2 Fundamentals: Company Creation

This chapter explains the basic steps for creating and maintaining a company in Tally Prime, including company details, statutory information (GST, TDS, TCS), and account management.

2.1 Creating a Company

2.1.1 Steps

  1. Open Tally Prime.
  2. From the Gateway of Tally, select Create Company.
  3. Enter the following details carefully:
Field Description
Directory Folder path where company data will be stored.
Name Legal name of the company (e.g., ABC Traders Pvt. Ltd.).
Mailing Name Can be same as the company name or a trade name.
Address Full postal address.
Country and State Choose correct location for GST and statutory compliance.
Pincode Optional but recommended.
Telephone / Mobile / Email / Website Contact details for invoices and reports.

2.1.2 Example

Name: RK Enterprises
Mailing Name: RK Enterprises
Address: No. 12, Main Road, Chennai – 600001
Country: India
State: Tamil Nadu
Email:

2.2 Company Features and Statutory Details

After filling the basic company details, press F11 – Features or F3 – Statutory & Taxation to configure additional options.

2.3 Enable Statutory & Taxation

Set the following options to Yes as applicable:

Option Purpose
Enable Goods & Services Tax (GST) For GST-registered businesses.
Enable Tax Deducted at Source (TDS) If applicable under the Income Tax Act.
Enable Tax Collected at Source (TCS) For applicable transactions.

When prompted, enter GST details:

Field Example Entry
GSTIN 33ABCDE1234F1Z5
Applicable from 01-04-2024
Type of Registration Regular / Composition
Assessee Type Individual / Company / Partnership

2.4 Currency Symbol Setup

Tally automatically assigns the ₹ (Rupee symbol) for Indian companies.

To change or view the currency symbol:

  1. Go to Gateway of Tally → Accounts Info → Currencies → Alter
  2. Edit the currency symbol or name as required.
    • Example: $ for USD, £ for GBP.

2.5 Maintaining Accounts

In the Company Creation screen:

  • Maintain Accounts Only → For non-inventory businesses.
  • Maintain Accounts with Inventory → For businesses dealing with goods or stock.

Select the appropriate option based on business needs.

2.6 Selection, Closure, and Alteration of Company

2.6.1 Selecting a Company

  1. From the Gateway of Tally, select Select Company.
  2. Choose the desired company name from the list.

2.6.2 Altering Company Information

  1. From the Company Info screen, select Alter.
  2. Modify details such as address, email, or GSTIN.
  3. Press Ctrl + A to save.

2.6.3 Closing a Company

  1. Press Alt + F1 (Shut Company) to close the current company.
  2. The system will return to the Company Info menu.

2.8 Summary

Operation Key Shortcut Purpose
Create Company Alt + F3 Begin new company setup
Select Company Alt + F1 Open existing company
Alter Company Alt + F3 → Alter Modify details
Shut Company Alt + F1 Close company
Backup Alt + F3 → Backup Save data copy

💡 Tip: Always verify company information after creation and before entering vouchers to ensure accuracy in GST and financial reporting.

2.9 Illustration

Journal Entries – April 2025 (Books of Rohit)

  1. 1 April 2025 – Cash Purchases ₹20,000

Cash A/c … Dr ₹20,000
    To Purchases A/c ₹20,000

  1. 9 April 2025 – Sold goods to Rama at ₹54,000

Rama A/c … Dr ₹54,000
    To Sales A/c ₹54,000

  1. 11 April 2025 – Purchased goods from Vinod ₹27,000

Purchases A/c … Dr ₹27,000
    To Vinod A/c ₹27,000

  1. 18 April 2025 – Returned goods to Vinod ₹1,800

Vinod A/c … Dr ₹1,800
    To Purchase Return A/c ₹1,800

  1. 22 April 2025 – Paid Vinod ₹24,000 in full settlement
    (He allowed discount = Balance – Amount Paid)

Vinod A/c … Dr ₹25,200
    To Cash A/c ₹24,000
    To Discount Received A/c ₹1,200

  1. 25 April 2025 – Rama returned goods ₹9,000

Sales Return A/c … Dr ₹9,000
    To Rama A/c ₹9,000

  1. 28 April 2025 – Rama paid ₹43,000 in full settlement
    Cash A/c … Dr ₹43,000
    Discount Allowed A/c … Dr ₹2,000
        To Rama A/c ₹45,000