Do you intend to set up a startup but worried about several laws to follow? In case your answer is yes then we can help you with all the compliances regarding start up.
With regard to start up, money is precious and it won’t be a good idea to waste some currencies as penalties towards non-compliance. So, follow rules and regulations to bypass hurdles.
The various laws you must follow:
- Goods and Services Act (GST)
- Companies Act
- Labor and mercantile laws
- Income Tax Act
After getting your startup registered as an Indian company, it is essential to follow the provisions specified in the Companies Act, 2013.
List of major things one should not miss with regard to startup:
- Accounts filing with ROC (Form AOC-04)
- Board meetings
- Statutory Audit
- Annual General Meeting (AGM)
- Annual Returns with ROC (Form MGT-07)
These happen to be some chief Startup compliances that individuals must follow but apart from these there are some more forms that differ. To give an example, if you have taken a bank loan, you must file the CHG-01 form with ROC to get your charge registered. There exists a penalty for the late filing of the statutory forms.
It is essential for every company to get the turnover audited by a certified CA every year. Even if there had been no transaction in a year.
Filing income tax is a must
In case the startup is formed as a limited liability partnership or a proprietor company, it is mandatory to file the income tax. If the taxable income happens to exceed the exemption limit, you must file within a certain time limit. A fee is levied for filing income tax late.
Startup Checklist to follow with GST
The ideal thing about GST is that you are no longer required to pay indirect taxes. Goods and Service tax is an easy and convenient tax regime. You should register under GST in case of a turnover of over Rs 20 Lakhs annually. If you happen to hail from any special states, you must get registered if the turnover exceeds Rs 10 Lakhs annually. In case you happen to be an online seller, GST compliance is mandatory.
In short, you must follow below-mentioned Startup compliances for GST:
Annual GST in case the annual turnover goes beyond Rs 2 Crores.
Registration if you go beyond exempted turnover of Rs. 20/10 lakhs
Monthly returns in case the turnover exceeds Rs 1.5 Crores or else quarterly returns
Annual returns
EWAY bill for transportation if the value of invoice crosses Rs 50 thousand for transportations of the goods.
Startup checklist to follow with labor laws
There are three chief laws applicable to a company on the basis of the number of employees working under you:
Provident fund
Provident fund applies to you if there are over 20 people working under you. You have to register under PF and file the returns. Each month, a part of employees’ salaries must be cut and paid to the government together with the share of the employer. Then, a return must be filed. Do not ignore PF as it is a critical law to be followed.
ESI
Employees’ State Insurance happens to be a health insurance and social security scheme meant for the workers in India. This fund is handled by the State Insurance Corporation for employees as per the ESI ACT 1948. The ESI law functions akin to the PF law.
Profession Tax
For certain states, it is essential to file the profession tax. For example, in states like Karnataka, in case you pay over Rs 15,000 salary then it is a must to subtract Rs 200 each month and pay the same to the government.
It is a must to follow these laws so that your company does not face any legal hurdles going forward. Hence, ignore this at your peril.
Who we are?
We are one of the leading business management consultants in India providing several services such as Proprietorship Firm Registration and Start up Compliance Package and Company Compliance Package. We also offer a host of services in tax administration and procedure expansion to efficiently manage GST compliance Process. You may contact biatconsultant.com now