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Legal Advice for Startup Company in India

With the ease in company registration process more and more aspiring entrepreneurs are motivated to bring their dream of forming a Startup into reality. When a startup is being incorporated, it goes through several phases. There are separate legal requirements for every phase like at an initial stage every startup is required to procure the business license, obtain registration, maintain books of accounts, taking care of taxation, drafting vendor contracts etc. The various legal advice that every startup must take include the following-

  1. Choosing the best legal structure- This is one of the most crucial decisions that must be taken by every startup. While taking this decision multiple factors must be considered such as nature/sector of business operation, business trajectory, regulatory and tax considerations, costs of formation, ongoing administration and many more. However, the most preferred entity structures for startups in India are limited liability partnership and private limited company.
  2. Obtaining Registrations and licenses- Any business entity is mandatorily required to obtain certain registrations as per the applicable law. Some examples are Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), Goods and Service tax number. Further according to the nature of the business entities they are required to obtain the Business licenses issued by a government authority that allow startups to start/conduct/continue to operate a particular business within its territorial jurisdiction lawfully.
  3. Protecting intellectual property rights- In the era of modernization, one of the most crucial assets for any business entity is its Intellectual property rights. These assets help the startups to establish a distinct brand image and gain the competitive advantage over others. One significant thing to be noted here is that Registration of a company or business in India does not by itself give protection against others who might commence using identical or similar marks. A trademark search should be conducted before deciding on these business name/ trade names to prevent any issues in future including potential infringement.
  4. Agreements – In case there is more than one founder of the startup then there is a need to formulate the agreement between them in order to establish the relationship between the founders of a startup. In the agreement, the roles, responsibilities and the rights of each partner shall be specified.
  5. Compliance Management- Just incorporating the startup is not enough. The companies once registered are required to fulfill certain annual compliance requirements and other requirements to avoid government intervention and hefty penalties. To manage the compliances of the company it may take some professional guidance.
  6. Third party Agreement- Utmost care must be taken by the company while entering into any third party agreements and setting out its terms and conditions. The clauses related to breach, termination and dispute resolution should be well negotiated and captured in all third-party agreements.
  7. Contracts with employees- Before employing any person the startup must ensure to enter into clear employment contracts detailing terms and conditions of employment. The contract must specify the details regarding the job profile, compensation, and other associated benefits, a number of clauses may be inserted to safeguard and protect the interest of the startup – such as stopping employees from setting up competing entities, Prohibiting employee from exercising any legal right on IPR on the work done/developed during the course of employment.
How to Sustain Your Business?

Acquiring success is considered an easy task then to maintain the success of the business. Maintaining success of the business, in the long run, requires continues efforts and expert knowledge. Many of the business entities have attained success very early however they are not able to adequately handle their business and as a result, they fall down. In order to maintain the business strategic approach shall be adopted by the managers. Maintaining a business is not a one day job. It requires ample amount of time and efforts. To sustain the growth of the business following steps should be undertaken by the business entity-

  1. Adequate Planning- In order to achieve any kind of goal proper planning is a compulsory requirement. Proper planning helps the business to choose the best possible path for achieving a predetermined goal. People think of planning as final decisions with no chance to change your mind later. However this belief is completely wrong, you always have an option of changing the plan according to the circumstances keeping your eye on the goal. The process of planning shall include the ways to achieve the future goals of the business. Further, the working pattern within the organization shall also be set up. In the process of planning the challenges that will occur in the way shall also be ascertained.
  2. Protecting the brand name of the business- The brand name of the business also known as the intellectual property rights shall be protected by it to prevent any third person from exploiting the brand name. The brand image helps the business entity to gain the competitive edge over the competitors and establish itself in the industry. The well-established brand image helps the business entity to acquire a good market share and attract more customers. Thus business entities shall obtain trademark registration, copyright registration, and patent registration.
  3. Customer Service- To keep the business going on in the long run successfully it is very crucial for the business to build and maintain the customer's trust in the brand name. It is important for every business entity to understand the needs of their customers and satisfy them in the best possible manner. The approach of every business entity shall be customer centric and customer satisfaction shall be the priority.
  4. Meetings the compliance requirements- There are certain Annual Compliances and other compliances which every form of business is required to fulfill as per the applicable law. Every business entity shall make sure to fulfill these requirements in order to avoid hefty penalty and intervention of the government. Non-compliance may lead to disqualification of directors even winding up of the business.
  5. Technological Up gradation- In the era of modernization the business entities are required to continually monitor and upgrade the technology system within their organization. If the technological up gradation is not taken into consideration the operations of the business may become obsolete and it may lose its competitive edge in the market.

Every business entity which aspires to grow and maintain its growth shall make sure to undertake the steps specified above.

Benefits of Startups Registration

More and more startups are emerging in India over the years. Government of India has taken various initiatives like make in India which is motivating more and more entrepreneurs to start their own business. Earlier the procedure of company registration was quite cumbersome and time consuming thus, most of the startups were unregistered in India. But now the process of startup registrations has become easier and less time consuming. The multiple benefits of company registration for startups are as follows-

1. Simpler incorporation process – In order to motivate startups a mobile app has been launched by the government of India and a website for easy registration for startups. The interested person is just required to fill up a simple form on the website and upload certain documents. The entire process is facilitated completely online.

2. Professionalism- Generally people prefer to associate with the registered company rather than the unregistered company. The registered company sound more professional and is able to attract more people to form associations. Further, it establishes the company as a professional in the market.

3. Reduced cost of IPR- For the startup government provides the list of lists of facilitators required to pay the statuary fees. The professional fees will be borne by the government and the startup will bear only the statutory fees. Thus startups will enjoy the huge benefit of 80% reduction in the cost of filing patents.

4. Getting easy access to funds- In order to provide funds to the startups as venture capital a 10,000 crore rupees fund is set-up by the government to provide funds to the startups as venture capital. Moreover, the government is proving guarantee to lenders like banks and other financial institutions to motivate them for providing venture capital.

5. To participate in tender processes- Only the registered startups are empowered to apply for both government and commercial tenders. All tenders have on their top of the list the requirement to be an incorporated company. Also, the startups are exempted from the previous experience or turnover criteria applicable to normal companies.

6. Tax holiday for 3 years – If the startups manage to get certification from Inter-Ministerial Board (IMB) then they can enjoy tax exemption for 3 years.

7. Liability protection – After registration, the company becomes a separate legal entity thus the liability of the members are limited to their share only. This means that if the company incurs debt or is sued; its members are not required to satisfy the claims with their personal assets. By registering your business, your business and personal assets are separated from each other.

Ease in compliances- Various compliances have been simplified for startups to save time and money. Startups shall be allowed to self-certify compliance (through the Startup mobile app) with 9 labor and 3 environment laws (for list of white industries which are eligible under self-compliance.

For more information about Startups Registration visit Registrationwala.com register your startups.

Choose a Right Name for Your Startup

Choosing an appropriate name is one of the most important decisions that should be taken by any Startup.  In order to choose an appropriate name, a proper research must be conducted. After choosing a name the startup must ensure that the name chosen must be available for registration. Many times people start investing in the branding of their business name without even checking its availability, which may prove to be costly and may drag you in litigation in future for trademark infringements of other’s brand. So, before you begin, you should make sure that your business name is available for registration with the Registrar of Companies

Factors that should be considered while choosing a perfect name for the company are as follows-

  1. Unique and unforgettable- The name chosen shall be distinct and memorable. Every company wants a name that stands out from the crowd, a catchy handle that will remain fresh and memorable over time helps to acquire large market share.
  2. Avoid critical spellings- While creating a name, stay with words that can easily be spelled by customers. Some startup founders try unusual word spellings to make their business stand out, but this can be trouble when customers ‘Google’ your business to find you, or try to refer you to others. Also, customers are unable to memorize the unusual spellings.
  3. Keep it simple- The name chosen must be simple and short. Avoid using special characters and algorithms.

4.Easy to pronounce- Try to choose the business name that customer can pronounce and remember easily. Skip the acronyms, which mean nothing to most people. When choosing an identity for a company or a product, simple and straightforward are back in style, and cost less to brand.

  1. Avoid using restrictive name-While choosing the brand name make sure that the name chosen must allow your business to move around or add to its product line. This means avoiding geographic locations or product categories to your business name. With these specifics, customers will be confused if you expand your business to different locations or add on to your product line.

6.Ensure that the name is available- After finalizing a name an applicant must check the availability of the name chosen in order to avoid any further litigation.

  1. Suggestive company name- Try to choose a name which suggests the activities of the business entity rather than choosing any random name. Suggestive name helps the business entity to attract more customers.
  2. Use common suffixes- Try to choose common suffixes like“.com” or the standard suffix f. If these suffixes are not available for the name you prefer, pick a new name rather than settling for an uncommon suffix.

 Thus, a startup shall keep all the factors mentioned above in mind while choosing his company name as it will assist it in establishing a good brand image in the market.

Start-up a Platform to Raise Opportunity in India

Make in India and Digital India are the two parallel steps for start ups in India. Start-up registration has given opportunities to youngsters. Technology has encouraged many young minds in India to start Business in India. Since in India unemployment rate is decreased by1 percent.     

Start-ups have important roles to play in economy of the country. Many new comers have been employed with start-up regime in India. Therefore, is the major concern to boost start-up registration in India and also the event Start-up India Stand-up India campaign has motivated many young entrepreneurs to make a wake call to start the Business. Youngsters and Mid-level executives are seeking a stable career with start-up.

Many start-ups have got funding from the investors for Business expansion. Business with private limited company is the simplest and easiest form to start business in India. Since, it is easy to raise funds. The company has also greater flexibility and Limited Liability to make things reliable. It is a corporate structure that has generated better ROI and managed operational cost in India. 

Running Business in India has been has ocean of opportunity. Since, Couple of years MNCs have shown interest to invest the capital for start-up in India. Indian Human Resource is among greatest in all over the world. Many Foreign Company in India has Indian CEO. Plans and strategies have emerged to a greater success and consistency in the work is the best factor to set of factors that make startup companies successful. It is the curiosity in the young minds that succeed better.

Here are some of the points to start a successful start-up

  • Greater focusmotivation, commitment and passion
  • Enjoy small success and celebrate them
  • Follow success stories and failure stories side by side
  • Taking advice from a good mentor or consultant and domain-specific business knowledge for example finance, operations, and marketing.
  • Good pitch for the funding.
  • Usage of technology and internet make things less costly and saves time and manpower.
  • Patience and persistence due to the timing mismatch of expectations and reality.
  • Passionate about the Business and shows commitment.

A genuine start develops better outcomes for greaterprofits with the flexible procedure. It could be along the item pivot or the market hub, yet it must be a sufficient change that it truly requires a modification in technique and a relating alteration in asset portion. In any event, that is my definition. Energy and inspiration are the undeniable variables. Each business person, business mentor, specialist, counselor, news analyst, speculator and industry examiner discusses energy. It's likely progressed toward becoming excessively antique.

What I like about this examination is that it goes to the foundation of the enthusiasm. Individuals that are fruitful trust in what they are doing. The fruitful business visionary feels that they can have an effect and an effect on the planet. There is so much idleness and antagonism around getting a startup off the ground. Effective business people are aggressive. They play to win, and they prefer not to lose. This quality may show-up distinctively with various identity sorts; however I have never met a fruitful business visionary that doesn't have an aggressive soul and a will to win.

The following two things go as an inseparable unit. I kept them isolate since I think mentorship is so vital, and it has assumed such an immense part in my vocation achievement. Because you will learn does not imply that you will look for a tutor and tune in to their direction. Incidentally, I'm not upholding that you accept each suggestion and direction from your tutors, however in the event that you have chosen solid coaches that have huge space, specialized or business skill.  It gets to modesty. It's something when you think you have it, you don't.

Past that, you require an arrangement, steadiness, persistence, a readiness to be adaptable, and a world-class group. You additionally should be cheap, brilliant, and develop solid coaches. The most ideal path know to do every one of these things well and productively is to take after an efficient procedure where you design, confer, track comes about, advance achievements and raise the essential capital, or "fuel in the tank," to drive the development of your startup.

Tips to Start your Own Company

Company Incorporation is a massive load of work for entrepreneurs those who are fresher with own Business and having professional experience. Business men need to deal with lot of legal formalities to follow rules and regulation according to the Indian company Law. People in India are very talented and hardworking to achieve something they put effortless hard work and cooperating with their social environment.     

There are many ways to start company in India. Private Limited Company is considered the most preferable form of company due to greater flexibility and Limited liability. It is easy to raise funds when company registration is registered as Private limited Company. Private Limited Company in Delhi NCR, Kolkata, Mumbai, Chennai or in electronic capital of India Bangalore are beneficial to start. You will have great Business expansion in India. They are many other forms of that you can register One Person Company, Section 8 Company and Public Limited Company.

Business Registration is a not faint hearted task. It is a mountainous and stressful job. Entrepreneur need to have full focus upon the demands of the market. Here are the points to start your company.

Evaluation of sources and time

Time Management and Sources are the two parallel deeds required to start a Business. What Resources do you have with you and how you will implement them according to the time are the most important aspects that should be followed across to carry business.   

Business Idea development

Person should have unique and impressive idea to start a Business. It should match each reliable criteria so as to be successful. Anyone should not just move into something that is in vogue and you think commercializing it will make money. Be passionate about what you are doing and you are experience about that niche. Develop an Idea that will solve problem of the society integrate it to practically make it real.  

Market identification and Business plan

Business should be planned according to the market in which you will implement it. Target your people to work with whether they are freelancer or solopreneur. Be ready with mission statement, an executive summary, a company summary, a service or product offerings, a description of a target market, cost of the operation and the financial projections. Perform a competitive assessment.  Assess the market, targeting the customers most likely to make a purchase    


Identification of the capital is an important aspect to manage your business more effectively. Determine money for mandatory compliances to figure with product development. Funding is an important whether it is from your savings, loans, credit cards, grants or venture capitalists. 

Legal Structure and Support system

New venture requires full attention time and resources. There are some of the process for which you need to be aware with should be challenging. Person before starting sure about the form of company a sole proprietorship, a limited liability company, partnership,  corporation, a non profit or a cooperative. Go to web and check online about the domain whether it is available or not in the country.

Business Name Registration

Person need to check company name on MCA portal and before any company registration or firm registration, or Sole proprietorship Registration. Arrangement of Insurance covers theft or damage to business assets, as well as liability for any business-related injuries. Location of the Business should be chosen as per convenience. Place that best fits the needs of your business. Offering opportunity for growth with the right competition and be accessible to customers. Having an Office is the second need and trademark, patent and copyright can wait. Trademark registration can be done afterwards after good business expansion. There are some other forms of registration for intellectual property like patent registration, Copyright registration etc. Since, it cost extra money to invest. 

Flexibility of Business

Original idea is many times modified to succeed more in Business. Things should be known  to the nearest and dearest to honest people who can suggest and advice you for the betterment of the Business. At the same time, there will be some people to criticize the concept try to ignore them in case the idea of being listened and approved by most of the expert. Control your anger towards the interference in the Business this weaker your energy to work for your start-up.

Quick service with motivation

Launch your product or service quickly. Through this business will work in progress. Interaction with people is an important part of Business. Potential customers want to know as much about your business. Keep moral stories your and always remember that success won’t happen overnight. Profit will come day by day as the Business progresses. Listen to failure stories with success stories.

Make more meetings

Prepare more meeting with Business partner and also with the client at the right. Share each and every small about the Business about the industry. There’s no need to become an object of pity. Manners might even focus customers to a competitor who may offer a product or service. Market is one of the knowledge Resource as an inspiration to outperform a rival. Good old-fashioned word-of-mouth marketing cannot be beaten by anything. Reveal yourself and do not be afraid to get out there and show your outside in the market to the public.

Record your payment

Make record of the clients to pay bills and be certain to receive payment for your products or services. You should be sure about the clients to be sure about the activity. Effective management is necessary to deal Business.

Foreign Direct Investment is a boost for Start-Ups in India

Foreign direct investment has been one of the highly considered investments for Business expansion. Indian start-up raises their full capital from foreign ventures. Make in India is a platform set by Indian Government to encourage start-ups in India. The step has given pace to the economic growth in India. Liberalisation is one of key role to play in India boost Business and economic policies. Making India a destination for the investors.SME and other small private limited Company has also got the lamp in their hand to showcase their talent.    

Foreign Direct Investment for Private Limited Company has opened a treasure of more Business in India and has boosted the concept of entrepreneurship. Many companies can activate foreign investment through the issue of convertible preference shares.

FDI also give good bond to good Business relation outside India. According to data from start-up intelligence the deal count for the first half (H1) of 2017 was down by 27 per cent on a year-on-year basis. Many Companies get investment at the crucial time and Indian venture capital funds have not grown which has led the funds to dry up.FDI has encourage the inflow of funds in India as foreign investors are likely to get better returns from Indian start-ups than European ones. According to the policy of FDI separate section and spells out provisions that allow them to raise foreign money from venture capital funds and other investors through instruments such as convertible notes.

Non residential Indian are allowed will be permitted to purchase convertible notes issued by an Indian start-up company. There are certain policies under Goods and service tax for non residential Indian. Consideration of Start-ups in FDI arrangement permitting 100 FVCI is an awesome activity by the administration. This activity will help part many new companies to access genuinely necessary capital which now and again ends up plainly awkward because of procedural issues. The administration has taken proactive measures in supporting new businesses and permitting 100% FVCI is clear sign of significance what new businesses have in government's plan of thing.

Salient features of FDI

  • Bonds are expressed in Foreign Currency
  • Principle Amount and interest amount is to be paid in foreign currency.
  • Foreign Capital Equity Bond is issued by the company which is a part of promoter group of a listed company.
  • Foreign Direct Investment hold shares offered in the company
  • FCEB permits for investment in capital market or in real estate in India.
Maintaining Statutory Register of the Company

Company is a legal entity made up of association of people. Companies can be natural, legal, or mixture. These are the organizations which can be commercial as well as industrial. Members of the company share a common goal and focus upon by uniting themselves. Company’s goal is an agenda for the employees of the company which is  achieved by the talent, effort, and skills in them.  

Statutory register is a form of register in which company’s data is maintained. Every company needs to have a statutory register which is kept in registered office or in Company’s house. Mostly these are the single bound book or loose-leaf binder which can be kept in any form, such as a computer record.  

According to Section 94, private companies may opt to keep certain information on the Central Companies House register instead of on their own statutory registers. In most of the companies, it is important to keep statutory registers. Since it is not only is it requirement of the Companies Act. But, also they should be kept up to date. Most probably the register of members, in particular, is the primary authority.

There are different types of Statutory Register

  • Register of members
  • Inspecting the register of members
  • Register of directors
  • Register of secretaries
  • Register of charges
  • Persons with significant control ("PSC") register
  • Other registers

Register of members

In every company record of the members (shareholders) is kept. This includes the names, addresses, numbers, Class of shares of the members. It also includes the date at which the person was registered or ceased as a member, the amount paid, or agreed to be considered as paid, on the shares.

Inspection of the Register

In Companies Act, 2006 there is an amendment about the inspection of the register. It remains open to any member of the company without payment. It can be with anyone else on payment of the prescribed fee.

Request for inspection or copies must contain the following information

  • Name and Address of the person making a request .This should also have the name of the organization they are acting. 
  • The purpose for which the information is to be used whether the information will be disclosed to any other person.
  • It must comply within 5 working days or apply to the court.

Register of directors

  • In every company, there must be the register of its director.
  • It must require contained particular of each person who is a director of the company.
  • The register must be inspected in company’s registration office or at a place specified in regulations.
  • The notice must be given to the registrar. The register must be open to the inspection. This should be available to every member without charge.
  • There is a provision of shadow director which is treated as an officer of the company.
  • A person found guilty in an offense under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.
  • Inspection of the register can be refused and the court may by order compel an immediate inspection of it.

Register of Secretaries

Company register of secretaries is required under section 275.In many Private companies, There are many companies where there are company secretary.

Register of charges

In every limited company, there is a requirement to keep its registered office a register of charges and enter in it all charges specifically affecting property of the company and all floating charges.

  • It has been abolished as far as all charges created by the Companies Act, 2006.
  • This register must be kept with regard to all charges on the undertaking or any property of the company created before that date.
  • These are in case of short description of the property charged and the amount of the charge.
  • The names of the persons entitled to the charge.

Persons with significant control (PSC) register is the new register of people with significant control underemployment act 2015  .

Register of Debenture holders- Every company should keep this register .This is the register for holders and Register of any other security holders in accordance with Section 88(1) of the Companies Act, 2013. This register is allotted in every company used to maintain a separate register of debenture holders or security holders

Other registers are the registers, such as a register of allotments, register of transfers, These are not statutory registers and there is no obligation.


Benefits of Start-up India Scheme

Start-up India is the plan launched by honorable P.M. Shri Narendra Modi. This plan enables to create an ecosystem to promote and nourish entrepreneurship. The scheme is based on an action plan aiming at the promotion of financial bank for start-up ventures and to boost entrepreneurs.

Start-up is an entity registered in India. Start-up is the company which is not older than 5 years and its annual turnover should not exceed 25 Crore. It works towards innovation, development, deployment or commercialization of new products driven by technology or intellectual property. Such an entity is not formed by splitting up, or reconstruction, of a business already in existence.

Start-up's aim is to develop and commercialize which creates or add value for customers or workflow. Here are some features which have benefitted to entrepreneur

Features in Start-up India

Income tax provisions in Start-up India

This exemption is available for first three years. Start-up will be eligible for tax benefits only if the certificate has been obtained a certificate from the Inter-Ministerial Board.  

Self-certify compliance

Start-up is allowed to self-certify the compliances with labor and environmental laws.In labor law, no inspections will be conducted for a period of 3 years.  Inspection can be on receipt of a credible and verifiable complaint of violation. In environmental laws, will follow white category.

Start-up India Intellectual Property Protection scheme(SIPP)

This scheme provides fast-tracking of patent applications. A panel of facilitators to assist in the filing of IP applications. The government will bear the cost of such facilitation and rebate on the filing of patents.

Mobile application and web support

The scheme also provides on-the-go accessibility for Start-up's registration, tracking the status of registration, filing for compliances, Start-up collaboration with various Start-up ecosystem partners and for applying for various schemes under the Action Plan.

How tax benefits can be availed in Start-ups

Addition in value: Value added in the product and customer.

Solution to the problem: Start should be available to solve certain problems of the society. Points should be clearly mentioned.

Working with Business Model: Start-up should be according to the particular business model about Business model otherwise, incubators may be rejected.

Recommendation letter –This application is needed from certain authorities. Authorities can any incubators established the post-graduate college in India, incubator which is funded from Central or state government.

Step to get Recommendation letter

  • Easy task: You can Directly reach out to the incubators via email or phone and to tell case correctly.
  • Startup application filling: After you are connected, the incubators will send you the application form which you need to fill out properly along with the necessary documents.
  • Visit the incubators: possibility that incubators may call you for the meeting, and you may have to visit it personally.
  • Business should be working: Business model is, it should be working model. Proposed business will not be considered by incubators.
  • Fees: The incubators may charge you Rs.5000. If your application has been taken up by an expert panel, then the cost will further increase by Rs.5,000/-. This will not be more than Rs.10,000/- in any case.

Start-up is the fast-growing business that aims to meet a marketplace need by developing an innovative product or service. Start-up India has given an opportunity to many young youths to bring their business idea into the application. This scheme is a success and has given many benefits to entrepreneur and other people. 


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