Legal Aspects Related To Starting Up Your Company

1) KIND OF OWNERSHIP:

The type of ownership determines the degree of control and the nature of liability you have in the business. Below are the various options:

a) Sole Proprietorship

b) Partnership

c) Limited Liability Company

d) Private limited company

Sole proprietorship and partnership have unlimited liability (meaning your house, cars and other assets can be sold if the business is not able to repay the loan). LLP and private limited have limited liability, however, require more compliance.

2) REGISTRATION:

After making a choice of the business name you want, you will have to register it depending on what the name is. If the company’s name pertains to anything other than your name or one of the partner’s name, you will have to do company registration under the authorised State or local government. Build up a domain with the same name. Also get trademark registration for name for further brand protection

3) VAT REGISTRATION:

VAT registration number is mandatory for transactions to take place at inter-state level. In most states, it is mandatory for traders or manufacturers who have a turnover of more than Rs. 5 lakhs per year (Rs.10 lakhs in some states).

4)BUSINESS LICENSE:

A business license is a permit that allows a business to run legally in an area. Different licenses are corresponding to the products being served/manufactured. For instance, if you want to open a bar to serve drinks, first you will need a license to open a bar in that area and then a license to serve alcohol. If you want to import, you will need an import export license

The elements mentioned above- philosophical build-up as well as Legal factors- are the most essential to get funding from investors and start your dream startup. Start procuring the requisite documents to make the process hassle-free and smooth. Happy starting-up!