Complying with various laws haunts every start-up. In general, Compliance means following a rule, such as a term, policy and standard or law. Regulative compliance explains the goal that organisations strive to achieve and the actions are taken to comply with relevant rules and regulations.
The primary thing after the establishment of a business entity is to follow up with compliances. Hence, before company registration, you should know whether you would be able to comply with its compliances or not. And for the same, you need to find out the assets of the business entity you have chosen to register with. So, before moving ahead, it’s necessary to discuss the right type of business structure.
There are different types of business structure, and each one has different compliance. However, if you’re a start-up, then according to the professionals’ advice, you must opt for Pvt Ltd Company Registration. It is because compliances of a private limited company are less and simple to follow as related to other forms of business.
Many start-ups often neglect the importance of compliances because they are not aware of the present laws. Ignorance may not be bliss in such matters as it affects a start-up’s viability and a potential investor.As the Indian start-ups are evolving, the need for complying with rules and regulations is also becoming necessary.
Here is a list of Compliance-
Opening A Bank Account.
This is the first, and most accessible of all compliances. To be able to function, the very first requirement is to open a ‘Current’ Bank Account in your company’s name. For opening an account, you will need PAN Card registered in the company name & a copy of a Board Resolution approving for opening an account in the name of the company.
Deposition of Share Capital in The Bank Account.
Within 60 days of the Company Incorporation, every shareholder is needed to deposit their contribution to the bank account. It is necessary that such a transfer is made through the personal accounts of the shareholders to the company’s bank account. It is necessary that every shareholder who possesses share worth Rs. 20 thousand or more, transfer the money only by cheque or via internet transaction. Although, the shareholders holding lesser than Rs. Twenty thousand can deposit money through cash.
It is suggested that such transfer is done by a cheque or an online transfer so that the amount is estimated for.
GST registration is necessary for all start-ups to avail several benefits under the GST Scheme. It is important that if your start-up is supplying goods outside the State, you are obliged to register.
Filing Income Tax Return.
Income tax returns are reports provided by the company includes the details of the company’s incomes, aspects of tax inclined to be paid and any claims or refunds to be credited by the government. Filing of an income tax return is necessary even if the company has made no notable income or no income at all in. A case of non-compliance can entice a penalty.
Issuance of Share Certificates to Shareholders.
A share certificate is a proof of the stake any shareholder possesses in the organisation. It is important for a company to issue share certificates within two months of its establishment. Non-compliance can append penalty up to from Rs. 50,000 to Rs. 5,00,000.
Declaration of Shareholding by The Directors.
In the first board meeting after the establishment of the company, the directors are obligated to give full disclosure of their status in the business. Every director is needed to provide state ownership in the company. He is also expected to disclose if he handles any such position in any other company. This is one of the mandatory compliances as it helps in bringing in the clarity of decisions and assures those third-party agreements are appropriately met.
Maintenance of Legal Registers.
A company is expected to keep a record of Times of Meetings and several statutory registers like the register of members, directors, etc., which require to be filed with the ROC. These registers act as a certificate of evidence for the judgments taken up by the company.
Annual Return Filing.
In a current state, the Ministry of Corporate Affairs has shut down 1 lakh companies for non-compliance. As per Companies Act, 2013, every corporation is expected to file its annual returns with the ROC within two months of the Annual General Meeting.
Apart from these compliances, there is a range of agreements which need to keep in mind. These are compliances such as trademark registration, the procedure for maintaining the books of accounts, the process to be followed in an annual general meeting, etc. It is essential that all of these legal compliances are duly met.
Assuredly, there are many compliances that you need to follow while operating a business. But you are supposed to follow all of them rigidly, or you would have to pay substantial penalties in case of non-compliance.However, the compliance requirement depends upon business nature, service or product, the volume of turnover, and many more.If you face any difficulty handling the compliances of your company, you can contact Afleo.com.