Common Compliance Mistakes Founders Make – It Is Not Just ROC
One of the most common compliance mistakes founders make is believing that compliance means filing annual ROC returns once a year. It does not. Running a company involves monthly and quarterly obligations across books, GST, TDS, professional tax and PF-ESI – and missing them quietly builds up penalties, interest and notices. This guide covers the mistakes to avoid.
Mistake 1: Treating ROC as the only compliance
ROC filings such as AOC-4 and MGT-7 are annual, but they are a small part of the picture. The compliance that actually attracts penalties month after month sits elsewhere – and that is exactly what founders overlook.
Mistake 2: Not keeping books updated monthly
Books written up only at year-end lead to wrong GST, missed TDS and a stressful audit. Maintain books monthly, reconcile the bank, and keep invoices and expenses recorded as they happen.
Mistake 3: Missing monthly GST obligations
GSTR-1 and GSTR-3B are due monthly or quarterly depending on your scheme, input tax credit must be reconciled with GSTR-2B, and e-invoicing applies once you cross the notified turnover. Late filing means late fees and interest, and mismatched credit invites an ASMT-10 notice.
Mistake 4: Ignoring TDS
Founders routinely forget to deduct TDS on rent, professional fees, contractors and salaries. TDS must generally be deposited by the 7th of the following month, with quarterly TDS returns thereafter. Non-deduction can also cause the expense to be disallowed.
Mistake 5: Overlooking Professional Tax and PF-ESI
Professional Tax is a state levy (in Telangana, for example) with its own monthly deposit and returns. Provident Fund applies to establishments with 20 or more employees, with dues typically deposited by the 15th of the following month. ESI applies to establishments with 10 or more employees for wages up to Rs. 21,000 per month, also due by the 15th. These payroll compliances are easy to miss when the team is small and growing.
Mistake 6: Mixing personal and business money
Running the business from a personal account destroys the separate-entity benefit, muddles the books and creates tax and audit problems. Keep a dedicated business account from day one.
The fix: a monthly compliance calendar
Avoiding these compliance mistakes is simple in principle: maintain books monthly, file GST and deposit TDS on time, run payroll compliances (PT, PF, ESI) every month, pay advance tax quarterly, and keep ROC and event-based filings on a calendar. Compliance is a monthly habit, not a year-end scramble.
How to avoid these compliance mistakes
Most compliance mistakes come from treating compliance as a once-a-year event rather than a monthly routine. Put every recurring obligation on a dated calendar, set reminders for GST, TDS, professional tax, PF and ESI, keep the books current with a monthly close, and have a professional review the numbers each month. Founders who build this rhythm stop making the compliance mistakes that quietly accumulate into penalties, interest and notices – and they free their attention for the business itself. A single missed TDS payment or an unfiled GSTR-3B looks minor in month one; across a year, the same compliance mistakes become an expensive clean-up and, often, a departmental notice.
Stay compliant with a CA in Hyderabad
ComplianceKart runs end-to-end monthly compliance for founders across Hyderabad – Kondapur, Gachibowli, Kokapet, Manikonda, Kothaguda, Hitech City and Mindspace. See our guide to CA services in Kondapur or visit ComplianceKart. You can verify GST details on the GST portal.
Frequently asked questions
Is ROC filing the only compliance a company has?
No. Monthly and quarterly GST, TDS, professional tax and PF-ESI, plus bookkeeping and advance tax, are all ongoing obligations beyond annual ROC filings.
By when must TDS be deposited?
TDS is generally deposited by the 7th of the following month, with quarterly TDS returns filed thereafter.
When do PF and ESI apply?
PF generally applies to establishments with 20 or more employees, and ESI to those with 10 or more employees for wages up to Rs. 21,000 per month; both are typically due by the 15th of the following month.
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