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Have you heard about the concept of “Be your own boss” (BYOB)? Have you ever listen to the people cribbing about their workplace and saying that if I were the boss, I would have run this business in a much better way. Let us inform you, gone are the days of sitting back and watch the show. In this article we will discuss about Top Registration Mistakes by Startups.
Welcome to the 21st century, where “nothing is impossible”, millennials have already their businesses built before even getting out of the college. Entrepreneurs are taking the hold of the market. But if we look at the statistics, they are very few startups which are able to make it big in this fray.
If you have an idea and looking to make it into a business, or already in the nascent stage, then you must learn from the mistakes done by people in their start-up business.
Further, in this blog we will take a look at the registration mistakes by the startups, you can avoid.
Table of Contents
There are numbers of startups launching every day; even so, there are only a few making it to the headlines. And at times, it is seen, in spite of having the great and unique idea, these startups hang stuck at their initial stages only. Their failure at the beginning stages owes to the registration mistakes.
If you are new to the business, then let us inform you there are lots of businesses formats, under which you can register your business to kick start your entrepreneurial journey. If we look at the current situation, you can register your business in the form of Private Limited Company, One person company, Limited Liability Partnership firm, or Sole proprietorship firm.
You must choose the entity of business carefully, as they come with their pros and cons. Before a business entity, you must ask yourself, which business entity to opt for?
If we look around, we see lots of people operating their business on their own. However, we never bother to look at the insights of a business. Every business sooner or later requires the help of more than one person for the successful functioning of the business.
As your business progresses, you need to bring in more people to have kept the things in control. You may want to consult experts regarding different aspects of the business.
If you want to grow your business, you need to have talented people working for your business. How do you attract this talent and keep it intact? You need to offer the best incentives possible and take care of emotional and mental health at work.
Now a day, organizations hold lots of entertaining &learning workshops and motivational seminars to keep the employee fit and relaxed at the workplace. Even employees are made the part of ESOPs (Employment Stock Option Plan), this way employees feel the ownership of the entity and try to put his best foot forward to align his effort with business goals.
Are you someone, who is running the business without registering it? If you have a business plan and started working on it, do not delay to get it registered under the suitable framework and earn the legal protection for your business and all the members involved in the business.
Funds are essential for the growth of the business. You need to be very careful and subtle in choosing the business structure, where you could manage the capital and tackle the unforeseen challenges in the journey of your startup growth.
Have heard about the allegations made regarding the idea of Facebook being stolen at the time of the inception? Even there is a Hollywood movie made on the same. We are not sure how much truth prevails, however, there are reports, news, etc of ideas being stolen every then and now.
Can you segregate the intellectual property/assets of your business? Do you know how to protect your idea and keep it safe?
There are basically two types of assets, tangible and intangible assets. Tangible assets include assets such as building, equipment, etc. While the domain name, unique product design, shape, label, company logo, a unique combination of ingredients which makes your products and services stand out in the market comes under the intangible assets.
All these ideas and intangible assets fall under the category of intellectual property.
Companies must contact legal service provider such as Enterslice to protect their intangible assets by registering them under applicable protections such as Patents, Copyrights, and Trademarks.
You can always ask, whoever is involved in the business to sign the non-disclosure agreement. There are cases when you are involving someone or taking their help, you need to explain the details of the business.
“The best startups generally come from somebody needing to scratch an itch.”–Michael Arrington
In this case, there might be a risk of getting your idea stolen
As we all know, in our Indian education system, it is unlikely to learn about the taxes and other aspects of it, which is needed by everybody at some point in time.
When you start a business, dealing with taxes is a separate task in itself. It is always advisable to hire somebody or outsource your work to get it done on time. There are multiple central and state level taxes. Before starting a business you must consult a firm, where people could educate you regarding the registration need to be done beforehand. There are several types of registrations and licenses such as shop and establishment license, IEC (import-export code), GST registration, Professional tax, Employee provident fund.
If you have defined the roles and responsibilities to be fulfilled by the co-founders of the company, that’s an amazing step. However, have you made them sign the Co-founders agreement? Are you not aware of the term Co-founders’ agreement?
Co-founders agreement is crucial as it protects the co-founders from the dispute and serves as a legal agreement which can be used to resolve the disputes in the court of law.
You may need to take ask for the expert advice for clearly defining the terms and conditions.
All startups need to draft these as per the acts and laws to avoid the legal troubles in the future.
Avoiding Registration Mistakes can beneficial for them.
We wish you all the best for your future startup. For any query, please contact Enterslice.
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
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Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
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