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By CS Sapna Malpani
Practising Company Secretary, Bangalore
Congratulations on incorporating your startup! But incorporation is just the beginning. Indian regulatory laws require private limited companies to maintain ongoing compliance across multiple authorities — MCA, Income Tax, GST, FEMA, Labour Laws, and more.
Non-compliance can result in heavy penalties, disqualification of directors, striking off of the company, and — most critically — it can derail your next funding round. Investors and their legal counsel conduct thorough due diligence, and compliance gaps are red flags that can kill deals.
issues in their first year
for non-compliant startups
for a typical startup
This comprehensive checklist is designed for:
- Founders of newly incorporated private limited companies
- Early-stage startups (Seed to Series A) navigating regulatory requirements
- Funded startups with foreign investors requiring FEMA compliance
- CFOs and Finance teams managing compliance calendars
- Company Secretaries and CAs advising startup clients
How to use this checklist: Go through each section systematically. Check off items as you complete them. For items marked with deadlines, add them to your compliance calendar immediately. Consult a practising Company Secretary for complex matters, especially FEMA filings.
| Authority | Governs | Key Portal |
|---|---|---|
| MCA (Ministry of Corporate Affairs) | Company Law, ROC Filings | mca.gov.in |
| Income Tax Department | Income Tax, TDS | incometax.gov.in |
| GST Network | Goods & Services Tax | gst.gov.in |
| RBI (Reserve Bank of India) | FEMA, Foreign Investment | rbi.org.in |
| EPFO / ESIC | Provident Fund, Insurance | epfindia.gov.in |
| State Labour Dept. | Shops & Establishment, PT | Varies by state |
Complete these essential steps within the first 30-90 days after incorporation:
- Apply for PAN — Permanent Account Number from NSDL/UTIITSL (Usually received within 7 days)
- Apply for TAN — Tax Deduction Account Number for TDS compliance (Apply on TRACES portal)
- Open a current bank account — In the company name with Certificate of Incorporation, MOA, AOA, PAN (Requires Board Resolution)
- Obtain Digital Signature Certificates (DSC) — For all directors (Class 3 DSC) (Needed for all MCA filings)
- Issue share certificates — To initial subscribers within 60 days of incorporation (Form PAS-3 within 30 days of allotment)
- GST Registration — If turnover exceeds threshold or if engaging in inter-state supply (Threshold: Rs. 20L / Rs. 40L)
- Professional Tax Registration — State-specific (Karnataka: within 30 days of hiring) (Karnataka: Rs. 2,500/annum per employee)
- Shops & Establishment License — Register with local labour department (Karnataka: BBMP or local authority)
- First Board Meeting — Must be held within 30 days of incorporation (Mandatory under Section 173)
- Appoint Statutory Auditor — Within 30 days of incorporation (Board); ratify at first AGM (Form ADT-1 within 15 days)
- MSME Registration (Udyam) — If qualifying as Micro/Small/Medium enterprise (Free registration at udyamregistration.gov.in)
- DPIIT Startup India Registration — For tax benefits, self-certification, funding access (Via Startup India portal)
- EPF Registration — If 20+ employees (voluntary for fewer) (Employer: 12% + Employee: 12%)
- ESI Registration — If 10+ employees and wages up to Rs. 21,000/month (Employer: 3.25% + Employee: 0.75%)
- Trademark Application — File for brand name and logo protection (Apply via IP India portal)
- Commencement of Business Declaration — File INC-20A within 180 days of incorporation (Declare subscription money received)
- Registered Office Verification — File INC-22 if office address differs from incorporation documents (Within 30 days of change)
- Maintain Statutory Registers — Register of Members, Directors, Charges, etc. (As per Sections 88, 170, 189)
- Issue Letters of Appointment to Directors — Formal appointment letters with terms (Section 152 compliance)
Pro Tip: Create a shared compliance folder (Google Drive or similar) from Day 1. Organize it by authority — MCA, GST, Income Tax, Labour, FEMA. Upload all certificates, registrations, and returns as they are filed. This will save enormous time during investor due diligence.
These compliances repeat every month. Set up recurring reminders for each.
| Due Date | Compliance | Form/Return | Authority | Responsible |
|---|---|---|---|---|
| 7th | TDR/TCS Deposit | Challan 281 | Income Tax | CA/CFO |
| 11th | GSTR-1 (Outward Supplies) | GSTR-1 | GST | CA/CFO |
| 13th | GSTR-1 (IFF for QRMP) | IFF | GST | CA/CFO |
| 15th | PF Payment | ECR | EPFO | HR/CFO |
| 15th | ESI Payment | ESI Challan | ESIC | HR/CFO |
| 20th | GSTR-3B (Monthly) | GSTR-3B | GST | CA/CFO |
| 25th | PF Return Filing (ECR) | ECR | EPFO | HR/CFO |
| 30th | Professional Tax (if applicable) | PT Return | State Govt | HR/CFO |
| Due Date | Compliance | Form/Return | Authority |
|---|---|---|---|
| 31st Jul / Oct / Jan / Apr | TDS Return | Form 24Q, 26Q, 27Q | Income Tax |
| 22nd/24th of month after quarter | GSTR-3B (QRMP scheme) | GSTR-3B | GST |
| 30 days from quarter end | Board Meeting | Minutes & Resolutions | MCA |
| 15th of month after quarter | TCS Return | Form 27EQ | Income Tax |
| Within 15 days of quarter end | Issue TDS Certificates | Form 16A | Income Tax |
Minimum 4 Board Meetings per year (one each quarter)
Maximum gap: 120 days between two consecutive meetings
First meeting: Within 30 days of incorporation
Quorum: 1/3rd of total directors or 2 directors, whichever is higher
Notice: 7 days advance notice to all directors
Minutes: Must be prepared and signed within 30 days of the meeting
- Opening of bank account — With authorized signatories
- Appointment of statutory auditor — Within 30 days of incorporation
- Approval of share allotment — For each round of fundraising
- Authorization for borrowing — If taking loans or credit lines
- ESOP scheme approval — Before granting any stock options
- Related party transactions — Prior Board/Shareholder approval required
- Change of registered office — If relocating within same state
- Approval of annual financial statements — Before filing with ROC
Critical annual filings that every private limited company must complete:
| Due Date | Compliance | Form | Authority | Penalty |
|---|---|---|---|---|
| 30 Sep 2027 | Annual General Meeting | AGM Notice + Minutes | MCA | Rs. 1 lakh + Rs. 5,000/day |
| Within 30 days of AGM | Financial Statements Filing | AOC-4 / AOC-4 XBRL | ROC | Rs. 100/day (no max) |
| Within 60 days of AGM | Annual Return Filing | MGT-7 / MGT-7A | ROC | Rs. 100/day (no max) |
| 15 days of AGM | Auditor Appointment Filing | ADT-1 | ROC | Rs. 300/day (max Rs. 12L) |
| 30 Sep 2027 | Director KYC (for all DINs) | DIR-3 KYC / Web KYC | MCA | Rs. 5,000 (DIN deactivation) |
| 31 Oct 2027 | Income Tax Return | ITR-6 | Income Tax | Rs. 5,000 / Rs. 10,000 |
| 31 Oct 2027 | Tax Audit Report | Form 3CA / 3CB | Income Tax | 0.5% of turnover (max Rs. 1.5L) |
| 30 Jun 2027 | DPT-3 (Return of Deposits) | DPT-3 | ROC | Rs. 1Cr or 3x deposit amt |
| 31 Oct 2027 | MSME-1 (Half-yearly) | MSME-1 | ROC | Rs. 20,000 (max Rs. 5L) |
| 31 Dec 2027 | GST Annual Return | GSTR-9 | GST | Rs. 200/day (max 0.5% turnover) |
| 15 Jun 2027 | Advance Tax – 1st Installment | Challan 280 | Income Tax | Interest u/s 234C |
| 15 Sep 2027 | Advance Tax – 2nd Installment | Challan 280 | Income Tax | Interest u/s 234C |
| 15 Dec 2027 | Advance Tax – 3rd Installment | Challan 280 | Income Tax | Interest u/s 234C |
| 15 Mar 2028 | Advance Tax – 4th Installment | Challan 280 | Income Tax | Interest u/s 234C |
Important Note on AGM: First AGM must be held within 9 months of the close of the first financial year. Subsequent AGMs within 6 months from the close of the financial year. The gap between two AGMs should not exceed 15 months.
| Compliance | Deadline | Authority |
|---|---|---|
| PF Annual Return | 25th April | EPFO |
| Shops & Establishment Renewal | Before expiry | Local Authority |
| Professional Tax Annual Return | 30th April | State Govt (Karnataka) |
| Gratuity Insurance (if applicable) | Annual | LIC / Insurer |
| Form 16 Issuance to Employees | 15th June | Income Tax |
If your startup has received or plans to receive foreign investment (from foreign VCs, angel investors, NRIs, or foreign entities), FEMA compliance is mandatory. Non-compliance can attract penalties up to 3x the amount involved.
- Verify sectoral cap — Confirm your sector allows FDI and check the applicable cap (100% / 74% / 49%) (Refer DPIIT Press Note)
- Determine investment route — Automatic Route vs Government Approval Route (Most tech startups: Automatic 100%)
- Valuation by CA/Merchant Banker — Share price must be at or above fair market value (DCF method mandatory for unlisted companies)
- Board Resolution approving foreign investment — Document terms, price, and allottee details
- Shareholders’ Resolution (if required) — Special Resolution for certain sectors/thresholds
| Step | Action | Deadline | Form | Authority |
|---|---|---|---|---|
| 1 | Receive foreign funds in company bank account | Day 0 | — | — |
| 2 | File Advance Reporting Form with AD Bank | Within 30 days of receipt | Advance Reporting | AD Bank / RBI |
| 3 | Allot shares to foreign investor | Within 60 days of receipt | PAS-3 (ROC) | MCA |
| 4 | File FC-GPR (Foreign Currency – Gross Provisional Return) | Within 30 days of allotment | FC-GPR | RBI (via AD Bank) |
| 5 | File FLA Return (Annual) | By 15 July every year | FLA Return | RBI |
| 6 | File Annual Return on Foreign Liabilities & Assets | By 15 July every year | ARFLA | RBI |
- KYC of foreign investor — Passport, address proof, entity registration documents
- FIRC (Foreign Inward Remittance Certificate) — From the AD Bank
- Board Resolution — Approving allotment to foreign investor
- Valuation Certificate — CA certificate / Merchant Banker valuation report
- CS Certificate — Certifying compliance with FDI regulations
- Share certificates — Issued to the foreign investor
- Shareholders Agreement (SHA) — Executed copy
- FCGPR form duly filled — On the FIRMS portal (RBI)
- Annual Activity Certificate (AAC) — From Statutory Auditor for FLA
Critical Warning: Failure to file FC-GPR within the deadline attracts a penalty of up to 3 times the amount involved in the contravention under FEMA. Late filing also requires compounding application to RBI, which involves additional fees and timelines. Always prioritize FEMA filings.
| Requirement | Details | Section |
|---|---|---|
| Minimum Meetings | 4 per year (1 per quarter) | Section 173(1) |
| Maximum Gap | 120 days between two meetings | Section 173(1) |
| First Meeting | Within 30 days of incorporation | Section 173(1) |
| Notice Period | 7 days advance written notice | Section 173(3) |
| Shorter Notice | Allowed with consent of majority directors (min one Independent) | Section 173(3) |
| Quorum | 1/3 of total directors OR 2 directors, whichever is higher | Section 174 |
| Video Conference | Allowed (except for restricted matters) | Section 173(2) |
| Minutes Preparation | Within 30 days of meeting | Section 118 |
| Minutes Signing | By Chairman at next meeting | Section 118(1) |
- Confirmation of previous minutes
- Financial performance review — Revenue, expenses, cash position, burn rate
- Compliance status update — ROC, GST, Income Tax, FEMA filings
- Share transfer/allotment approvals (if any)
- Related Party Transactions disclosure — Form MBP-1 from directors
- Directors’ interest disclosure — Annual disclosure required
- ESOP grants/vesting approvals (if applicable)
- Key business decisions — New contracts, partnerships, hiring
- Ratification of routine matters
Every set of minutes must include:
1. Name of company, date, time, and venue of meeting
2. Names of directors present and absent (with leave of absence note)
3. Name of Company Secretary / person taking minutes
4. Each agenda item with discussion summary
5. Resolutions passed with proposer and seconder names
6. Voting details (for/against/abstain) if applicable
7. Time of adjournment
8. Signature of Chairman with date
| Matter | Section |
|---|---|
| Approval of Annual Financial Statements | Section 134(1) |
| Approval of Board’s Report | Section 134(1) |
| Approval of Prospectus | Section 23 |
| Approval of Merger/Amalgamation matters | Section 230-232 |
Understanding penalties helps prioritize compliances. Here is a comprehensive penalty reference:
| Filing | Due Date | Penalty for Delay | Max Penalty |
|---|---|---|---|
| AOC-4 (Financial Statements) | 30 days of AGM | Rs. 100/day | No maximum |
| MGT-7 (Annual Return) | 60 days of AGM | Rs. 100/day | No maximum |
| ADT-1 (Auditor Appointment) | 15 days of AGM | Rs. 300/day | Rs. 12 lakhs |
| DIR-3 KYC | 30 Sept each year | Rs. 5,000 + DIN deactivation | DIN blocked |
| INC-20A (Commencement) | 180 days of incorp. | Rs. 50,000 | Strike off risk |
| DPT-3 | 30 June each year | Rs. 1 Cr or 3x deposit | Imprisonment |
| MSME-1 | Half-yearly | Rs. 20,000 | Rs. 5 lakhs |
| PAS-3 (Share Allotment) | 30 days of allotment | Rs. 500/day | Rs. 5 lakhs |
| MGT-14 (Special Resolutions) | 30 days of passing | Rs. 100/day | No maximum |
| Default | Penalty | Section |
|---|---|---|
| Late filing of ITR (income up to Rs. 5L) | Rs. 1,000 | 234F |
| Late filing of ITR (income above Rs. 5L) | Rs. 5,000 / Rs. 10,000 | 234F |
| Late deposit of TDS | 1.5% per month | 201(1A) |
| Late filing of TDS return | Rs. 200/day (max = TDS amount) | 234E |
| Non-deduction of TDS | Equal to TDS amount | 271C |
| Late/non-filing of Tax Audit | 0.5% of turnover (max Rs. 1.5L) | 271B |
| Default | Penalty |
|---|---|
| Late filing of GSTR-3B | Rs. 50/day (Rs. 20/day for Nil return) |
| Late filing of GSTR-1 | Rs. 50/day (Rs. 20/day for Nil return) |
| Late filing of GSTR-9 (Annual) | Rs. 200/day (max 0.5% of turnover) |
| Non-registration despite liability | 100% of tax due or Rs. 10,000 (higher) |
| Wrong ITC claim | 100% of ITC wrongly claimed + interest |
General Penalty: Up to 3 times the sum involved in the contravention. Where the amount is not quantifiable, penalty up to Rs. 2 lakhs, plus Rs. 5,000 per day of continuing violation.
Compounding: Contraventions can be compounded by RBI (up to Rs. 3 Cr) or by the Adjudicating Authority/Court (above Rs. 3 Cr). Compounding fee is in addition to any other liability.
Use this decision guide to determine whether your startup needs to engage a Company Secretary:
YES → Mandatory full-time CS appointment (Section 203)
NO → Continue to next question
YES → Mandatory full-time CS appointment (Section 203)
NO → Continue to next question
YES → Strongly recommended (CS certification required for FEMA filings)
NO → Continue to next question
YES → Essential for due diligence, drafting, and secretarial audit
NO → Continue to next question
YES → Engage a Practising Company Secretary (PCS) on retainer
NO → Continue to next question
YES → Engage a PCS for project-based compliance filings
NO → Consult a PCS for an initial compliance health check
What a Practising Company Secretary does for your startup:
• ROC compliance — All annual and event-based filings
• Board meeting management — Notices, agendas, minutes, resolutions
• FEMA compliance — FC-GPR, Advance Reporting, FLA Returns
• Due diligence support — Compliance certificates for investors
• ESOP scheme — Design, documentation, and administration
• Corporate restructuring — Mergers, demergers, conversions
• Secretarial audit — Annual compliance certification
| Scenario | Typical Cost |
|---|---|
| Annual PCS retainer for a startup | Rs. 30,000 – Rs. 1,00,000/year |
| Penalty for missing AOC-4 by 6 months | Rs. 18,000+ |
| Penalty for missing DIR-3 KYC | Rs. 5,000 per director |
| FEMA compounding for late FC-GPR | Rs. 50,000 – Rs. 5,00,000+ |
| Due diligence failure leading to deal collapse | Priceless (loss of funding) |
About CS Sapna Malpani
Practising Company Secretary based in Bangalore, specializing in startup compliance, FEMA advisory, corporate governance, and secretarial services.
Areas of Expertise:
Startup Compliance • FEMA & FDI Advisory • ROC Filings • Board Advisory • ESOP Structuring • Due Diligence • Corporate Restructuring • Secretarial Audit
sapnamalpani.com
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CS Sapna Malpani is a Practising Company Secretary based in Bangalore, specializing in startup compliance, FEMA advisory, and corporate governance.