Advise for Startups- How to Set-up Your Start-up
Legally setting up your startup
Step 1. Deciding the nature of Startup
As soon as you decide what a startup is please decide upon its nature. Decide as to what industry will it cater to in the real world such as entertainment, finance, travel, food, technology, information etc.
This is very important since different industries have different regulation which one must stay aware of before starting its business.
Step 2. Decide the Business Structure
By business structure I mean that you decide whether you want to register your startup as a company, a partnership, a Limited Liability Partnership or a Proprieter Firm.
While registering as company is a bit complex compared to registering as partnership or a proprietership however after the advent of the New Companies Act I will recommend that one registers his startup as a company. Since the new companies act has greatly cut down the legal responsibilites that come with a company it has also increased flexibility of business. As a company it will always be easy for you gather funding etc.
Step 3. Register you company, Logo etc.
Once you have decided upon the business structure, go and register your business. If you are registering as a company please refer to this and this slide show from the economic times . Now a days there are several online legal service provider that can help you with registering your company or partnership very easily.(I would have mentioned there name but it would look like as if I am advertising for them, so google it).
Also, do not forget to register your companies logo etc. since that comes handy while building your website.
Step 4. Get an Account Open
Once you have your company or proprietership registered please open a corporate account with a bank. Do Not Conduct Business with a personal account since it can cause you problems at a later stage.
Step 5. Check with that Industry to which your startup belongs
As soon as you are done with all the above step make sure you know the nature of your business whether it is a service sector business or a manufacturing or sales business.
As soon as you do it you will also be required to register with the service tax or sales tax department respectively.
These are the major regulatory procedures that you MUST FOLLOW. There may be several other regulations that may need compliance but they can be complied with at a later stage once your business gets growing and you come to know more about the business.
It is recommended that you get a professional legal advice from a startup lawyer.
P.S. This advice does not form any attorney client relationship and should not be considered a substitute for professional legal advice.
Lawyer, Entreprenuer and Publisher
Very good article. Thanks for the such a amazing post. Hope it helps startups. Waiting for other useful posts from you.
Excellent Initiative by writing this article. I'd like to ask the following: If I have a Sole Proprietorship in hand, what are its disadvantages as compared to a Company ? Shall I start a new thread regarding this. I Suyansh Manjul and Pulkit Sharma of this group to kindly have a say in this.