1 What are the immediate post-incorporation obligations for companies in India?
Some of the key obligations include:
First board meeting – must be held within 30 days of the date of incorporation;
First auditor appointment – must be made within 30 days of incorporation;
Declaration of commencement of business (Form INC-20A) – must be filed within 180 days of incorporation; and
Return of allotment (Form PAS-3) – must be filed within 30 days of allotment, or within 15 days for private placement.
Additionally, the registered office must be verified by filing Form INC-22, and a bank account must be opened to receive subscribed capital, particularly where foreign investment is involved.
2 What foreign investment reporting is required after incorporation?
Foreign investment triggers time-bound reporting obligations under the Foreign Exchange Management Act, 1999 (FEMA). The primary requirement is filing Form FC-GPR within 30 days of the allotment of shares to foreign investors.
Other key obligations include downstream investment reporting, filing the annual foreign liabilities and assets return by July 15 each year, and completion of know-your-customer (KYC) and Reserve Bank of India reporting formalities through the authorised dealer bank.
3 What registrations must a new company obtain post-incorporation?
The registrations must be assessed based on the nature, location, and scale of operations. Core categories include the following.
Tax registrations:
Goods and services tax registration – mandatory once applicable turnover thresholds are crossed or for specific transaction types; e.g., inter-state supply; and
Professional tax – a state-level levy on employed persons.
Labour law registrations:
Shops and establishments registration – mandatory under applicable state shops and establishments legislation for all commercial establishments; and
Employee benefits and social security registrations – mandatory depending on the number of employees engaged and the applicable wage thresholds under applicable state laws.
Trade and import/export:
Import Export Code – mandatory before undertaking any cross-border trade in goods or services.
Environmental and waste management registrations:
Depending on the sector and operational activities, registrations and authorisations relating to pollution control, hazardous waste, e-waste, and other environmental compliances may be required.
Sector-specific licences:
Companies operating in certain regulated industries – such as financial services, telecommunications, and electronics manufacturing – must obtain applicable approvals before operations can lawfully commence.
Navigating the interplay between central and state-level requirements, and sequencing registrations correctly, is a material compliance risk for companies operating in India.
4 What are a company’s key annual ongoing compliance obligations?
Apart from maintaining statutory registers – including the register of members, directors, and key managerial personnel – and corporate records at all times, companies must comply with ongoing requirements under the Companies Act, 2013, including:
Board meetings – minimum four annually, with no gap exceeding 120 days between consecutive meetings, and maintenance of minutes;
Annual general meeting (AGM) – within six months from the end of each financial year (nine months for the first AGM);
Director-level filings – annual director identification number KYC filings (DIR-3 KYC), disclosure of interests (MBP-1), and declarations of non-disqualification (DIR-8); and
Annual filings – financial statements and annual returns, along with micro, small, and medium enterprises payment returns and deposit returns.
5 What compliance missteps do foreign investors most commonly make?
Most compliance failures arise from timing gaps and coordination issues rather than deliberate non-compliance. Common issues include:
Delayed FC-GPR filings;
Treating incorporation as operational readiness without completing post-incorporation registrations and filings;
Overlooking state-level registrations and labour law compliances; and
Improper structuring that risks breach of sectoral caps or FEMA conditions.
A well-structured compliance framework, coupled with ongoing regulatory oversight, is critical to ensuring smooth operations and avoiding post-facto remediation challenges. Non-compliance and delayed regulatory filings may attract penalties or even trigger strike-off proceedings and therefore require careful monitoring.
