Get your legal foundation right from Day 1
Many founders treat compliance as an afterthought. They build the product, get customers, then realize their company isn't even registered properly. By then, raising money becomes hard, hiring employees becomes complicated, and tax authorities start asking questions.
The good news: Indian government has dramatically simplified startup compliance through the Startup India initiative. With proper guidance, you can be fully compliant in 30 days for less than ₹25,000.
Choose your business entity
Most startups choose Private Limited (Pvt Ltd). Here is why, and what the alternatives are.
Private Limited (Pvt Ltd)
✅ Best for startupsLimited liability · Easy to raise VC funding · Separate legal entity · Better for ESOPs · Recognized internationally
Most VCs only invest in Pvt Ltd companies. ~95% of funded startups are Pvt Ltd.
Limited Liability Partnership (LLP)
Good for service businessesLower compliance · Lower cost · Pass-through taxation · Limited liability
Cannot raise institutional VC funding easily. Hard to issue ESOPs.
One Person Company (OPC)
Solo founder optionSingle founder · Limited liability · Auto converts to Pvt Ltd when revenue hits ₹2Cr
Cannot raise external equity. Auto-converts when scaling.
Sole Proprietorship
For very early stageEasiest setup · Personal liability · No separate entity · Use for early customer validation
NOT recommended for any startup planning to raise funds.
Mandatory registrations every startup needs
These are non-negotiable. Get them done in the first 30 days.
Step 01 — Pvt Ltd Incorporation
₹6,000 – ₹15,000 · 7–15 daysVia: MCA / SPICe+
Single form (SPICe+) that registers your company, gets PAN, TAN, and EPFO/ESIC all in one go. Submit through MCA portal.
Step 02 — PAN (Permanent Account Number)
Free (with SPICe+) · 7–10 daysVia: Income Tax Dept
Mandatory for all financial transactions. Comes bundled with incorporation. You will use it everywhere.
Step 03 — TAN (Tax Deduction Account Number)
Free (with SPICe+) · 7–10 daysVia: Income Tax Dept
Required if you deduct TDS (you will, when paying salaries, rent, consultants).
Step 04 — GST Registration
Free · 7 daysVia: GST Portal
Mandatory if turnover > ₹20L (₹10L for special states) OR if you sell online OR if you sell B2B services across states.
Step 05 — Bank Account
₹0 – ₹10,000 · 3–7 daysVia: Any commercial bank
Open a current account in the company's name. ICICI, HDFC, Axis offer fast-track for startups.
Step 06 — Startup India / DPIIT Recognition
Free · 5–10 daysVia: Startup India portal
Unlocks tax exemptions, faster IP filings, government schemes. Apply online with pitch deck + business plan.
Recommended (not mandatory but smart)
Do these to protect your brand, your IP, and your team.
Trademark Registration
Protect your brand name and logo. Filed at IPIndia. ₹4,500 per class. Takes 12–18 months but you can claim TM as soon as filed.
MSME / Udyam
Free registration. Get priority sector loans, subsidies, late-payment protection from PSUs/govt.
Shop and Establishment
Required in most states for any commercial establishment. Renew annually.
Professional Tax
State-level. Mandatory if you have employees. Different rates per state.
Trade License
Required for restaurants, food businesses, manufacturing. Varies by city/state.
Copyright
Protect software, written content, design. Filed at Copyright Office Delhi. ₹500 fee.
Patent
Protect inventions. Provisional patent ₹1,600. Full ₹8,000+. Takes 3+ years.
Founder Agreement
Co-founder vesting, equity split, dispute resolution. Get a lawyer. Worth every rupee.
GST — what every startup founder must know
When to register
- Turnover > ₹20 lakh in a year (₹10L for special states)
- Inter-state sale of goods or services (any amount)
- Selling on Amazon, Flipkart, Zomato, Swiggy (any amount)
- Voluntary registration (helps you claim input tax credit)
Common GST rates
Essentials
Daily-use items
Standard goods
Most services / SaaS
Luxury / sin goods
Filing schedule
- GSTR-1 (Monthly or Quarterly): Sales report, due 11th of next month
- GSTR-3B (Monthly): Summary + tax payment, due 20th of next month
- GSTR-9 (Annual): Annual return, due 31 Dec of next FY
Why Startup India recognition matters
Free to apply. Massive benefits. Almost every funded startup gets this.
Income Tax Exemption
Section 80-IAC: 100% tax exemption on profits for any 3 consecutive years out of first 10 years of incorporation.
Capital Gains Exemption
Section 54GB: Exemption on long-term capital gains if invested in eligible startups.
Faster Patent Filing
80% rebate on patent fees. Fast-track examination. Free legal facilitation.
Self-Certification
Self-certify compliance with 9 labour laws and 3 environment laws. No inspection for 5 years.
Government Tenders
Exemption from prior experience / turnover criteria when bidding for government tenders.
Fund of Funds
Access to ₹10,000 Cr Fund of Funds for Startups (FFS) managed by SIDBI.
Annual compliance calendar
Mark these dates. Missing deadlines = heavy penalties.
| Compliance | Frequency | Due Date | Penalty if missed |
|---|---|---|---|
| GSTR-3B | Monthly | 20th of next month | 18% interest + late fees |
| GSTR-1 | Monthly / Quarterly | 11th of next month | ₹100/day per Act |
| TDS Returns | Quarterly | 7th / 31st of next month | ₹200/day + interest |
| Annual ROC Filing (MGT-7, AOC-4) | Annual | 30 days from AGM | ₹100/day |
| Income Tax Return | Annual | 31 Oct (audited) / 31 Jul | 0.5% of TT/year + interest |
| Statutory Audit | Annual | Before AGM | Heavy — non-compliance |
| EPF / ESIC | Monthly | 15th of next month | ₹5/day + 12% interest |
| Professional Tax | Monthly / Annual | Varies by state | Up to ₹2,000 |
What it costs to be fully compliant
Year 1 estimates for a 2-founder Pvt Ltd. Excludes legal disputes / professional advisory.
Many of these are reduced or waived for Campus Hype member startups through our CA / legal partners.
Need help with compliance?
Our partner CA and legal firms offer Campus Hype members up to 30% discount on full registration packages.