Are you in the plan of establishing a startup and concerned about various laws to comply with? If yes, don’t worry, we are here to help you with all the Startup compliance that one should follow to proceed with the business smoothly.
When you begin with a startup, it involves a lot of effort and cost and hence, it will not make any sense in wasting the hard-earned money in government penalties on non-compliance. Therefore, you should abide by all laws to make sure there are no hurdles.
The various laws that you need to comply with are as mentioned below:
- Goods and Services Act (GST)
- Companies Act
- Labor and mercantile laws
- Income Tax Act
Once you get your startup registered as an Indian company, it is compulsory to abide by the provisions that are mentioned in the Companies Act, 2013.
Major things you can’t miss for Annual Compliance Package
Here is a list of major things that you cannot miss with your startup:
- Accounts filing with ROC (Form AOC-04)
- Board meetings
- Statutory Audit
- Annual General Meeting (AGM)
- Annual Returns with ROC (Form MGT-07)
The above ones are some of the major Startup compliances that one needs to follow but other than these there are some more forms that vary. For example, if in case you take a bank loan, you have to file the CHG-01 form with ROC in order to get your charge registered. There is a penalty for the late filing of the statutory forms.
It is mandatory for all companies to get the audit done by the CA whatever your turnover is. Every year auditing has to be done whether there were transactions done in the whole year or not.
Startup Checklist to comply with the Income Tax Act
If the startup is incorporated as a limited liability partnership or a proprietor company, it is compulsory to file the income tax. If the taxable income is more than the exemption limit, you need to get the filing done within the specified time limits. A fee is charged for late income tax filing.
Startup Checklist to comply with GST
The best part about GST is that now no more indirect taxes have to be paid. Goods and Service tax is one of the simple taxes. You need to get registered under GST if you have a turnover of more than Rs 20 Lakhs in a year. In case you are from special states, you need to get registered if the turnover is more than Rs 10 Lakhs in a year if you are an online seller, it is compulsory for you to get the GST compliance done.
In nutshell, you need to abide by below-mentioned Startup compliances for GST:
- Annual GST if the yearly turnover exceeds Rs 2 Crores.
- Registration on crossing exempted turnover of Rs. 20/10 lakhs
- Monthly returns if the turnover crosses Rs 1.5 Crores else quarterly returns
- Annual returns
- EWAY bill for transportation if in case the value of invoice exceeds Rs 50 thousand for transportations of the goods.
Startup checklist to comply with labor laws
There are three major laws that are applicable to a company based on the number of employees working under you:
Provident fund is applicable if there are more than 20 people working under you. You need to get registered under PF and get the returns filed. Every month, a share from employees’ salaries needs to be deducted and has to be paid to the government along with the share of the employer. Then, a return has to be filed. Never neglect PF as it is one of the most important labor laws to abide with.
Employees’ State Insurance is a health insurance and social security scheme for the workers in India. This fund is managed by the State Insurance Corporation for employees according to the ESI ACT 1948. The ESI law works similar to the PF law.
For some states, it is compulsory to have the profession tax filed. For example, in states like Karnataka, if you pay more than Rs 15,000 salary then it is required to get Rs 200 deducted every month and get it paid to the government.
It is very important to follow all the compliances like Startup compliances, Annual Compliance or Company Compliance in order to run your business without the hindrance of any laws and also you get safe from the penalties and punishment by the government.
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