It checks your current structure (Pvt Ltd, LLP, OPC, proprietorship, or Section 8) against a few high-priority flags: Rule 9B demat-mandate readiness for private companies, s.194T partner TDS exposure for LLPs and firms, and the structural pressures that build toward conversion. It is a triage tool — it tells you which flag needs attention first, not a full compliance audit.

Under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules 2014, private companies are required to facilitate the dematerialisation of their securities — with timelines based on company size (large unlisted companies and new incorporations first, with phased coverage for others). A company without a demat-readiness process gets flagged here so the obligation isn't discovered at the next allotment.

Section 194T of the Income-tax Act 1961 (inserted by the Finance (No. 2) Act 2024, effective 1 April 2025) requires a firm or LLP to deduct TDS at 10% on salary, remuneration, commission, bonus or interest paid to a partner once the aggregate crosses ₹20,000 in a financial year. An LLP still paying partners without a deduction workflow carries a compliance exposure, which this check flags with high weight.

Each flag carries a risk weight — s.194T exposure is weighted highest for LLPs because it is a recurring, event-based deduction with a penalty tail (₹200/day under s.234E for late returns, plus s.272B penalties). The check surfaces the highest-weight items first so you fix the exposure that compounds, rather than the one that looks loudest.

No — it is a fast health check on a handful of known pressure points, not a statutory audit or a full compliance review. For a definitive position on demat timelines, partner TDS, or whether your structure needs to change, a professional review is required. The tool's job is to tell you where to look first.