Congratulations on successfully registering your company in India! The journey to becoming a legitimate business entity is a significant milestone. However, the work doesn’t stop here. It’s just the beginning. There are several essential tasks that you must undertake compliance after the incorporation of a company to ensure your business operates smoothly, complies with legal regulations, and sets a strong foundation for growth. Whether you are a startup entrepreneur or an established business owner, adhering to these regulations is crucial to ensure your company’s smooth and legal operation.
This blog will discuss ten must-do tasks for Post Incorporation Compliances in India.
- Obtain the Certificate of Commencement
After incorporating your company, the first crucial step is to obtain the Certificate of Commencement of Business. This certificate signifies that your company is ready to commence operations. To acquire it, you must file the necessary documents with the Registrar of Companies (ROC) within 180 days of incorporation.
- Apply for a Permanent Account Number (PAN)
After company registration, one of the first things you should do is obtain a Permanent Account Number (PAN) for your business. PAN is essential for tax-related transactions, bank account opening, and complying with income tax regulations. You can apply for a PAN through the online portal of the Income Tax Department.
- Register for Goods and Services Tax (GST)
If your business deals with the supply of goods or services, GST registration is mandatory in India. You should apply for GST registration within 30 days of crossing the threshold turnover limit. GST compliance is crucial to avoid legal penalties and maintain smooth business operations.
- Open a Business Bank Account
Separate your finances from your business by opening a dedicated business bank account. It will help you manage your business’s financial transactions efficiently and maintain transparency for tax purposes.
- Conduct the Board Meeting
Hold the first board meeting of your company within thirty days of incorporation. During this meeting, important decisions will be made, like appointing directors, allocating shares, and approving the company’s registered office address.
- File Annual Returns and Financial Statements
Timely filing annual returns and financial statements with the ROC is a legal requirement. Defaulting on these requirements can result in penalties and noncompliance issues. Ensure you adhere to the deadlines for filing these documents.
- Comply with Labour Laws
Ensure you comply with labour laws, including employee provident fund (EPF) and state insurance (ESI) regulations. Register your employees for these schemes and provide them with the necessary benefits.
- Appoint an Auditor
Appointing a qualified auditor is essential to maintain accurate financial records and comply with statutory audit requirements. Regular audits help identify financial discrepancies and ensure transparency.
- Obtain Trade Licenses and Permits
You may need various licences and permits depending on your business type and location. These could include trade licences, environmental permits, and health permits. Ensure that you have all the necessary approvals to operate legally.
- Implement an Accounting System
Establish a robust accounting system to maintain accurate financial records, track expenses, and generate financial reports. This system will be vital for tax compliance and making informed business decisions.
Importance of Following Post-Incorporation Compliances
Following post-incorporation compliance in India is not merely a legal requirement but also a strategic move that can safeguard your business, enhance its reputation, and pave the way for sustained growth and success. Failure to comply with these regulations can have severe consequences, making it imperative for every company to prioritise and stay updated on its compliance obligations.
Legal Obligation: The Companies Act of 2013 and other pertinent laws require compliance with post-incorporation requirements.
Good Governance: It showcases your commitment to transparency and sound corporate governance practices, building stakeholder trust.
Avoid Legal Issues: Non-compliance can result in severe penalties, fines, or even dissolution of the company, leading to legal troubles.
Financial Transparency: Compliance involves accurate financial reporting, which is crucial for stakeholders and potential investors.
Tax Efficiency: This ensures your company doesn’t engage in tax evasion and allows you to benefit from tax incentives.
Access to Funding: Many investors and financial institutions require compliance as a prerequisite for funding.
Avoid Penalties and Prosecution: Non-compliance can lead to hefty penalties and legal actions, harming your business’s financial health.
Operational Efficiency: Compliance streamlines operations, promotes organized record-keeping, and helps adhere to standard procedures.
Creditworthiness: Compliance enhances your company’s creditworthiness, making it easier to secure loans and financing.
International Expansion: This is crucial for international trade and expansion, as non-compliance can lead to barriers in foreign markets.
Safeguarding Shareholder Interests: It protects shareholders from misuse of company funds or assets by directors and executives.
Sustainable Growth: Compliance provides a stable foundation for long-term business sustainability and growth.
Company registration is a significant step towards establishing your business in India, but it’s only the beginning of compliance after the incorporation of a company to ensure a long-term successful entrepreneurial journey. You must complete compliance after the incorporation of a company to ensure long-term success and compliance with legal regulations. Alonika can assist you with everything from obtaining important government documents to setting up a solid financial foundation and protecting your business. By diligently addressing these post-registration tasks, you’ll be better prepared to navigate the complexities of the Indian business landscape and achieve your entrepreneurial goals. Contact us now!