As a business owner, you have to make sure your company is run legally to avoid any issues that could cause harm to your business. That is why you need to make the government aware of the business you are running. As long as your company is legal and verified by the law – you will be safe to continue.
As a part of the country, you also have some responsibilities towards the government. Apart from paying your taxes, the government – whether it is state or central – requires businesses to submit a statutory report. It can be both financial reporting, as well as non-financial reporting. These reports must contain accurate information to avoid any legal issues. The statutory financial reporting should consist of an income statement, a cash flow statement and a balance sheet. They should also include the risk factor and other information necessary to inform about their financial condition and management.
Submitting a statutory report is mandatory to keep the government informed about your business. Moreover, the amount of tax you are eligible to pay also depends on the annual income your company makes. So unless the law does not know how much your business is generating, they cannot assist you with any deduction that might be available for you. The filings are also submitted based on the legal requirements based on the law of a country or state.
As it is already mentioned above, the reports should contain accurate information about the financial condition of the company. Hence there must not be any room for any kind of error. For this to be possible, you need a professional who is accustomed to drawing up such reports. The company itself can have a member who does this, or you can contact an agency to help you with the report. Either way, the statutory report should be filed by an expert.
Several benefits are attached to submitting a report like this. You can have an updated report of your company’s financial condition. You can also have more confidence in the investors since you would know the pattern in your returns on investment and showcase the same to the investors. Moreover, there will be transparency between your company and the authority responsible for regulating the business, leading to an improvement in communication. This way you can develop better relations with peers that can contribute to the growth of your business.
On the flip side, it is crucial to submit the statutory report to the respective organization. This is because it will keep you legally safe and not cause any hindrance to your work. If you fail to produce a report of your company’s financial condition your license to run the business will be revoked and you may either have to pay a hefty amount of fine or face criminal charges.