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HR Policy for Startups- An Overview

In the rush of building a product and acquiring customers, many Indian startups often overlook the importance of formal HR policies. However, these policies are not just about bureaucracy or paperwork. They are tools to ensure consistency, fairness, and legal compliance.

HR policies balance employee rights and company objectives. They prevent arbitrary decision-making, reduce disputes, and clarify expectations for both employers and employees. They also provide frameworks for discipline, rewards, grievance redressal, and professional conduct, creating a workplace where talent can thrive.

While startups face constraints in time, budget, and HR resources, basic HR policies can go a long way in promoting stability, scalability, and a positive employer brand.

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Related Read: Templates for Startup Founders

Why HR Policies for Startups in India are Crucial?

Here’s why every Indian startup should prioritise HR policies from day one:

• Builds a consistent work culture: Written HR policies foster consistency across teams and leadership, even as the company grows or experiences turnover.
  
  
• Reduces misunderstandings: Policies help resolve or prevent conflicts between employees and employers by clearly communicating rights, responsibilities, and processes.
  
  
• Protects against legal risks: Indian labour laws, workplace safety regulations, and anti-harassment laws require compliance; having HR policies ensures your startup stays compliant.
  
  
• Drives employee morale and loyalty: Transparent policies around leave, performance, and compensation demonstrate that the company cares for its people, fostering trust and engagement.
  
  
• Defines company values and culture: HR policies codify expected behaviour and ethics, reinforcing the cultural DNA you want your startup to embody.
  
  
• Streamlines core HR functions: HR teams can better manage recruitment, onboarding, training, payroll, and performance reviews when guided by clear policy frameworks.

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Major HR Policies for Startups

Here are the key HR policies that Indian startups should prioritise:

Leave Policy

A Leave Policy outlines the various types of leave employees can avail themselves of, including:

• Casual leave
• Sick leave
• Paid time off (PTO)
• Maternity/Paternity leave
• Public holidays

Clearly define leave eligibility, accrual, approval processes, and encashment rules to avoid confusion.

Menstrual Leave Policy

Many progressive startups in India now include a Menstrual Leave Policy offering additional flexibility to female employees. Typically, this includes:

• A set number of days of paid leave per month or year specifically for menstrual health.
• A simple, stigma-free process to request this leave.

Performance Management, Appraisal, Rewards & Recognition Policy

A well-defined Performance Management Policy ensures that employees understand how their work is evaluated and rewarded. Include:

• Goal-setting frameworks (OKRs, KPIs)
• Appraisal cycles and review processes
• Criteria for promotions and salary hikes
• Recognition mechanisms (awards, bonuses, public appreciation)

Code of Conduct

A Code of Conduct defines acceptable behaviour and ethical standards at the workplace. Cover aspects such as:

• Professionalism and respect
• Anti-discrimination
• Anti-bribery and corruption
• Use of company property
• Conflict of interest
• Disciplinary actions for violations

Employee Joining and Exit Policies

Clearly outline onboarding and offboarding procedures:

• Documents and verification required upon joining
• Probation period terms
• Notice period during resignation or termination
• Final settlement process
• Exit interviews and knowledge transfer

Salary and Other Perks

Document your Salary and Benefits Policy, including:

• Salary structure (CTC breakup)
• Frequency of salary payment
• Statutory benefits (PF, ESIC, gratuity)
• Voluntary benefits (insurance, wellness programs, stock options)
• Reimbursement policies (travel, meals, etc.)

Sexual Harassment in the Workplace Policy

It is mandatory under the POSH Act, 2013, for Indian companies with 10 or more employees to have an Anti-Sexual Harassment Policy. The policy should:

• Define sexual harassment
• Outline the complaints process
• Establish the Internal Complaints Committee (ICC)
• Ensure confidentiality and protection for complainants

Regular Working Hours

A Working Hours Policy defines:

• Standard working hours
• Flexible working options, if any
• Remote work guidelines
• Overtime policies (if applicable)
• Break and meal times

Related Read: Startup India Scheme: Eligibility Criteria and Benefits

 Frequently Asked Questions

What Is ROC Full Form?

ROC stands for Registrar of Companies. It is a government body responsible for regulating and overseeing company registrations and compliance in India. The ROC plays a key role in corporate governance by maintaining company records, approving registrations, and ensuring adherence to statutory requirements.

About ROC Filing

ROC filing refers to the mandatory submission of financial statements and annual returns by companies to the Registrar of Companies. Under the Companies Act of 2013, all registered entities must comply with ROC filings to ensure proper documentation of their financial activities and operational status. Failure to comply can result in penalties, fines, or legal action.

Why ROC Filings Are Necessary?

ROC filings serve multiple purposes:

• Ensuring Legal Compliance: Companies must file returns and financial statements as mandated by law.
  
• Transparency & Financial Accountability: Stakeholders, including investors and creditors, rely on these filings to assess a company’s financial health.
  
• Regulatory Oversight: The government uses ROC filings to monitor corporate activities and prevent fraudulent practices.
  
• Avoiding Penalties: Late or non-compliance can result in heavy fines and even disqualification of directors.
  

Functions of ROC

The Registrar of Companies performs several key functions:

• Approves and registers new companies.
  
• Maintains company records and statutory filings.
  
• Monitors corporate compliance and governance.
  
• Regulates financial disclosures and annual returns.
  
• Handles company dissolution and winding-up processes.
  

Who Is Responsible For ROC Filings?

The responsibility for ROC filings lies with Company Directors, Company Secretaries & Auditors.

Failure to comply with ROC filing requirements can lead to penalties, disqualification of directors, and even company deregistration. Hence, the combined responsibility of directors, company secretaries, and auditors ensures the company remains legally compliant and operational.

ROC Filing Process: A Step-By-Step Guide

Step 1: Preparatory Board Meeting

Auditors and company officials prepare financial statements and reports.

Step 2: Subsequent Board Meeting

The Board of Directors reviews and approves the financial statements.

Step 3: Annual General Meeting (AGM)

Shareholders review and finalise financial reports and pass resolutions. The approved documents are submitted to the ROC.

Documents Required For ROC Filing

• Financial Statements (AOC-4): Balance sheet, profit & loss account, cash flow statement.
  
• Board’s Report: Overview of company operations, risk management policies.
  
• Annual Return (MGT-7): Company details, shareholding pattern.
  
• Auditor’s Report: Assessment of financial statements.
  
• Shareholder Resolutions: Approvals related to finances, and director appointments.
  
• Director Disclosures: Details of director interests and compliance declarations.
  

Due Date For ROC Filing

Key deadlines for different ROC filings include:

• AOC-4 (Financial Statements): Within 30 days of AGM
  
• MGT-7 (Annual Return): Within 60 days of AGM
  

ROC Filing Fees

ROC filing fees vary depending on company type, share capital, and document type. Fees may range from a few hundred to several thousand rupees.

The ROC fees for filing forms, including AOC-4 and MGT-7, are as stated below:  

Amount of Penalty Levied On Late ROC Filing

• Delay in AOC-4 filing: ₹100 per day
  
• Delay in MGT-7 filing: ₹100 per day
  
• Persistent non-compliance may lead to company strike-off and director disqualification.
  

Company Registration by ROC

The Registrar of Companies (ROC) oversees the incorporation and regulation of companies under the Companies Act, 2013. Registering a company involves multiple steps, from obtaining name approval to compliance with statutory requirements post-incorporation. Below is a detailed breakdown of the process:

Step 1: Name Approval

Before registering a company, select a unique name and submit it for approval through the SPICe+ (Simplified Proforma for Incorporating a Company Electronically) Part A form on the Ministry of Corporate Affairs (MCA) portal.

Step 2: Submission of Incorporation Documents

Once the name is approved, the company must prepare and file the necessary incorporation documents. This is done through the SPICe+ Part B form on the MCA portal.

Step 4: Compliance with the Companies Act

After incorporation, the company must comply with several regulatory requirements, including:

• Opening a Business Bank Account
  
• Issuing Share Certificates
  
• Declaration of Business Commencement (INC-20A)
  
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ROC Refusal For Company Registration

The ROC may refuse registration due to:

• Non-compliance with legal requirements.
  
• Similarity with existing company names.
  
• Incomplete or incorrect documentation.
  
• Business activities not aligning with statutory provisions.
  

To avoid rejection, ensure proper documentation, follow name guidelines, and meet statutory conditions.

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Role of ROC After Registration of a Company

Once a company is registered, the Registrar of Companies (ROC) continues to play an important role in ensuring that the company complies with legal and regulatory requirements.

1. Monitoring Compliance with Statutory Requirements

After incorporation, companies must adhere to various statutory requirements to maintain legal standing. The ROC monitors compliance by ensuring that companies:

• Hold board meetings and general meetings as per legal requirements.
  
• Maintain statutory registers, including those related to shareholders, directors, and financial records.
  

2. Ensuring Timely Filing of Annual Returns & Financial Statements

The ROC mandates companies to submit annual filings to ensure financial transparency and accountability. Key filings include:

Mandatory ROC Filings:

1. AOC-4 (Financial Statements)
   
2. MGT-7 (Annual Return)
   
3. DIR-3 KYC (Director KYC Compliance)
   
4. INC-20A (Declaration of Business Commencement)
   

3. Overseeing Corporate Governance & Legal Transparency

The ROC plays a significant role in ensuring that companies maintain good corporate governance practices, such as:

• Ensuring fair and transparent financial reporting.
  
• Verifying changes in directorship.
  
• Monitoring mergers, acquisitions, and corporate restructuring processes.
  

Final Thoughts

Incorporating a company is just the beginning, ongoing compliance with ROC filings is key to sustaining a business.

Ignoring ROC filings can lead to fines, legal troubles, and even business deregistration while maintaining compliance opens doors to credibility, funding, and seamless operations. The choice is clear- businesses that prioritise regulatory adherence set themselves up for long-term success, while those that neglect it risk costly consequences.

Frequently Asked Questions

Meaning Of Registered Office Of A Company

The registered office of a company is its principal place of business, serving as its official address for all legal and government-related correspondence. It must be a physical postal address located within the Registrar of Companies (ROC) jurisdiction where the company is registered.

It is not necessarily the same as the place where day-to-day operations are carried out (corporate office or branch office). Instead, it ensures that government authorities and stakeholders know where to contact the company for statutory purposes.

Registered Office Requirement during Company Registration

At the time of incorporation, every company must declare its registered office. For this, certain documents are required:

• Proof of address (electricity bill, water bill, or property tax receipt, not older than 2 months)
• No Objection Certificate (NOC) from the landlord (if the property is rented)
• Rent/lease agreement in case of rented premises, or property ownership documents in case of owned premises

If the company does not have a permanent office at the time of registration, it can declare a temporary address. However, the final registered office must be filed with the ROC using Form INC-22 within 30 days of incorporation.

Importance Of the Registered Office Of A Company

Declaring and maintaining a registered office is a legal mandate under the Companies Act, 2013. Its importance can be summarised as follows:

• Legal Compliance: A company must have a registered office within 30 days of incorporation.
• Official Address for Communication: All government notices, summons, and correspondence are sent to this address.
• Use on Official Documents: The registered office address must be printed on all letterheads, invoices, business correspondence, and official publications.
• Jurisdictional Relevance: It determines the ROC jurisdiction under which the company falls and where records are maintained.

Without a registered office, a company cannot be considered legally compliant.

Change In The Registered Office Of A Company

Companies may shift their registered office after incorporation. The process depends on the nature of the change:

1. Change within the same city/town/local limits: Notify the ROC by filing Form INC-22 within 15 days.
2. Change outside local limits but within the same ROC jurisdiction: Requires passing a special resolution and filing with the ROC.
3. Change from one ROC jurisdiction to another (state-level change): Needs approval from the Regional Director, shareholder consent via special resolution, and filing of required forms (INC-22 & MGT-7).

In every case, the company must update its address on all official documents.

Registered Office of an LLP

Like companies, Limited Liability Partnerships (LLPs) are also required to declare a registered office during incorporation. This is where all legal and government correspondence is sent. Any change must be filed with the ROC using Form 15.

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Registered Office of a Private Limited Company

A Private Limited Company must declare its registered office within 30 days of incorporation and notify the ROC of any change through Form INC-22. It acts as the official point of communication and is used on all business documents.

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Registered Office of a One Person Company (OPC)

For an OPC, the registered office requirement is the same as that of other companies. It must be declared during incorporation, and any changes should be reported to the ROC. Since OPCs have single ownership, the registered office is key in establishing legal identity.

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Difference Between A Registered Office And A Corporate Office

Many businesses confuse the registered office with the corporate office, but they serve different purposes:

• Registered Office:
  
  
  • Legal requirement under the Companies Act
  • Official address for receiving government and legal communications
  • Determines the jurisdiction of the ROC
  • Must appear on all statutory documents
    
    
• Corporate Office:
  
  
  • Operational headquarters of the company
  • Where executives and employees manage daily business activities
  • Focuses on decision-making, sales, and operations
  • Not a legal mandate under the Companies Act

In simple terms, the registered office gives the company its legal identity, while the corporate office drives its business operations.

Frequently Asked Questions (FAQs)