Running a company in India involves adhering to a complex set of laws and regulations mandated by various government bodies. Keeping track of the ever-changing rules around tax compliances, account audits, annual filings and more can be daunting even for experienced professionals. Just a minor slip can result in huge financial penalties or even imprisonment for company directors.
This article will provide a comprehensive guide on the major statutory compliances applicable to Indian companies and practical tips to remain compliant. You’ll also learn how outsourcing this function to specialized services firms like Filingwala can make compliance easy while you focus on business growth.
Table of Contents:
- Why Managing Compliance is Critical
- Key Company Compliance Requirements in India
- Common Pain Points in Compliance Management
- Expert Tips to Avoid Non-Compliance
- Role of Technology in Compliance Management
- Why Outsource Compliance Management?
- Filingwala’s Unique Compliance Management Services
- Getting Started with Filingwala
Why Managing Compliance is So Critical
Before going deeper into specific compliance regulations, it is vital to understand why keeping your company compliant should be non-negotiable:
Financial Costs: Penalties under various laws for non-compliance are massive often ranging from Rs. 50,000 to even Rs. 10 lakh per instance. These penalties multiply rapidly given the breadth of filing requirements.
Business Disruptions: Beyond fines, serious offences can also result in freezing of company operations or cancellation of business licenses till defaults are rectified. Getting back to normal business after such actions by MCA, Income Tax or GSTN involves heavy lawyers’ fees and months may pass by.
Reputational Damage: Details of all company non-compliances are available publicly on government portals given mandatory disclosures. This results in massive credibility loss among customers, vendors, investors etc directly impacting future revenues.
Legal Consequences: As per latest amendments, serious offences under Companies Act and Tax laws can now result in heavy fines as well as imprisonment up to 7 years for promoters and directors. Even technical defaults can result in long-drawn legal trials.
Given so much at stake, prudent directors and owners invest in robust systems and capable teams to keep their companies fully compliant at all times.
Key Company Compliances in India
While the entire gamut of rules applicable to Indian companies runs into thousands of pages, the most critical compliance requirements mandated by MCA and Tax Departments include:
| Compliance Activity | Relevant Laws | Filing Agency | Penalty for Default |
|---|---|---|---|
| Annual Statutory Audit | Companies Act | MCA | Up to Rs. 5 Lakhs |
| Annual Return Filing | Companies Act | MCA | Rs. 100 per day |
| Financial Statement Filings | Companies Act | MCA | Rs. 1000 per day |
| AGMs & Board Meetings | Companies Act | MCA | Up to Rs. 25,000 |
| Director/Address Change Intimation | Companies Act | MCA | Up to Rs. 50,000 |
| Income Tax Return Filing | Income Tax Act | CIT | Maximum Rs 5000 and interest paid at 1% for every month or part thereof for after due date. |
| Income Tax Audit | Income Tax Act | CIT | 0.5% of Sales or Rs. 1.5 Lakhs |
| GST Return Filing | GST Act | GSTN | Up to Rs. 10,000 monthly |
| GST Registration | GST Act | GSTN | Up to Rs. 10,000 |
This table covers just the tip of the compliance iceberg – over 100 more filings like TDS, PF Returns, Export Reporting etc. may apply!
Staying on top of these multifarious filing requirements consistently is extremely challenging for most companies. But some basic discipline and expert help can prevent non-compliance.
Common Pain Points in Company Compliance Management
Talking to numerous Compliance heads across industries, three chief pain points always emerge on managing ever-growing compliance burden:
Lack of Visibility: Multiple critical compliances fall due almost daily but key directors are unaware with visibility limited to compliance staff. Small oversights result in defaults getting missed till penalties start hitting.
Lack of Accountability: Dispersed ownership of filings across functions like finance, legal, IT results in gaps with no single point overseeing end-to-end compliance. Issues keep falling through cracks between teams.
Manual Tracking: Reliance on basic Excel sheets to log and track hundreds of filings across laws is prone to frequent exceptions. Lead times for follow-ups are inadequate.
Expert Tips to Avoid Non-Compliance
Through decades of assisting enterprises maintain robust compliance systems, industry experts highlight 5 vital best practices:
- Maintain a continuously updated compliance calendar with all activities, due dates and responsible owners tagged. Review it weekly.
- Invest in automated alerts and tracking mechanisms rather thanpure manual methods to eliminate human errors.
- Assign single point accountability to a senior executive for end-to-end compliance performance.
- Educate functional teams constantly on evolving compliance norms through workshops.
- Take external expert assistance from specialized professionals rather than entirely relying on internal teams.
While these practices require some tools and effort, they pay rich dividends preventing the disastrous outcomes of non-compliance!
Harnessing Technology for Managing Compliance
Thankfully, modern governance, risk and compliance (GRC) tools offered by various RegTech providers can eliminate most manual challenges and provide Directors unmatched visibility and control.
Solutions like Filingwala ComplyOpt enable one-stop tracking of all compliance activities providing features like:
- Centralized calendar showing upcoming filing timelines
- Automated email and SMS alerts to internal teams on due filings
- Dashboards to view compliance health-scores and pending activities
- Tax and legal database access with latest Circulars, Forms etc.
- Templates and checklists for key filing procedures
- Filing and documentation management tools
- MIS reports to gauge compliance metrics
Such solutions plug gaps through automation, accountability and access – hallmarks of a world-class compliance system.
Why Outsource Company Compliance Management?
But given internal bandwidth limitations in most companies, outsourcing compliance support to external specialists has now become vastly popular. Over 80% of mid-sized companies now use third-party compliance services in some form as per industry estimates.
Compared to inhouse handling, outsourcing compliance management provides unmatched advantages:
Reduced Risk: Expert teams specializing in company law ensure absolute adherence to statutory requirements and proactively highlight any changes.
Cost Savings: Inhouse hiring of qualified compliance staff plus tools involves massive fixed expense whereas outsourced fees are variable based purely on work volume.
Improved Efficiency: Seasoned teams manage filings faster with fewer errors leveraging institutional knowledge and specialized tech tools like audit software, e-filing APIs etc.
Better Visibility: Management dashboards provide real-time status of pending and completed compliance tasks rather than fragmented internal reporting.
Proactive Advisory: External specialists inform clients well in advance regarding new compliance rules, documentation needs etc rather than just tracker-based reporting.
Expanded Capabilities: Multi-disciplinary partner teams also provide value-added services like registrations, certifications, licenses etc. making them a one-stop-shop.
For these compelling reasons, trusted names like Filingwala now manage compliance functions for thousands of enterprises across manufacturing, retail, IT and infrastructure sectors.
Filingwala’s Unique Compliance Management Services
Filingwala distinguishes itself from average outsourced providers through proprietary compliance technology and advisory solutions tailored to client-specific needs. Core offerings include:
1. ComplyOpt Compliance Tracking Software: Their smart portal and mobile app provides intuitive dashboards, alerts, trackers and reports for all compliance activities due across various regulations. This serves as a single point of truth with no visibility gaps.
2. End-to-End Filing Services: Their expert teams don’t just track but directly complete and eFile all statutory returns with income tax, GSTN, MCA portals through appropriate digital/paper channels.
3. Tax Advisory & Litigation Support: Their multi-disciplinary tax consultants offer personalized advisory on optimizing tax costs through exemptions, rebates plus represent clients during assessments and appeals.
4. Legal Advisory & Documentation: Customized legal advice based on business specifics ensures clients remain fully aware of evolving laws, new rulings and resultant changes needed in agreements or HR policies if any.
5. Audit & Certification Assistance: Where specific certifications like tax audits, CSR audits, environment clearance certificates etc. are sought, their specialists ensure seamless coordination and execution.
6. Registrations & Renewals: Across various sectors, securing licenses, dealerships, society formation etc and keeping them renewed periodically becomes easier relying on Filingwala’s dedicated teams.
On the whole, Filingwala makes compliance and associated regulatory aspects integral to doing business seem vastly more doable!
Getting Started With Filingwala
I hope this guide has convinced you on the importance of meticulous company law compliance as well as showed how capable partners like Filingwala make the journey easier through technology and human resources.
Ensure your exciting business ideas avoid becoming entangled in a complex web of regulatory filings, fines, and litigation by entrusting this critical function to trusted specialists!
Start the process by visiting www.filingwala.com and filling out their concise registration form, or take immediate action by calling 9072166000.Feel free to clarify any specific questions regarding their compliance services through email, chatbot or by scheduling an obligatory consultation meeting.
Here’s raising a toast to managing a fully law-abiding, responsible business!
FAQs on Company Compliance Management
Q1. Does every Indian company need external compliance support?
It depends on internal expertise available. Larger companies have inhouse company secretaries but small/mid-sized players lacking focused bandwidth can benefit greatly from external specialists like Filingwala.
Q2. What compliance activities can be outsourced?
Almost all statutory filings like annual filing, tax returns, ROC disclosures, audit reports etc. can be tracked or partially/fully managed by external teams. Advisory across taxes, accounting, legal matters can also be provided based on requirements. Only final certification is needed from company management.
Q3. Are there any risks in outsourcing compliance?
Yes, you must assess capabilities and client portfolio of providers carefully before engaging them. But leading names like Filingwala with proven track records, transparency and client-first approach greatly mitigate these risks. Checking for ISO-certified process orientation is also recommended.
Q4. How much cost and effort saving actually happens via services like Filingwala?
Filingwala clients reported over 50% savings in total compliance management costs compared to fully inhouse handling as per company-published case studies. Average turnaround times for filing key returns reduced by 3-4 days through process improvements. Top management’s time involvement also dropped by 60% owing to dashboard visibility.
Q5. How quickly can outsourced compliance support be started?
Once basic details are submitted, Filingwala onboards clients onto its Compliance software and assigns account manager within 3-5 working days. First set of compliance filings can begin immediately based on where client is in financial year. So the process is quite fast and smooth.
