64 terms, each in one plain sentence.
The forms, sections and jargon you will meet from incorporation to your first funding round. One-line definition here; on each term's page, how it works, a worked example, the mistakes we see and the questions founders ask.
A
- ADT-1 ADT-1 is the MCA form a company files to notify the Registrar that it has appointed a statutory auditor, due within 15 days of the appointment.
- Advance tax Advance tax is income tax paid in four instalments during the year, due on 15 June, 15 September, 15 December and 15 March, by anyone whose tax after TDS exceeds ₹10,000.
- AGILE-PRO AGILE-PRO-S (Form INC-35) is the form linked to SPICe+ that applies for GST, EPFO, ESIC, profession tax and a bank account in the same incorporation filing.
- AIS The Annual Information Statement (AIS) is the income tax department's record of your financial transactions for the year, including interest, dividends, share sales, TDS and high-value spending.
- Angel tax Angel tax was income tax under Section 56(2)(viib) on the premium a startup received above fair value when issuing shares; it was abolished for all investors from FY 2024-25.
- AOA The Articles of Association (AOA) are a company's internal rulebook, setting how shares are issued and transferred, how directors are appointed, and how meetings and decisions work.
- AOC-4 AOC-4 is the annual MCA form through which a company files its audited financial statements, board report and auditor's report, due within 30 days of the AGM.
- Authorised capital Authorised capital is the maximum value of shares a company is permitted to issue under its MOA, and the figure on which MCA fees and stamp duty at incorporation are calculated.
C
- Cliff A cliff is the initial period in an ESOP or founder vesting schedule, usually one year, during which no shares vest at all; on the cliff date the first tranche vests together.
- CMA data CMA data (Credit Monitoring Arrangement data) is the set of financial statements and projections, in a bank-prescribed format, that a business submits when applying for a working capital or term loan.
- COI The Certificate of Incorporation (COI) is the document issued by the Registrar of Companies that proves a company legally exists, showing its name, CIN, PAN, TAN and date of incorporation.
- Composition scheme The composition scheme is a simplified GST option for small businesses with turnover up to ₹1.5 crore (₹50 lakh for services), paying 1% to 6% of turnover with quarterly filing and no input credit.
D
- DIN A Director Identification Number (DIN) is the permanent 8-digit number every director of an Indian company must hold, allotted by the MCA and used in all company filings.
- DIR-12 DIR-12 is the MCA form a company files to report the appointment, resignation or change in designation of a director or key managerial person, within 30 days of the event.
- DIR-3 KYC DIR-3 KYC is the annual verification every DIN holder must complete on the MCA portal by 30 September, confirming their identity, address, mobile and email; late filing costs ₹5,000.
- DPIIT DPIIT is the Department for Promotion of Industry and Internal Trade, the central government department that grants Startup India recognition and administers the benefits attached to it.
- DPT-3 DPT-3 is the annual return of deposits and loans that every company files with the MCA by 30 June, covering money received from directors, members and others as on 31 March.
- DSC A Digital Signature Certificate (DSC) is a USB token that lets a person sign government e-forms; every director signs MCA filings, and authorised signatories sign GST and income tax filings, with one.
E
- E-invoicing E-invoicing is the GST rule requiring businesses with turnover above ₹5 crore to register every B2B invoice on the Invoice Registration Portal, which returns a unique IRN and QR code.
- E-way bill An e-way bill is the electronic document generated on the GST portal before goods worth more than ₹50,000 are moved, carrying the invoice details, vehicle number and the route's validity period.
- ESOP An Employee Stock Option Plan (ESOP) gives employees the right to buy company shares at a fixed price after a vesting period, so they share in the value they help create.
- Examination report An examination report is the Trademark Registry's written objection to a trademark application, citing grounds such as similarity to an existing mark, and requiring a reply within 30 days.
F
- Form 11 Form 11 is the annual return every LLP files with the MCA by 30 May, listing its partners, their contributions and any changes during the financial year ended 31 March.
- Form 16 Form 16 is the TDS certificate an employer issues to each employee by 15 June, showing the salary paid, deductions claimed and the tax deducted and deposited during the financial year.
- Form 26AS Form 26AS is your consolidated annual tax statement on the income tax portal, showing all TDS and TCS credited against your PAN, advance tax paid, refunds and high-value transactions.
- Form 8 Form 8 is the Statement of Account and Solvency that every LLP files with the MCA by 30 October, declaring its financial position at 31 March and that it can pay its debts.
- Founders' agreement A founders' agreement is the contract in which a startup's co-founders record the equity split, vesting, roles, decision-making, IP ownership and what happens to a founder's shares if they leave.
G
- Good leaver and bad leaver Good leaver and bad leaver are the categories a founders' or shareholders' agreement uses to decide what a departing founder keeps and the price at which their shares are bought back.
- GSTIN A GSTIN is the 15-character Goods and Services Tax Identification Number issued to each registered business in each state, built from the state code, the PAN, an entity digit and a check character.
- GSTR-1 GSTR-1 is the monthly or quarterly GST return in which a registered business reports every outward supply, invoice by invoice for B2B sales, due by the 11th of the following month.
- GSTR-3B GSTR-3B is the monthly self-assessed summary GST return in which a business declares its total sales, claims input tax credit and pays the net tax, due by the 20th of the following month.
- GSTR-9 GSTR-9 is the annual GST return that consolidates a year's GSTR-1 and GSTR-3B filings, due by 31 December; it is optional for businesses with turnover up to ₹2 crore.
H
I
- IEC An Importer Exporter Code (IEC) is the 10-character registration from the DGFT that any business needs to import or export goods, or to receive foreign payment for exported services.
- INC-20A INC-20A is the declaration of commencement of business a company must file within 180 days of incorporation, confirming the shareholders have paid for their shares and the registered office is verified.
- INC-22 INC-22 is the MCA form that notifies the Registrar of a company's registered office address, filed within 30 days of incorporation if not fixed in SPICe+, and within 30 days of any change.
- Input tax credit Input tax credit (ITC) is the GST a registered business paid on its purchases that it can set off against the GST it collects on sales, so tax is paid only on the value added.
- ITR-3 ITR-3 is the income tax return form for individuals and HUFs with income from a business or profession that is not covered by presumptive taxation, along with salary, property and capital gains.
- ITR-4 ITR-4 (Sugam) is the simplified income tax return for resident individuals, HUFs and partnership firms declaring business or professional income under presumptive taxation, with total income up to ₹50 lakh.
M
- Madrid Protocol The Madrid Protocol is the treaty behind WIPO's Madrid System, which lets an Indian business file one international trademark application through IP India and ask for protection in any of the other member countries.
- MGT-7 MGT-7 is the annual return a company files with the MCA within 60 days of its AGM, listing shareholders, directors, share capital, meetings and changes during the year; small companies file MGT-7A instead.
- MGT-7A MGT-7A is the abridged annual return that small companies and One Person Companies file with the MCA within 60 days of the AGM (or its due date for an OPC) in place of MGT-7.
- MIS MIS (management information system) reports are the monthly pack of financial and operating numbers a business reviews to run itself: revenue, margins, cash, receivables, burn and key metrics against plan.
- MOA The Memorandum of Association (MOA) is a company's charter document, stating its name, registered state, objects, liability of members, authorised capital and the first subscribers to its shares.
- MSME-1 MSME-1 is the half-yearly return a company files with the MCA, by 30 April and 31 October, listing payments to micro and small enterprise suppliers that were outstanding for more than 45 days.
P
- Paid-up capital Paid-up capital is the amount shareholders have actually paid to the company for the shares issued to them, and it cannot exceed the authorised capital stated in the MOA.
- Presumptive taxation (44AD and 44ADA) Presumptive taxation lets small businesses declare 8% of turnover (6% if digital) under Section 44AD, and professionals 50% of receipts under 44ADA, as taxable profit without maintaining audited books.
R
- Reverse charge Reverse charge is the GST rule under which the buyer, not the seller, must pay the tax on certain purchases, such as services from a lawyer, a goods transport agency or an overseas supplier.
- RUN RUN (Reserve Unique Name) is the MCA web service for reserving a company or LLP name; new companies now reserve names through SPICe+ Part A, while RUN-LLP serves LLPs and RUN serves name changes.
S
- SAC code A SAC code is the six-digit Services Accounting Code, beginning with 99, that classifies a service under GST and determines its tax rate on invoices and returns.
- Section 80-IAC Section 80-IAC gives a DPIIT-recognised startup a 100% income tax deduction on profits for any three consecutive years out of its first ten, on approval by the inter-ministerial board.
- Shareholders agreement A shareholders agreement (SHA) is the contract between a company's founders, investors and the company that sets out rights on shares, board seats, decision-making, transfers and exit.
- SPICe+ SPICe+ is the MCA's integrated web form for incorporating a company, with Part A for name reservation and Part B for incorporation, PAN, TAN, DIN allotment and the linked AGILE-PRO-S registrations.
T
- TAN A Tax Deduction and Collection Account Number (TAN) is the 10-character number every business that deducts or collects tax at source must hold and quote on TDS payments, returns and certificates.
- Tax audit A tax audit under Section 44AB is an independent audit of accounts for income tax, required when business turnover exceeds ₹1 crore (₹10 crore if cash is under 5%) or professional receipts exceed ₹50 lakh.
- TDS Tax Deducted at Source (TDS) is income tax that a payer withholds from salaries, rent, professional fees, contractor payments and interest at prescribed rates and deposits with the government on the payee's behalf.
- Term sheet A term sheet is the short, mostly non-binding document in which an investor sets out the proposed valuation, investment amount, share type, board rights and key protections before due diligence and final agreements.
- TM-A TM-A is the single application form for registering a trademark in India, filed online with the Trademark Registry for one or more of the 45 classes, at ₹4,500 or ₹9,000 per class.
- Trademark class A trademark class is one of the 45 categories in the Nice Classification, 1 to 34 for goods and 35 to 45 for services, in which a mark is registered and protected.
U
V
- Valuation Valuation is the estimated worth of a company, expressed as pre-money before an investment and post-money after it, used to price shares in a funding round, ESOP grant or share transfer.
- Vesting Vesting is the schedule over which an employee or founder earns the right to their ESOPs or shares, usually four years with a one-year cliff, so that equity is earned by staying and contributing.
- Virtual CFO A virtual CFO is an outsourced, part-time finance head who handles budgeting, cash planning, MIS, investor reporting, fundraising support and compliance oversight for a business that cannot yet justify a full-time CFO.