ROC Annual Filing Importance For Start-Ups In India | Ebizfiling

 

Introduction

As a result of expanding start-up culture, India has evolved into a start-up hub. Many entrepreneurs and founders enter into the start-up ecosystem nowadays, to create a profitable business. These companies begin with small capital and minimal resources, but they probably grow to the point where managing various duties becomes difficult.

The majority of company owners view legal matters as a duty that only involves completing paperwork and formalities, and that's why they put off ROC filing for later stages. Because of this, 80% of companies fail or are forced to close their doors during the first stage of laying a foundation for their business. So let us discuss the importance of compliance for start-ups.

What is ROC compliance?

In the context of business, "ROC compliance" refers to mandatory annual filing of the company which are incorporated under the Companies Act, 2013. Any company that has a separate legal entity needs to register with ROC and to maintain its legal responsibilities, generally to safeguard the welfare and health of others. Any change in name or director or winding and so on by the company needs to be filed with ROC. Simple examples of ROC compliance include filing your taxes on time and getting a business license from the Ministry of Corporate Affairs (MCA).

The importance of legal compliance

 

  • The most important outcome of ROC filing is that it lowers your risk of facing fines, penalties, layoffs, legal action, or even the closure of your company and simultaneously builds companies' reputations in the Indian market.

 

  • One important feature of compliance is being able to highlight your accomplishments in your marketing materials and on your website when you complete your legal compliance. For instance, if the company writes about the policies, rules, and regulations on their website, it will encourage more people to apply or build business relations with other companies.

 

  • Legal compliance is important to create a secure and professional workplace. For instance, the company invest a lot of effort in selecting and recruiting the best applicants for their team. Therefore, regardless of the size of the company, start-ups must insist that all new hires sign employment contracts that include certain conditions like confidentiality, IP ownership, non-compete, etc. Also polices regarding POSH, discrimination on basis of caste, race, and gender. etc.

Conclusion

The main objectives of a start-ups are to make money and maintain competitiveness in the Indian market. It might be challenging to address the legal requirements for operating a business smoothly while you're trying to remain ahead. But legal compliance in India, functions as the chariot wheel that drives and maintains the company.

 

 

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