Startups operating as limited liability companies must comply with many regulations set by various laws and other regulatory bodies This includes but is not limited to, filing regular tax and other tax returns, holding board meetings, and other meetings, and maintaining statutory books and accounting
Matches can be categorized as follows:
- Registrar-related compliance
- Non-registrar compliance
|Appointment of Auditor(E-form ADT-1)
|Does First Auditor have to be appointed within 30 days? However, the shareholders shall confirm that appointment in the First Annual General Meeting (AGM) of the company and file Form ADT-1.
|Form ADT-1 is to be filed for the appointment of the auditor, duly approved by the shareholders in the first AGM. It needs to be filed within 15 days of the AGM.
|Holding Board Meeting
|First meeting within 30 days of incorporation.
|A minimum gap of 120 days is required between 2 meetings
|Holding Annual General Meeting(AGM)
|First AGM within 9 months from the date of closing of the first financial year. Thereafter, AGM is to be held every year within 6 months of the end of the financial year.
|a Maximum gap of 15 months between 2 AGMs
|E- Forms Filing Requirements
|E-form: INC-20A (Declaration for commencement of business)
|Form INC-20A is a declaration for commencement of Business that is filed within 180 days of the date of incorporation of the company
|E-form: AOC-4 (Financial statements)
|Financial statements, i.e. Balance Sheet along with Statement of Profit and Loss Account and Directors’ Report must be filed within 30 days of holding AGM.
|E-form: MGT-7A (Annual Returns for Small Company/OPC)
|Annual Returns must be filed within 60 days of the AGM.
|E-form: DIR-12 (Appointment/Resignation of Directors)
|The particulars of appointment/ resignation of directors, if any, along with their consent to act as directors/Resignation Letter must be filed within 30 days of appointment/Resignation.
|E-form DIR – 3 KYC (Director KYC submission)
|Every Director of the Company has to file KYC whose DIN is allotted on or before 31 March, within 30th September every year.
|E-form: MGT 14 (Filing of resolution with MCA)
|The details of the resolutions passed in the board meetings should be filed within 30 days of passing such Board Resolution.
|E-form: DPT-3 (Return of Deposits)
|Every company needs to file this return furnishing information about deposits and/or outstanding receipt of loans or money other than deposits within 30th June every year.
|Abridged Directors’ Report is to be filed covering 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.
|Maintenance of Statutory registers and books of accounts
|Statutory Registers such as Register of Members/ Directors and KMP/ Shareholders/ Beneficial owners/ Loan, Contract and Arrangements/ Deposits/ Related Parties Transactions, etc.; Minutes Book of Board Meeting / AGM /Other Meeting; Books of Accounts; Financial Statements; ROC File, etc., needs to be maintained and regularly updated.
|Circulation of Financial Statement & other relevant Docs
|The company should send to the members, approved Financial Statements along with Abridged Directors’ reports and Auditor’s reports at least 21 clear days before the Annual General Meeting.
Note: The above compliance is mandatory annual compliance of the Small Private Limited Company. Apart from the compliances listed above, there may be event-based compliance for small businesses.
Other legal obligations of such limited liability companies revolve around the regular filing of taxes and other tax returns and the maintenance of accounting in accordance with the Income Tax Act and other laws. Compliance requirements vary from case to case and depend on the type of business, product or service, net worth, borrowing, the volume of sales, and so on.
Payment of periodic dues (GST Liability, TDS, TCS payment, Advance tax, and tax)
Filing of periodic returns –
Monthly/Quarterly/Annual GST Returns
Quarterly TDS Returns
Assessment of advance tax liability
Filing of Income Tax Returns
Filing of Tax Audit Report
Filing of half-yearly ESIC returns
Filing of PF returns
Filing of professional tax (PTax) returns
Evaluation and reporting of regulations based on various law acts (environmental protection law, competition law, factory law, etc.)
Entrepreneurs are often overwhelmed by the number of compliances and lack professional guidance, resulting in interest and fines.
Five Key Startup Compliance Deadlines
Accounting and bookkeeping
Submission of income tax return
Penalties for violations
Legal audit compliance
Penalties based on RoC