What is Corporate Compliance Check?

A Corporate Compliance Check is a systematic review of a company's legal, statutory, financial, tax, HR and regulatory compliances to determine whether the company is complying with the laws and regulations applicable to its business.

It is essentially a health check-up of the company's compliance framework.

The review generally covers whether the company has:

• Filed statutory returns on time
• Maintained proper books and records
• Complied with GST and Income Tax requirements
• Complied with TDS/TCS provisions
• Completed ROC/MCA filings
• Maintained proper statutory registers and records
• Complied with labour and employment laws
• Followed applicable licenses and registrations
• Maintained proper corporate approvals and documentation
• Complied with applicable industry-specific regulations

The scope depends upon the nature, size, location and activities of the company.

Who Can Do a Corporate Compliance Check?

A Corporate Compliance Check can be conducted by professionals having appropriate knowledge of the relevant laws.

1. Chartered Accountant (CA)

A CA can conduct a comprehensive review covering areas such as:

• Income Tax
• GST
• TDS
• Accounting and financial controls
• Payroll-related compliance
• Financial reporting
• Internal controls

2. Company Secretary (CS)

A CS is particularly suitable for corporate law and secretarial compliance, including:

• Companies Act compliance
• MCA/ROC filings
• Board Meetings
• General Meetings
• Statutory registers
• Directors' compliance
• Share capital-related matters
• Corporate governance

3. Cost Accountant (CMA)

A CMA may be involved particularly where the review requires expertise relating to:

• Cost records
• Cost accounting
• Cost audit
• Cost management and related compliance

4. Internal Compliance / Legal Team

Larger organisations may also conduct compliance checks through their internal legal, finance, HR or compliance departments.

Best Approach

For a complete corporate compliance review, a multidisciplinary approach involving CA + CS + legal/HR specialists, depending on the company's requirements, can provide wider coverage.

What Are the Benefits of Corporate Compliance Check?

1. Identify Compliance Gaps

It helps management identify missed filings, incorrect reporting, pending registrations and procedural deficiencies before they become major issues.

2. Avoid Penalties and Interest

Timely identification of non-compliance can help reduce exposure to:

• Late fees
• Interest
• Penalties
• Notices
• Litigation

3. GST & Tax Risk Identification

A review can identify issues such as:

Books vs GSTR-1 vs GSTR-3B vs GSTR-2B vs E-Invoice

and help identify potential GST and tax liabilities.

4. Improve Internal Controls

The exercise can identify weaknesses in processes relating to:

• Purchase
• Sales
• Payments
• Payroll
• Inventory
• Expenses
• Approvals

5. ROC/MCA Compliance

It helps ensure that applicable Companies Act and MCA filings are completed correctly and within the prescribed timelines.

6. HR & Payroll Compliance

The review can cover applicable areas such as:

• Salary processing
• TDS
• Leave records
• Employee documentation
• Provident Fund
• ESIC
• Professional Tax
• Gratuity
• Other applicable labour compliances

7. Better Corporate Governance

Regular compliance reviews create accountability and improve the company's overall governance framework.

8. Reduce Risk During Due Diligence

A clean compliance record is valuable when the company is:

• Raising funds
• Bringing in investors
• Applying for bank finance
• Going through a merger/acquisition
• Selling the business
• Undergoing due diligence

9. Management Gets a Compliance Dashboard

A well-designed review can provide management with a simple Red / Amber / Green compliance report, showing:

Corporate Compliance Check – In Simple Words

Corporate Compliance Check is a periodic health check of a company's statutory and regulatory compliances to identify gaps, reduce penalties and risks, and strengthen the company's overall compliance system.