CA Services for Startups in Delhi: What You Actually Need in Year One (and What You Don't)
- Year one has four hard deadlines that create real penalties: INC-20A within 180 days, the first auditor within 30 days, DIR-3 KYC by 30 September, and the annual filings after the AGM.
- DPIIT recognition and the 80-IAC tax holiday are worth doing early, but they are separate applications — recognition alone gives you no tax exemption.
- A cap table, a signed ESOP pool and clean bank-routed share capital cost almost nothing in year one and are the things that break a funding round if missing.
Most first-time founders in Delhi buy "CA services" as a bundle and never find out what was in it. Then at the first due-diligence a missing INC-20A, an unsigned ESOP policy or share capital introduced in cash becomes a three-week problem. This is a plain, month-by-month account of what a startup genuinely needs from a chartered accountant in its first year, and what is being sold to you too early.
Month 0 to 1 — the things with penalties attached
| Task | Deadline | Cost of missing it |
|---|---|---|
| First auditor appointment (ADT-1) | 30 days from incorporation | Board must then convene an EGM; audit sign-off gets delayed |
| Subscribed capital brought in by bank transfer | Before INC-20A | A false INC-20A declaration; cash capital is a scrutiny magnet |
| INC-20A, commencement of business | 180 days from incorporation | ₹50,000 on the company, ₹1,000 per day on officers; the company cannot borrow or trade |
| Current account and board resolution for banking | Immediately | Capital cannot be routed; vendor payments run through personal accounts |
| First board meeting and statutory registers | 30 days | Registers reconstructed later always look reconstructed |
These five are non-negotiable. Everything in the rest of this article is a judgement call; these are not.
Month 1 to 3 — registrations that pay for themselves
- Udyam (MSME) registration. Free, takes minutes, and gives you the section 43B(h) 45-day payment right against buyers plus access to collateral-free credit guarantee schemes. There is no reason to delay it.
- GST, if and only if you are liable. Delhi thresholds are ₹40 lakh for goods and ₹20 lakh for services, but any inter-state supply or marketplace selling makes it compulsory from the first invoice. Registering voluntarily "to look professional" buys you monthly returns you may not need yet.
- DPIIT Startup India recognition. Available if the entity is under ten years old and under ₹100 crore turnover and is working on innovation or scalability. It gives self-certification under labour and environment laws, easier public procurement and the ability to apply for 80-IAC and angel-tax relief. Recognition itself is not a tax exemption — that confusion costs founders a year.
- Trademark application for the brand name. Filing early is cheap insurance; MCA name approval does not protect your brand.
- Professional tax / shop establishment as applicable once you have employees at a premises.
Month 3 to 9 — bookkeeping that will survive diligence
This is where a good CA earns their fee and where most startups are weakest. What matters is not elegance but reconstructability:
- Books maintained monthly, not annually. Section 44AA requires them; investors require them readable.
- Every bank line matched to a voucher. Founder expense reimbursements documented, not merged into "misc".
- TDS deducted correctly from the first payment — 194J on professional fees, 194C on contractors, 192 on salary — and deposited by the 7th. TDS caught late attracts interest at 1% or 1.5% per month plus a 234E late-filing fee of ₹200 per day.
- A cap table maintained as a document, with the share certificates actually issued and stamped and PAS-3 filed for each allotment.
- If you promise equity to employees or advisors, a board-approved ESOP scheme with a written pool. Verbal promises become valuation disputes.
Month 9 to 15 — the first audit and annual filings
Every private limited company in India needs a statutory audit regardless of turnover — there is no small-company exemption. Work backwards from that:
- Close the books and reconcile bank, GST and TDS by around month 11.
- Audit fieldwork and financial statements under Schedule III, including the ratio disclosures.
- Board approval, then the AGM within nine months of the first financial year-end.
- AOC-4 within 30 days of the AGM and MGT-7/MGT-7A within 60 days. Late additional fee is ₹100 per day per form, with no cap.
- Income-tax return — and a tax audit under 44AB only if turnover crosses the limits. Many startups do not need a tax audit but do need the statutory audit; these are different things.
- DIR-3 KYC for every director by 30 September each year: free on time, ₹5,000 per director if late and the DIN is deactivated meanwhile.
What you are probably being sold too early
- A Virtual CFO retainer at pre-revenue. Useful once you have real monthly volume, a team, or a bank or investor asking for an MIS. Before that, monthly bookkeeping plus a quarterly review is enough.
- Transfer pricing, 15CA/15CB, FEMA work before you have a single cross-border transaction.
- Valuation reports before an actual share issue. A 11UA valuation is needed when you allot shares at a premium, not as a shelf document.
- Trademark in ten classes. File in the class you trade in; add classes when you expand.
Common mistakes
- Treating DPIIT recognition as the tax holiday. 80-IAC is a separate application to the Inter-Ministerial Board, and it must be claimed in the return.
- Share capital brought in as cash. It breaks the INC-20A declaration and invites section 68 questions.
- Ignoring TDS in the first two quarters because "the amounts are small". The 234E late fee is per day, not per rupee.
- No written ESOP pool while promising percentages to early hires.
- Changing the CA mid-audit without an NOC and ADT-3 trail — it stalls the filing and looks bad in diligence.
- Buying a one-line "all compliance" package with no list of filings. Ask for the filing-by-filing scope in writing; what is not named is not included.
If you want this sequenced for your own company rather than as a generic list, the Startup Services page sets out the incorporation-to-first-audit path with the statutory items named individually. Professional fees are exclusive of GST, government and statutory fees, DSC charges and out-of-pocket expenses at actuals.
Do it yourself in minutes — free to try, no login needed.
Open Startup Services →Frequently asked questions
Does a startup private limited company need a statutory audit in its first year?
Yes. Every company incorporated under the Companies Act needs a statutory audit by a chartered accountant from its very first financial year, whatever the turnover — even a nil-revenue company. This is separate from a tax audit under section 44AB, which depends on turnover limits.
Does DPIIT Startup India recognition give a tax exemption?
No, not by itself. Recognition gives self-certification, procurement benefits and eligibility. The three-year tax holiday under section 80-IAC and the angel-tax exemption under section 56(2)(viib) are separate applications, and 80-IAC is granted by the Inter-Ministerial Board.
What happens if INC-20A is not filed within 180 days?
The company becomes liable to a ₹50,000 penalty and every officer in default to ₹1,000 per day up to ₹1,00,000. Until it is filed the company cannot legally commence business or exercise borrowing powers, and the Registrar can move to strike it off.
Should an early-stage startup hire a CA monthly or only at year-end?
Monthly, at least for bookkeeping, TDS and GST. Year-end-only engagements mean reconstructed books, missed TDS deposit dates where interest and the ₹200-per-day late fee are already running, and a first audit that takes far longer than it should.
General information for FY 2026-27, not professional advice for your specific case. Rules change — verify against the latest notification or ask a KyaTax expert.
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