Legal Checklist for Startups Under Companies Act 2013

Introduction

Starting a startup in India requires more than just a good idea. Legal compliance under the Companies Act, 2013 is essential to run your business smoothly and avoid penalties. This checklist will help startup founders understand the key legal requirements they must follow.

1. Company Incorporation
   Before starting operations, ensure:
   • Choose the right business structure (Private Limited, OPC, or LLP)
   • Minimum 2 directors and 2 shareholders for a private limited company
   • At least one resident Indian director
   • Obtain DIN (Director Identification Number)
   • Obtain DSC (Digital Signature Certificate)
   • Register the company with the Registrar of Companies (ROC)
   • Registered office address proof submitted
2. Memorandum & Articles of Association (MOA & AOA)
   
   • MOA defines company objectives and scope of work
   • AOA defines internal rules and management structure
   • Must be filed at the time of incorporation
   • Any change requires ROC approval
3. Share Capital & Share Certificates
   
   • Decide authorized and paid-up share capital
   • Issue share certificates within 60 days of incorporation
   • Maintain shareholding records
   • File ROC forms for allotment of shares
4. Appointment of Directors & Key Personnel
   
   • First directors appointed at incorporation
   • File director details with ROC
   • Appointment of auditor within 30 days
   • Maintain records of directors and shareholders
5. Opening Bank Account & PAN/TAN
   
   • Open company bank account
   • Obtain PAN and TAN for tax purposes
   • Ensure all transactions go through company bank account
6. Board Meetings & Resolutions
   
   • Conduct first board meeting within 30 days
   • Minimum 2 board meetings every year for small companies
   • Maintain minutes and resolutions properly
7. Statutory Audit & Financial Records
   
   • Appoint a statutory auditor
   • Maintain books of accounts
   • Prepare financial statements annually
   • Get accounts audited every year
8. Annual ROC Filings
   Mandatory filings include:
   • Monepenaltiestary
   • MGT-7 / MGT-7A (Annual Return)
   • File within prescribed timelines to avoid penalties
9. Fundraising & Share Issuance Compliance
   If raising funds:
   • Follow private placement rules
   • Issue shares at proper valuation
   • File necessary ROC forms
   • Comply with investor reporting requirements
10. Director KYC & Compliance Updates
    
    • Directors must complete DIR-3 KYC every year
    • Update any changes in:
    • Registered office
    • Directors
    • Share capital
    • Company name
11. Penalties for Non-Compliance
    Failure to comply may result in:
    • Heavy monetary penalties
    • Director disqualification
    • Legal notices from ROC
    • Company strike-off