Legal Compliance Q&A Handbook

  Q1: What are the basic legal compliances for a Sole Proprietorship?

- Registration under GST (if turnover > ₹40 lakhs for goods or ₹20 lakhs for services)

- UDYAM (MSME) registration (optional but beneficial)

- Professional Tax registration (if applicable in your state)

- Shop & Establishment Act registration (for business premises)

- Income tax return filing (ITR-3 or ITR-4 depending on income type)

Q2: What are the tax compliances for a Sole Proprietorship?

- Income is taxed as individual income.

- File ITR by 31st July every year (if not liable for audit).

- Maintain proper books of accounts if turnover exceeds ₹25 lakhs (professionals) or ₹1 crore (business).

- GST returns (GSTR-1 and GSTR-3B) monthly or quarterly if registered.

 Q3: Are there any ROC (Registrar of Companies) filings for a Sole Proprietorship?

 No, proprietorships are not registered with ROC, so there are no annual filings with MCA.

 Q4: What are the common penalties for non-compliance?

- Late filing of ITR – ₹5,000 to ₹10,000 u/s 234F.

- GST late fee – ₹50 per day (₹25 CGST + ₹25 SGST).

 Q1: What are the annual compliances for an OPC?

- Filing Form AOC-4 (Financial Statement) – within 180 days from financial year end.

- Filing Form MGT-7A (Annual Return) – within 60 days of AGM (AGM not mandatory for OPC).

- Income Tax Return (ITR-6) – by 31st October every year.

- Maintenance of Statutory Registers and Minutes Books.

- Appointment of Auditor – File ADT-1.

 Q2: What are the mandatory filings with ROC?

- INC-22 – for change of registered office.

- MGT-14 – for resolutions (if any).

- DIR-3 KYC – annually for the director.

Q3: Are tax audits applicable?

A: Yes, if turnover exceeds ₹1 crore (for business) or ₹50 lakhs (for profession).

 Q4: What are penalties for non-compliance?

- ₹100 per day per form for delay in MCA filings.

- Income tax late filing – ₹5,000–₹10,000 u/s 234F.

- Auditor not appointed – ₹25,000 to ₹5,00,000.

  Q1: What are the mandatory annual filings for an LLP?

- Form 11 (Annual Return) – by 30th May every year.

- Form 8 (Statement of Accounts & Solvency) – by 30th October every year.

- ITR-5 (Income Tax Return) – by 31st July, or 31st October (if audit applicable).

- DIR-3 KYC for Designated Partners.

 Q2: What are the tax compliances?

- Tax rate is 30% (plus cess & surcharge).

- Tax audit mandatory if turnover > ₹40 lakhs or contribution > ₹25 lakhs.

- Advance tax payments as per income slabs.

 Q3: What are penalties for non-compliance?

- ₹100 per day per form under MCA.

- Up to ₹5 lakh fine for continuous default.

- Late ITR filing – ₹5,000–₹10,000.

Q4: Are there other registrations needed?

- GST (if applicable)

- Professional Tax (if state requires)

- TAN for TDS

- Shops & Establishment Act (if business premises).

Q1: What are mandatory annual compliances?

- Form AOC-4 (Financial Statements) – within 30 days of AGM.

- Form MGT-7 (Annual Return) – within 60 days of AGM.

- Form ADT-1 – Auditor Appointment within 15 days of AGM.

- Form DIR-3 KYC – for each director every year.

- Board Meetings – Minimum 4 per year (1 every quarter).

- AGM – within 6 months of financial year end.

- ITR-6 – by 31st October.

 Q2: What are the ROC and MCA filings?

- AOC-4 (Balance Sheet, P&L)

- MGT-7 (Annual Return)

- ADT-1 (Auditor)

- DIR-12 (for appointment/resignation of directors)

- INC-22 (for change of address).

 Q3: What are the tax compliances?

- Corporate tax rate: 22% (for domestic companies under Section 115BAA)

- Tax audit mandatory for all.

- TDS, GST, and Advance Tax as per applicable laws.

Q4: What are penalties for non-compliance?

- ₹100/day per form for ROC delay.

- Directors can be disqualified for default > 3 years.

- Late ITR filing – ₹5,000 to ₹10,000.

- Auditor appointment default – ₹25,000 to ₹5,00,000.

 Q5: Other important compliances:

- MSME Form I (for payments pending >45 days).

- DPT-3 (Deposits) – by 30th June every year.

- Maintenance of Statutory Registers (Members, Directors, etc.).