In our previous blog Quick guide for Filing Annual Return for Private Limited Company, we learned about the various steps involved in filing annual returns. Now, a simple question might arise in a lot of minds – Why do we actually need all this? Is it just to abide by the laws or is there a deeper reasoning behind following this process? Look4Expert answers all these questions for you in this little blog here. Let us understand the actual reasoning as to why Filing Annual Return for Private Limited Company is so important.

Importance of Filing Annual Returns for Private Limited Company

Importance of Filing Annual Returns for Private Limited Company

1. Transparency

Maintaining a Book of Accounts will not only clear the path for the visionary but also help them analyse the various financial transactions which may not have been necessary for the company. As a private limited company, the funds are impervious and ‘every penny counts’ so to say. With the book of accounts open to all members in the company along with the stakeholders, the decision in cutting short unnecessary overhead can be an initiative taken by all. Look4Expert stresses that this boasts confidence amongst all company members and hence improves the working standard.

2. Feasibility

Having an orderly fashion of record-keeping for all the financial transactions reduces chaos within the company. Once there is a certain method of doing something, it makes it easy for all the members of the company to follow the same. Thus, it increases the convenience and feasibility for your business.

3. Policies and Procedure

Only when you know what works for a private limited company, you can imbibe that for yours. Thus, when there is order in following certain steps that are beneficial, you make it a procedure and hence a policy. The same applies to maintaining Book of Accounts and Annual meetings.

4. Confidentiality

Revealing all confidential facts regarding the company to an accountant can cause a little anxiousness among the board members of a private limited company. The accountant who is to file the return is required to guard information about the company from unauthorized disclosure or public release. As a company, we ourselves understand and comply with the confidentiality principle, and hence our clients are frank in revealing all relevant facts regarding accounting issues. Maintaining Book of Accounts and actually sharing that kind of information with every member in the company empowers the personnel as they get access to a lot of confidential information. This also gives them a feeling of belongingness.

5. Stakeholder Empowerment

The actual perspective behind conducting an annual meeting every year is to make sure that the stakeholders get the exact picture of the organization. As a private limited company, it is pertinent to curb overhead expenses and take decisions accordingly which can only be done accurately when you have the complete scenario right in from of you.

6. Standards on Accounting and Auditing

There are certain standards that any private limited company has to follow in maintaining all the records. Following the method catered by Look4Expert ensures that you reach that level and maintain it all the while.

7. Land of Laws

Although already mentioned above, it is important to shout out loud again the most important benefit of have a professional like Look4Expert handling all the accounting is that your company would never fall behind in being compliant with the laws.

Although as a private limited company in India, it is mandatory to follow certain norms for filing your returns based on the Companies Act, 2013. But just following the mere procedure may not always suffice. Having an expert like the Look4Expert guide you, can be beneficial in more than many ways. As a successful businessman, Diane Garnick has rightly pointed, “Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings”.

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