The Ultimate Annual Compliance Checklist for Startups in India

The Ultimate Annual Compliance Checklist for Startups in India

by Sanjeev Archak

For a Startup registered as a private limited company in India, there are certain compliance requirements laid down by the Companies Act, 2013 and other regulatory bodies that need to followed and adhered to from time to time. Failure to adhere to such regulations would lead the startup to penalties that could severely damage your business and harm the reputation that you have worked so hard for. Keeping this in mind, we have curated an annual compliance checklist for startups in India.

Following the various regulatory compliance not only makes you a legal entity as per the government norms but also makes you trustworthy for your investors, shareholders, and customers.

It is important to note that this is not an exhaustive list but it includes the mandatory compliances such as holding board and other important meetings, filing of tax returns, filing of audit reports and regulatory assessment of your business under various acts of law.

Annual Compliance Checklist for Startups in India

For the purpose of this blog post, the annual Compliances are divided into two categories:

I. Registrar related Compliances
II. Non-Registrar related Compliances

Note: The annual compliance checklist for startups below is applicable for companies registered as a private limited entity, especially for Small Companies with paid up capital upto Rs. 50Lakh or having annual turnover in the last year below Rs. 2Cr.

I. Registrar related Compliance

S. No.   Section & Rules Particular of Compliance
1. Receipt of MBP-1 184(1) Form MBP- 1

Every Director of the Company in First Meeting of the Board of Director in each Financial Year shall disclose his interest in other entities.

Every Director is required to submit with the Company a fresh MBP-1, whenever there is change in his interest from the earlier given MBP-1.

 2. Receipt of DIR- 8  164(2)143(3)(g) Form DIR – 8

Every Director of the Company in each Financial Year will file with the Company disclosure of non-disqualification.

 3. E- Forms Filing Requirements  92 E-form: MGT-7

Annual Return: Every Small Company will file its Annual Return within 60 days of holding of Annual General Meeting. Annual Return will be for the period 1st April to 31st March.

 4.    137 E-form: AOC-4

Financial Statement: Company is required to file its Balance Sheet along with Statement of Profit and Loss Account and Directors’ Report in this form.

Attachment:
Balance Sheet, Statement of Profit& Loss Account, Directors’ Report, Auditors’ Report and Notice of AGM.

 5. Directors’ Report  134 Directors’ Report shall be prepared by mention of all the information required for Small Company under Section 134.

It should be signed by the “Chairperson” authorized by the Board, where he is not so authorized by at least 2 Directors.

 6. Circulation of Financial Statement & other relevant Documents  136 Company will send to the members of the Company approved Financial Statement, Directors’ Report and Auditors’ Report at least 21 clear days before the Annual General Meeting.(Except in case of AGM is called on Shorter Notice)
 7.  Notice of AGM  101 & SS-II Every Notice of Annual General Meeting will be prepared as per Section 101 of Companies Act 2013 and Secretarial Standard – II.
 8.  Sending of Notice of AGM  101 & SS  Notice of Annual General Meeting will be sent to following:• All Directors, Members, Statutory Auditor.
 9.  Board Meetings  173 & SS-I Every Company shall hold a minimum number of Two Meetings of its Board of Directors every year in such a manner that Minimum gap between both the meetings not less than 90 (Ninety) days.
 10. Appointment of Auditor  139  E-form ADT-1

Auditor will be appointed for the 5 (Five) year and form ADT-1 will be filed for 5-year appointment.

After that every year in AGM, Shareholder will ratify the Auditor but there is no need to file ADT-1.

11. Maintenance of Registers 88 Company will maintain the following mandatory Registers:
• Register of Director, Director Shareholding, Members.

 

Important Note: The above mentioned Registrar related compliances are mandatory annual compliances for the Small Private Limited Company. Except above compliances, there may be other event based compliances for the Small Company. These include the following:

– Incorporation Of Company And Matters Incidental Thereto
– Management and Administration
– Appointment And Qualification Of Directors

For more details on the above, click here

II. Non-Registrar related Compliance

The non-registrar compliance requirements include the following:

  • Income Tax Returns Filing
  • Tax Audit Report Filing
  • Periodic Returns Filing– (Monthly, Quarterly, Annual Returns of GST, TDS, etc.)
  • Monthly/Quarterly GST Returns
  • Quarterly TDS Returns
  • Assessment of advance tax liability and the periodic payment of advance tax
  • Payment of periodic dues such as GST Liability, TDS & TCS payment.
  • Regulatory Assessment of business under different acts of law (For example – Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act etc.)

Running a Startup business in India is not an easy task. It involves a constant investment of both time and effort as well as technical capabilities of knowing the various statutory compliance and regulations. We hope the above annual compliance checklist for startups is helpful for both founders and budding entrepreneurs in imparting the right knowledge and guiding them.

But many early businesses struggle with the multitude of compliances that are part of doing business in India. Our advisors at Integra Books can help you ensure you file the right things at the right time.

 

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