In May 2023, the Ministry of Corporate Affairs launched C-PACE — a compliance enforcement initiative. Within months, 38,658 Indian companies were struck off the register. Most of them were startups and small businesses.
The founders didn't plan to fail. They just stopped filing.
The MCA strikes off companies that fail to file annual returns (MGT-7) and financial statements (AOC-4) for two consecutive years. The process is automated now — there's no warning letter, no second chance.
Here's the timeline that kills most startups:
The penalty isn't just legal. A struck-off company can't raise funding, open bank accounts, sign contracts, or hire employees. It's effectively dead — even if the product is live and generating revenue.
Beyond MCA filings, GST compliance is the biggest operational killer for Indian startups. GSTR-3B must be filed monthly. GSTR-1 quarterly. Miss one and you're paying ₹50/day in late fees, minimum. Miss two and your GST registration gets suspended.
A suspended GST number means you can't invoice customers legally. For a B2B SaaS startup, that's instant death.
The simplest answer: build a compliance calendar based on your founding date and set reminders 7 days before every deadline. Most companies that get struck off simply didn't have a system.
Compyte auto-generates your compliance calendar the moment you enter your founding date. Every filing is tracked, every deadline is flagged, and penalties are calculated live so you know exactly what's at stake.
Compyte auto-generates your GST, TDS, and ROC compliance calendar from your founding date.