The Compliance Checklist Every Founder Needs
Compliance feels boring until you get an email from a regulator. Suddenly it's not boring. It's expensive.
We've helped 30+ startups through compliance audits. Most of them could have avoided 50% of the work if they'd planned from day one. Here's how.
The Startup Compliance Stack (India)
Day 1: Business Registration
- ✓ Register as a Private Limited Company (PVT LTD) or Sole Proprietorship
- ✓ Get PAN and TAN
- ✓ Open a business bank account
- ✓ Cost: ₹10-15K (if DIY). ₹30-50K (if lawyer)
Month 1-3: Tax Setup
- ✓ GST Registration (mandatory if revenue > ₹40L/year). Register even if not required—it's cleaner.
- ✓ Accounting setup. Use software (Tally, QuickBooks). Don't do it in Excel.
- ✓ Monthly GST filing if B2C. Quarterly if B2B (optional).
- ✓ Cost: ₹50-100K in accountant fees. Worth every rupee.
Month 3-6: Employment & Labor
- ✓ Employment contracts. Every employee. Not optional. Include NDA and IP assignment.
- ✓ PF & ESI registration (if you have employees making > ₹15K/month)
- ✓ Professional Conduct Policy. Anti-harassment, code of conduct, leave policy.
- ✓ Cost: ₹30-50K one-time for templates and setup.
Month 6-12: Data & Privacy
- ✓ Privacy Policy & Terms of Service on your website
- ✓ Data Processing Agreement if you use third-party tools
- ✓ Customer data deletion process (GDPR + DPDP Act compliance)
- ✓ Vendor agreements for any SaaS tools you use
- ✓ Cost: ₹40-80K for proper documentation
Ongoing: Annual & Quarterly
- ✓ Monthly GST returns (if applicable)
- ✓ Monthly payroll processing (if employees)
- ✓ Annual Income Tax filing (ITR)
- ✓ Annual audit (if revenue > ₹1Cr or required by regulation)
- ✓ Cost: ₹100-150K/year in accounting
The Mistakes We See Most
❌ Mistake #1: No Employment Contracts
Founder hires 5 people without contracts. 'We're family.' Six months later, someone leaves and claims unpaid bonus. It becomes messy.
Fix: Employment contracts from day one. Includes: salary, benefits, probation, IP ownership, confidentiality, notice period.
❌ Mistake #2: Ignoring GST Until Revenue Hits ₹40L
You don't register for GST. Then you cross ₹40L revenue. Suddenly you owe backlog GST + penalties. Now it's ₹20L.
Fix: Register for GST even if not required. It takes 1 week. You can claim input credits. It looks professional to investors.
❌ Mistake #3: No Data Privacy Policy
You collect customer emails. No privacy policy. Someone reports you to the DPA. Now it's a legal issue.
Fix: Privacy policy + Terms of Service on your website. Use a template if needed. Update as you collect new data types.
❌ Mistake #4: Doing All Accounting in a Spreadsheet
You track revenue in a Google Sheet. Tax time comes. You have 500 entries with no categories. Your accountant charges ₹3L to clean it up.
Fix: Accounting software from day one. Tally, QuickBooks, or Zoho Books. Spend 2 hours/month. Save ₹2L at tax time.
Your Compliance Budget
| Startup (Day 1) | ₹50-80K |
| Year 1 ongoing | ₹100-150K/year |
| Fixing missed compliance | ₹500K-2Cr |
It's cheaper to do it right from the start.
Your Next Step
Hire a good accountant. Not a friend. Someone who's worked with startups. Budget ₹100-150K/year. In return:
- → You sleep at night knowing compliance is handled
- → You can raise capital without legal surprises
- → You avoid ₹500K fines or worse
Need a compliance audit?
We help startups structure their compliance from day one. Let's make sure you don't miss anything.
Get a consultation