capable of trading shares on the stock market, and open to investment by the public.

✸ The Company's Prospectus: Public limited companies are required to prepare and issue a prospectus. This document offers a detailed look at the company's operational activities and financial health, providing essential information to potential investors and aiding their decision-making process.

✸ Paid-Up Capital: While the Companies Act stipulates various regulations for public limited companies, it does not impose a minimum initial share capital requirement for registration. This absence of a specified minimum allows companies the flexibility to set their capital structure according to their specific needs and strategic objectives.

❖Types of Public Limited Company

Public limited companies are broadly categorized into two distinct types:

❏ Listed Company

This type of public limited company has its shares actively listed and available for trading on one or more stock exchanges. This accessibility allows the public and various financial entities to buy and sell the company's shares, providing greater liquidity and exposure to a diverse pool of investors.

❏ Unlisted Company

Unlike its listed counterparts, an unlisted public limited company does not have its shares traded on any stock exchange. As a result, its shares are not as easily transferable, and the company does not experience the same level of public scrutiny or regulatory requirements as a listed company. This category of public limited company may appeal to businesses seeking to benefit from a broader base of shareholders while avoiding the complexities of full public trading.

❏ Requirements for the Registration of a Public Limited Company

When planning to register a public limited company, it is important to understand and adhere to the specific rules and regulations set under the Companies Act. Here are the key requirements for forming a public limited company in India:

✸ Minimum Shareholders: The minimum members in public company to form a PLC is seven shareholders, with no limit on the maximum number.

✸Board of Directors: A minimum of three directors is required to establish a public limited company. Each director must possess a valid Director Identification Number (DIN).

✸Authorised Share Capital: The company should have a minimum authorized share capital of Rs. 1 lakh to meet the initial financial requirements for registration.

✸Digital Signature Certificate (DSC): The registration process includes the electronic submission of documents. Therefore, a digital signature certificate from at least one director is necessary for authenticating documents submitted electronically.

✸Company Name: The proposed name of the company must comply with the provisions of the Companies Act and Rules, ensuring it is unique and not already in use.

✸Foundational Documents: Key documents required include the Memorandum of Association (MOA) and Articles of Association (AOA). Additionally, Form DIR-12 must be duly filled to register the details of the directors.

❏ Limited Liability Partnership (LLP) Registration in India

Limited Liability Partnership (LLP) has become a preferred form of organization among entrepreneurs in India. An LLP incorporates the benefits of a partnership firm and a company. As the name suggests, an LLP is a partnership firm established by a minimum of two partners who enter into an LLP agreement. However, the partners of an LLP have limited liability, and the LLP has perpetual succession, just like a company.

The concept of the Limited Liability Partnership (LLP) was introduced in India in 2008. The Limited Liability Partnership Act, 2008, regulates LLPs in India. A minimum of two partners are required to incorporate an LLP. However, there is no upper limit on the maximum number of partners in an LLP. 

Among the partners, there should be a minimum of two designated partners who must be natural persons, and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement. They are directly responsible for the compliance of all the provisions of the LLP Act, 2008, and the provisions specified in the LLP agreement.

❏ Features of LLP

• It has a separate legal entity just like companies.
• Minimum two persons should come together as partners to establish LLP.
• There is no upper limit on the maximum number of partners.
• There must be a minimum of two designated partners.
• Atleast one designated partner must be a resident of India.
• The liability of each partner is limited to the contribution made by the partner.
• The cost of forming an LLP is low.
• Less compliance and regulations.
• No requirement of minimum capital contribution.

❏ Partnership Firms Registration

A partnership firm is one of the most important forms of a business organization. It is a popular form of business structure in India. A minimum of two persons are required to establish a partnership firm. A partnership firm is where two or more persons come together to establish a business and divide its profits amongst themselves in the agreed ratio. The partnership business includes any kind of trade, occupation, or profession.

The Indian Partnership Act, 1932, governs and regulates partnership firms in India. The persons who come together to form the partnership firm are known as partners. The partnership firm is constituted under a contract between the partners. The contract between the partners is known as a partnership deed, which regulates the relationship among the partners and also between the partners and the partnership firm.

❏ Advantages of Partnership Firm

❚Easy to Incorporate

The incorporation of a partnership firm is easy as compared to other forms of business organizations. The partnership firm can be incorporated by drafting the partnership deed and entering into a partnership agreement. Apart from the partnership deed, no other documents are required. It need not even be registered with the Registrar of Firms. A partnership firm can be incorporated and registered at a later date, as registration is voluntary and not mandatory.

❚Less Compliances

The partnership firm has to adhere to very few compliances as compared to a company or LLP. The partners do not need a Digital Signature Certificate (DSC) or Director Identification Number (DIN), which are required for the company directors or designated partners of an LLP. The partners can introduce any changes in the business easily. They do have legal restrictions on their activities. It is cost-effective, and the registration process is cheaper compared to a company or LLP. The dissolution of the partnership firm is easy and does not involve many legal formalities.

❚ Quick Decision

The decision-making process in a partnership firm is quick, as there is no difference between ownership and management. All the decisions are taken by the partners together, and they can be implemented immediately. The partners have a wide powers and activities that they can perform on behalf of the firm. They can even undertake certain transactions on behalf of the partnership firm without the consent of other partners.

❚ Sharing of Profits and Losses

The partners share the profits and losses of the firm equally. They even have the liberty of deciding the profit and loss ratio of the partnership firm. Since the firm’s profits and turnover are dependent on their work, they have a sense of ownership and accountability. Any loss of the firm will be borne by them equally or according to the partnership deed ratio, thus reducing the burden of loss on one person or partner. They are liable jointly and severally for the activities of the firm.

❖Submission of return of ROC.

Every company and limited liability partnership firm need to file annual returns with the Ministry of Corporate Affairs (MCA). Delay or non-filing of returns attracts heavy interest and penalties. This plan is designed to provide you with professional help in filing your returns.

Companies incorporated under the Companies Act 1956 or the Companies Act 2013 must file the audited financial statement with ROC. In simpler words, it means a company must file the annual return form or audit financial statement with the ROC.

❖Benefits of Annual Filing With ROC

❏ Legal Benefit

If a company fails to file its annual filing with ROC, a penalty will be imposed on it. Thus, the ROC filing must be completed before the due date to avoid legal issues. 

❏ Determination of Financial Position

The annual filing includes the compilation of the company’s total accounts of a financial year. Thus, it assists in analyzing or determining the company’s financial position.

❏Serve as an Existence Proof

The regular filing of the annual filing with ROC allows the government to keep a record of the company’s existence. On the contrary, if a company fails to do so, it won’t be considered ROC-approved, which can be regarded as fake.

❏Pre-requisites to Complete When Filing ROC Return Form | Pre-requisites to Complete Annual Filing With ROC

✸ If you don’t have a Director Identification Number (DIN) or Digital Signature Certificate (DSC), you must apply for the same. 

✸ You must register the DSC of the authorized signatory or signatories on the official MCA portal.

✸ If there is an error in the master data of the company, you must rectify it with the respective ROC office. 

✸ To fill out the ROC return filing form, you must download the latest e-form and instruction kit. 

✸ Understand the instructions before filling out the form, and ensure a proper internet connection when filing the form. 

✸ For PDF conversion, you can use the PDF conversion provided on the MCA portal. Consequently, an Excel or Word file can be uploaded for conversion. To find the converted PFD, check your provided email.