Legal compliance in India: significance & impact on entrepreneurship

Legal compliance in India: What & How ?

Depending upon the types & nature of the business organization, each business type must prepare themselves for the different legal requirements and regulations need to be filed after incorporation. These set of different legal requirements & regulations are known as corporate legal compliance in India for the enterprises and organizations. Corporate legal compliance in India varies from business to business.  There is some statutory legal compliance in India applicable as per the companies’ act 2013, Partnership act 1932, and LLP act 2008 for the companies that are already incorporated under these laws. So, basically legal compliance in India for the businesses is nothing but the set of legal & statutory regulations & practices, an organization need to follow after its incorporation governed by these laws.

Legal compliance checklist in India those are mandatory to adhere legal compliance in India

Legal compliance checklist in India can be summarized as some essential guidelines for the companies and business organizations that are governed and regulated by the laws relating to their incorporation, required to follow some strict annual legal compliance in India framed by the respective act. For each type of business & company structure, there are some specific set of periodic regulations & practices that come under the legal compliance checklist in India. Every organization must gather adequate knowledge & information about their specific annual legal compliance in India applicable for the specific business structure selected for incorporation. For example: For any private limited company, their corporate legal compliance checklist in India table must include the list for all the legal formalities and practices before incorporation and after incorporation, as mentioned in the companies, act 2013 The to-do list for the annual legal compliance in India for a private limited company will be definitely different from the Limited Liability company legal compliance checklist in India. A private limited company has to be registered with the ministry of corporate affairs under the companies’ act 2013, whereas a limited liability company has to be registered with the ministry of corporate affairs under the LLP act 2008.

Legal compliance checklist in India for the companies must include the pre-incorporation formalities as follows:

  • Obtaining Digital Signature Certificate (DSC) and the director’s identification number (DIN) for the future filing of all legal documents are absolutely essential for the legal compliance in India for the companies registered through the ministry of corporate affairs.
  • MOA and AOA of any private companies and one-person companies are absolutely essential for preparing a legal compliance checklist in India for those companies.
  • Name approval and prepared charter documents (MOA & AOA) should also be filed with the registrar of companies.
  • Finally, the legal compliance checklist in India must also include the filling of all incorporation forms with the ROC for registration.

Pre incorporation formalities are very much important for any business organization for their corporate legal compliance in India.

Once the company has been incorporated its corporate legal compliance checklist in the India table must include the legal and statutory formalities required post-incorporation:

  • After the organization has received its certificate of incorporation (COI) from ROC, the company becomes a completely separate legal entity or artificial person in the eyes of laws applicable under annual corporate legal compliance in India. Legal compliance checklist in India worksheet then must include certain basic registrations like a permanent account number (PAN) and tax deduction account number (TAN). According to the nature of business and types of economic activities, its legal compliance in India chart may also include other licensing and registrations like Export-import code number (IE code)
  • Besides every organization’s corporate legal compliance checklist in India schedule must have to consider the certain compliances & regulations prescribed & articulated in the companies’ act 2013 for its annual legal compliances India rules laid down by the ministry of corporate affairs. Annual legal compliance checklist in India prescribed and laid down by MCA must also include maintenance of all statutory registers, holding an annual general meeting every year, minute’s books, etc.

The structure of corporate legal compliance in India has the following annual legal compliance checklist in India, depending on the formation of the company as well as the industry to which it belongs.

Annual legal compliance checklist in India for manufacturing companies.

Why the implications & understanding of legal compliance in India is very important for the manufacturing sector?

As mentioned before, apart from some mandatory legal requirements & regulations as per companies act, & other related laws and MCA instructions, there are some specific industry-related licensing and certification necessary to complete the overall aspect of its annual legal compliance in India portfolio.

For any company operating under the umbrella of manufacturing industries in India, if the company is incorporated through MCA it has to comply with all kinds of annual corporate legal compliance in India mentioned above. But for any manufacturing company, it’s important to comply with the laws & acts pertaining to the manufacturing industry. Here are some of the special labour laws & environmental laws important for the production & their impact on the surrounding environment, workforce & society at large:

  • A manufacturing company that has a production plant & factory must ensure its adherence with the legal compliance in India attached to the maintenance and proper functioning of the factories. So for every manufacturing organization must comply with the Factories Act; 1948 as the starter for their legal compliance checklist in India. Legal compliance checklist for the Factories Act 1948 include applicability & registration and renewal of factories etc
  • Legal compliance checklist in India for a manufacturing company should also comply with the regulations & legal provisions of the Minimum Wages Act; 1948
  • All manufacturing companies also have to comply with the regulations and provisions of the Payment of Wages Act; 1936 which plays a very important point on the legal compliance checklist for the manufacturing companies in India.
  • There are some statutory acts of legal compliances in India that a manufacturing company has to comply, in order to provide better financial & medical support to their workforce for the future. Employees’ State Insurance Act; 1948, Employees’ provident funds and miscellaneous provisions Act; 1952, Payment of Bonus act; 1965, and payment of gratuity act; 1972 are a few of them.

Legal compliance in India framework should also consist of different environmental regulations in India. The legal compliance checklist for the manufacturing companies in India should consider the following acts and their probable implications on its operational capacity: Environment Protection Act, 1986, National Green tribunal act, 2010 and Water (Prevention and control of pollution) Act, 1974, etc. For any manufacturing companies in India, a piece of complete knowledge of several labour and environmental laws need to be ascertained in their legal compliance checklist for the manufacturing companies in India.

 Regulations & legal considerations of annual legal compliance checklist in India for service companies in India

What are the different legal compliance in India, a service company should prepare for?

Though the service industry is most people dependent in India, there is some specific annual legal compliance for the service industries in India which is important to remember for the industries related with particular service industries like Hotel & Restaurants, Tours & Travels, Bank & financial institutions, Hospitals & health care and various professional & technical education institutes. Therefore let’s focus on the overall legal compliance checklist for the service companies in India:

  • If the company belongs to the hotels and restaurant services in India and is incorporated through company registration, apart from its statutory corporate legal compliance in India, depending upon the formation of the company it has some specific legal obligations to fulfill. For any hotel and restaurant, it’s mandatory to do FSSAI registration. It’s important for them to start & maintain in the food industry. For the annual legal compliance checklist for food businesses in India, FSSAI license is a must do the registration. For the companies that are associated with liquors & beverages, it’s important to have special liquor license & permit in order to maintain their business under the legal compliance checklist in India framework
  • As for the tours & travel industries, it’s important to do IATA registration for their legal compliance in India. The legal compliance checklist for the tours & Travel Company should also include its registration with a tour operating organization. It’s needless to say that at first the choice of its business organization must be accomplished through corporate legal compliance in India for its specific choice for the business organization.
  • It’s important for any pharma company or health care company to maintain a strict vigil for the maintenance of specific legal compliance in India. This service industry must include some mandatory clinical licensing & registration at their legal compliance checklist in India bucket list. Legal compliance checklist for the pharmacy & health care company must maintain it’s licensing and registrations through Central Drugs Standard Control Organization (CDSCO), National pharmaceutical Pricing Authority (NPPA), Indian Council for Medical Research (ICMR), Drugs Controller General of India (DCGI) and other important legal registrations.
  • For the banks and financial institutions, legal compliance in India is jointly maintained by the Reserve bank of India and the Ministry of Finance & SEBI. For any financial institutions to carry out its business, should comply with the different guidelines issued by these authorities from time to time. For this reason alone, these kinds of banking and non-banking organizations should maintain a detailed & complete legal compliance checklist for the financial sectors. The list for their legal compliance in India must include and comply with the following acts and regulations: Reserve Bank of India Act, 1934, Government Securities Act, 2006, Government securities regulations, 2007, Banking regulations Act, 1949 and so many other banking acts and regulations necessary to conduct financial business in India.

Here at SLPL Associates India private limited, we maintain our sharp observations for different legal compliance in India required for One Person Company, Pvt ltd Company, LLP Company, Nidhi Company, and Section 8 companies. For each type of business organization, we maintain, separate client database for legal compliance checklist in India.

For anyone person company, there are the following corporate legal compliance in India:

Corporate legal compliance checklist in India for one Person Company

  • Business commencement to start legal compliance in India
  • Receipt of MBP-1.
  • Receipt of DIR-8.
  • Board Meeting: (Minimum 2 meetings in a year).
  • Appointment of Auditor.
  • File form ADT-1 of Auditor appointment.
  • Annual filing for the final corporate legal compliance in India formalities on MCA portal.

Corporate legal compliance checklist in India for Pvt Ltd Company includes:

  • Business commencement to start legal compliance in India.
  • Receipt of MBP-1.
  • Receipt of DIR-8.
  • Board meeting (Minimum 4 board meetings every year).
  • Holding AGM every year.
  • Adoption of financial & board reports for accounting & legal compliance in India.
  • Appointment of the auditor, who will maintain the complete legal compliance in India for Pvt Ltd Company.
  • File form ADT-1 of auditor appointment.
  • Maintenance of Statutory Registers.
  • Annual filing at the end of the year to complete the legal compliance in India processing for Pvt Ltd Company.

Corporate legal compliance checklist in India for Unlisted public companies includes:

  • Receipt of MBP-1
  • Receipt of DIR-8.
  • Board Meeting: every company shall hold a minimum number of FOUR Meetings of its Board of Directors every year to complete the obligations & formalities relating to legal compliances in India.
  • A compliance framework for holding AGM every year.
  • Adoption & preparation of financial account for the financial part of the legal compliance in India.
  • Filling of financial account & board report in Form MGT-14
  • Appointment of Auditor in order to complete all kinds of work-related to legal compliance in India for unlisted companies.
  • Maintenance of statutory registers for all the meetings and financial reports for the company’s legal compliance checklist in India.
  • Annual filling required for MCA legal compliance in India for the unlisted public company.
  • E-form filling acceptance of deposits & appointment of key managerial personal who can take care of the complete annual legal compliance in India for the public company.
  • Constitution of audit committee if applicable.
  • Constitution of Nomination committee to complete the annual compliance checklist in India for the incorporated public company.

Corporate legal compliance in India for LLP Company’s legal compliance checklist in India includes:

  • Maintenance of Minute Book.
  • File E-form 4 for any change of designated partner.
  • Supplementary LLP agreement requires filing E-form 3.
  • Holding General Meeting every year to complete the formalities made for legal compliance in India for LLP’s.
  • Filing of statement of account and solvency is required for any LLP’s to fulfill the obligations for compliance in India.
  • Annual return with ROC required to be filed in E-form 11 for the annual regulatory work for legal compliance in India.
  • File income tax return for LLP Company, which is statutory legal compliance in India.

The perspective and point of view of legal compliance in India is now much more easy and smooth for the entrepreneurs, as most of the regulatory and filing work come with online application for compliance in India work. Online legal compliance in India for businesses has brought so many advantages for entrepreneurs & enterprises. It improves safety & operations, improves public relations, and most importantly enhances its reputation. Proper maintenance of compliance in India also ensures higher employee retention.

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