Annual Compliance Filing for Startups
Startups are all those business or industrial entities which are established as per the "Start Up India, Stand Up India" initiative of the Modi government, the drastic action-plan of the initiative was launched in January 2016. These startups are being promoted in India to give further space to innovations, entrepreneurship development, and faster growth of Indian economy. This exclusive webpage informs about the annual compliance filing for startups in India to help the concerned entrepreneurs. Here, it may be noted that strict and timely compliances are recommended, to avert huge penalties, and closure of the business in the extreme cases. Again, the periodic and annual compliances for startups stipulated here, apply only to those startups which are running as private limited companies with an annual turnover less than Rs. 25 Crore.
Though startups are given certain welcome and lavish facilities and benefits by the Government of India, these units also essentially require to make mandatory periodic and annual compliances with various regulatory bodies concerned, just like other types of companies. In general, the particulars of periodic and annual compliance for startups in india, relate to the following:
- Annual Return
- Financial Statement
- Board Meetings and Annual General Meeting (AGM)
- Appointments of Directors and Auditors
- Directors' Report
- Tax-related compliances including Income Tax Return and GST
- Company Disclosure of Non-Disqualification
- Statuary Registers and Books of Accounts
- Event-based compliances
- Compliance under various other statutes and regulatory bodies concerned, such as Labor & Employment Laws, Environmental Law, etc.
Annual Compliance Checklist for Startups
The annual compliances are those compliances which a company is required to make once in every financial year, with the concerned regulatory bodies and legal statutes. Thus, as far as only the annual compliance checklist for startups is concerned, the following are the major and most significant compliances:
- Annual Return in Form MGT-7: This is to be filed electronically with the relevant ROC, within Sixty Days of holding the last AGM by the Startup for the financial year concerned. Delays in its filing may attract penalty as much as 12 times the normal fee.
- Financial Statements in Form AOC-4: This is to be filed within Thirty Days from the completion of the AGM, and should contain the Balance Sheet, the Statement of Profit and Loss, and the Directors' Report.
- Compliances related with ITR and GST: These are to be made with the Central Income Tax Department and the GSTN, as per the prescribed timelines.
Here, it must be noted that several compliances related with the other particulars mentioned in the section above, may also fall under the annual compliances for startups.