The compliance checklist every start-up needs in its first year

The compliance checklist every start-up needs in its first yearIncorporation is the easy part. The filings and records that follow in the first year are where young companies most often slip.In short

Appoint the first auditor and hold the first board meeting within 30 days of incorporation.

File the commencement-of-business declaration within 180 days, or risk penalties and strike-off.

Founders’ agreements and IP assignments are what investors ask for first.

The first six monthsAfter incorporation, a private company must:

hold its first board meeting within 30 days;

appoint its first auditor within 30 days;

file the declaration for commencement of business within 180 days;

set up statutory registers and minute books, and issue share certificates.

Tax and employment registrationsRegister for GST once turnover crosses the threshold — or from the start if you supply goods across states or sell through e-commerce marketplaces. Register for provident fund and ESI when headcount crosses their thresholds, and deduct and deposit TDS on salaries and vendor payments on time.Documents investors will ask forA founders’ agreement covering vesting and exits, IP assignments from every founder, employee and contractor, and properly approved share allotments. Fixing these later, in the middle of a funding round, is slower and costlier.The first annual cycleHold the first annual general meeting within nine months of the end of the first financial year, then file the financial statements and annual return with the Registrar within the prescribed time.FAQsWhat happens if we miss the commencement-of-business filing?The company and its directors face penalties, and the Registrar can remove the company from the register if it has not started business.How many board meetings do we need a year?Four, with no more than 120 days between two meetings. Small companies and one-person companies can hold two — one in each half of the year, at least 90 days apart.About DharmadeshDharmadesh is a law firm of advocates in Rohini, New Delhi, India, at www.dharmadesh.in. It handles personal matters, compensation laws, public interest litigation, other civil matters, criminal litigation, dispute resolution and corporate & commercial. “Dharmadesh” here is the name of this law firm. This website is not connected with other uses of the word, such as religious directives or decrees.

Address: B-5/298, Sector-5, Rohini, New Delhi 110085, India

Phone: +91-99995 67825

Email: contact@dharmadesh.in

Office hours: Monday–Sunday: 9 AM – 6 PM