Startup Compliance Checklist India: 10 Must-Dos in Your First Year
Startup compliance checklist for India: 10 must-dos in your first year covering incorporation, auditor appointment, INC-20A, GST, TDS, ROC filings and more.
Starting a company in India takes a few days, but keeping it compliant takes discipline for as long as the company exists, and the first twelve months carry more one-time deadlines than any later year. A startup compliance checklist India founders can rely on helps them see those obligations in one place before they turn into late fees. In the first year, a new private limited company must hold a board meeting, appoint an auditor, file a declaration that its shareholders have paid for their shares, register for taxes, run payroll, deduct and deposit tax at source, close its books and file annual returns with the Registrar of Companies. None of this depends on whether the company has earned revenue. Investors also read these records during due diligence, so a clean first year makes later fundraising easier.
Below we set out the ten must-dos in plain language, the timelines that go with them, the tax and employment registrations to plan for, and what happens if a deadline is missed. The rules differ slightly for LLPs, one person companies and partnerships, and we note the main differences where they matter for Bengaluru founders and others across India.
What Does a Startup Need to Comply With in Its First Year in India?
In its first year, a startup must comply with company law, tax law, indirect tax law and employment law, in that order of urgency. The first deadlines arise within 30 days of incorporation, and the annual filings follow once the first financial year ends.
Company law brings the first board meeting, the first auditor, the commencement declaration, statutory registers, an annual general meeting and annual filings. Tax law brings a TAN, deduction of tax at source, advance tax and the income tax return. GST becomes relevant once turnover crosses the threshold or earlier where the nature of supply requires it. Employment law applies once the team grows, through provident fund, ESI, professional tax and a workplace harassment committee. Taken together, the rules look heavy, but in a good startup compliance checklist India founders can follow, most of them are calendar events. Treating them as a monthly and quarterly routine, supported by good bookkeeping, keeps the effort small. Our company compliance services and compliance overview pages describe what we handle for new companies.
Which Business Structure Should You Choose Before You Start?
Most venture-backed startups choose a private limited company, while small service businesses with few owners often prefer an LLP, and a solo founder may use a one person company. The structure decides the forms, deadlines and audit rules you will follow, so settle it before you build your startup compliance checklist India filings around it.
Private Limited Company
Allows shares to be issued to investors and employees, which is why funds generally expect it.
Limited Liability Partnership
Lighter compliance, but less convenient for equity fundraising.
One Person Company
Suits a single founder who wants limited liability, though it must convert in certain situations.
Switching Later
Changing structure later costs time and money, so choose with fundraising, liability and tax in mind.
A private limited company allows shares to be issued to investors and employees, which is why funds generally expect it. An LLP has lighter compliance but is less convenient for equity fundraising. A one person company suits a single founder who wants limited liability, though it must convert in certain situations. If you are still deciding, see our pages on private limited company, limited liability partnership and one person company, or speak to an incorporation consultant.
What Are the 10 Must-Dos for a Startup in Its First Year?
The ten must-dos are completing incorporation formalities, obtaining a TAN and opening the bank account, holding the first board meeting, appointing the first auditor, filing the commencement declaration, registering for GST and local licences, keeping books and running payroll, handling TDS and advance tax, completing the AGM and annual filings, and sorting out ESOPs, foreign investment and intellectual property.
Complete Incorporation and Secure the Core Documents.
After the certificate of incorporation arrives, store the MOA, AOA, PAN, and each director's DIN and digital signature safely. Check that the registered office address is accurate, since statutory notices are sent there.
Get a TAN and Open the Company Bank Account.
The company needs a TAN before it deducts any tax. Open a current account in the company's name and have each shareholder deposit their share subscription into it, since the commencement declaration relies on that payment. See our TAN registration page.
Hold the First Board Meeting Within 30 Days.
Within 30 days of incorporation, the board should meet to fix the financial year, adopt the common seal if any, approve registers and disclosures, and authorise bank operations. Record minutes properly, as they form part of the company's permanent record. Our board meeting and secretarial practices services help with this.
Appoint the First Statutory Auditor.
The board can appoint the first auditor within 30 days of incorporation, and Form ADT-1 must be filed within 15 days of the appointment. If the board misses its window, the shareholders must make the appointment at a general meeting. Read about ADT-1 auditor appointment.
File the Commencement of Business Declaration.
A company with share capital must file Form INC-20A within 180 days of incorporation, declaring that the subscribers have paid for their shares. Until it is filed, the company should not begin business or exercise borrowing powers, and default can attract penalties and strike-off proceedings.
Register for GST and Local Licences.
Check whether GST applies to you. The general threshold is Rs 40 lakh for goods and Rs 20 lakh for services, lower in special category states, and registration is compulsory regardless of turnover in cases such as interstate supply of goods or sales through e-commerce operators. Also check the local trade licence and professional tax in your state. See GST registration.
Keep Books of Accounts and Run Payroll Properly.
Record every transaction from the first day, reconcile the bank each month and keep invoices. Process salary through a structured payroll with the correct deductions. Our bookkeeping services and payroll management teams cover this.
Deduct TDS and Pay Advance Tax on Time.
Deduct tax at source on salary, professional fees, rent and other payments covered by the law, deposit by the 7th of the next month and file quarterly returns. Pay advance tax if your estimated liability crosses the threshold. See TDS return filing, Form 24Q and Form 26Q.
Hold the AGM and File the Annual Forms.
Hold the first annual general meeting within nine months of the close of the first financial year, file Form AOC-4 within 30 days of the AGM and Form MGT-7, or MGT-7A where eligible, within 60 days. Keep minutes and registers current. See AOC-4 and MGT-7 filing.
Put ESOPs, Foreign Funding and IP in Order.
If you grant stock options, document the plan and valuation. If you raise money from abroad, report the allotment to the RBI within the prescribed time. Secure your brand and ensure employees assign their work to the company. Our ESOP advisory, FDI filing with RBI and investment readiness pages explain more.
The company law deadlines among these ten steps run on different clocks, so the table below turns the startup compliance checklist India founders need into a single calendar.
| Task | Deadline |
|---|---|
| First board meeting | Within 30 days of incorporation |
| First statutory auditor appointed by the board | Within 30 days of incorporation |
| Form ADT-1 | Within 15 days of the appointment |
| Form INC-20A (commencement of business) | Within 180 days of incorporation |
| First annual general meeting | Within nine months of the close of the first financial year |
| Form AOC-4 | Within 30 days of the AGM |
| Form MGT-7 (or MGT-7A where eligible) | Within 60 days of the AGM |
What Do Tax Compliances Look Like for a New Company?
In any startup compliance checklist India companies follow, tax compliance for a new company means a TAN and monthly TDS routine, quarterly TDS returns, advance tax where applicable, and an annual income tax return, along with GST returns if registered.
TDS on salary and other payments must be deposited by the 7th of the following month, with 30 April for March, and quarterly returns fall due on 31 July, 31 October, 31 January and 31 May. Advance tax is payable in instalments on 15 June, 15 September, 15 December and 15 March once the estimated tax liability crosses Rs 10,000.
| Tax compliance | Due date |
|---|---|
| TDS deposit | By the 7th of the following month (30 April for March) |
| Quarterly TDS returns | 31 July, 31 October, 31 January and 31 May |
| Advance tax (liability above Rs 10,000) | 15 June, 15 September, 15 December and 15 March |
| Income tax return of the company | Generally 31 October |
A company must file its income tax return every year, generally by 31 October, and a tax audit can apply if turnover crosses the limit under section 44AB. Even if your company has losses, the return is still needed, since only a filed return can carry forward business losses. If you collect GST, monthly or quarterly returns follow. For an overview, see our accounting and tax compliance service.
Which Employment and Local Registrations Apply as You Hire?
As you hire, provident fund, ESI, professional tax, shop and establishment registration and a workplace harassment committee may apply, depending on headcount and state.
| Registration | When it applies |
|---|---|
| Provident fund | Generally mandatory once an establishment has 20 employees, though earlier registration is common |
| ESI | Covered establishments with 10 or more employees where wages fall within the ceiling |
| Professional tax and shop and establishment | State-level, so a Bengaluru startup follows Karnataka rules and a multi-state team registers separately |
| Internal Committee (workplace harassment) | Companies with 10 or more employees |
Each of these registrations brings monthly or annual returns, so build them into the same compliance calendar. Founders who prefer a single partner for these needs can use our CFO services.
How Has Startup Compliance in India Evolved Over the Years?
Startup compliance in India has evolved from a licence-heavy, paper-based process before 1991 to a largely online system that gives new companies simplified incorporation but a clear annual calendar.
| Period | Change |
|---|---|
| Before 1991 | Industrial licensing and manual company registration under the Companies Act, 1956 |
| After 1991 and early 2000s | Liberalisation reduced licensing, and online filing began with the Ministry of Corporate Affairs |
| 2013 | The Companies Act, 2013 introduced the one person company and a modern governance framework |
| 2016 | The Startup India initiative gave eligible startups a recognised status |
| 2017 | GST unified indirect taxes |
| Recent years | Integrated online incorporation, the commencement declaration and decriminalisation of several minor offences |
Before 1991, setting up a business involved industrial licensing and manual company registration under the Companies Act, 1956. Liberalisation reduced licensing, and the early 2000s brought online filing with the Ministry of Corporate Affairs. The Companies Act, 2013 introduced the one person company and a modern governance framework, and GST in 2017 unified indirect taxes. The Startup India initiative of 2016 gave eligible startups a recognised status, and later reforms introduced integrated online incorporation and the commencement declaration for new companies. Several minor offences were also decriminalised in recent years. Official forms and company records are available on the Ministry of Corporate Affairs portal at https://www.mca.gov.in.
What Happens If a Startup Misses a First-Year Compliance Deadline?
Missing a first-year deadline usually brings additional filing fees, penalties on the company and its officers, and, for repeated default, possible strike-off or director disqualification. Late fees generally grow with delay, so the cheapest time to fix a miss is immediately.
A late INC-20A can draw penalties and put the company at risk of being struck off. A missed ADT-1 or board meeting attracts additional fees and can complicate later filings. Late deposit of TDS carries interest, late quarterly returns carry a daily fee, and defaults in annual ROC filings carry additional fees per day. Over time, a pattern of defaults can lead to disqualification of directors. Beyond penalties, defaults show up in due diligence and can slow a funding round. If you have missed something on your startup compliance checklist India, record what is overdue, compute the cost and file in order of seriousness. Our Financial Reporting and MIS support and DIN eKYC page can help to keep records and director data current.
Startup Compliance Checklist India: Frequently Asked Questions
Need Help With Your Startup's First-Year Compliance?
A short call can turn the startup compliance checklist India founders need into a dated calendar for your first year, so nothing is missed while you focus on the business. N D Savla & Associates supports founders with incorporation, auditor appointment, tax registrations, bookkeeping and annual filings. Call +91 95810 00770 or +91 97420 00773, write to info@nainitsavla.com, or visit our contact page.
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