Startup Compliance Checklist India: 10 Must-Dos in Your First Year
A practical startup compliance checklist for India: 10 must-dos in your first year, from incorporation and INC-20A to GST, TDS, auditor appointment and annual filings.
Most founders spend their first months on product, funding and customers, and the legal paperwork quietly piles up in the background. A good startup compliance checklist for India exists to stop that pile from becoming penalties. In the first year, a newly incorporated company faces a surprising number of deadlines: a declaration to commence business, appointment of its first auditor, a first board meeting, tax registrations, monthly and quarterly tax payments, and then annual filings with the Registrar of Companies.
Missing any of them can lead to late fees, director disqualification risk in serious cases, or trouble raising money, because investors routinely check compliance during due diligence. This guide sets out the ten must-dos for your first year, explains the timelines in plain language, and shows how to organise them into a simple calendar. The details differ for LLPs, one person companies and partnerships, but the discipline is the same: know what is due, who owns it, and when.
Why Does a Startup Compliance Checklist Matter in the First Year?
A startup compliance checklist matters because the first year sets the compliance record that investors, banks and regulators will look at later, and many first-year deadlines are triggered automatically by incorporation rather than by business activity. Late filings are usually avoidable, but the penalties are not.
Compliance obligations begin on the day of incorporation even if the company has no revenue. A company must hold its first board meeting, appoint an auditor, keep statutory registers, maintain books of accounts and file annual returns whether or not it has earned a rupee. Tax rules add their own layer, covering registrations, deductions at source and advance tax. Founders who treat compliance as a quarterly routine, managed alongside accounting and payroll, find it much lighter than those who deal with it only when a notice arrives. If you are still choosing a vehicle, our pages on private limited company and limited liability partnership setup explain the options.
What Are the 10 Must-Dos in Your First Year as a Startup in India?
The ten must-dos are choosing and completing incorporation correctly, setting up tax identities and a bank account, filing the commencement declaration, appointing the first auditor, registering under GST and local laws where applicable, considering DPIIT recognition, building accounting and payroll discipline, meeting TDS and advance tax deadlines, completing board and annual filings, and protecting your intellectual property and investor documents.
Choose the Right Structure and Incorporate Properly.
Decide between a private limited company, LLP, one person company or partnership based on funding plans, liability, taxation and the number of founders. Venture investors generally prefer private limited companies. Once incorporated, collect the certificate of incorporation, MOA, AOA and PAN, and store the founders' DIN and digital signature details safely.
Obtain PAN, TAN and Open the Bank Account.
The PAN is issued with incorporation, while the TAN must be applied for separately before you deduct or collect any tax. Open a current account in the company's name and have each shareholder deposit their subscription money there, because the commencement declaration depends on proof that shares have been paid for.
File the Commencement of Business Declaration.
Companies with share capital must file Form INC-20A within 180 days of incorporation, confirming that subscribers have paid for their shares. Failure can attract penalties and, if the default continues, the possibility of the company being struck off. See our commencement of business service.
Hold the First Board Meeting and Appoint the First Auditor.
The first board meeting must be held within 30 days of incorporation. The Board can appoint the first statutory auditor within 30 days of incorporation, and Form ADT-1 is then filed within 15 days of appointment. If the Board misses its window, the members must make the appointment at a general meeting. Our ADT-1 auditor appointment page explains the process.
Register for GST and Local Business Licences.
GST registration is required once aggregate turnover crosses the applicable threshold, which is Rs 40 lakh for goods and Rs 20 lakh for services in most states, lower in special category states, and it is compulsory regardless of turnover in cases such as interstate supply of goods or selling through e-commerce operators, subject to exemptions. Also check state-level requirements such as the shop act registration and professional tax registration. Start with GST registration if you expect to cross the limit.
Consider DPIIT Startup Recognition and Udyam Registration.
Recognition under the Startup India scheme is optional but can unlock tax benefits and faster compliance for eligible entities, subject to conditions on age, turnover and the innovative nature of the business. Separately, Udyam registration can help with MSME benefits. Read about Startup India and the section 80-IAC tax exemption before applying.
Set Up Proper Accounting, Bookkeeping and Payroll.
Maintain books of accounts from the first transaction, reconcile bank statements monthly, and keep invoices and expense proofs. Run salaries through a defined payroll process with the right deductions and filings, and register for provident fund or ESI once you cross the relevant headcount thresholds. Our bookkeeping services and payroll management teams can handle this.
Meet TDS and Advance Tax Deadlines.
Deduct tax at source on salaries, professional fees, rent and other payments covered by the law, deposit it by the 7th of the following month, and file quarterly TDS returns by 31 July, 31 October, 31 January and 31 May. A company with expected tax liability above the threshold also pays advance tax in instalments on 15 June, 15 September, 15 December and 15 March. See TDS return filing.
Complete Board Meetings, the AGM and Annual ROC Filings.
Hold the prescribed board meetings through the year, convene the first annual general meeting within nine months of the end of the first financial year, and then file Form AOC-4 within 30 days and Form MGT-7 (or MGT-7A for eligible small companies and one person companies) within 60 days of the AGM. Keep minutes and registers up to date. See AOC-4 and MGT-7.
Protect IP and Document Founder and Investor Arrangements.
Register your brand as a trademark, ensure employees and contractors assign intellectual property to the company, and put a founders' agreement in place covering roles, vesting and exit. If you take foreign investment, observe FEMA reporting timelines for share allotment. Our trademark registration team can assist.
How Should You Plan Your First-Year Compliance Calendar?
You should plan the calendar by mapping each obligation to the quarter in which it falls, assigning an owner, and setting reminders a week before every deadline. A simple shared calendar is usually enough for an early-stage team.
Month 1
Focus on the bank account, the first board meeting, the auditor appointment and the TAN.
By Month 3
Complete tax registrations, set up accounting and payroll, and decide on GST and DPIIT.
Through the Year
Run the monthly cycle of salary processing, TDS deposit and bookkeeping reconciliation, and the quarterly cycle of TDS returns and advance tax.
After Year-End
Prepare financial statements, get them audited, hold the AGM and file the annual forms.
Before the six-month mark, check that the INC-20A declaration has been filed. Where growth is fast, a retained adviser who sees all of this in one view is more reliable than ad hoc help; see our company compliance overview and CFO services. The table below pulls the key timelines from this guide into one place.
← Scroll to see the full table →
| Obligation | Timeline | Form / Note |
|---|---|---|
| First board meeting | Within 30 days of incorporation | Keep minutes and statutory registers |
| First auditor appointment | By the Board within 30 days of incorporation; otherwise by members at a general meeting | Form ADT-1 within 15 days of appointment |
| Commencement declaration | Within 180 days of incorporation | Form INC-20A |
| TDS deposit | By the 7th of the following month | Needs a TAN |
| Quarterly TDS returns | 31 July, 31 October, 31 January and 31 May | See TDS return filing |
| Advance tax | 15 June, 15 September, 15 December and 15 March | If expected tax liability is above the threshold |
| First AGM | Within nine months of the end of the first financial year | Financial statements audited first |
| Annual ROC filings | AOC-4 within 30 days and MGT-7 within 60 days of the AGM | MGT-7A for eligible small companies and one person companies |
How Has Startup Compliance in India Evolved Over the Years?
Startup compliance in India has moved from a slow, paper-heavy, licence-driven process before 1991 to an online, largely standardised system, and recent reforms have focused on making it easier for new businesses to start and stay compliant.
1991
Licensing Controls and the Companies Act, 1956
Starting a business meant navigating licensing controls and the Companies Act, 1956, with limited digital support and long approval times.
Liberalisation and Gradual Simplification
Reforms after 1991 opened the economy and gradually simplified rules, but company formation still required physical paperwork for years.
The Companies Act, 2013
The Act modernised governance, introduced the one person company and brought in requirements such as an annual board meeting calendar and mandatory auditor rotation for certain companies.
17
Startup India and GST
The Startup India initiative launched in 2016 created the DPIIT recognition framework, and the GST regime from 2017 unified indirect taxes across the country.
SPICe+, Commencement Declaration and Decriminalisation
Later reforms digitised incorporation through SPICe+, added the commencement declaration for new companies, and decriminalised several minor offences. Official forms, filings and company records are available on the Ministry of Corporate Affairs portal.
What Are the Most Common Compliance Mistakes Startups Make?
The most common mistakes are missing the INC-20A deadline, forgetting to appoint the auditor on time, deducting TDS but depositing it late, ignoring GST thresholds, and treating annual ROC filings as optional when the company has no revenue. All of them are preventable with a calendar.
Founders also tend to mix personal and business spending, which makes bookkeeping and audits harder, and sometimes hire contractors without proper agreements, leaving ownership of code or designs unclear. Another recurring problem is delayed employee registrations, since provident fund, ESI and professional tax apply once certain thresholds are crossed, and companies with ten or more employees may also need to set up an Internal Committee under the law on workplace harassment. Some founders overlook the interaction between statutory deadlines and funding rounds, and discover late that a foreign investment filing was due within a short period of share allotment. If you have already missed a deadline, act quickly: late fees generally increase with time, and some defaults can be regularised more cheaply early.
Frequently Asked Questions About Startup Compliance in India
Which compliances are mandatory for a startup in its first year?
A newly incorporated company must hold its first board meeting, appoint its first auditor, file Form INC-20A for commencement of business, maintain books and registers, obtain a TAN, and meet tax and annual filing deadlines. GST, provident fund, ESI and professional tax apply only where their thresholds or conditions are met.
What is Form INC-20A and when is it due?
Form INC-20A is the declaration that every subscriber to the company's shares has paid the amount due. A company with share capital must file it within 180 days of incorporation, before it begins business or exercises borrowing powers. Failure can lead to penalties and, if the default continues, the possibility of striking off.
Do I need to file returns if my startup has no revenue?
Yes. Annual filings with the Registrar of Companies, including financial statements and the annual return, are required irrespective of revenue. A company must also file its income tax return and, if applicable, TDS returns. Skipping them can result in additional fees and director disqualification risk.
Is DPIIT recognition compulsory for startups?
No, it is optional. However, recognition can give eligible startups access to benefits such as tax exemptions and simplified compliance, subject to conditions on age, turnover and business model. Companies that plan to use these benefits should apply early and confirm eligibility with an adviser.
When does a startup need to register for GST?
A business must register once its aggregate turnover crosses the applicable threshold, generally Rs 40 lakh for goods and Rs 20 lakh for services, with lower limits in special category states. Registration is compulsory regardless of turnover in cases such as interstate supply of goods or selling through e-commerce platforms, subject to exemptions.
Should a startup hire a Chartered Accountant from the first year?
It is strongly advisable. A Chartered Accountant can help choose the right structure, set up books, manage tax deductions and filings, and keep the ROC calendar on track. Early advice is usually cheaper than correcting mistakes later and builds the compliance record that investors expect.
CA Nainit Savla
CA Nainit Savla is a Chartered Accountant practice with 15+ years of experience, serving individuals, NRIs, startups and businesses in Mumbai and Hyderabad with income tax, GST, audit and compliance services.
Need Help With Your Startup's First-Year Compliance?
Setting up the right processes in the first year saves money, time and stress later. CA Nainit Savla helps founders with incorporation, registrations, accounting, tax compliance and ROC filings through our startup registration and compliance services.