{"id":26266,"date":"2021-02-20T12:24:40","date_gmt":"2021-02-20T06:54:40","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=26266"},"modified":"2021-02-20T17:23:02","modified_gmt":"2021-02-20T11:53:02","slug":"reason-of-failures-of-start-ups-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/reason-of-failures-of-start-ups-in-india\/","title":{"rendered":"An Overview on Reason for Failures of Start-ups in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Successful start-ups in India are run by\npassionate entrepreneurs focused on creating unique solutions that deliver\ncustomer delight. While it is very important to have a strong focus and\nknowledge on customers and the market, it is equally important to have a good\nunderstanding of the basic laws that apply for the smooth operation of the\nbusiness in order to keep a distance from the failures of start-ups.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Reason for Failures of Start-ups in India<\/h2>\n\n\n\n<p><em><strong>Listed below are the reasons of failures of start-ups in India, which are as follows:-<\/strong><\/em><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Reason-of-Failures-of-Start-ups-in-India.png\" alt=\"Reason of Failures of Start-ups in India\" class=\"wp-image-26294\" width=\"508\" height=\"515\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Reason-of-Failures-of-Start-ups-in-India.png 652w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/02\/Reason-of-Failures-of-Start-ups-in-India-296x300.png 296w\" sizes=\"(max-width: 508px) 100vw, 508px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Failing to Choose the Right Business Structure<\/h3>\n\n\n\n<p>We have seen businesses struggling to choose the right business structure\nthat suits their needs. Each business structure has different implications. There\nare mainly three business structures that can be registered in India.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Company<\/h4>\n\n\n\n<p>The Businesses can be registered, a body corporate under the Companies Act. The following are possible:-<\/p>\n\n\n\n<ul><li><a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>Private Limited Company Registration<\/strong><\/a><\/li><li><a href=\"https:\/\/corpbiz.io\/one-person-company\"><strong>One Person Company Registration<\/strong><\/a> <\/li><li><a href=\"https:\/\/corpbiz.io\/public-limited-company-registration\"><strong>Registering a Public Company<\/strong><\/a><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Sole Proprietorship<\/h4>\n\n\n\n<p>It gets established when the business is owned by a single person and\nincludes minimal compliance. Although registered, it is eligible to be a legal\nentity and remains an informal structure.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Partnership<\/h4>\n\n\n\n<p>It is a business structure created by a group of people for profit\nsharing. There are 3 ways to do this; Limited Liability Partnership (LLP) or a\ngeneral partnership where the former body acts as a body granting all legal\nrights.<\/p>\n\n\n\n<p>Choosing a structure includes considering the size as well as the type of\nyour business &amp; how you envision its growth. Generally, a sole member may\nprefer a proprietorship firm or OPC. However, to take advantage of other\nstructures, some founders rely on family members or friends to meet structural\nneeds.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Business Licensing<\/h3>\n\n\n\n<p>Some businesses require a license to start as a part of mandatory compliance. For example, <a href=\"https:\/\/corpbiz.io\/fssai-license\"><strong>FSSAI license<\/strong><\/a> for food businesses. Start-ups &nbsp;in India needs to be careful in complying with licensing requirements because the consequences of not doing so can put businesses at great risk of facing lawsuits.<\/p>\n\n\n\n<p>Ensure that your start-up has all the necessary and optional licenses or\nregistrations such as Udhyog Aadhar -MSMEs to increase fundraising\nopportunities.<\/p>\n\n\n\n<p>An ideal way is to consult business professionals and ask if your start-up requires a license. Be sure to prepare and apply documents if necessary. An important document is the business incorporation certificate, on the basis of which necessary licenses can be sought.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-startup-india-registration-in-india\/\">Benefits of Startup India Registration in India <\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Accomplishing Contracts &amp;\nAgreements<\/h3>\n\n\n\n<p>Such functioning dependencies will effect in an agreement that includes\nwork policies and employment criteria set by the start-up.<\/p>\n\n\n\n<p>An employment contract includes work commitments, deliverables, and\nsalary details along with ESOP details if offered. If you are starting up, you\nmust gain clarity on such aspects and having a contract helps. Ultimately, this\nwill reduce the risks of uncertainty to help scale effectively.<\/p>\n\n\n\n<p>Although vendor agreement is not compulsory compliance, it is also best\nfor those people to be abided in order to keep a distance from failures of\nstart-ups. This is to promote long-term synergy to secure business transactions\nand to equate symbiotic demand and supply relationships.<\/p>\n\n\n\n<p>Also, there is a trend among <a href=\"https:\/\/corpbiz.io\/startup-india-registration\"><strong>start-ups India<\/strong><\/a> these days wherein a co-founders\u2019 agreement and shareholders\u2019 agreement is done. Such an agreement would help demarcate the business-specific roles and responsibilities of co-founders and others.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Safety Works &amp; Minimum Wages<\/h3>\n\n\n\n<p>The <strong><em>Ministry of Labour &amp; Employment<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Ministry_of_Labour_and_Employment_(India)\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> has laid down certain safety, health, and environmental regulations for the workplace. If your start-up works with a hazardous substance or if workers are exposed to certain chemicals, then adherences to such standards are compulsory. Do not endanger your business by avoiding such set standards.<\/p>\n\n\n\n<p>There is also the Payment of Minimum Wages Act, 2005 which increases the\nminimum wage payment as per industry norms. Again, start-ups that undertake\nlabour for diverse tasks must meet those criteria to keep themselves obedient.\nThe reason for this is that a start-up is responsible for the health and safety\nof its employees while they are at work.<\/p>\n\n\n\n<p>A risk assessment is recommended to perform so as to help and identify\npotential hazards and measures to deal with them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Intellectual Property Protection<\/h3>\n\n\n\n<p>Intellectual property is one of the most valuable assets of any\nbusiness. Start-ups must take appropriate steps, especially to keep them safe. The\nbelow mentioned are the most common intellectual property protection that an\nentrepreneur can devote efforts to his business in order to keep a distance\nfrom failures of start-ups.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Patent<\/h4>\n\n\n\n<p>A patent protects the products\/processes that are inventive, novel, and\nusable. For example, a software company will have to file for a patent if they\nhave created a unique and new computer program.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Trademark<\/h4>\n\n\n\n<p>Trademarks protect brand names, logos, signs \/ slogans, etc. For ex., if\ncompanies like Apple had not applied for their famous logo, they would not have\ncreated a billion dollar company.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Copyright<\/h4>\n\n\n\n<p>Copyrights are very important for start-ups in India that have\nbusinesses related to creative, artistic works. A multimedia company should\nregister songs \/ movies made by it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Importance of Intellectual\nProtection<\/h4>\n\n\n\n<ul><li>It provides maximum protection from infringers\nand is a legal weapon that prevents others from using the brand.<\/li><li>This prevents start-up security from maximum\ntheft and prevents any counterfeit product from entering the market.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>There are a lot of other things that start-ups in India should not ignore when it comes to being obedient. Maintaining a compliance partner onboard is the best way to start so you can focus on doing business and keep distance from the failures of start-ups. Taking care of statutory compliance on a monthly basis, from company registration to day to day tracking of business, all this needs to be done properly. The main aspect is to relieve you from such burden and perform the business activities without reinventing the wheel for branch out an altogether new department. Kindly associate with the <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> expert to know more about the reason of failures of start-ups in India.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-for-start-up-registration-india\/\">What is the Procedure for Start-up Registration India? <\/a><\/mark><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Successful start-ups in India are run by passionate entrepreneurs focused on creating unique solutions that deliver customer delight. While it is very important to have a strong focus and knowledge on customers and the market, it is equally important to have a good understanding of the basic laws that apply for the smooth operation of [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":26293,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[968],"tags":[1548],"acf":{"service_id":"250"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":3356,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/26266"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=26266"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/26266\/revisions"}],"predecessor-version":[{"id":26331,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/26266\/revisions\/26331"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/26293"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=26266"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=26266"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=26266"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}