{"id":33731,"date":"2021-07-30T12:28:42","date_gmt":"2021-07-30T06:58:42","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=33731"},"modified":"2021-10-29T18:29:31","modified_gmt":"2021-10-29T12:59:31","slug":"legal-aspects-for-business-that-every-start-up-should-know","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/legal-aspects-for-business-that-every-start-up-should-know\/","title":{"rendered":"Legal Aspects of Business that Every Start-up Should Know"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Commencing a business journey isn\u2019t a straightforward job as it attracts heaps of legal compliances. Thus, it is pertinent for entrepreneurs to get a better understanding of legalities before laying the foundation of new business. Knowing Legal Aspect of Business could help <a href=\"https:\/\/corpbiz.io\/startup-india-registration\"><strong>start-ups<\/strong><\/a> prevent irrelevant expenditure and save time. This write-up reveals critical Legal Aspects of Business that every start-up should know.<\/p>\n\n\n\n<div class=\"mt-3 mb-3 embed-responsive embed-responsive-16by9\"><iframe class=\"embed-responsive-item\" src=\"https:\/\/www.youtube.com\/embed\/WET0DmPQ_IY\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen=\"\"><\/iframe><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Legal Aspects of business that Every Start-ups should be aware of <\/h2>\n\n\n\n<p>The following section briefs out fundamental legal aspects of business that every new entrepreneur should know:&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Select an apt legal structure for your business&nbsp;<\/h3>\n\n\n\n<p>Selecting the proper business structure is certainly the most complicated task for any start-up. The new entrant always finds it hard to pick a structure that ensures the best fit for their business. In such a situation, it is advisable to go for a general thumb of rule in which you need to take the following parameters into account to serve this purpose.<\/p>\n\n\n\n<ul><li>Scope of business <\/li><li>Number of partners&nbsp;<\/li><li>Quantum of compliances<\/li><li>Applicable taxes<\/li><\/ul>\n\n\n\n<p>Now\ntry co-relating these parameters against&nbsp;\nthe norms and conditions for setting up the following <strong><em>business\nstructures available in our legal framework <\/em><\/strong><\/p>\n\n\n\n<ul><li>Limited Liability partnership<\/li><li>Private Limited Company&nbsp;<\/li><li>Public limited company&nbsp;<\/li><li>One Person Company&nbsp;<\/li><li>Sole Proprietorship<\/li><\/ul>\n\n\n\n<p>This\nis a viable approach for selecting an apt business structure.<\/p>\n\n\n\n<p>LLP, OPC, and Sole Proprietorship are generally preferred by those start-ups having fewer partners and a limited scope of operation. Conversely, legal structures like Private and public limited companies are suited for those entities that operate on a larger scale and possess a larger workforce. <\/p>\n\n\n\n<p><strong><em>The\napplicant seeking to get registered under a private and public limited company\nor OPC needs to apply on the Ministry of Corporate Affairs official\nportal.&nbsp;<\/em><\/strong><\/p>\n\n\n\n<p>If\ncase you unable to figure out which legal structure can give best fit for your\nbusiness, then get in touch in CorpBiz\u2019s professional. <\/p>\n\n\n\n<p><strong><em>To understand the prominence of the right business structure, it is important to know the possible downsides of not having the same. <\/em><\/strong><\/p>\n\n\n\n<p><strong><em>Here\u2019s\nwhat you can experience if you opt for an irrelevant business structure<\/em><\/strong><\/p>\n\n\n\n<ul><li>An unexpected surge in tax liabilities&nbsp;<\/li><li>Frequent confrontation with tedious compliances&nbsp;<\/li><li>The rise in irrelevant expenditures&nbsp;<\/li><li>Reduced ROI because of ever-increasing compliance handling cost<\/li><\/ul>\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\">Secure Business-specific licenses&nbsp;<\/h3>\n\n\n\n<p>A\nbusiness requires specific permits &amp; licenses as per the nature of the\nindustry it is engaged with. Some common examples of industry-specific licenses\nare:&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">FSSAI license<\/h4>\n\n\n\n<p>FSSAI\nfood license is specifically required by businesses in the food sector. This is\nissued by FSSAI based on the following eligibility criteria:&nbsp;<\/p>\n\n\n\n<ul><li>Annual turnover&nbsp;<\/li><li>Scope of Business&nbsp;<\/li><li>Production capacity<\/li><\/ul>\n\n\n\n<p><strong><em>Visit\nFOSCO \u2013 FSSAI\u2019s online portal to apply for this license.&nbsp;<\/em><\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Import Export code\nissued by DGFT<\/h4>\n\n\n\n<p>It\nis required by the businesses operating in an EXIM domain. Every exporter and\nimporter in India is mandated to get this license from DGFT after submitting an\ne-form and the requested fee.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">BIS registration<\/h4>\n\n\n\n<p>BIS stands for Bureau of Indian Standard. It is a governmental institution that seeks to regulate the manufacturers of electronics goods. Therefore, <a href=\"https:\/\/corpbiz.io\/bis-registration\"><strong>BIS registration<\/strong><\/a> is mandatory for OEMs and manufacturers that deal with electronic items. To avail this license, one has to nominate AIR, i.e.&nbsp;Authorized Indian Representative, via a standard nomination form. Submit the properly filled application and the requested fee at Form of AIR&nbsp;FMCD, BIS Headquarters, <em><strong>New Delhi<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/New_Delhi\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Shop and\nestablishment license<\/h4>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/shop-establishment-license\"><strong>Shop and Establishment license<\/strong><\/a> is issued by the labor department of the respective state. Every commercial establishment is mandated to get this license.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">GST registration<\/h4>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST registration<\/strong><\/a> is a mandate for every business whose annual turnover surpasses Rs 40 lakhs (Rs 10 lakhs for Northern east &amp; hill states<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">NBFC\nRegistration<\/h4>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>NBFC Registration<\/strong><\/a> is issued by the Reserve bank of India. NBFC Registration fundamentally covers private lenders, fintech companies, and non-banking financial institutions.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Get Additional Licenses to Boost Growth<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">MSME registration<\/h4>\n\n\n\n<p><a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME registration<\/strong><\/a> is offered by the Ministry of Micro, Small, and Medium Enterprise. Although this registration is not mandatory, it could help small businesses to grow by having access to several government-based schemes.&nbsp;<\/p>\n\n\n\n<p>Small\nbusinesses, in particular, always have trouble with keeping irrelevant expenses\nat bay, which further resulted in a liquidity crunch. This is where MSME\nregistration comes in very handy.&nbsp;&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Trademark\nregistration&nbsp;<\/h4>\n\n\n\n<p>The first thing we need to clarify is that trademark registration is not mandatory. It is up to the owner\u2019s discretion whether to opt for this registration or not. However, there are plenty of reasons that make this registration utterly important for your business.\u00a0<\/p>\n\n\n\n<p><strong><em>Here\nare the reasons that support the obtainment of Trademark protection for a\nbusiness <\/em><\/strong><\/p>\n\n\n\n<ul><li>It renders the exclusive right to the owner over their intangible property such as logo, design, and sign.&nbsp;<\/li><li>It safeguards intangible properties from possible counterfeiting and violation.&nbsp;&nbsp;<\/li><li>It helps businesses to create a distinct identity in the market.&nbsp;<\/li><li>Once registered, the owner can rejoice in trademark protection for 10 years. <\/li><\/ul>\n\n\n\n<p><strong><em>Applicants\ncan file a trademark application on the IPR India portal.&nbsp;<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Leverage confidentiality\nor Non-Disclosure Agreement with Vendors and suppliers&nbsp;<\/h3>\n\n\n\n<p>A\nnon-disclosure agreement, best known as NDA, refers to a written contract\nbetween two parties (entities or people) that forbid sharing of sensitive\ninformation shared between both ends.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Why must\nbusinesses consider NDA?&nbsp;<\/h4>\n\n\n\n<ul><li>Since Non-Disclosure is\na legally binding document, it offers sense of security to the involved partners\non account of confidentiality over sensitive matters that are bound to remain\nisolated from outside world.&nbsp; Any default\nin this regard could invoke pre-determined penalties for the defaulter. <\/li><li>It safeguards the\nsecrecy of the information known to the concerned parties and minimizes the\nleakage of sensitive information.&nbsp;<\/li><li>Overall, it safeguards\ndisclosure of intellectual property (including proprietary information, trade\nsecrets, &amp; other confidential detail), protecting the company as a\nwhole.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>Setting\nup a new business brings myriad challenges for the start-up and new\nentrepreneurs, predominately from the legal standpoint. This is the phase where\nstart-ups need to remain watchful as any negligence in this regard could cost them\na lot of time and money. That is the reason why most start-ups prefer to\naddress such obligations under the supervision of a professional firm.&nbsp;<\/p>\n\n\n\n<p>The team at <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz\u2019s<\/strong><\/a> can help you get started with your dream business by mitigating legal obstacles. Further, they can help you understand comprehensive Legal Aspects of Business that actually act as a major deterrent for start-ups, particularly in the initial phase.&nbsp;<\/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","protected":false},"excerpt":{"rendered":"<p>Commencing a business journey isn\u2019t a straightforward job as it attracts heaps of legal compliances. Thus, it is pertinent for entrepreneurs to get a better understanding of legalities before laying the foundation of new business. Knowing Legal Aspect of Business could help start-ups prevent irrelevant expenditure and save time. This write-up reveals critical Legal Aspects [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":33740,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[968],"tags":[1889],"acf":{"service_id":"250"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":9431,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/33731"}],"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\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=33731"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/33731\/revisions"}],"predecessor-version":[{"id":37306,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/33731\/revisions\/37306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/33740"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=33731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=33731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=33731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}