What are the different types of Account I should start maintaining after opening a proprietorship so

Pvt ltd 195 views 3 replies

mack

Thinking-to-start-business

154 Points Joined November 2022

I am planning to open a proprietorship to conduct an export-import business and to get the Importer-Exporter Code (IEC) it is mandatory to get a GSTIN regardless of turnover. Now my concern is that in the future if I want to convert a proprietorship to a Private Ltd then there missing audit information should not be a problem, so what type of account I should start maintaining after opening a proprietorship (also considering all accounts that MCA requires that a Pvt Ltd must maintain).

Examples of different types of accounts

1) General ledger

2) Cost Account

3) Final Accounts (Machinery A/c, P&L A/c, and Balance sheet) also called Final Statements

4) income statements cash flow statements (I am not sure if they are part of P & L A/c)

-- I don't know for these types of audits what account types should be maintained.

4) STATUTORY Audit Report under Companies Act, 2013 for Annual ROC - MCA

5) TAX Audit (Income Tax Return )

6) GST Audit

7) SECRETARIAL Audit

8) Free tax due-diligence check

9) Monthly, Quarterly TDS, Services Tax , Sales Tax, Excise Compliance to be completed within the scheduled time frame

Please add any account which I left and is a good practice for a propretor to maintain and later after a few years if converting into Pvt Ltd then it would be easy as already maintaining all essential accounts.

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

197052 Points Joined July 2016

Yes, you can maintain the said account, which are automatically taken care by Tally or any another good accounting software. Being proprietorship concern, you will not be liable to conduct any audit/s, unless your turnover exceeds Rs. 1 Cr., for which tax audit u/s. 44AB of IT act would be applied.

mack

Thinking-to-start-business

154 Points Joined November 2022

Thanks for replying to me. My concern is if today I am starting an export business using sole proprietorship and after some time I decide to convert it to a Pvt. Ltd and at that time if any government body or other legal body require me to show all sorts of auditable accounts from the day I started as a sole proprietorship then I will be in trouble.

So to avoid this I want to know what are the only (minimum required) mandatory account type names so that I will focus on maintaining those accounts only rather complete list of all accounts. (the above list of accounts I mentioned is very long, I don't think all account type are mandatory ?)

My age is 40 and in my academics, I completed B.Com, M.Com. in Buss-Admin and then MCA; so I want to handle accounts by my own till I will be running a sole proprietorship.

Another situation is, suppose being a proprietor if on a particular year my export business turnover exceeds Rs. 1Cr and I need to present an auditable account but I never expect that turnover will exceed and so I never maintain any records of transactions in a systematic way or any auditable account and then I am running to the CA asking to make an auditable account. so this is another unpredictable situation.

Or the situation is completely different and I no need to worry on this because, at the time of conversion from proprietorship to Pvt Ltd, the government doesn't require any auditable accounts. ? and even if being a proprietor if my turnover exceeds 1Cr then also CA will only require selling and purchase invoice to make an auditable account? Correct me if I am wrong.

There is another important thing that if someone is doing an Export business being a proprietor then also he had to take GSTIN and he has to file GST. Now here again I am not sure what are the name of the accounts I should maintain ?

Please tell me only the name of the mandatory accounts being a sole proprietor I must maintain to deal with any of the above situations. or I don't have to worry and only keep invoices of purchases and sales.

I am also thinking that for few export products I will be making at home, (Handicraft artwork), and for that, if I am buying raw materials and then making that by my one (no other person/labor) and then exporting it in that situation what account will I require or suppose if I visit other country exhibition or fair to sell my product by sitting in a fair stall and then coming back to India (I heard that government reimburse stall and flight expenses to a small and micro business person if registered to RCMC or Udyam but I don't know for that Pvt ltd is require or proprietor can avail these facilities ?) so in that case, again account will be different if the government will be reimbursing me ?