Proprietorship firms needs to maintain compliances like LLP’s and companies (Public or Private limited company). Proprietorship firm compliance mainly includes income tax return filing whereas LLP & companies needs to submit both the reports – Income tax return filing to the income tax department and annual filing to the ministry of corporate affairs. Sole proprietorship firms also need to comply with TDS regulations, GST regulations, ESI regulations etc.
The requirement of compliance varies depending upon the type of entity, industry, state of incorporation, number of employees & sales turnover. It has very minimal statutory compliances as compared to public or a private limited company. In case of sole-proprietorship, a sole proprietor does not enjoy the benefit of separate legal entity and limited liability. The annual income of sole proprietor is considered as the annual income of the proprietorship firm. There is no need to file any annual report or financial statement to MCA. The major compliances of sole proprietorship firms are tax related periodic and annual compliances.
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Documents Needed For Annual Compliances For A Proprietorship Firm
Procedure For Annual Proprietorship firm Compliance Fulfillment
The procedure for annual compliance fulfillment is as follows –
Major Compliances For A Proprietorship Firm
- Income tax filling – Every sole proprietor running a proprietorship firm has to mandatorily file income tax return, if his taxable income lies above the exemption threshold. In some of the cases, audit is also required.
- GST filing – Sole proprietors registered under GST has to mandatorily file GST returns monthly, quarterly and annually.
- TDS filing – Proprietors having TAN must file quarterly TDS returns as per TDS rules
- ESI return – All proprietors registered under ESI act has to mandatorily file ESI returns. ESI registration is required in case a proprietor employs 10 or more employees in a firm.
Penalty for not filing Proprietorship Compliances
Proprietorship Compliances FAQ’S
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