Corporate law and company compliance

Business structures in India

Sole proprietorship, partnership firm, LLP (limited liability partnership under the LLP Act, 2008), private limited company and public limited company (Companies Act, 2013), one person company (OPC). Startups typically incorporate as private limited companies to raise investment.

Key concepts under the Companies Act, 2013

• Memorandum (MoA) and Articles of Association (AoA): the constitution and internal rules.
• Directors: duties of care, diligence, good faith and avoiding conflicts; DIN requirements; independent directors for certain companies.
• Board meetings and general meetings (AGM, EGM), resolutions (ordinary and special), minutes.
• Statutory registers and annual filings with the Registrar of Companies through the MCA portal (financial statements and annual return forms), auditor appointment, director KYC.
• Share capital: allotment, transfer, ESOPs; private placement rules.
• Related party transactions need approvals and disclosure.
• CSR: companies above thresholds must spend on corporate social responsibility.

The company secretary ensures governance and compliance with the Companies Act, maintains records and coordinates board processes. Listed companies also comply with SEBI regulations (LODR, insider trading rules).

A compliance calendar

Companies track recurring deadlines: board meetings, annual filings, GST and TDS returns, PF/ESI payments, labour law filings, licence renewals, and sector-specific regulatory reports. Missing deadlines leads to penalties and reputational damage, so compliance teams maintain calendars, checklists, owners and reminders, often in compliance management software.

Due diligence

Before investments, mergers or major contracts, legal due diligence reviews a company's incorporation documents, shareholding, material contracts, litigation, IP ownership, licences, employment compliance and regulatory issues, then reports red flags and recommendations.

Check yourself

• Why do startups prefer a private limited company?
• What does a company secretary do?
• List six items you'd check in legal due diligence of a small software company.