Start-ups are those companies which have been especially been set up under the ‘Start-up India, Stand up India’ scheme by the Prime Minister in January 2016. This is done in order to promote entrepreneurship and in order to create more jobs.
Startups are so optimistic about the payoff, they usually ignore the shrapnel. But you can and should be taking advantage of the law every chance you get. Paying attention to the risks of legal negligence or non-compliance can literally make or save your start-up. It’s happened before and it’ll happen again. Every form of a company like Private Limited Company, Public Company and Government Company is required to fulfill certain annual compliances requirements. Likewise, startups are also required to fulfill these annual compliance requirements.
Some of the annual compliances to be followed by every startup (irrespective of their nature) are as follows-
- Appointment of Auditor- Every start up is required to appoint a statuary auditor and file ADT-1 within 30 days of its incorporation in the first board meeting held. Further, subsequent auditors shall be appointed for 5 years in annual general meeting.
- Holding Boards Meeting- First board meeting shall be conducted within 30 days of incorporation and minimum 2 meetings shall be conducted in a calendar year. Also, a minimum gap of 90 days should be there between two meetings.
- Holding Annual General Meeting- Every startup is required to one annual general meeting in one year and the maximum gap between 2 annual general meetings shall not exceed 15 months.
Filing electronic forms- Every startup is required to file following electronic forms annually-
- MGT 7- Every startup is required to fill this form electronically within 60 days of holding of Annual general meeting for the period from 1st April to 31st March.
- AOC 4- Within 30 days from the conclusion of annual general meeting form AOC-4 containing the financial statement that is Balance Sheet along with Statement of Profit and Loss Account and Directors’ Report shall be filed by every startup.
- Form MBP 1- Through MBP-1 every director of the company in the first meeting of the Board of Director in each Financial Year needs to disclose his interest in other entities. Further, fresh MBP-1 shall be filed whenever there is a change in his interest from the earlier given MBP-1.
- Form DIR 8- Through form DIR-8 the director of the startups in each financial year are required to file with the company disclosure of non- disqualification.
- Directors’ Report- A Directors report signed by the chairperson and authorized by the board shall be filed by every startup.
- Statuary registers and books of accounts- Every start up is required to maintain certain statuary registers. Also, it is required to maintain the minute book of the board meeting and annual general meeting. In addition to this, books of accounts and register of directors attendance shall be submitted to the registrar.