Indian Laws and Rules to take before setting up a Business

Starting a business? then you should choose a proper legal structure. Before setting up a business in India, some essential registrations are required and are mandatory by law of Indian government. Such as Tax Deduction, VAT Registration, Collection Account Number, Service Tax Registration and Permanent Account Number (PAN) etc.

In India mostly entity structures for startups are private limited company and limited liability partnership.

The choice should be based on the number of components such as nature of business, business trajectory, tax considerations, charges of formation and capital and type of funding, number of stakeholders, mechanism for profit sharing or distribution amongst investors etc.

Business licenses are permits issued by Indian legal system that allow startups to continue to work in a particular industry within its territorial jurisdiction. The license requirements are based on nature of enterprise. Additional factors may comprise the number of employees, locality of business and business ownership type.

It is very important for the sustainable development of any enterprise that the startup is in compliance with legal, secretarial, accounting, taxation, employee related. The penalties of non-compliance can charge penalties on the entity.

Protecting intellectual property with proper registration is very important for startups gain competitive advantage. It is necessary to trademark your property under the Trademarks Act. Registration of a firm or corporation does not provide security against those who might steal your idea and start a business. Intellectual Property Civil rights are a very vital for a startup.

Another important point to consider is Founder equity it must be divided amongst founders on the basis of capital, time and effort contributed. People should not divide equity equally by default without considering the above mentioned factors because it usually leads to tautness amongst teams as the company grows.

 


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