Top Registration Mistakes Made By Startups in India
If you are planning to start up your business online, then there are plenty of things that you must know. A big amount of money is spent on advanced technologies, tools, business applications and many other things every year. Investment let's you put your innovative ideas into action. But, many individuals like you who want to open their own business are prone to make many registration and other business related mistakes that can spoil your whole investment.
Top Registration Mistakes Made By Startups in India
So, we have listed some of the most common registration mistakes that can jeopardize the success of your startup.
1) Choosing Wrong Business Entity
Many entrepreneurs choose the wrong business entity. So you need to determine the type of business entity to form because compliance with many different registration needs and legal laws depends on your business entity. You can go for a limited liability company, one person company, private limited company, etc.
2) Neglecting Taxes
Remember, there are central and state level authorities that make rules and regulations, policies and regulate business operations. Every business needs to get registered under the relevant authorities. Many entrepreneurs neglect the applicability of some registrations and later they have to pay a big amount as fine and penalties. Let's take a look at some of the government registrations.
- Establishment license: You must get a shop or establishment license for your business location including registered office.
- Import Export Code ( IEC):Transactions related to import and export are only possible if you have IEC Registration.
- GST registration:This must be get by those businesses that are engaged in the supply of goods and services.
- Professional tax:If you are self -employed or even work under an employer, you have to pay this tax. It can be deducted if it is collected by your employer.
3) Missing Tax Payment Regularly
You have to pay taxes except for some exceptions as prescribed under the income tax act. Therefore, you are needed to find out your liability accordingly before the beginning of the financial year for the relevant financial year. Missing it means you have to suffer with penalties. Thus, pay it regularly and you can hire an expert if you have any doubt.
4) Do Not Protect their Intellectual Property
Proactive Business owners must be aware of intellectual property protection. In today's world, it is quite obvious to steal business ideas. There are several instances where businesses spend a large amount of money in a court proceeding in order to reclaim their business intellectual property. As a business entrepreneur, you do not want that way. So, you must protect your ideas to get rid of any business anomalies.
There are two types of intellectual property- Tangible and intangible. Tangible assets are your office building, IT products ,etc. On the other hand, intangible assets include your new product design, good will, company logo and web domain name. Intangible assets come under intellectual property. You must get in touch with an expert in this field to secure these assets by availing registration and copyrights.
5) Wrong Company Name
Choosing the right name for the startup your business online is very important. Registering your company name is not difficult but you need to keep in mind certain things. You must be aware that the selected company name should be unique and do not match with any existing entity. The company name format must follow the guidelines as mentioned in the law. For instance- An one person company needs to register a name like ABC (OPC) private limited. The proposed company name should not include any offensive words or can't violate the trademarks.
6) Now Taking Help of Professional Legal Counsel
Many businesses entrepreneurs and Start-ups employ inexperienced legal counsel to save some money. Usually, they go for someone who is their relative or friend or hire those who provide them a good discount. Don't choose someone like this as it can lead to many legal issues for your business. But, you must look for a professional and experienced legal service provider.
7) Negligence of Legal Due Diligence
It can make or break your investment deal. Business documents are very important and are also the biggest asset of your company. Thus, they should be completed.
8) Ignoring Non Disclosure Agreement
It is a legal settlement between your company and outside business entities to maintain the integrity of your company's intangible assets. This agreement is significant for protecting your company's assets from dublicacy. If you need an outside entity to serve a purpose, then this agreement will confine the involvement of the outsider with the subtleties of your firm simply by imposing relevant provisions. So, do not take it lightly.
9) Not Taking Care of Founder's Agreement
It means memorandum of association ( MoA) and Article of association (AoA) or any other important documents on the nature of your business.
How to register your startup company in India?
Here are some steps you must follow to startup india registration in India.
- Step 1: Firstly, you have to get the registration certificate of your company
- Step 2: Complete details of the directors
- Step 3: You need to collect proof of concepts such as your website link, pitch deck, etc.
- Step 4: Now, register your company with startup India.
- Step 5: Get DPIIT recognition
- Step 6: Go for patent and trademark details. It is not necessary.
- Step 7: Your PAN number.
If you can avoid the above mentioned mistakes, then it will surely help you in moving ahead with start-up your business online. You can hire any professional before Start-up registration as it will streamline the entire registration process.
For different Registration such as public limited company registration, private limited company registration, GST registration, sole proprietorship, ISO Registration, GST Monthly filing, etc, you need some fundamental compliance and knowledge of ethical issues prior to going to register and running your company. Contact ExpertBells today and know more about the mistakes made by many start-up businesses in India. We are available 24 hours, so you can contact us anytime you want.