START-UP’S COMPANIES & THE MISTAKES THEY DO WHICH CAUSE THEM A BIG TROUBLE TO EXPAND THEIR BUSINESS

Details about start-ups and the mistakes they do which cause them a big trouble to expand their business and yes sometimes more serious than that, they have negative remark on their goodwill. Also, in the present scenario government has become more conscious and strict about following the Corporate Laws and every day a new rule/regulation is coming out. Those who are not following good corporate governance are facing serious trouble in running their business.

So, if you are a start-up then this article is very useful for you, have a look and save your entity from trouble.

When we go for a start-up, at conceiving stage we try to operate at break-even. In that struggle, we forget to look at the related Compliance which becomes a great trouble at later stage when the organizations are seeking for funding from investors for expansion & growth.  Without Due Diligence & Process Audits, No investor will be convinced to make a move & hand over his funds to a startup.

Let us discuss the trouble areas of non-compliance which becomes a major prick of the path:-

• No recorded meetings of the board of Directors and the Members i.e. No minutes are recorded for the meeting as per the Act.
• No Statutory Registers are maintained by the Company i.e. no official recording of loans, Related Party Transactions, Members etc. as per the Act.
• Non-compliance of the provisions of the Act.
• Non-filling of documents with in the stipulated timeline to the ROC and other regulatory bodies.

Apart from the applicability of the some Special Acts and other Regulations, the above stated are some of the common mistakes done by the start-ups which become a trouble for them to get funding. So along with growing the business one should be conscious toward the compliances related to it which will give him a green reporting & an image of responsible corporate.

Some tips to save the start-up from Compliance Troubles:-

• Duly convene the meetings and do proper recordings of the same. Along with recordings maintenance of the minutes is very important i.e. it should be preserved and kept in safe custody.
• Maintain the Statutory Registers, record every entry as per the format prescribed in the Act and place at the Registered Office of the Company. Maintenance of Statutory Registers also provides the detailed information of the act held in the Company.
• Always comply with the provisions of the various Corporate Laws and to prevent from forgetting the Due dates use the Compliance Calendar Software or having an experienced Company Secretary is advisable to the corporate to consult from time to time.
• File the required documents in the prescribed forms to the ROC or other Regulatory Authorities on time to save from penalties and non-punctual compliances.
• Always have expert’s advice before going for any new project or expansion.
• In case the startup is seeking investment from Foreign Investor always comply the RBI Guidelines and FEMA Regulations to have smooth funding.

Some Don’ts for the Start-ups are:

• Do not try to act smart by saving few bucks from non-compliance but try to engage with experienced consultants on full time or on Retainer ship.
• Avoid hearsay advices from a non-expert, sometimes they do not have root level knowledge and they may misguide.
• Compliances are not secondary things to manage; it is very important part of the business even in case of start-ups.
• Do not go for the new projects without verifying the legal scope of it in the Country.

Read more:

Procedures for the conversion of partnership firm into Private limited company

Conversion of LLP into Company Limited by Shares

Having some good advice and compliance schedule, one can have growing business and long term stability in the market. So, the Business buds! Be Compliance friendly and enjoy watching your business from a bud to becoming a blossoming flower.

HOW DO I REGISTER A COMPANY OR A STARTUP IN INDIA?

In today’s world, the majority of businesses operate in order to become a well-established company in the long run. Many start-ups prefer to register a private limited company or a one person company (OPC) rather than a public limited company because of certain added benefits such as independent company operation and much more freedoms. Whether you are looking for a private company registration in India or a one person company (OPC) registration in India, the two main governing bodies are MCA >>> Registrar of companies (ROC). We’ll go through the steps for forming a company in India in this blog.

Company:

A company is a legal entity formed by a group of specific individuals with the goal of achieving the organization’s ultimate end goal as a whole. The provisions of the Companies Act, 2013 are extracted from the provisions of the Companies Act, 2013 to clear any uncertainty that may exist. According to the Companies Act of 2013, a company may be formed for any lawful purpose by:
1. Seven (7) or more people, if the company is to be considered a public company; 2. Two (2) or more people, if the company is to be considered a private company.

3. One person, where the company to be incorporated is to be a One Person Company, that is, a private company; by subscribing their names or his name to a memorandum and complying with the said companies act, 2013 in respect of company registration in India.

Procedure for forming a company in India

The process of company incorporation in India is essentially the same for all types of companies that want to be registered in India.

Look for a company name that is appropriate. It is the most important because it represents the essence of the company’s operations. It is the company’s name that will live on in perpetuity until the end of the company’s life; as a result, it requires a significant amount of time investment.

The holder’s identity is authorized by a digital signature, and the risk of forging a digital signature is minimized. As a result, a digital signature certificate (DSC) is more trustworthy than a free hand signature. The MCA recommends that all official work be done using DSC for all company purposes.

1	Name for the Company	Look for a company name that is appropriate. It is the most important because it represents the essence of the company’s operations. It is the company’s name that will live on in perpetuity until the end of the company’s life; as a result, it requires a significant amount of time investment.
2	Digital signature certificate (DSC)	The holder’s identity is authorized by a digital signature, and the risk of forging a digital signature is minimized. As a result, a digital signature certificate (DSC) is more trustworthy than a free hand signature. The MCA recommends that all official work be done using DSC for all company purposes.
3	Directors identification number (DIN)	DIN is an unique identification number that is linked to a company’s director’s identity. According to the Companies Act of 2013, every director must have a DIN.
4	MOA/AOA	MOA and AOA are regarded as the foundation for the company’s effective and efficient operation. It not only defines the company’s rules and regulations, but it also serves as a guiding principle for management and employees.
5	PAN/TAN	Permanent account number (PAN) and Tax deduction and collection account number (TAN) are important documents in the company registration process for all businesses because they help with online ITR filing.
6	Certificate of Incorporation	After successfully submitting all required documents to the authorities within the time period specified, the documents are pre-screened before the company incorporation certificate is issued.
7	Current Bank Account	Lastly open a current bank account in the company’s registered name. The bank will require you to apply the company’s incorporation certificate, MOA, and AOA as part of this procedure. It is important to open a bank account in the company’s name in order to conduct business transactions.