1. Post Incorporation ensure to open bank account and deposit paid up capital from Individual shareholder account in company account. After paid up capital is deposit after that only company can commence business.
2. The company is subject to a fixed 25% tax rate. To minimize tax liabilities, it's advisable to conduct company expenses through the company's bank account.
3. Avoid incurring expenses exceeding Rs 10,000 in cash, as such expenditures are not allowable.
4. Private Limited Companies are not permitted to take loans from external sources eg friends etc, except for banks, company directors, and directors' relatives.
5. It is prohibited for a Private Limited Company to directly or indirectly lend money to its directors or individuals in whom the director has a vested interest.
6. Prior to making payments to vendors or incurring expenses, it is essential to assess the applicability of Tax Deducted at Source (TDS). Certain payments, such as rentals, advertising expenses, consultant fees, and salaries, are subject to TDS. Failure to deduct TDS can result in expense disallowance and penalties.
7. Directors have the option to draw a salary from the company. Nevertheless, prudent tax planning should be carried out to determine the optimal remuneration amount, maximizing tax benefits.
8. If the company is registered under GST, ensure that all business-related invoices are issued in the company's GST number to claim input tax credit for GST paid on expenses.
9. It is mandatory for private limited companies to do annual filings and get accounts audited irrespective of turnover. If compliance are not done company will go in strike off and heavy penalties are applicable
For further information and comprehensive company compliance management and effective tax planning, please do not hesitate to reach out to us.