To run a startup is exciting and joyful, but to stay compliant is also important to build the element of credibility, avoid penalties and ensure long-term stability. Whether you are a Private Limited Company, LLP, Partnership or OPC, certain annual compliances are essential under Indian laws. Various new founders overlook these things due to a lack of awareness or focus on day-to-day operations, which usually leads to legal notices, fines or disqualification of directors.
This blog will provide a complete and accurate Annual Compliance Checklist for Startups so that you can confidently manage and operate your various legal responsibilities and keep your business safe and compliant throughout the year.
Why Annual Compliance Matters for Startups?
Startups usually prioritise the elements of funding, product development, hiring and marketing. However, non-compliance can disrupt all these efforts. Here’s why compliance is essential:
- It helps to avoid various heavy penalties under the Companies Act, LLP Act, Income Tax Act, GST laws and labour laws.
- It builds trust and confidence with investors, banks and stakeholders.
- Helps to maintain business legitimacy and also corporate governance.
- Smooth funding and valuation, as investors thoroughly check the compliance status during due diligence.
- It also ensures the element of transparency and accountability within the organisation.
With this rough understanding, let’s move to the detailed checklist.
Annual Compliance Checklist for Startups
Below is a category-wise list of various annual compliances applicable to most Indian startups. It depends on your business structure; the exact requirements may vary.
1. Company Law Compliance (For Private Limited and OPC)
Startups registered as companies under the Companies Act, 2013, must follow mandatory annual filings:
Board Meetings
- Minimum two board meetings in a year for OPC and four for Private Limited Companies.
- Maintain minutes and attendance registers.
Annual General Meeting (AGM)
- Conduct AGMs within six months of the financial year-end for Private Limited Companies.
- OPCs are exempt from holding AGMs, but filings remain mandatory.
Filing of Financial Statements – Form AOC-4
- Must be filed within 30 days of AGM.
- Includes balance sheet, profit and loss account, directors’ report and auditor’s report.
Filing of Annual Return – Form MGT-7 / MGT-7A
- Must be filed within 60 days of AGM.
- Contains shareholding details, management information and compliance status.
Auditor Appointment – Form ADT-1
- Every company must appoint or reappoint an auditor for the next five years.
- ADT-1 filed within 15 days of AGM.
Directors’ Disclosure – Form MBP-1 and DIR-8
- Directors must disclose interests and confirm eligibility annually.
Maintenance of Statutory Registers
- Register of directors, shares, charges, loans, contracts, etc.
2. LLP Annual Compliances
For startups registered as Limited Liability Partnerships:
Filing of Annual Return – Form 11
- Due by 30th May every year.
- Contains partner details and changes during the year.
Filing of Financial Statements – Form 8
- Due by 30th October each year.
- Covers Statement of Accounts and Solvency.
LLP Agreement Updates
- Any amendment must be filed in Form 3 within 30 days.
3. Income Tax Compliance for Startups
All startups, whether Company, LLP, Partnership or Proprietorship, must follow these:
Annual Income Tax Return Filing
- Companies and LLPs: File ITR-5 or ITR-6 by 31 October.
- Partnership and Proprietorship: File ITR-3 before 31 July (if no audit).
Tax Audit (If Applicable)
Mandatory if:
- Turnover exceeds 10 crores for businesses, or
- Professional income exceeds 50 lakhs.
Maintenance of Books of Accounts
- Mandatory under the Income Tax Act.
- Startups receiving funding must maintain strong books for due diligence.
TDS Returns
- File quarterly TDS returns in Form 24Q or 26Q.
- Issue TDS certificates (Form 16 and 16A) timely.
4. GST Annual Compliances
If your startup is registered under GST:
Monthly or Quarterly GST Returns
- GSTR-1 for sales
- GSTR-3B for summary return
GST Annual Return – GSTR-9
- Mandatory for taxpayers above the prescribed turnover threshold.
- Due by 31 December following the financial year.
GST Audit (If Applicable)
- Applicable if turnover crosses the prescribed limits.
Reconciliation of GST Data
- Reconcile GSTR-2A or 2B with purchase records annually.
5. ROC Event-Based Compliance
Besides annual filings, startups must comply with event-based filings whenever a change occurs:
- Change in directors – DIR-12
- Share allotment – PAS-3
- Change in registered office – INC-22
- Change in authorised capital – SH-7
- Creation or modification of charge – CHG-1
Not filing event-based compliance often results in penalties during due diligence or funding rounds.
6. Labour Law Compliance
Startups hiring employees must follow labour regulations, including:
PF Registration and Annual Returns
- Mandatory for organisations with 20 or more employees.
- Monthly contributions and annual filing are required.
ESIC Registration
- Mandatory if employees earn below the specified wage limit.
Professional Tax (State-wise)
- Deduct and deposit professional tax monthly or annually, depending on state rules.
Shops and Establishment Act
- Maintain and manage registers, attendance records, and salary slips.
- Renew license annually as per the state-specific rules…!
Labour Welfare Fund
- Deposit contributions yearly in applicable states.
7. Startup India and DPIIT Compliances (If Applicable)
Startups registered under DPIIT must also:
File Self-Declaration Compliances
- Report annual progress and operations.
Apply for Tax Exemptions
- Section 80-IAC tax-holiday eligibility.
- Angel tax exemption under Section 56(2)(viib).
Update Startup Recognition Details
- Any change or modification in directors, address or activities must be updated on the portal.
8. Intellectual Property (IPR) Compliance
Startups relying on innovative products or branding must ensure:
- Trademark renewal every 10 years.
- Patent renewal annually (from the third year onward).
- Copyright registration for creative assets.
- Monitoring IP infringements regularly.
9. Other Important Annual Tasks for Startups
- Financial Audits: Statutory audit for companies and LLPs is mandatory every year.
- Internal Compliance Review: Review agreements, HR policies, vendor contracts and data protection practices.
- Data Privacy and Cybersecurity Checks: Mandatory for tech startups handling personal data.
- Founders’ Agreements and ESOP Records: Ensure proper documentation for investors and employees.
Conclusion
Annual compliance is not merely a legal obligation. It is an investment in the long-term credibility, transparency and operational stability of your startup. By staying compliant, you can easily avoid various penalties, maintain investor trust and confidence and also ensure that your business runs in a smooth manner. Whether you operate a Private Limited Company, LLP or any other small business, following this annual compliance checklist keeps your startup legally sound, confident and future-ready.
