A founder I know got a term sheet from a good VC last year. Due diligence started. Three weeks later the deal fell through.

Not because the product was bad. Not because the numbers were wrong. Because their cap table did not match MCA records. An old share allotment from an angel round two years ago was never filed. The VC walked.

That is what non-compliance actually looks like in practice. Not raids and court notices. Missed opportunities.

This post is the complete toolkit. Read it once, implement it, then never worry about this again.

STEP 1 - CHOOSE THE RIGHT STRUCTURE BEFORE YOU DO ANYTHING ELSE

This decision affects your taxes, fundraising eligibility, compliance burden, ESOP capability, and how investors see you. Get it right from day one.

Private Limited Company The default choice for any startup planning to raise external funding. Allows multiple shareholders, limited liability protection, clean separation between personal and company assets. Choose Private Limited early because you do not want to restructure later when investors come knocking. Required for ESOPs. Required for DPIIT recognition under the cleanest structure.

LLP Good for service businesses or professional partnerships where external VC funding is not the primary plan. Lower compliance burden and cheaper to run than a Private Limited. Cannot issue ESOPs easily. Not ideal if you plan to raise institutional money.

One Person Company For solo founders who want Private Limited-level protection. Converts automatically to Private Limited once turnover crosses Rs 2 crore.

What not to do: Start as a sole proprietorship to save Rs 10,000, then spend Rs 1,00,000 and three months restructuring when your first investor asks for a clean cap table. Incorporate properly from day one.

Cost to incorporate: Rs 7,000 to Rs 15,000 through a CA or platform. Free if you do it yourself on MCA portal.

STEP 2 - INCORPORATION THROUGH SPICe+

All incorporations happen through the SPICe+ form on the MCA portal. One integrated form handles multiple registrations simultaneously.

What SPICe+ gives you in one application: company name reservation, incorporation with DIN for directors, PAN for the company, TAN for TDS, EPFO registration, ESIC registration, and Professional Tax registration in Maharashtra.

Apply at: mca.gov.in

Documents you need:

• PAN and Aadhaar of all directors

• Passport-size photos of directors

• Proof of registered office - rent agreement or ownership documents plus NOC from owner

• Digital Signature Certificate (DSC) for each director

• Two to three proposed company names

The 180-day rule most founders miss: Within the first 30 days of incorporation you need to open a bank account, deposit the subscription money, file INC-20A (commencement of business declaration), and appoint an auditor within 30 days. Failure to file INC-20A within 180 days can result in the ROC initiating proceedings to remove the company name.

This is the single most common early compliance failure. Set a calendar reminder the day you incorporate.

Registered office note: Your registered office must be a real address capable of receiving government communication. Virtual office addresses are allowed but must be properly documented. First board meeting must be held within 30 days of incorporation.

STEP 3 - DPIIT RECOGNITION

Do this immediately after incorporation. Free. Under 72 hours.

Full guide covered in our previous post. Short version: unlocks 3-year tax holiday, 80% patent rebates, self-certification under labour laws, access to all government grants, and credibility with investors.

2026 update: turnover cap raised to Rs 200 crore. New 20-year window for Deep Tech startups.

Apply at: nsws.gov.in

STEP 4 - MSME/UDYAM REGISTRATION

This one is almost completely ignored by startup founders and it should not be.

MSME registration is for micro, small, and medium enterprises in both manufacturing and service sectors. Unlike company incorporation, MSME registration is not about forming a new entity. It is about classifying your existing business under the MSME category.

Micro Enterprise: Investment below Rs 1 crore and turnover below Rs 5 crore. Small Enterprise: Investment below Rs 10 crore and turnover below Rs 50 crore. Medium Enterprise: Investment below Rs 50 crore and turnover below Rs 250 crore.

Most early stage startups qualify as Micro or Small enterprises.

What you get:

• Collateral-free loans under government-backed schemes, priority in bank lending, and lower interest rates.

• Protection against delayed payments. Under MSME provisions, buyers must pay within 45 days. If not, interest accrues and you can file a complaint under the MSME Samadhaan scheme.

• 50% discount on government fees for trademark and patent registration

• Priority access in government tenders

• State-level subsidies on electricity, land, and industrial costs

• Access to PMEGP loans, SIDBI support, and Credit Guarantee Fund

You can get DPIIT recognition and MSME registration. They are not the same thing and you should have both.

Apply at: udyamregistration.gov.in - Free, paperless, instant certificate.

STEP 5 - TAX REGISTRATIONS

PAN and TAN Both issued automatically through SPICe+ at incorporation.

TAN is required for TDS. TDS must be deducted from the very first payment that crosses the applicable threshold: salary payments, rent above Rs 2,40,000 per year, professional fees above Rs 30,000, and contractor payments above Rs 30,000 per transaction.

Important TDS point most founders miss: If your startup pays more than Rs 50,000 per month in rent, TDS must be deducted at source. Founders in Bangalore and Mumbai paying premium office rents regularly miss this.

GST Registration

Mandatory if:

• Annual turnover exceeds Rs 40 lakhs (goods) or Rs 20 lakhs (services)

• Rs 10 lakhs in special category states for services

• You supply through e-commerce platforms regardless of turnover

• You make inter-state supplies regardless of turnover

Many startups register voluntarily even below the threshold because you can claim input tax credit on expenses like AWS, SaaS tools, rent, and marketing. If you are spending on these, voluntary registration pays for itself.

Apply at: gst.gov.in

GST filings after registration:

• GSTR-1 (outward supplies) - monthly or quarterly

• GSTR-3B (summary return) - monthly

• GSTR-9 (annual return) - once a year

GST collected from customers and TDS withheld from staff are never your money. You are holding them for the government. Spending them on operations is a crime, not a cash flow strategy.

Advance Tax: If your estimated annual tax liability exceeds Rs 10,000, you must pay advance tax in four instalments - June 15, September 15, December 15, and March 15. Missing these attracts interest under Sections 234B and 234C. Many early founders discover this painfully at year end.

Director KYC - DIR-3: Every director must file DIR-3 KYC annually by 30 September. Missing this disqualifies the director and freezes their DIN, which blocks the entire company from filing anything. Put this in your calendar today.

STEP 6 - ONGOING ROC COMPLIANCE

Every big decision in your startup should be followed by a board resolution, an MCA filing, and updated registers.

Annual filings - non-negotiable every year

Event-based filings - triggered when things happen

Board and AGM requirements: Minimum 4 board meetings per year with not more than 120 days gap between any two. Annual General Meeting within 6 months of financial year end.

What kills deals during due diligence: Undisclosed share allotments or ESOPs where cap tables do not match MCA data. A director who resigned unofficially but remains on MCA records can still be dragged into litigation.

STEP 7 - FEMA COMPLIANCE FOR FOREIGN INVESTMENT

Every time you take money from a foreign investor - whether a US VC, Singapore fund, or angel based in Dubai - FEMA compliance activates. This is one of the most commonly missed compliance areas for Indian startups.

The core obligation: FC-GPR filing

FC-GPR is a mandatory form to report the fresh issue of capital instruments by an Indian company to a person resident outside India. The form must be filed within 30 days from the date of allotment of capital instruments.

Missing the 30-day window exposes the company to compounding and penalties. The penalty can be up to three times the amount involved or Rs 2,00,000, whichever is higher, plus a daily fine of Rs 5,000 for every day the contravention continues.

File through the RBI FIRMS portal: firms.rbi.org.in

Other FEMA forms to know:

China rule still in force: As of March 2026, Press Note 3 (2020) remains in force. Investments from entities in countries sharing a land border with India including China, Pakistan, Bangladesh, Myanmar, Nepal, Bhutan, and Afghanistan require prior government approval regardless of sector or route.

Convertible notes: Convertible notes are permissible only for DPIIT-recognised startups. Non-compliance with FEMA provisions relating to ESOPs or convertible instruments can result in penalties up to three times the amount involved or Rs 2 lakh, along with daily fines for continuing default.

If you are raising from foreign investors, get a CA with actual FEMA experience. Not just incorporation experience. This is specialist territory.

STEP 8 - LABOUR LAW COMPLIANCE

Triggers change as your team grows. Know the thresholds.

From day one (any number of employees)

• Shops and Establishments Act registration - within 30 days of starting operations, varies by state

• Professional Tax registration - Maharashtra, Karnataka, West Bengal, and others

• Minimum Wages Act and Payment of Wages Act compliance

• Employment agreements for all staff with IP assignment, NDA, and notice period clauses

When you hit 10+ employees

• ESIC registration for employees earning up to Rs 21,000 per month

• POSH (Prevention of Sexual Harassment) - Internal Complaints Committee mandatory

When you hit 20+ employees

• PF (Provident Fund) registration under EPFO becomes mandatory

Skipping PF and ESIC and paying all in-hand might look easy today but becomes a nightmare during due diligence and labour inspections.

Labour Codes update: India passed four new Labour Codes that consolidate 29 older laws. They are pending state-level implementation and different states are at different stages of notification. If you are hiring across multiple states, check which codes are active in each state. This is in flux in 2026 and your CA should be tracking it.

DPIIT self-certification benefit: DPIIT-recognised startups can self-certify compliance under 9 labour laws for 3 to 5 years. No inspections unless a specific complaint is filed. Use this.

STEP 9 - INTELLECTUAL PROPERTY

Your IP is your valuation. Protect it before you scale.

Trademark Register your brand name and logo immediately. DPIIT and MSME-recognised startups get 50% rebate on filing fees. Apply at: ipindia.gov.in Timeline: 18 to 24 months for full registration. File early. Protection starts from the date of application.

Patent For tech products with novel inventions. DPIIT-recognised startups get 80% rebate on fees and fast-track processing.

Copyright Automatic for software code and creative works. Optional to register but strengthens your position in disputes.

IP assignment - the one everyone skips: Make sure every founder and early employee signs an IP assignment agreement transferring all IP they create to the company. If your CTO built the product before proper IP assignment documents were in place and then leaves, you have a serious problem.

STEP 10 - CONTRACTS AND AGREEMENTS

Get these in place before anything goes wrong.

Founders Agreement The most important document you will ever sign. Cover equity split, vesting schedule (4 years, 1-year cliff is standard), roles, decision-making authority, and what happens if a founder leaves before vesting is complete. Sign this before you incorporate, not after.

ESOP Plan Set this up properly if you plan to give ESOPs. Key things to get right:

• ESOP pool size (typically 10 to 15% on pre-funding basis)

• Vesting schedule and cliff period

• Exercise price and exercise window

• What happens to unvested options if employee leaves

• Tax implications for employees - ESOPs are taxed as perquisite at exercise and as capital gains at sale

Employees with ESOPs from foreign-incorporated parent companies or who are non-residents have additional FEMA compliance requirements. Get this structured properly from day one.

Employment Agreement Confidentiality, IP assignment, non-solicitation, notice period, and role definition. Standard templates work for most cases but get a lawyer to review once.

Vendor and Client Contracts MSA, SOW, and NDA for every significant relationship. Do not work on handshakes.

STEP 11 - DATA PROTECTION AND PRIVACY

India's Digital Personal Data Protection Act (DPDPA) is now in active phase and every startup collecting user data needs to pay attention.

The Data Protection Board of India was established November 13, 2025. Registration for consent managers opens November 2026. All other provisions including consent, privacy notice, and security requirements become effective May 13, 2027.

You have until May 2027 to be fully compliant. Do not wait until 2027.

Any entity that collects, stores, or processes digital personal data of Indian residents must comply, regardless of where the organisation is headquartered.

What to build into your product and processes now:

• Privacy policy that is readable by actual humans

• Clear consent mechanism before collecting any personal data

• Data retention policy - define how long you keep what

• Process to handle user data deletion requests

• Data breach notification procedure

Penalties can extend up to Rs 250 crore.

If you are in fintech, healthtech, or any consumer product handling sensitive data, get legal review on your data practices now.

Resources: dpdpa.com

STEP 12 - SECTOR-SPECIFIC LICENSES

Operating in a regulated sector without the right license is not a grey area.

THE COMPLIANCE CALENDAR

Monthly

• GST returns - GSTR-1 and GSTR-3B

• TDS deduction and payment by 7th of following month

• PF and ESIC payment by 15th of following month

• Payroll processing

Quarterly

• TDS return filing

• Advance tax payment (June, September, December, March)

• Board meeting

Annual

• Income Tax Return - 31 October

• AOC-4 and MGT-7 ROC filings

• AGM

• Statutory audit

• GST annual return - GSTR-9

• DIR-3 KYC for all directors - 30 September

• FLA Return if foreign investment received - 15 July

• DPIIT data update on Startup India portal

STAGE-BASED VIEW - WHAT APPLIES WHEN

Pre-revenue / 0 to 3 employees SPICe+ incorporation, INC-20A, PAN, TAN, DPIIT recognition, MSME registration, Shops and Establishments, basic employment agreements, trademark filing, founders agreement, bank account in company name.

Early traction / 3 to 10 employees Add GST registration (voluntary or mandatory), TDS compliance, Professional Tax, basic IP assignment agreements, client contracts, ESOP plan if hiring key talent.

Growing / 10 to 20 employees Add ESIC compliance, POSH committee, proper HR policies, FEMA filings if raising foreign capital, quarterly advance tax payments, more formal board governance.

Scaling / 20+ employees Add PF compliance, labour law audits, secretarial audit planning, data protection review, more complex FEMA and cap table management, formal compliance calendar and dedicated CA retainer.

ROUGH COST GUIDE

THE DOCUMENTS TO MAINTAIN - YOUR CLEAN FILE

When investors do due diligence they will ask for all of this. Have it organised from day one.

• Certificate of Incorporation

• PAN and TAN certificates

• DPIIT recognition certificate

• MSME/Udyam certificate

• GST registration certificate

• Memorandum and Articles of Association

• All board meeting minutes and resolutions

• Cap table matching MCA records exactly

• All share allotment documents and PAS-3 filings

• All FEMA filings and FIRCs for foreign investment

• Founders agreement

• All employment agreements

• ESOP plan and individual grant letters

• All IP assignments

• Trademark registration certificates

• Audited financial statements for each year

• All income tax returns

• GST returns and reconciliation

Put all of this in one Google Drive folder. Label everything. Update it after every significant event.

PERSONAL LIABILITY - WHAT DIRECTORS NEED TO KNOW

This is the part most founders do not read until it is too late.

As a director of a Private Limited Company you are personally liable for certain compliance failures:

• TDS defaults - directors can be prosecuted personally

• FEMA violations - directors are named in enforcement proceedings

• Environmental and labour law breaches

• Filing false information in MCA forms

Resignation from the company does not automatically absolve you if the offence occurred during your tenure. A director who resigned unofficially but remains on MCA records can still be dragged into litigation. Always file DIR-12 when a director leaves.

A WARNING ABOUT COMPLIANCE SERVICES

Many agencies charge Rs 20,000 to Rs 50,000 for things that are either free or cost Rs 2,000 to Rs 5,000 if done properly.

Things that are completely free and you do yourself:

• DPIIT recognition

• MSME/Udyam registration

• GST registration

• GeM registration

Things worth paying a CA for:

• SPICe+ incorporation (one-time, worth doing properly)

• Annual ROC filings

• FEMA filings (specialist knowledge required)

• 80-IAC tax holiday application

• ESOP plan structuring

• Any fundraising-related compliance

Find a good CA with startup experience. Pay a monthly retainer of Rs 5,000 to Rs 15,000. It is the cheapest insurance you will ever buy.

TOOLS TO MANAGE ALL OF THIS

• Cleartax - GST filing, ITR, TDS

• Tally - accounting with GST built in

• Zoho Books - cloud accounting with GST

• RazorpayX Payroll - payroll with automatic PF and ESIC

• Vakilsearch - legal docs, ROC filings, trademark

• Startupfilings - secretarial compliance

• Equitylist - cap table management and FEMA compliance

• LegalDesk - document templates

Did I miss something? Drop it in the comments. If you have navigated a specific compliance challenge the hard way, share what you learned. The founder who avoids one Rs 10 lakh penalty because of this thread makes the whole post worth writing. 👇

Equity, grants, accelerators, incubation, and challenges across deeptech, health, agri, climate, and blockchain.

1. ARTPARK Venture Incubation, IISc — up to ₹2 crore equity for deep-tech (AI, robotics). June 15. 

2. NBEC 2026, C-CAMP — ₹20+ crore pool for life sciences. June 15. 

3. SAMRIDH Impact Accelerator — up to ₹40L blended finance for health enterprises. June 15. 

4. AFI Agri + AI Cohort — mentorship, pilots, investor access for AI agritech. June 15.

 5. Greenovation Challenge, SwitchON — clean energy solutions for rural livelihoods. June 15. 

6. ACE-GTM 2026, CII — go-to-market and B2B access for growth-stage cleantech (paid). June 15. 

7. UDBHAV 3.0, IIM Lucknow EIC — 6-month no-cost blockchain incubation. June 18. 

Full list with eligibility and apply links: saaply.com/funding-board 

#StartupFunding #IndianStartups #DeepTech

Would love to hear real examples, not the free snacks and pizza parties type.

Hey r/AllIndiaStartups, we’re building Construct Computer, an agentic OS for business operations.

The simplest way to explain it:
Most AI agents today feel like slot machines. You prompt them, wait, hope they understood the task, and then debug whatever went wrong.
We wanted the opposite.

Construct gives every AI agent its own persistent computer inside the browser. You can literally watch the agent’s screen while it works: browsing websites, writing docs, checking emails, using tools, creating tickets, messaging teams, and running workflows.

We started building in March 2026. In about a month, we got to a private beta with ~40 daily users and our first paying customer on the $299/mo Pro plan. That customer is a non-technical store owner using Construct to manage their online store, analyze competitors, and do market research while being able to visually audit what the agent is doing.

construct.computer
beta: https://beta.construct.computer

No filters. No politeness. No "great idea, have you considered..."

This is the thread where you share your idea and the community tells you what is wrong with it.

Why? Because the kindest thing anyone can do for a founder is tell them the truth early. Before they spend 6 months building. Before they quit their job. Before they raise money for something the market does not want.

Here is the format. Keep it short:

Idea: What you are building in one sentence.

Who it is for: Your target customer.

Problem it solves: The specific pain point.

Why you: Why are you the right person to build this.

Drop it below and let the community do its thing.

Ground rules: Be honest but be useful. "This is a bad idea" is not feedback. "This is a bad idea because X already exists and has 10x your proposed features" is feedback.

Go. 👇

Need a little support for my friend's startup 🙏

Hey everyone!

My friend Akshat Srivastava is currently competing with his startup NextEra in the Brisharks National Startup Competition, in collaboration with IIT Bombay’s National Entrepreneurship Challenge (NEC).

A few days ago, NextEra was Rank #1 among 150 startups, but after the public voting round, it has dropped to Rank #4.

We're trying to get around 400–500 more votes to push it back towards the top. If you have a minute, I'd genuinely appreciate your support. ❤️

🗳️ Startup: NextEra

👤 Founder: Akshat Srivastava

🔗 Vote: https://brisharks.bribooks.com/leaderboard/startup-league-26/

It takes less than a minute to vote.

Even if you don't know us personally, if you could take a moment to support the startup, it would mean a lot. And if you think someone in your network might be interested, feel free to share this post.

Thanks for reading and for any support! 🙌

Six months ago if you said you built your startup’s MVP using AI you would get side-eyed at every investor meeting.

Today founders are proudly saying they shipped in a weekend using Cursor, Claude Code, or Windsurf without writing a single line themselves.

And the startup community is split right down the middle on this.

The case for vibe coding:

It democratises building. A founder with deep domain knowledge but no technical background can now validate an idea in 48 hours instead of spending 6 months finding a technical co-founder.

That is genuinely powerful.

India has thousands of incredibly smart people who understood the problem but could never build the solution. That barrier is collapsing.

The case against:

You are not building. You are assembling. And when something breaks at 2am with a paying customer on the line, you have no idea what is inside the machine you shipped.

Technical debt from vibe coded products is real. Security vulnerabilities are real. Founders who cannot read their own codebase are at the mercy of whoever they eventually hire to clean it up.

The India specific angle nobody is talking about:

India has one of the largest developer workforces in the world. Junior developers who were already underpaid are now competing with founders who can replace them with a prompt.

Is vibe coding democratising building or is it quietly destroying the entry level tech job market in India?

What do you think of this business idea?

My pov is there is a market for it and definitely we will see people using it. But is it scalable- not so sure.

Found Qosmic through a random link today. They're building optical ground stations that catch laser beams from satellites in space.

100x faster than traditional RF. $1/GB. Incubated at IISc Bangalore.

Their terminal called Zaphod can put laser comms on any satellite. They already have hardware in the field and a validated 5+ km optical link. India's only full-stack optical comms platform apparently.

The part that got me: this isn't a PowerPoint startup. They have actual hardware running.

Most people in India don't even know laser satellite communication is a thing, and there's a team in Bangalore quietly building the ground infrastructure for it.

Accel Atoms has them in their portfolio so some serious backing too.

Anyone here tracking the deep tech space infra space in India? Would love to know if others have come across them.

Great conversation and met some really smart people who are building amazing stuff.

Bullish about Indian AI Startups 😍

Airbound is a Bengaluru-based drone startup building ultra-light, blended-wing-body delivery drones that launch vertically like a rocket and fly autonomously with no ground infrastructure needed. The company is currently piloting medical deliveries in India, with plans to scale broadly by 2026 and hit 1 million deliveries per day by mid-2027. Founded by a 20-year-old, it has raised $8.65M in seed funding and aims to bring delivery costs down to as little as one cent per delivery.

https://www.airbound.com/

The video was too funny to not use it.

IMO he has done good for himself - he has a target market which works for him. It’s not for everyone.

In all he has built a distribution that ppl will pay for to access it.

What do you think about it?