Just recently we came across a Company who sought our assistance in completion of its annual compliances since the date of its incorporation, where the date of incorporation dates back to the year of 2007. The company had not filed its annual returns with the ROC in the form of the Annual Return, Balance Sheet and Profit & Loss Account. By not doing the same, the Company has attracted a Herculean Penalty of round Rs. 50000 till date…all for the compliances which could have been completed in Rs. 600 per year, if done timely. The company in question paid the same. But exactly how many of the start-ups can afford that? The excitement of starting up a business is sky high. Imagine the shock and depression of closing it down..!! That too just because you had failed to maintain the business in safe harbor compliance!!Yes…You read it right…among all other things; Non-Compliance with ROC can close down your business.  

Case Study : Non-Compliance with ROC can close down your business

Setting up a business is no plaything. The Companies Act provides for various forms, returns to be filed in electronic mode to the ROC by the Companies incorporated under the Act. Every Company is required to comply with the legal and procedural requirements as and when required. As part of Annual Filing or Annual Compliances various forms have been prescribed under the Companies Act which is required to be filed to the ROC annually by the Companies. To remain hassle free and for healthy business; every business owners should follow the correct compliances like Service tax, TDS, Return Filling, ROC etc. Here, are these tax compliances which start-ups should follow seriously and should not be ignored at any cost. The legal compliances of ROC depend on what type of form of organization is selected by an entrepreneur. There are various types of forms available in Ministry of Corporate Affairs which depends on the type of business. As a part of Annual Filing, Companies incorporated under the Companies Act 2013, are required to file the following e-Forms with the Registrar of Companies (ROC):

• Form 23AC: For filing Balance Sheet by all Companies;
• Form 23ACA : For filing Profit & Loss Account by all Companies;
• Form 20B : For filing Annual Return by Companies having share capital;
• Form 11: Annual Return of LLP as per LLP Act, 2008;
• Form 8: Statement of Accounts and Solvency for LLP as per LLP Act, 2008;

Non filing of such forms will attract huge penalty as mentioned by the Companies Act. So, for proper compliances to get followed, every startup requires a professional who assist them in performing all such compliances. They should hire experts in order to remain hassle free. Often what happens is that we succeed to manage and conduct our business in the most efficient way-maintaining books of accounts, conducting audit, proper invoicing…etc. But where we fail is while filing the ROC returns. It is like preparing a sumptuous meal and then not serving it to the guests. There can be various reasons for the same…less or no knowledge about the compliances and their related penalty being the prime ones. Hence, it is extremely important that start-ups educate themselves with the basic knowledge of the compliances. Educate yourself! Save yourself from shutting down!! Please visit Annual Tax and ROC Compliances a to know more.