Startup Scratch (Startup Solution Hub) > Startups Resources > Legal points to consider before starting up your startup in India

Legal points to consider before starting up your startup in India

In India, where like the baby is born and grown up the startup have similar instances right from its birth to its growth.

A startup requires many aspects to be clear and focussed before starting it up and establishing the foundation of the startup and need to care many points before it start running one such aspect is considering the legal aspects of startups.

This is not a big or miraculous aspect, but very prominent in startups establishments as many things in startups are interconnected and interdependent. So one wrong step and startup slips out of hands easily, so we must work on startups Legal and corporate planning side too.

Some of the points which are needed to be considered for every startup is as follows:-

Point No one:-

Right Kind of Legal Entity for Startup :-


If you want to save your collar on personal liability, and do not want to be held responsible for other founders deeds and save on taxes I recommend you to go for establishing Limited Liability Partnership structure, If you wish to outgrow market and want to have a strong baseline and wish to get funded or being chosen through the Startup India Scheme I recommend you to choose private limited Company Structure. If your startup has a one person leader got for One person Company instead.

Point No Two:-

Not Keeping Track of Expenses :-


Many Startups do not keep track of their expenses and keep on spending many things regularly and when Income tax return filling date comes they keep their hands towards reciepts  and expenses notes so good way is to manage the petty cash maintenance and growing the business.Entity must record their expenses track and must keep track of invoices and limit their cash flows and must use proper system while dealing with staff and all latest softwares and apps being launched now so keeping a track is a must now.Soft Documents of accounts and all must be adhered also.


Point no Third:-


Entities must follow proper Diligence on keeping Documentation strong soft and hard both:-


Suppose you get leads and you do not record the same or your Business Development officer do not track the leads and left the cold callings lists and contacted person for leads in the array can lead to a huge split on the complete wastage of time, money and efforts.

In a similar manner if your startup do not record Minutes of the meetings and do not take a proper compliance check system, then your startups have many leak points, where from many authorities and Government agencies can pitch in and hands on and give you notices and can give you enormous penalties some are so huge that cannot be paid by money only and can put you behind bars,

So if you are a company, LLP or OPC or even sole proprietors keep your safeguard through being strong on documentation side.

Point no Four:-

Founders agreement, absence:-

Many startups do ignore this one important legend point in their startups and leave it for ignorance sense.but do not think of vesting rights,ownership,promoters stake and roles and responsibilities of founder and co-founders including profit sharing and future salary pattern or growth modelling fund which will result in complete chaos later on and in India where it is of utmost importance how can you ignore the same. The startup must take care of the same.




Point no Five:-

Not Protecting Intellectual Property Rights of the startup:-



In today’s Modern world where everything happens over a cup of coffee to a whatts app chat from Innovation of Idea to the creation of a big multinational big brand one must take care and enhance the protection of the brand which starts from the beginning of innovation.So it is always advisable for startups to protect you Intlectual Property through propper protection whether by taking trademark, Copyright or patent or through keeping a agreement between startups founders and doing legal agreements in upcoming business models like Memorandum of Understanding  or Joint venture agreements and keeping all clauses of the same intact for protecting Intellectual property rights safe and stiff.


We provide affordable and best in class services of legal gambit to startups so in case of any requirements reach us at below details.

For more Legal Startup safeguards contact our team on 9971504105 or drop us email on [email protected]





Startup Scratch team

Leave a Reply

%d bloggers like this: