Post Incorporation

Checklist for a New Venture planning to be Fully Compliant

Guess what is the next set of action items in the Checklist for a new Startup planning to be a fully compliant? The answer is – Legal, Accounting, and Compliance work that a startup has to carry within 6 months of its inception. In this article, we are going to be helping you, entrepreneurs, to plan accordingly to win the battle of becoming a successfully compliant startup. This blog precisely will act as a checklist for a new venture planning to be a fully compliant one.

 

LEGAL WORK

  1. Obtain director identification number (DIN) online from the Ministry of Corporate Affairs portal (National). It will take 1 day and cost of INR 100.
  2. Obtain digital signature certificate online from a private agency authorized by the Ministry of Corporate Affairs (National). It will take 3 days and the cost of INR 1,500.
  3. Reserve the company name online with the Registrar of Companies (ROC) (National). It will take 2 days and INR 500 as cost.
  4. Stamp the company documents at the State Treasury (State) or authorized bank (Private). it will take 1 day and INR 1,300 (INR 200 for MOA + INR 1,000 for AOA for every INR 500,000 of share capital or part thereof + INR 100 for stamp paper for declaration Form 1)
  5. Get the Certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs (National). It will take 5 days and INR 14,133.
  6. Make a seal (Private. It will take 1 day and the cost of INR 350 (cost depends on the number of seals required and the time period for delivery).
  7. Obtain a Permanent Account Number (PAN) from an authorized franchise or agent appointed by the National Securities Depository Ltd. (NSDL) or the Unit Trust of India (UTI) Investors Services Ltd., as outsourced by the Income Tax Department (National). It will take 7 days and the cost of INR 67 (INR 60 application fee + 12.36% service tax + INR 5 for an application form, if not downloaded).
  8. Obtain a Tax Account Number (TAN) for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department. It will take 7 days and the cost of INR 57 (INR 50 application fee + 12.36% service tax).
  9. Register with the Office of Inspector, Shops, and Establishment Act (State/Municipal). It will take 2 days and the cost of INR 6,500 (INR 2000 + 3 times registration fee for trade refuse charges).
  10. Register for Value-Added Tax (VAT) at the Commercial Tax Office (State). It may take 12 days and the cost of around INR 5,100 (registration fee INR 5000 + stamp duty INR 100).
  11. Register for Profession Tax at the Profession Tax Office (State). The time period is 2 days and No cost.
  12. Register with Employees’ Provident Fund Organization (National). The time period is 12 days and No cost.
  13. Register for medical insurance at the regional office of the Employees’ State Insurance Corporation (National)

 

 

COMPLIANCE WORK

  • Bookkeeping services.
  • Tax return filing (GST,TDS)
  • Quarterly advance tax
  • Payroll services( up to 15 employees)
  • Company returns and ROC compliances
  • Maintenance of statutory records
  • One year free access to ClearTax GST Biz Software (for invoicing).

 


ACCOUNTING WORK

  1. Open a Bank Account – Having a separate bank account keeps records distinct and will make life easier come tax time.
  1. Track Your Expenses – It’s a crucial step that allows you to monitor the growth of your business, build financial statements, etc.
  1. Develop a Bookkeeping System – Bookkeeping is the day-to-day process of recording transactions, categorizing them, and reconciling bank statements.
  1. Set up a Payroll System – Maybe you’ll hire a part-time employee to help you out, or a freelancer to design your logo.  For employees, you’ll need to decide on a payroll schedule and ensure that you’re withholding the correct taxes; there are lots of services that can help with this. 
  1. Investigate Import Tax – When importing products, you’ll likely be subject to taxes and duties. These are fees that your country imposes on incoming goods. Take the time to learn about importing goods.

 

  1. Determine How You’ll Get Paid – When sales start rolling in, you’ll need a way to accept the payments. 
  1. Establish Sales Tax Procedures – The world of eCommerce has shaken up sales tax regulations and they are admittedly a bit confusing due to location issues. 
  1. Determine Your Tax Obligations – If you’re self-employed (sole proprietorship, LLC, partnership), you’ll claim business income on your personal tax return. Corporations, on the other hand, are separate tax entities and are taxed independently from owners. 
  1. Calculate Gross Margin – You need to know the costs incurred to produce your product. 
  1. Constantly Re-evaluate Your Methods – As you keep growing, it’s good to continually reassess the amount of time you’re spending on your books, and how much that time is costing your business. 

Start-up process entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk! ?

 

 

 

 

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