Everyone wants to be an entrepreneur these days. However, the excitement of starting a business on your own is like looking directly into the sunlight. If you aren't wearing glasses, you'll be blinded to everything around it. And to start your business properly, you need to observe your surroundings. Here is few word of wisdom for startups that can truly turn your idea of business, into a successful business.
Structure of the business:
Deciding on what should be the structure of the business is not an easy task for stratups because in the initial days of startups there is hardly any person in the team who have sound knowledge of laws applicable. Moreover, their low budget does not allow them to take opinion from the top lawyers and consultant.
Deciding on structure requires careful analysis of the different laws. Generally, people think if they are partners then they should register the partnership firm or LLP registration under the respective act. Similarly, if you want to incorporate a company so its not like that you should know the provision of the company act only rather you have to adopt the holistic view. You have to understand the industries first and list out the various regulations which are applicable to those particular industries. Startups should not take decision solely on the basis of companies act advantage or what LLP registration offers. You have to structure the company or other forms from a tax point of views as well.
Some of the following questions will broaden your horizon of thinking:
- What is optimal structure for venture capital funds?
- What are the RBI regulations to open a branch office?
- In case of industrial production what are the approval required to begin the production?
Business is not just started by simply registering private limited company or LLP registration. There are some other steps as well which have to take prior setting up a business or after setting up a business.
License required after registration of your business:
Before kick starts your operations, you have to take the various business registrations depending upon the business model, which includes shops & establishment license, factories act registration for manufacturing unit, labour and tax registration (income tax, VAT, service tax, central sales tax as applicable).
Contract and Agreement:
Though as a startups owner you cant not be an expert in the contract drafting or agreement but still you should have some basic knowledge be it LLP agreement, shareholder agreement, Joint venture agreement, a trust deed, memorandum of association or articles of association etc.
Some people think it is wastage of money to spend the huge amount on the drafting of the agreement, so they just pick a simple draft of any agreement from Google and just replace the parties name to give a final touch. But, in the actual scenario, it is not the case. Executing documents in this way will definitely lead to fail to address some of the issues which must be addressed in the documents itself. Therefore, dont adopt Jugaad technique while drafting legal documents; it is advisable to take expert advice from the legal professionals of the respective field who can guide you while structuring your agreement so that you should not miss out the important clauses. Properly executed documents are the soul of every deal.
These are some of the key issues which must keep in mind while running your business, though expertise level cant be expected but knowing these facts will definitely help the startups owner.