Startup in India provides us opportunities to explore ourselves. Starting any business is not a everyone’s cup of tea”. Various startups have followed some rules and regulations which have to be followed by any statutes. Starting any business, you have to put your investment, time, effort and know about some technical into the problems, like periodic filling of tax returns, maintaining of accounts etc. Annual compliance for company as classified as annual mandate compliance and event-based compliance.
Statutory Compliance provides legal framework for the companies to follow the rules for the welfare of employees and organizations. Here is the list of some annual Compliance for startups in India.
- Appointment of Auditor: The board of members appoint the auditor. The First Auditor has to be appointed within 90 days of the registered company. He will be appointed for 5 years. The function of the auditor is to determine the accuracy of the financial statements prepared by the company and to detect financial fraud.
- Annual ROC filings: Under the section of 123 and 137 of the companies act 2013, the company file audited finical statements and the annual returns to the Registered of companies (ROC).The ROC has to be done once in a year by:
- Annual Returns: It is the annual results of the company that provide an investment over a year. It is mandatory for the company to disclose the annual returns at the AGM. It has to be calculated at the end of the year (1 April to 31 March).
- Financial Returns: The company have declared the profit and loss financial statement within 30 days from the last AGM meeting.
- E-forms Filing: Various forms come under E-forms
- E-form INC-20A (Declaration of the commencement of the business)
- E-form: AOC-4, (It is used to file a financial statement in a year)
- E-form: MGT-7A (annual returns to be filled by the AGM)
- E-form: DIR-12 (appointment of new director and resignation of the old director)
- E-form: MGT 14 (it is used to file all the resolutions and agreements filled by the company)
- E-form: DPT-3(It is used to file the deposits of the company)
4. Board Meeting: Board meetings are the key part of any company. They play a pivotal role in the company’s growth. In Board meetings, the board of directors of discuss the overall business strategy of the company. The first Board meeting should be held within 30 days from the incorporation of the company. A minimum of 4 meetings should be held every year. A minimum gap of 120 days is required between the 2 meetings. The meeting should be recorded and registered by the company.
5. Annual General Meeting: The first general meeting is to be held within the 9 months from the closing date of the financial year. The AGM is to be held in a year and later in 6 months of the financial year. In AGM, the stakeholders, shareholders, members of the company participate. The main agenda of the meeting is to discuss which steps will be taken to make the company’s growth more fruitful.
6. Director’s Report: Under section 415 company act 2013, the director of the company prepares the financial report of the company in a year. The report is to be discussed in the AGM meeting. After the report, shareholders and stakeholders know the position of the company. Only large organizations have made director’s reports; the mini-companies are exempt from this.
7. Maintain of statutory records: Every company has to maintain their records. The records should be maintained properly and updated regularly. They should be kept at a registered company. Records like AGM, Board meetings, Director’s Report, account details, company transactions. Annual Compliance for startups
Periodic returns: various returns for annual compliance
- Filing of income tax returns
- Filing of GST returns
- Tax Audit Report
- Filing of PF returns
All the above-mentioned annual compliance is mandatory for any company. Annual compliance for startups is also the same as we mentioned above. Other compliance like trademark registration, income tax details, GST filing etc.
Every company follows the Statutory Compliance. If they do not follow the statuary compliance, a heavy financial penalty is imposed. Sometimes the imprisonment has to be given to the company’s directors/CEO.