Annual compliance checklist for startups

Annual compliance checklist for startups

Legal & Compliance

Shruti Aggarwal

Shruti Aggarwal

18 Sep 2019, 10:05 — 6 min read

Background: A startup running as a private limited company has to follow a number of compliances as laid down by various statutes and other regulatory bodies. These include but are not limited to the periodic filing of tax and other returns, holding of board and other meetings, maintaining statutory books and accounts etc. Shruti Aggarwal from The Startup Lab list out these compliances.

Here is brief overview of the documentation and formalities to be observed to become tax and law compliant. Non-compliance can attract penalties and may also bring an end to business in extreme cases.

 

Registrar related compliance

Appointment of Auditor

(E-form ADT-1)

* First Statutory Auditor has to be appointed within 30 days of incorporation in first board meeting

* Subsequent auditors will be appointed for 5 years in AGM.

Form ADT-1 is filed for a 5-year appointment. After that every year in AGM, shareholders ratify the Auditor but there is no need to file ADT-1.

Holding Board Meeting


* First meeting within 30 days of incorporation

* Minimum 2 meetings, one in each half of calendar year.

Minimum gap of 90 days is required between 2 meetings (ignore if more than 2 meetings held during the year)

Holding Annual General Meeting (AGM)

One AGM

Maximum gap of 15 months between 2 AGMs

INC-20A Commencement of business certificate


Every company has to file INC-20A within 180 days of incorporation of company.

Penalty of INR 50,000 will be levied on company for non-compliance.

e-KYC by every DIN Holder

Every Director holding DIN has to file KYC by 30th Sep’19.

Penalty of INR 5,000 will be levied if not filed by 30th Sep’19.

E- Forms Filing Requirements

E-form: MGT-7 File Annual Return within 60 days of holding of AGM for the period 1st April to 31st March.

 

 

E-form: AOC-4 File Financial Statement: i.e Balance sheet along with Statement of Profit and Loss Account and Directors’ Report

 

 

Form MBP- 1 Every Director of the company in first meeting of the Board of Director in each financial year needs to disclose his interest in other entities by filing the form

Fresh MBP-1 needs to be filed, whenever there is change in his interest from the earlier given MBP-1

 

Form DIR – 8 Every Director of the company in each financial year has to file with the company disclosure of non-disqualification

 

Directors’ Report

Directors’ Report is to be filed covering all the information required for small company under Section 134.

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

Statutory registers and books of accounts

1. Statutory Registers

2. Minutes Book 

* Board Meeting Minutes Book

* General Meeting Minutes Book (i.e. AGM, EGM, Postal Ballot, Creditors Meetings, Debenture holders Meetings)

3. Books of Accounts/Financial Statements (section 44aa)

4. Register of Directors Attendance at Board/Committee Meetings.

 

Circulation of financial statement & other relevant documents

Company will send to the members of the company approved financial statement, Directors’ Report and Auditor’s’ Report at least 21 clear days before the Annual General Meeting.

 

 

Note: Above mentioned compliances are mandatory yearly compliances for small Private Limited Companies. Except for the above compliances, there may be event-based compliances for the small companies.

Also read: Registrar Of Companies In India

 

Non-registrar compliance

  • Payment of periodic dues (GST Liability, TDS & TCS payment)
  • Periodic returns – (Monthly, quarterly, annual returns- GST, TDS, etc)
  • Monthly/Quarterly GST Returns
  • Quarterly TDS Returns
  • Assessment of advance tax liability and payment of advance tax periodically
  • Filing of Income Tax Returns (Tax will be payable at a flat rate of 30% plus Education Cess)
  • Filing of Tax Audit Report
  • Regulatory Assessment of business under different acts of law (Eg. Environment and Protection Act, Money Laundering Act, Competition Act, Factory Act etc.)

Often entrepreneurs get overwhelmed by the number of compliances and in absence of professional guidance end up paying interest and penalties. Reach out to us for assistance and information on the same.

 

Also read: What are the objectives of an Annual General Meeting of a company?

 

Image courtesy: shutterstock.com

To explore business opportunities, link with me by clicking on the 'Connect' button on my eBiz Card. 

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker. 

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