How to Make Your PVT LTD or OPC Operational: Charges and Steps

Introduction

If you've formed a Private Limited Company (PVT LTD) or a One Person Company (OPC) in India in November 2021 and have yet to file your Income Tax Returns (ITR), you may be wondering what charges you need to incur to make your company operational. In this guide, we’ll explore the necessary steps and associated costs to ensure your business is compliant and functional.

Understanding PVT LTD and OPC Structures

Before diving into the operational aspects, it’s essential to understand what PVT LTD and OPC companies are:

• PVT LTD: A Private Limited Company is a type of business entity that limits owner liability to their shares, meaning personal assets are protected.
• OPC: A One Person Company is a type of company that can be owned by a single individual, providing limited liability protection and the benefits of a corporate structure.

Initial Charges for Operational Compliance

To make your PVT LTD or OPC operational, you need to address several compliance aspects, which may incur the following charges:

• Annual Compliance Fee: Typically ranges from ₹5,000 to ₹15,000, depending on your company’s complexity and the services of a professional.
• Accounting and Auditing Fees: If your company has turnover above ₹1 crore, you’ll need to get your accounts audited, which can cost between ₹10,000 to ₹50,000 annually.
• Income Tax Return Filing Fees: Hiring a professional to file your ITR could cost anywhere from ₹2,000 to ₹10,000.

Additional Costs to Consider

In addition to the initial compliance charges, there are other costs you should be aware of:

• Goods and Services Tax (GST) Registration: If your company’s turnover exceeds ₹20 lakhs, you must register for GST, which may incur a one-time fee of ₹1,000 to ₹5,000 depending on your service provider.
• Professional Fees: Engaging a company secretary or chartered accountant can add to your annual costs, generally ranging from ₹15,000 to ₹30,000.
• Business Licenses and Permits: Depending on your industry, you might need specific licenses which can vary significantly in cost.

Steps to Make Your Company Operational

To effectively make your PVT LTD or OPC operational, follow these steps:

1. Resolve Outstanding Compliance Issues: Ensure that you are up to date with your compliance requirements.
2. Engage a Professional: Consult with a chartered accountant or a company secretary for expert guidance.
3. File ITR: If you have not filed your ITR since incorporation, file it immediately to avoid penalties.
4. Maintain Proper Books of Accounts: Keep detailed financial records to facilitate audits and future compliance.
5. Apply for Necessary Licenses: If your business requires specific licenses, apply for them to avoid legal issues.

Common Mistakes to Avoid

When making your company operational, be mindful of these common mistakes:

• Ignoring the importance of timely ITR filing can lead to penalties.
• Neglecting to maintain proper books can complicate audits and financial assessments.
• Overlooking industry-specific regulations can result in fines or operational restrictions.

Conclusion

Making your PVT LTD or OPC operational involves understanding the various charges and compliance requirements. By taking the necessary steps and avoiding common pitfalls, you can ensure that your business not only remains compliant but also thrives in the competitive landscape of Indian entrepreneurship.

FAQs

1. What is the penalty for not filing ITR?

The penalty can range from ₹5,000 to ₹10,000 based on the delay duration.

2. Can I file my ITR myself?

Yes, but it is advisable to seek professional help to ensure accuracy.

3. How often do I need to file compliance reports?

Annual compliance reports must be filed every financial year.