Every term, explained like a friend.

The filing of your company's balance sheet, profit & loss account, and cash flow statement with the Registrar of Companies every year. Must be certified by your statutory auditor and filed within 30 days of your AGM.

A yearly report every Private Limited Company must file with the Registrar of Companies. Covers shareholders, directors, share capital, meetings held, and any changes during the year. Due within 60 days of AGM.

Annual identity and contact verification that every person holding a DIN must complete with the MCA by September 30 each year. Takes about 10 minutes online via the MCA portal.

A mandatory declaration filed within 180 days of incorporation confirming that shareholders have paid for their shares and the company has actually started business. Without it, the company cannot legally operate.

An annual return disclosing all deposits held by the company, including loans received from directors. Must be filed by June 30 every year, even if the company has zero deposits.

A mandatory yearly meeting of all shareholders to approve financial statements, declare dividends, and appoint/re-appoint directors and auditors. Must be held by September 30 every year.

The government authority under the Ministry of Corporate Affairs (MCA) responsible for registering companies and ensuring they comply with the Companies Act. All annual filings go to the ROC.

A unique 21-character identification number assigned to every registered company in India. Issued by the MCA at the time of incorporation. Must appear on all company letterheads, invoices, and official documents.

A unique 8-digit identification number assigned to any person who wants to be a director of an Indian company. Applied for through the MCA portal; auto-generated via SPICe+ for up to 3 directors.

An electronic signature used to sign MCA filings, income tax returns, and other government documents. Required for all directors and authorised signatories. Issued by licensed certifying authorities.

Your company's constitution that defines its relationship with the outside world. The most important part is the Objects Clause — the list of business activities your company is legally allowed to carry out.

Your company's internal rulebook governing how decisions are made, how shares are transferred, how directors are appointed and removed, and what happens if a co-founder leaves.

Simplified Proforma for Incorporating Company Electronically Plus — the integrated MCA form used to incorporate a company in India. One form covers name reservation, company registration, DIN allotment, PAN, and TAN.

India's unified indirect tax system replacing VAT, service tax, and excise duty. Applies to supply of goods and services. You must register for GST if your annual turnover exceeds ₹20 lakhs (₹10 lakhs for Northeastern states).

A 15-digit unique identification number assigned to every GST-registered business. The first 2 digits are the state code, next 10 are the PAN, followed by entity code and check digit.

The GST you paid on your business purchases and expenses that you can offset against the GST you collect from customers. Reduces your net GST liability.

The income tax return form specific to companies. Must be filed electronically with a Digital Signature Certificate. Due October 31 every year for the previous financial year. Companies must file even if they have zero revenue or are making a loss.

Quarterly prepayment of income tax if your estimated annual tax liability exceeds ₹10,000. Due in four instalments: June 15, September 15, December 15, and March 15.

A mechanism where the payer deducts tax at the time of payment and deposits it directly with the government. If you pay a contractor, freelancer, or professional above certain thresholds, you must deduct TDS.

A mandatory annual audit of your company's financial statements by an independent Chartered Accountant, required under the Companies Act. Different from the tax audit under the Income Tax Act.

A separate legal entity with limited liability for shareholders, where shares cannot be publicly traded. The most common structure for funded startups in India. Governed by the Companies Act 2013.

A hybrid structure combining the flexibility of a partnership with limited liability protection. Taxed at 30% slab rate instead of flat 22%. Lower compliance cost than Pvt Ltd. Cannot issue equity to investors.

A Private Limited Company with a single shareholder and director. Designed for solo entrepreneurs. Files MGT-7A (simplified return) instead of MGT-7. Mandatorily converts to Pvt Ltd once paid-up capital exceeds ₹50 lakhs or turnover crosses ₹2 crore.

The maximum amount of share capital your company is legally allowed to issue, as stated in your MOA. For example, ₹10,00,000 authorised capital at ₹10 face value = 1,00,000 authorised shares.

The amount of share capital that has actually been issued to shareholders and paid for. For example, if founders put in ₹1,00,000 and received 10,000 shares at ₹10 each, the paid-up capital is ₹1,00,000.

A programme giving employees the right to buy company shares at a predetermined price (the "exercise price") in the future, after a vesting period. Used to attract and retain talent when cash salaries are limited.

The process by which a co-founder or employee earns their equity over time. Standard vesting for founders: 25% vests after year 1 (the cliff), then 1/48th vests each month for the next 3 years.

The minimum time a founder or employee must stay before any equity vests. Standard cliff is 1 year — meaning if they leave before 12 months, they receive 0% of their equity.

A spreadsheet or record showing who owns what percentage of your company, including founders, employees (via ESOPs), and investors. Updated every time new shares are issued.

The reduction in existing shareholders' ownership percentage when new shares are issued — whether to investors, employees (ESOP), or for any other reason. Your percentage goes down, but the absolute value may go up.

What your company is worth before an investor's money goes in. If an investor puts in ₹2 Cr at a ₹8 Cr pre-money valuation, the post-money valuation is ₹10 Cr and they own 20%.

The company's value immediately after an investment is made. Post-money = Pre-money + Investment. The investor's ownership percentage = Investment ÷ Post-money valuation.

Simple Agreement for Future Equity — a document where an investor gives you money now in exchange for the right to convert it into equity at your next funding round, usually at a discount or with a valuation cap.

A loan from an investor that converts to equity at a future funding round, usually at a discount to the next round's price. Accrues interest until conversion.

A non-binding document outlining the key terms of an investment deal — valuation, equity percentage, investor rights, and governance provisions. Becomes binding once both parties sign the final investment agreements.

The right of investors to receive their money back (or a multiple of it) before founders get anything when the company is sold or wound up.

An investor's right to invest additional money in future funding rounds to maintain their percentage ownership as the company grows.

A provision that taxes startup funding received from Indian investors as "income from other sources" if the valuation exceeds the fair market value. Abolished for DPIIT-recognised startups.

Recognition from the Department for Promotion of Industry and Internal Trade under the Startup India initiative. Unlocks significant tax benefits and government scheme access for eligible startups.

A provision allowing DPIIT-recognised startups to claim 100% deduction on profits for any 3 consecutive years out of the first 10 years of existence. Applied for separately after DPIIT recognition.

The predictable, recurring revenue your business generates every month from subscriptions or ongoing contracts. Does not include one-time payments. The most important metric for any SaaS business.

Your total annualised recurring revenue. For most SaaS companies: ARR = MRR × 12. The primary valuation metric for growth-stage companies. Does not include one-time or variable revenue.

The percentage of customers or revenue lost in a given period. Monthly churn of 2% means you lose 2% of your customer base or revenue every month.

The total revenue you expect to generate from a single customer over their entire relationship with your company. LTV = Average Revenue Per Customer ÷ Monthly Churn Rate.

The total cost of acquiring a single paying customer, including all sales and marketing expenses. CAC = Total Sales + Marketing Spend ÷ New Customers Acquired in that period.

The rate at which your company spends its cash reserves. Net burn = total cash spent minus revenue. If you spend ₹15L/month and earn ₹5L, your net burn is ₹10L/month.

How many months your company can operate at the current burn rate before running out of cash. Runway = Cash in Bank ÷ Net Monthly Burn Rate.

The ratio of company valuation to annual revenue (ARR). Used by investors to value growth-stage companies. Example: ₹50L ARR at 10× revenue multiple = ₹5 Cr valuation.

Legal protection for your brand name, logo, or tagline that prevents others from using the same or confusingly similar marks. Registered with the Office of the Controller General of Patents, Designs and Trade Marks.