Want to launch your startup? Here are the legal procedures


While a solid team, business plan and credible investors are critical to a startup, if you don’t register your startup as a business entity, it pretty much doesn’t exist!

In India, there’s a set procedure for Business Registration, and several new online sites would help you with this legal entity Registration.

Here are the options you have:

Sole Ownership-
The catch here is that it needs the name of one person for the Registration. It costs nearly Rs. 3000 for the Service tax registration or Shop Act License, and typically takes a week to process. The good news here – it’s the easiest and cheapest way around.

Mind, this model is difficult to scale. You’ll have to convert into a private limited company when your company starts to grow. Also, because there’s no limited liability, you cannot raise money for your new startup.

One Person Entity-
Not to be confused with sole ownership, this type of registration also needs one person for the registration. Costing over Rs.13,000, this typically takes a fortnight to process.

There are pros and cons here as well. This registration allows you legal status as single founder. The bad news is, you can’t include a partner in the business.

Private Ltd -
The most common of them all, this registration needs 2 people. It could be you or else you can include your any family member on the paper. The charges are in and around Rs. 15,000, and best part is you can raise capital from banks or other investors. The only downside is that annual compliance is higher as compared to a simple firm or other legal entities.

Limited Liability Partnership-
This type of registration requires a minimum of 2 people. Costing well over Rs. 9,000, it means you are doing business with limited liability.

In case you don’t have the money, and you still want to enjoy the features of being a private limited, this is the best idea.

Partnership Firm with/wo Registrar of Companies-
Another registration that requires a minimum of 2 people, this Rs. 3000 registration is targeted more towards testing your ideas and has less compliance.

The only bad news here is that you cannot file a case against any partner or third party in the business is you’re registering as a partnership firm.

If you want to register with the Registrar of Companies, the price goes up to Rs. 8000. You rather have an LLP for that price, honestly. It’ll give you more advantages and that too at the same cost and tax slabs.

Now go, start up.

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