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Want to Startup Business in India? Here is some Guidelines for YOU!
A startup refers to a company that's in the initial stages of business. Startups are created by one or more entrepreneurs who want to create a product or service to be marketed by the founders. Usually, these businesses do not have a fully established business model and, more importantly, lack enough resources to move on to the next business process. Most of these businesses are financed initially by their founders. For further funding, many startups turn to others: family, friends, and venture capitalists.
Setting up or starting a business in India is considerably easier in today's world. In order to initiate the Startup in India, the Government of India launched Startup India Scheme on 16th January 2016 by Prime Minister Shri. Narendra Modi. The aim of the Startup India Scheme is to build and innovate products and services and to increase India's employment rate. The time used during company registration has dropped dramatically with the digitalization of the company registration process.
Key Considerations when you launch a startup business
- Right Startup
Spend time making the legal set-up right early. It could distract you from honing your product sometimes, but it is essential for your business growth in further stage. Get past presumptions, and think about the legal decisions you make. The right legal framework enhances the chances of your start-up being a sustainable and investable company. It is the best and most accurate way to avoid consequences later on. This eliminates valuable time and resources from being wasted. Start-ups with the wrong legal framework sometimes fail-when VCs don't invest, they run out of funds.
As a founder, it is your responsibility to have the business set up in the right place, wisely divide the equity, appoint the management, and develop the team. Have the legal agreements in place from day one, clearly defined and legally enforceable with strategies, roles, and responsibilities. Enforceability is fundamental for every business for success. For this reason, in common law jurisdictions, VCs (Venture capital) prefer to invest. So, say, if you're a Delhi founder, set up your business in any part of India or outside India. My firm, Rajput Jain and Association, will guide you and facilitate many of these specific agreements, saving time and money on the company set-up process and beyond.
- Location Zone
Startups must determine whether their business operates online, in an office or home office, or in a shop. The position depends on the offering of the product or service. Technology startups selling virtual reality hardware, for example, may need a physical store to give consumers a face-to-face demonstration of the complex characteristics of the product.
- Legal Structure
Startups have to know what legal framework best suits their business. For a founder who is also the core employee of a company, a sole proprietor is suitable. For companies consisting of many individuals who have joint ownership, partnerships are a suitable legal structure, and they are also fairly straightforward to establish. The registration of a start-up as a limited liability company (LLC) will minimize personal liability.
- Know Your Market
For a great product that solves a particular problem, you may have an idea. Turning this solution into a consistent business model will be your hardest obstacle. You need to know your market in order to do this. And you need to analyze, and reevaluate frequently, how the market is reacting to your solution. Don't rely upon or make an uninformed leap of faith on outdated market research. Validate your assumptions: what problem has been solved by your business? How serious is this problem? Who are your customers? What market for your solution is there? Who are your competitors? Get input from your early users and clients.
This is invaluable, practical information that can allow you to monitor that if your product is actually what your market demands
- Execution over Ideas
To turn it into a company that can earn a profit, an idea requires better execution. And this can be achieved by a good team: to prove the idea, create the product, and excite the demand. Keep up the momentum up, this is what matters. Your good ideas would be just a dream if you can't do this. Overall, investors are teams of supporters. Your assumptions may be incorrect, businesses may pivot, and organizations will struggle, however, successful teams are going to be healthy enough to move on to the next challenge. Pay attention to your feedback, and expect that it will be brutal.
- Spend the Money on Professional Advice
Remember, skipping these steps will cost you later. When it comes to legal, financial, or taxation, don't hesitate to take advice from professionals. Get advice, make wise choices, and return to your mission. Investors will take you more seriously if you go for professional advice.
Note: You can take advice from our Team of Expert (RJA). We will glad to help you.
- Be Organized
Founders are required to maintain updated and relevant critical corporate information. If you are unable to produce the required financial information within 24 hours of submission, don't expect investors to take it seriously. Founders waste too much time and money establishing cap tables, establishing agreements with stakeholders, and undergoing thorough research. We say so, there's a better way— With RJA you can minimize these repetitive activities. With RJA, you can create cap tables, summaries of legal health checks, and build data rooms to show the entire legal framework of your startup.
FAQS ON START-UP INDIA SCHEME
Q.: Is the registration process of start-up, a fully offline process?
It is provided that registration of a new company can be made online using the registration portal. All the documents would be scanned and uploaded, without any physical transfer of documents.
Q.:How much time does it take for a start-up to get registered in India?
In case the application is filed properly, along with supporting documents, it takes almost 7-12 days from the date of filing application.
Q.:What is the meaning of innovation and improvement?
Innovation and improvement mean that the new entity would provide an improved version of product or service, which the earlier existing companies could not provide.
Q.:Can a salaried person be appointed as the director of a start-up?
Yes, a salaried person can be appointed as the director in private limited company, or a start-up. However, the applicant shall comply with the employment agreement and check whether the same provides for employment in any other company or not.
Q.:Can the residential address be provided while filing the information in the registration process?
It is provided that the applicant can provide their residential address, for registering their company. However, as a proof, the utility bill or electricity bill be submitted along with the application.
Q.:What is the validity for recognition of an entity as start-up?
An entity is termed as a start-up till –
- For 5 years from the date of its incorporation.
- Where their turnover does not exceed Rs. 25 crores, any of the financial years.
