Compliances are the legal requirement required for any startup. Entrepreneurs aim to build strong ventures and focus on its potential customer base, its USP and market situation. Entrepreneurs shall hire or outsource resources who have good knowledge of the laws of land and business.
Eligibility:
Pvt. Ltd. or LLP or Partnership Firm:
To be eligible for registration of Startup then the company shall be registered as Pvt. Ltd. Co. or any kind of Partnership.
Not Older than 5 years:
Any business incorporated in India in the past 5 years from the effective date of the policy from the initiation of the policy, such corporations shall be eligible to apply for a startup.
Annual Turnover:
Annual Turnover shall be Rs 25 crores in any of the past 5 years since its incorporation
New Product or New Service:
Startups developing new products or service must be working toward innovation and development whose aim is to commercialise new product
Approval of DIPP:
Start-ups shall obtain approval from the Inter-Ministerial Board set up by the Department of Industrial Policy and Promotion (DIPP). To obtain approval of DIPP, a start-up should submit an application to validate the innovative nature of business
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COMPLIANCES UNDER LABOUR LAW
Labour Law:
Labour Laws generally deal with compliances under Minimum Wages Act, Industrial Disputes etc. Startups often overlook the sexual harassment of Women at their workplace. In the event of non-compliance, either fine upto Rs. 50,000/- (Rupees Fifty Thousand) is imposed or licence can also be cancelled.
Companies Act 2013:
A startup that is incorporated under The Companies Act 2013 must confirm with the provisions of the Companies Act 2013. It regulates the appointment of directors, manner of other board meetings. Business is expected to comply with the rules and regulations applicable to them.
Income Tax Act, 1961:
Every business shall comply with filing income tax returns and procedural requirements. In case of any discrepancy, you can appeal to higher authorities.
GST Compliance:
Startups having less than Rs. 40 Lakhs per annum turnover are exempted by law to pay GST. This helps small businesses to grow at a faster pace.
There are various other laws in India which need to be followed to make the entity a profitable organisation.
Compliance with relevant laws is vital for the successful setup and efficient rise of startups. Compliance with laws signifies that no penalty is imposed on a growing startup at any point in its growth and helps it stay out of any other possible difficulties.
Lead India helps you to guide and comply with the laws through expert advocates.
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