Step-by-step guide to company registration in India — learn about the SPICe+ process, documents, MCA fees, Startup India benefits, and annual ROC compliance with clear timelines.Step-by-step guide on company registration in India: process, documents, MCA fees, compliance, and Startup India benefits explained clearly.

01. At-a-Glance – Company Registration in India (2025)

Particulars	Details
Portal	Ministry of Corporate Affairs (MCA V3)
Key Form	SPICe+ (Part A & B)
Processing Time	7 – 10 working days
Average Cost	₹6,000 – ₹10,000 (State & Capital Dependent)
Key ROC Forms	AOC-4 • MGT-7A • DPT-3 • DIR-3 KYC
Main Benefits	Legal identity • Limited liability • Funding ease • Credibility

02. Company Registration in India

A company is a separate legal entity having its own rights and liabilities. It exists independently from its directors and shareholders, which means that the company can own property, enter into contracts, and be held responsible for its actions in its own name.

This separation provides limited liability protection to its members — ensuring that their personal assets remain safe from business debts or obligations.

03. Why We Are Doing This

To promote Tech business in India and make India a startup hub, while ensuring that companies do not face any setback or penalty due to non-compliance, which often causes a strong negative impact on the company’s growth and reputation.

We will ensure complete compliance from our end as well, since we will also be shareholders in the company. This will help in ensuring that the rights of all shareholders, including co-founders’ rights, are protected and safeguarded at all times.

04. What is a Founders’ Agreement?

05. Benefits of a Founders’ Agreement

A well-drafted Founders’ Agreement offers several advantages to startups and growing businesses. It not only protects the rights of founders but also creates a strong foundation for professional management and investor confidence.

• Transparency: The agreement brings complete transparency among all founders regarding ownership, responsibilities, and decision-making authority. Everyone knows their role and stake from the beginning, preventing future misunderstandings.
• Clear Roles and Responsibilities: It clearly defines what each founder is expected to do — whether it’s product development, finance, marketing, or compliance. This helps maintain accountability and ensures the business runs smoothly.
• Early Dispute Resolution: By outlining predefined mechanisms for resolving disagreements, it helps to resolve disputes at an early stage, saving both time and cost that could otherwise go into legal battles.
• Defined Exit Roadmap: The agreement specifies the process if a founder wants to exit the company, sell shares, or transfer ownership. This provides clarity and prevents disruption in business continuity.
• Clear Guidelines for Investments: It lays down the rules for bringing in new investors or raising funds, ensuring that existing founders’ rights are protected and that the dilution of ownership happens transparently and fairly.

06.Documents Required to Incorporate a Company in India

For Directors / Shareholders	For the Proposed Company
Aadhaar Card / Passport / Voter ID	Proposed Company Name
PAN Card	Address Proof of Registered Office – Latest Electricity Bill
Passport Size Photograph	Email ID of the Company
Address Proof – Latest Bank Statement / Electricity Bill / Gas Bill	Contact Number of the Company
Email ID	Shareholding Pattern (Ownership Division)
Mobile Number

07. What is a Startup?

A startup is a newly established business formed with an innovative idea, technology, or service that aims to solve a specific problem or meet a market need.
Startups are generally characterized by their high growth potential, scalability, and focus on innovation.
In India, a company can be recognized as a Startup under the Startup India Initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) if it meets certain eligibility criteria such as age of the entity, turnover limit, and innovation focus.

08. Documents Required for Startup Registration

Documents for the Company / LLP	Documents for Founders / Directors
Certificate of Incorporation (Company / LLP)	PAN Card
Memorandum & Articles of Association (MOA & AOA) or LLP Agreement	Aadhaar Card / Passport / Voter ID
Company PAN & TAN	Passport-size Photograph
Registered Office Proof – Latest Electricity Bill / Rent Agreement	Email ID & Mobile Number
Bank Account Details	Director Identification Number (DIN) (if available)
Business Plan / Pitch Deck (for Startup Recognition)	Digital Signature Certificate (DSC)

09. Different Types of Funding in Startups

Type of Funding	Meaning / Description	When It’s Used
1. Bootstrapping (Self-Funding)	Founders use their own savings or income to start the business.	In the initial stage, when the idea is being tested.
2. Friends & Family Funding	Capital raised from personal contacts who trust the founder.	Early stage, before approaching investors.
3. Angel Investment	High-net-worth individuals invest in exchange for equity.	Seed or early growth stage.
4. Venture Capital (VC)	Professional funds invest large amounts for rapid scaling.	After product-market fit, during expansion.
5. Seed Funding	The first formal round of funding from incubators or early investors.	Used to build prototype, hire small team.
6. Series A, B, C… Funding	Successive rounds of investment as startup grows.	A for scaling, B for market expansion, C+ for global growth.
7. Crowdfunding	Raising small amounts from many people through online platforms.	For product-based or social startups.
8. Government / Startup India Schemes	Funding or loans provided under government programs.	Ideal for DPIIT-registered startups and MSMEs.
9. Bank Loans & NBFC Finance	Traditional debt with fixed repayment terms.	For working capital or asset purchase.
10. Corporate / Strategic Investment	Established companies invest in startups for synergy or innovation.	Used for partnership or technology expansion.

10. Types of Startup Grants Available in India

Grant / Scheme	Provided By	Purpose / Benefit
1. Startup India Seed Fund Scheme (SISFS)	Department for Promotion of Industry and Internal Trade (DPIIT)	Provides up to ₹50 lakh for proof of concept, prototype development, or product trials.
2. Atal Innovation Mission (AIM)	NITI Aayog	Supports incubators and innovators with grants for R&D and innovation.
3. Biotechnology Ignition Grant (BIG)	Biotechnology Industry Research Assistance Council (BIRAC)	Offers up to ₹50 lakh to biotech startups for idea validation and early-stage research.
4. Multiplier Grant Scheme (MGS)	Ministry of Electronics & Information Technology (MeitY)	Encourages industry–academia collaboration; matching grants for R&D projects.
5. TIDE 2.0 Scheme	MeitY	Provides financial and technical support to tech startups, especially in IoT, AI, and blockchain.
6. PRISM (Promoting Innovations in Individuals, Startups and MSMEs)	Department of Scientific & Industrial Research (DSIR)	Offers funding up to ₹50 lakh for innovation and commercialization support.
7. NIDHI-EIR / NIDHI-PRAYAS	Department of Science & Technology (DST)	Provides monthly fellowship or prototype grants to early-stage innovators.
8. MSME Innovative Scheme	Ministry of MSME	Financial assistance for design, IPR, and incubation of innovative ideas.
9. SIDBI Fund of Funds for Startups (FFS)	Small Industries Development Bank of India	Invests in SEBI-registered venture funds that support startups indirectly.
10. Stand-Up India / CGTMSE Schemes	Ministry of Finance	Provides collateral-free loans and guarantees for women and SC/ST entrepreneurs.

11. Tax Benefits for Startup Registration

The Government of India offers several tax incentives to promote entrepreneurship and encourage innovation under the Startup India Initiative. These benefits reduce the financial burden on new businesses and help them focus on growth and innovation.

i. Tax Holiday (Section 80-IAC)

Eligible startups can claim a 100% tax exemption on profits for any three consecutive financial years out of the first ten years since incorporation.
This benefit is available to startups recognized by DPIIT and incorporated as a Private Limited Company or LLP.

ii. Exemption from Angel Tax (Section 56(2)(viib))

Recognized startups are exempted from the Angel Tax, which is levied on the premium received on the issue of shares.
This helps startups raise capital from investors without facing unnecessary tax implications.

iii. Capital Gains Tax Exemption (Section 54GB & 54EE)

Investors who reinvest their long-term capital gains in eligible startups or specified funds can claim exemption from capital gains tax.
This encourages individuals and companies to invest in startup ventures.

iv. Carry Forward of Losses (Section 79)

Recognized startups are allowed to carry forward and set off losses incurred in the initial years even if there is a change in shareholding, provided all original shareholders remain the same.

v. Reduced Compliance Burden

DPIIT-recognized startups enjoy simplified tax and compliance procedures, including self-certification under certain labour and environmental laws, reducing time and operational costs.

vi.. Easier Access to Government Schemes

Startups also gain access to government-funded schemes and grants, such as the Fund of Funds for Startups (FFS) and Startup India Seed Fund Scheme, supporting growth and innovation.

12. Pre-Incorporation Compliances

There is no statutory penalty if a company fails to comply with pre-incorporation formalities.
However, these are considered protective measures that help in laying a strong foundation for a successful business start.
They ensure clarity among founders, smooth execution of incorporation tasks, and avoid future disputes.

Key Pre-Incorporation Compliances:

1. Founders’ Agreement: A written agreement between founders outlining their roles, responsibilities, ownership, and rights. This ensures transparency and prevents conflicts in the future.
2. Authorising a Person to Sign Documents: One or more individuals should be authorised to sign incorporation documents and liaise with professionals or authorities on behalf of the proposed company.
3. Defining Shareholding Pattern and Capital Structure: Before filing incorporation forms, the promoters should decide how many shares each founder will hold, the authorised capital, and the ratio of ownership.
4. Registered Office and Documentation Readiness: Ensuring a valid registered office address and collecting identity and address proofs of all directors and shareholders for smooth form filing.

13. Post-Incorporation Compliances

After a company is incorporated, there are several mandatory and procedural compliances that must be completed within specific timelines to ensure smooth operation and avoid penalties. These are essential for establishing the company’s legal and operational foundation.

1. Opening of Bank Account

A current account must be opened in the company’s name to handle all business transactions. This is also required for depositing share capital and operational payments.

2. Issue of Share Certificates

Share certificates must be issued to all shareholders within 60 days from the date of incorporation, in accordance with Section 56 of the Companies Act, 2013.

3. Appointment of First Auditor (Form ADT-1)

The Board of Directors must appoint the first auditor within 30 days from incorporation. If not done, shareholders must appoint one within 90 days at an EGM.

4. Holding of First Board Meeting

The first board meeting must be held within 30 days from the date of incorporation to take note of incorporation documents, statutory registers, and initial resolutions.

5. Register Maintenance

Statutory registers such as Register of Members, Directors, and Share Transfers must be maintained at the registered office of the company.

6. DIR-3 KYC (If Applicable)

Each director must file their KYC verification through Form DIR-3 KYC annually to keep their DIN active.

7. Maintenance of Books of Accounts

The company must prepare and maintain proper books of accounts at the registered office as per Section 128 of the Act.

8. ESIC and PF Registration

Newly incorporated companies are automatically registered under EPFO and ESIC through the MCA portal. Login credentials must be activated and compliance maintained regularly.

9. Application for GST Registration

If the company’s turnover exceeds the prescribed threshold or it intends to collect GST, it must apply for GST registration within due time.

10. MSME Registration

Small and medium enterprises can apply for MSME (Udyam) registration to avail benefits like government schemes, subsidies, and easier access to credit.

11. INC-22 (Verification of Registered Office)

If the registered office address was not verified during incorporation, the company must file Form INC-22 within 30 days to confirm the address.

12. INC-20A (Commencement of Business Certificate)

Every company having share capital must file Form INC-20A within 180 days of incorporation, confirming receipt of share capital and commencement of business activities.

13. Deposit of Subscription Money

All subscribers to the Memorandum must deposit their subscription money into the company’s bank account before filing INC-20A.

14. Startup Certificate Application (If Applicable)

If eligible, the company may apply for recognition under the Startup India Scheme to avail tax exemptions, funding support, and government incentives.

14. Yearly Compliance for a Private Limited Company (with ROC Filing)

Every Private Limited Company registered under the Companies Act, 2013 must comply with annual statutory requirements and file prescribed returns with the Registrar of Companies (ROC). These compliances help maintain transparency, legal standing, and financial discipline.

1. Audit of Financial Statements

The company’s books of accounts must be audited by a Statutory Auditor every financial year in accordance with Section 139 of the Companies Act, 2013.

2. Auditor’s Report

The appointed auditor issues an Audit Report detailing the company’s financial position, compliance, and accounting accuracy.

3. Preparation of Audited Balance Sheet

After audit completion, the company prepares its final balance sheet, profit & loss statement, and other annexures for ROC filing and internal records.

4. Filing of Form AOC-4 (with ROC)

Form AOC-4 must be filed within 30 days of the AGM, containing the company’s audited financial statements and other required attachments.

5. Filing of Form MGT-7A (Annual Return)

Form MGT-7A (for small companies) or MGT-7 (for others) must be filed within 60 days of the AGM. It includes details of shareholding, directors, and company changes.

6. Filing of Form DPT-3

Form DPT-3 is filed annually to report all outstanding loans, advances, or deposits as of 31st March. The due date is 30th June every year.

7. Filing of DIR-3 KYC

Every director must complete DIR-3 KYC annually to keep their Director Identification Number (DIN) active. Non-filing leads to DIN deactivation.

8. Filing of MSME-1 (Half-Yearly)

Companies with outstanding dues to MSME vendors beyond 45 days must file MSME-1 on a half-yearly basis —

• For April to September: by 31st October
• For October to March: by 30th April
• Yearly Compliance for a Private Limited Company under Other Authorities
• Apart from ROC (Registrar of Companies) compliances, a Private Limited Company must also comply with requirements under other regulatory authorities, such as GST, PF, ESIC, and Income Tax. These ensure financial discipline and statutory transparency.

15. Other Regulatory Compliance

S.No.	Authority / Law	Compliance Type	Frequency / Due Date	Remarks / Description
1	AGM (Companies Act)	Annual General Meeting	Once every financial year	Mandatory for adopting financial statements and approving auditor appointment.
2	Income Tax Act	Filing of ITR-6	Annually (on or before 30th September)	Applicable to companies not claiming exemption under Section 11.
3	GST Act	Monthly & Annual Returns	Monthly (GSTR-3B, GSTR-1) and Annually (GSTR-9)	To report outward and inward supplies, and pay GST dues.
4	ESIC (Employees’ State Insurance)	Monthly Filing	By 15th of every month	Applicable if employee strength ≥10 and salary ≤ ₹21,000.
5	PF (Provident Fund)	Monthly Filing	By 15th of every month	Applicable to companies with 20 or more employees.
6	Professional Tax	Monthly & Annual Return	Monthly or Annually (depending on state)	Must be deducted from employees’ salaries and deposited accordingly.
7	TDS (Tax Deducted at Source)	Monthly Payment & Quarterly Return	Payment by 7th of next month; Return quarterly	Deduct TDS on salary, rent, professional fees, etc., and deposit with the government.

16. Some Other Event-Based Compliances

In addition to annual and routine filings, a company is also required to comply with certain event-based compliances under the Companies Act, 2013.
These filings arise when specific corporate events or changes occur within the company structure.

S.No.	Form / Return	Event Trigger	Description / When to File
1	BEN-1, BEN-2, BEN-3	Disclosure of Significant Beneficial Ownership	Required when any individual holds beneficial interest or control in the company beyond prescribed limits.
2	DIR-12	Change in Directorship	To be filed in case of appointment, resignation, or change in designation of any director.
3	ADT-3	Resignation of Auditor	Must be filed when a statutory auditor resigns before the completion of their term.
4	MR-1	Appointment of Managing Director / Whole-Time Director	Filed upon the appointment of key managerial personnel (MD/WTD/Manager).
5	MGT-14	Filing of Resolutions	Required for filing special resolutions or significant decisions passed by shareholders or the Board.

 17. Types of Compliance

On the basis of time and occurrence, company compliances can be divided into three main categories — Monthly, Yearly, and Event-Based Compliances.
Each type has its own timeline and purpose under corporate and tax laws.

Type of Compliance	Description	Examples
1. Monthly Compliance	These compliances are mandatory every month, regardless of business activity. The company must submit the necessary returns and payments on a regular monthly basis.	– TDS (Tax Deducted at Source) – GST Returns (GSTR-1, GSTR-3B) – ESIC and PF filings
2. Yearly Compliance	These are annual filings that every company must comply with once a year, whether or not any business activity is conducted.	– AOC-4 (Filing of Financial Statements) – MGT-7A (Annual Return) – Audit of Financial Statements – AGM (Annual General Meeting)
3. Event-Based Compliance	These compliances are required only when a specific event occurs in the company. If no such event happens, no filing is needed.	– DIR-12 (Appointment/Resignation of Directors) – ADT-3 (Auditor Resignation) – MR-1 (Appointment of Managing Director)

18. Steps to Incorporate a Company in India

The process of incorporating a company involves several structured steps under the Companies Act, 2013 and the MCA portal.
Here’s a simplified explanation of each stage:

1. Obtain Digital Signature Certificate (DSC)

The first step is to obtain a Digital Signature Certificate (DSC) for all proposed directors and subscribers.
It is required for signing electronic forms during incorporation.

2. Name Finalization

After obtaining DSC, the company must apply for name reservation through SPICe+ Part A on the MCA portal.
The name should comply with Rule 8 of the Companies (Incorporation) Rules, 2014 and must not be identical to any existing company or trademark.

3. Document Preparation for Incorporation

Before filing incorporation forms, all necessary documents must be prepared, such as:

• Identity and address proof of directors and shareholders
• Proof of registered office
• Declaration by directors and subscribers (INC-9)
• Consent to act as director (DIR-2)

4. Filing of SPICe+ Part B and Linked Forms

The next step is to file SPICe+ Part B along with the linked forms:

• MOA (INC-33) – Memorandum of Association
• AOA (INC-34) – Articles of Association
• AGILE-PRO-S (INC-35) – For GST, EPFO, ESIC, and bank account registration
• INC-9 – Declaration by directors and subscribers

5. Approval by ROC

Once all forms are successfully filed and verified, the Registrar of Companies (ROC) issues the Certificate of Incorporation (COI).
This certificate serves as conclusive proof that the company is legally incorporated and recognized under law.

19. Government Fees for Company Registration

The government fees for incorporating a company in India depend on the authorised share capital, state of registration, and type of company (Private/Public/OPC).

Common Components of Fees:

1. Filing Fees for SPICe+ forms (Part A and Part B)
2. Stamp Duty on MOA, AOA, and SPICe+ (varies by state)
3. Name Reservation Fees – ₹1,000 (SPICe+ Part A)
4. PAN and TAN Processing Fees – ₹131 combined (approx.)

Example:

• For a Private Limited Company with ₹10 lakh authorised capital, the average total cost (including MCA + stamp duty) may range between ₹6,000 to ₹8,000, depending on the state.

Being a director comes with both authority and responsibility. The role carries statutory and fiduciary obligations under the Companies Act, 2013.

Key Risks:

• Personal Liability in cases of fraud, non-compliance, or mismanagement.
• Disqualification under Section 164 for non-filing of annual returns or default in repayment.
• Penalties & Prosecution for contravention of statutory provisions.
• Reputational Damage if associated with blacklisted or struck-off companies.

21. Role and Responsibility of Directors

Directors are responsible for the overall management and governance of the company.
Their duties include:

1. Ensuring compliance with the Companies Act and other applicable laws.
2. Acting in good faith and in the best interests of the company and its stakeholders.
3. Maintaining transparency and accountability in financial matters.
4. Holding and attending board meetings to make policy decisions.
5. Ensuring timely filings and reporting to regulatory authorities (ROC, GST, Income Tax, etc.).
6. Role of Shareholders

22. Shareholders are the true owners of the company. Their rights and responsibilities include:

1. Investing capital and receiving returns in the form of dividends.
2. Voting rights in important decisions like appointment of directors, auditors, mergers, etc.
3. Right to inspect statutory registers and financial statements.
4. Right to transfer shares and participate in company meetings.

23. Measures Available to Shareholders in Case of Violation

If the rights of shareholders are violated, several legal remedies are available under the Companies Act, 2013:

1. Oppression and Mismanagement (Sections 241–242) – Shareholders can approach the NCLT for relief if the company’s affairs are being conducted in a prejudicial manner.
2. Right to Information – Shareholders may demand disclosure of financial or operational details.
3. Removal of Directors – Through a special resolution passed in a general meeting.
4. Filing Complaint to ROC or NCLT – In cases of fraud, non-filing, or illegal activities.
5. Exit through Share Sale – Shareholders can exit by selling shares to protect their interests.

24. Measures Available to Directors

If a director is involved in a case of non-compliance unknowingly or without personal fault, they can take certain protective measures.
Some common steps include:

1. Proving Bona Fide Intention – Showing that the director acted in good faith and relied on information provided by officers or auditors.
2. Recording Dissent in Minutes – If a director disagrees with a board decision, they should record their dissent in the minutes of the meeting to avoid liability.
3. Delegation of Duties – If functions are properly delegated to a responsible officer or professional, the director can avoid personal liability for operational lapses.

Resignation Before Violation – If aware of potential non-compliance, a director may resign before the act occurs and report the same to ROC

25. Types of Non-Compliance

Non-compliance under the Companies Act, 2013 can result in different categories of punishment, depending on the severity and intent.

Type	Nature of Punishment	Typical Situation	Example Form / Case
Only Fine	Monetary penalty only	Minor delay or omission	KYC non-filing
Fine with Imprisonment	Both fine and imprisonment	In case of serious fraud or misrepresentation	Form PAS-3 (in case of fraudulent allotment)
Fine or Imprisonment	Either penalty or imprisonment, based on gravity	Significant or repeated non-compliance	AOC-4 (non-filing of financial statement)

26. Tax Planning Guidance for Startup Companies

Provision / Benefit	Description	Key Section
Preliminary Expenses	Incorporation, legal & project report expenses can be claimed over 5 years (1/5th each year).	Section 35D
Depreciation on Assets	Deduction on business assets — Computers (40%), Machinery (15%), Furniture (10%).	Section 32
Carry Forward of Losses	Recognised startups can carry forward losses for 8 years, even if shareholding changes (with conditions).	Section 79
Tax Holiday	100% tax exemption for any 3 consecutive years out of the first 10 years.	Section 80-IAC
Angel Tax Exemption	Exemption from Angel Tax on share premium for DPIIT-recognised startups.	Section 56(2)(viib)
Capital Gain Exemption	Reinvested long-term gains in eligible startups/funds are tax-free.	Sections 54GB / 54EE
R&D Deduction	Expenses on approved research activities are deductible.	Section 35(1)/(2AB)
ESOP Tax Deferral	TDS on ESOPs deferred up to 48 months or until sale/resignation.	Finance Act 2020

27. How a Startup Can Get a Higher Valuation

Key Area	Simple Explanation
1. Clear Business Model	When your business model shows how the company will earn money and grow, investors value it higher.
2. Market Size	A startup that targets a large and growing market always attracts better valuation.
3. Founders’ Capability	Experienced or skilled founders reduce risk and build investor trust.
4. Customer Growth	Consistent user growth or paying customers increase confidence in your product.
5. Technology & IP	Having unique software, patent, or proprietary system increases long-term value.
6. Clean Compliance Record	Regular ROC, tax, and GST filings show professionalism and reduce investor risk.
7. Strong Brand & Visibility	A visible, trusted brand — good website, reviews, or media mentions — adds credibility.
8. Financial Discipline	Transparent accounts and proper documentation help justify higher valuation.

28. FAQ

What is the minimum capital required to start a Private Limited Company in India?

There is no minimum capital requirement anymore. You can start your company even with ₹1 as authorised and paid-up capital.

2. How many directors are needed to register a Private Limited Company?

You need a minimum of two directors, and at least one must be a resident of India.

3. Can a single person start a company?

Yes. You can form a One Person Company (OPC) if you are the sole promoter and shareholder.

4. What are the documents required for company registration?

You’ll need each director’s Aadhaar card, PAN card, address proof, email ID, mobile number, and a proof of registered office like an electricity bill or rent agreement.

5. How much time does it take to register a company?

Usually 7–10 working days, provided all documents and details are correct.

6. What is the SPICe+ form?

It’s an integrated digital form used on the MCA portal for company incorporation along with PAN, TAN, GST, EPFO, and bank account opening.

7. What is the difference between authorised and paid-up capital?

Authorised capital is the maximum amount the company is allowed to issue, while paid-up capital is the actual amount invested by shareholders.

8. What is DIN and DSC?

DIN (Director Identification Number) is a unique ID for directors.
DSC (Digital Signature Certificate) is used to digitally sign all ROC and MCA forms.

9. What is Form INC-20A?

It’s the Commencement of Business Certificate. Every company with share capital must file it within 180 days of incorporation to confirm receipt of subscription money.

10. What are post-incorporation compliances?

Opening a bank account, issuing share certificates, appointing the first auditor, maintaining registers, and filing Form INC-20A.

11. What is the difference between LLP and Private Limited Company?

An LLP has less compliance and is good for small professionals, while a Private Limited Company builds more trust among investors and banks.

12. How can I register my company under Startup India?

Once incorporated, apply for DPIIT recognition through the Startup India portal with your incorporation documents and brief about your idea.

13. What are the benefits of Startup India / DPIIT recognition?

Tax holiday for 3 years, exemption from angel tax, easier access to government funds, and reduced compliance burden.

14. What is seed funding and how can a startup get it?

Seed funding is the first formal round of investment used to build your product. You can apply through Startup India Seed Fund Scheme, incubators, or angel investors.

15. What are preliminary expenses and how are they treated under tax?

These are the expenses incurred before starting the business. They can be claimed as deductions over five years under Section 35D of the Income Tax Act.

16. Is GST registration mandatory for startups?

Only if your turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, or if you’re doing interstate trade or e-commerce.

17. What are the key annual ROC compliances?

Every company must file AOC-4 (financials), MGT-7A (annual return), and DPT-3 (loan/deposit disclosure) every year. Directors must also file DIR-3 KYC.

18. What is MSME or Udyam Registration?

It identifies your startup as a Micro, Small, or Medium Enterprise and helps you get benefits like loan subsidies, tender relaxation, and delayed payment protection.

19. What happens if ROC filings are delayed?

A penalty of ₹100 per day per form applies, with no upper limit — so timely filing is essential.

20. What is an ESOP and how does it help startups?

An Employee Stock Option Plan gives employees ownership rights through shares. It helps retain and motivate key team members.

21. How can a startup raise funds from investors?

Through angel investors, venture capital firms, crowdfunding platforms, or by applying to government startup schemes.

22. What is a startup valuation?

Valuation means the financial worth of your startup, based on market size, business model, growth rate, and investor confidence.

23. Can foreign nationals or NRIs register a company in India?

Yes, they can. However, they must comply with FEMA guidelines and have an Indian address for the registered office.

24. What’s the difference between funding and a grant?

Funding is investment (you give equity or repay), while a grant is free financial assistance from the government with no repayment obligation.

25. What are the yearly compliances for a Private Limited Company?

Conduct audit, hold AGM, file AOC-4, MGT-7A, DPT-3, DIR-3 KYC, and maintain GST and Income Tax filings on time.