According to the India business climate index The majority of companies find themselves overwhelmed by the bureaucracy and administration of their company in India (see Problem area #1: Compliance & Bureaucracy in India).

This is also confirmed in our work: a large proportion of our customer projects are in our specialist area WB Finance & Compliance® which deals with issues of Indian tax and corporate law and takes on administrative tasks for medium-sized companies in India.

What is corporate compliance?

By definition, the term compliance stands for Compliance with legal requirements, regulatory standards and – in general – the Fulfillment of other standards and requirements set by the company itself.

However, compliance is usually reduced - especially with regard to India - to compliance with ethical principles of conduct (“Code of Conduct”) and the avoidance of criminally relevant matters such as corruption, fraud and breach of trust (note: by local management) (see Medium-sized companies in a swamp of corruption?).

However, we define compliance much more broadly and distinguish between:

  • Legal Compliance (also: Secretarial Compliance): Corporate governance in accordance with Indian corporate law (Companies Act 2013)
  • Tax Compliance: applies in particular to Income Tax, GST etc.
  • Further compliance regulations: FEMA (Foreign Exchange Management Act) and RBI (Reserve Bank of India) Compliance etc.
  • Internal company compliance

In our current blog series we will focus in particular on the complex topic “Legal compliance”, i.e. the fulfillment of corporate law requirements.

Legal Compliance – Secretarial Compliance

In 2013, Indian corporate law from 1956 was comprehensively renewed and modernized. The Companies Act 2013 (including amendments 2015 and 2017) defines all legal requirements, in particular Foundation (Memorandum, Articles of Association/Statute) and administration of Indian companies.

The detailed legal texts are here a DAK Bungalow.

In the next articles we want to show you the most important ones Roles and organs together with their rights and obligations and introduce one Overview of compliance tasks, which are due in India during the course of a financial year.