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Top Registration Mistakes by Startups in India

Top Registration Mistakes by Startups in India

Top Registration Mistakes by Startups in India – Are you a young graduate and planning to start your own business or have already stepped in entrepreneurship? In both cases, there are a lot of things that you need to know and understand. 

Every year, vast sums of money are invested in technologies, apps, and other similar endeavors. Investments enable you to put your ideas into action, but today’s entrepreneurs are prone to make mistakes that might jeopardize their whole investment. As a result, we’ve compiled a list of the most common registration blunders that might jeopardize a startup’s success.


A start-up is a young company that is usually founded with an objective to develop a unique product or service and introduce it to the market. The start-up is initially funded by the founders or their friends and families

Many businesses fail in their first few years. This is why the first few months are so crucial. Entrepreneurs must raise funds, develop a company strategy and plan, employ key staff, iron out nitty-gritty issues like stock holdings for partners and investors, and prepare for the long term. Many of today’s most successful businesses—including Microsoft (MSFT), Apple (AAPL), and Facebook (FB), to mention a few—began as startups and eventually became publicly listed.

Start-ups are generally risky propositions, but potential investors have various approaches to determine its value. Start-ups start with an idea that they have to develop, test and market. It involves investing considerable amount of money. We cannot run from the bitter truth that majority of the start-ups today fail, but some of the start-ups have gone onto becoming history’s most successful start-ups. For eg- Microsoft, Ford Motors etc.

Registration Mistakes

1. Opt for the Right Legal Structure for Your Business :

If you are planning to start your business, it is very important to know about the business formats, under which you can register. You can register your business as a private limited company or sole proprietorship firm. 

Before deciding how you have to register your business, you should be aware of its advantages and disadvantages.

2. Single founder-one man army

If you are a founder and think that you can carry on the business on your own, it is time to rethink! As you grow you will need people to bring in expert knowledge, capital and enterprise skills. Choose an entity structure that allows multiple people join you as the business grows.

Note: in one person company, there can be only one member, however, there can be multiple directors.

3. Not regarding employees as assets

In case you need to develop your business, you need capable individuals working for your business. How would you draw in this ability and keep it unblemished? You have to offer the most ideal motivators and deal with emotional and mental health at work.

Presently, companies hold various engaging and exciting training workshops and persuasive seminars to keep the worker fit and stress-free in the working environment. Indeed, even workers are made the member of ESOPs (Employment Stock Option Plan), along with these lines employees sense the responsibility for work and attempt to put his or her best attempt forward to adjust his attempt to business objectives.

4. Delay in lunching business

In case you have a business plan and if it is actionable, then get it registered under appropriate framework and get legal protection also. Delay in launching your business could be a mistake that you would want to avoid. It can also delay the benefits that you are about to experience therefore, you should kick start the business if you got a business plan and if it’s actionable.

5. Non-protection of intellectual property

Do you realize how critical it is to obtain legal protection for your intellectual property? It is critical to obtain such protection since the output of your brain might be used for profit by others, resulting in the loss of commercial possibilities as well as financial loss.

Aside from tangible assets such as buildings, different intangible assets are acquired and created over the life of a firm. It may be your domain name, corporate logo, distinctive product design, form, or a unique blend of components that distinguishes your product from the competition. Intellectual property refers to things like ideas, logos, and innovations.

6. Ignorance of the legal boundaries and taxation 

Authorities at the federal and state levels establish rules and regulate company activities. Businesses are needed to register under the applicable authorities’ legislation.

It is typical to see enterprises disregard the application of some registrations and end up paying hefty fines and penalties for failing to register with the appropriate authorities.

The following are some of the different government registrations:

Shop and Establishment License– For your business locations such as your registered office, branch office, and so on, you may be needed to get a shop and establishment license. Top Registration Mistakes by Startups in India.

IEC– Transactions involving import and export are only feasible if you have an Import Export Code.

GST Registration– Those involved in the provision of goods and services in India should get GST Registration.

When a person is self-employed or works for an employer, they must pay professional tax. The employer is the one who deducts and collects it. Furthermore, it is only applicable in a few states.

EPF (Employee Provident Fund) Act– The EPF (Employee Provident Fund) Act applies to businesses with more than 20 workers.

7. Now hiring professional legal counsel

Sometimes to save cost and expenses Startup companies hire Inexperienced legal counsel who is friends or relatives or provide discounts which lead to many Legal problems for the company. Therefore, I would like to point out that A startup company seeks the service of a competent and Professional Legal Service Provider. Top Registration Mistakes by Startups in India

Conclusion – Top Registration Mistakes by Startups in India

If you’re just starting started with your new firm, make sure you avoid these common registration blunders. Company registration, deciding of partnership deed, and some basic yet crucial decisions are necessary to make for the startup to run smoothly and in a long run. Using the services of legal professionals before registering a business can also help to streamline the process.

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