Do You Need an Audit for a Pvt Ltd Company with Zero Turnover?
Welcome to our blog: Do You Need an Audit for a Pvt Ltd Company with Zero Turnover? Even if your private limited company has no sales or income, an audit is still important. It helps keep your company’s records correct, follow the law, avoid fines, and build trust with banks, investors, or future partners. An audit shows that your company is well-managed and transparent, even without any business activity. It also helps find mistakes early, understand your company’s financial situation, and get ready for future growth or investment. Our expert team at [Your Company Name] has years of experience helping zero-turnover companies stay compliant and maintain proper records. We guide you through the audit process step by step, making it simple and stress-free, so you can focus on growing your business.
What Does Zero Turnover Mean for Your Pvt Ltd Company?
Audit for a Pvt Ltd Company Compliance with Zero Turnover means conducting a statutory audit of your company’s accounts even if it did not generate any sales or income in the financial year. Zero turnover can happen for many reasons — like starting a new business, being temporarily inactive, or facing business slowdowns.
Even in such cases, conducting a statutory audit helps ensure your company’s records are correct, stay compliant with legal requirements, avoid penalties, and maintain trust with banks, investors, or future partners. Our expert team guides you through the entire process, making it simple and stress-free, so your company stays transparent and ready for future growth.
Even with zero turnover, companies are expected to maintain accounts, file statutory documents, and comply with the Companies Act, Income Tax laws, and other applicable regulations. Ignoring this can lead to fines, penalties, or legal issues in the future.
Key points about zero turnover companies:
Zero turnover = no sales or revenue in a financial year.
The company may still have expenses like rent, salaries, or utility bills.
Books of accounts must be maintained even if no transactions occurred.
Conducting a statutory audit helps maintain transparency for stakeholders and future investors.
Audit may be needed depending on company type and laws.
Maintains good legal standing for ROC compliance.
Filing income tax return is still required.
Avoids penalties under the Companies Act.
Simplifies future audit and tax filing processes.
Builds trust with banks if you plan loans in the future.
Why You Should Consider an Audit Even with Zero Turnover
Even if your company is exempt from mandatory audit due to zero turnover, getting an audit done has several advantages:
Confirms that all records are accurate and compliant.
Helps maintain credibility with banks, investors, and authorities.
Simplifies future tax return filings.
Identifies any errors in accounting or bookkeeping.
Keeps your company in good legal standing.
Prevents last-minute compliance rushes.
Helps during company valuation or sale in the future.
Shows professionalism and transparency.
Protects directors from legal penalties.
Provides a clear financial snapshot even with no income.
Documents Needed for Auditing a Zero Turnover Pvt Ltd Company
Certificate of incorporation
Memorandum and Articles of Association
Balance sheet and Profit & Loss account
Bank statements for the financial year
Books of accounts or accounting software reports
Details of loans, advances, or liabilities
Previous audit reports (if any)
Statutory registers maintained by the company
Income tax filings and challans
Supporting vouchers, bills, or receipts
How Much Does an Audit Cost for Zero Turnover Companies?
- Audit charges for companies with zero turnover are generally lower because there are fewer transactions to review. Costs depend on:
- Location of the company
- Complexity of accounts and records
- Experience of the Chartered Accountant (CA)
- Any additional compliance services needed
- Typical fees may range from ₹5,000 to ₹20,000. It’s a good idea to compare quotes from 2-3 CAs to get the best price.
Step-by-Step Process for Getting Your Audit Done
- Hire a Chartered Accountant (CA): Find an experienced CA for company audits.
- Share Company Records: Give all financial statements, bank statements, and documents.
- Review Accounts: CA checks books, bank reconciliations, and vouchers.
- Prepare Audit Report: The CA prepares the official audit report.
- Board Meeting: Present the audit report to the board for approval.
- File with ROC: Submit the audited financial statements to the Registrar of Companies.
- Tax Return Filing: Use the audit report to file income tax returns (if required).
- Maintain Records: Keep all audit documents for future reference.
How to Prepare Financial Statements for Audit
Preparing your financial statements properly makes the audit easier :
- Maintain all books of accounts up-to-date.
- Prepare balance sheet with assets and liabilities.
- Prepare profit & loss account (even if zero).
- Reconcile all bank statements.
- Record loans, advances, and statutory payments.
- Keep vouchers, receipts, and invoices organized.
- Verify previous year balances.
- Correct any accounting errors before audit.
- Classify expenses properly.
- Ensure GST or other statutory compliance is recorded.
- Document salaries, PF/ESIC, and other statutory deductions.
- Keep records of board resolutions if any financial decisions were made.
- Prepare a trial balance to check totals.
- Use accounting software for accuracy.
- Highlight any zero transactions clearly for audit clarity.
- Keep digital backups of all records.
- Ensure bank statements match cashbooks.
- Separate company and personal expenses.
- Check that all statutory registers are maintained.
- Ensure opening balances match previous audited statements.
Important Deadlines for Filing Your Audit
File audited financial statements with ROC within 180 days of financial year-end.
Submit annual returns to ROC within 30 days of AGM.
Income tax return filing deadline (if audit is applicable) is usually 30th September.
Tax audit report must be filed along with income tax returns on time.
Maintain books of accounts and supporting documents throughout the year.
Penalties for Missing Audit Deadlines
- Late filing fee under Companies Act: ₹1,000 per day.
- Penalty on company and directors: ₹50,000 or more.
- Interest on late tax payments by Income Tax Department.
- Risk of prosecution for repeated non-compliance.
- Difficulty in availing loans, credit, or investment due to non-compliance.
- Legal notices from ROC or other authorities.
- Additional fines for incorrect or incomplete audit reports.
We Are Your Trusted Partner for Zero Turnover Pvt Ltd Audit and Compliance
At VakilAdda, we help Audit for a Pvt Ltd Company with Zero Turnover complete their audits quickly and correctly. Our team of experienced Chartered Accountants ensures your company meets all legal and statutory requirements without hassle. Even if your company has no business activity, we guide you step by step—from preparing financial statements to filing audit reports with ROC. This ensures you stay compliant and avoid penalties.
We provide complete support, including document preparation, audit filing, and compliance advice. With VakilAdda, your zero turnover company is always in safe hands. We make audits simple, affordable, and stress-free for small companies.
Visit us: www.vakiladda.com
Call us: +91 9726365833
