The startup culture in India is more vibrant than ever. But as far as startup ecosystems go, certain aspects still lacking in the country. Regardless of the vertical one belongs to, every startup needs to pay close attention to compliance, and this can be a minefield.
A report from 2018 shows that lack of proper compliance is a major cause of startups failing to either gain business acumen or attract investors. Compliance cost is also another factor that keeps startups from considering taking the necessary steps.
There are thousands of startups running in India that are not compliant with either state, national or international business laws. And this is primarily because of a lack of proper mentorship for young CEOs.
What Are Some of the Most Important Compliance Factors?
Startup CEOs in India need to consider compliance as a prerequisite to starting a business. This includes finance and accounting, taxes, security, data protection, payroll, HR, etc.
While there are consultancies popping up that can help CEOs achieve satisfactory compliance levels, being all-round compliant is still something many are yet to achieve.
Especially for startups that aim to raise funds via investors, the lack of compliance can often lead to a deal being rejected. All organizations should not only adhere to local financial compliance laws but also ensure they are considering regulations under International Financial Reporting Standards.
Since most startups are heavily reliant on technology to achieve a competitive edge, data compliance becomes equally important. India still lacks any solid data policies for startups. The best step is to ensure that your business is GDPR compliant, and also ensure there is physical data protection services available for in-office employees.
Lastly, payroll and HR compliance is something that needs to be looked at by startup CEOs everywhere. Running a business without an HR team is not only dangerous but also unethical.
Leveraging Technology and Building an Ecosystem
There are many compliance management software available in today’s market to help startups gain better regulations. However, what is really needed is an ecosystem whereby CEOs are trained to achieve the best possible compliance standards right from the get-go.
India is currently the third largest startup ecosystem in the world, and it needs to ensure that certain critical aspects are covered in order to compete with the world truly. The burden of responsibility also falls on the government to ensure that the compliance process is made accessible to all without hassle.
