Since last one year, the Indian government is constantly trying to make the country more business friendly and even encouraging foreign investors to invest in Indian economy. It is being viewed as as opportunity to establish new ventures for those who want to startup their own business. Starting a new business in India requires many thing to be considered. There are certain startup laws which every novice entrepreneur must know. Before you decide any further steps for your startups in India, let’s have a look on those primary startup laws with which you may need to deal on your own whenever required.
1. Taxation laws
To run a startups in India, one has to pay taxes to the Central/State government or local authorities. So, it mandatory for every new entrepreneur to be aware of accounting details and basic knowledge of the taxation world. You can consult a CA for the same.
One should always try to keep a record of accounts and make a practice to go through them periodically. Taxation information based on area and sector of work will help in retaining and improving the financial and legal strength of any organization.
2. Selection of startup
Everything depends on what kind of business or startup you want to set up. It can be a private limited company, public limited company, partnership firm, limited liability partnership or an HUF. So before selection, one should analyze its feasibility, visibility, sustainability, possible cash-flow or expenses and related returns that are expected from this type of organization.
Structuring should be implemented in accordance of type of startup but an entrepreneur needs to be careful that proper legal framework have been taken care of. The startup is bound with certain laws and not complying with them means loss in the form of heavy fines before you can even start earning good returns.
3. Staffing and Labor Laws
Every startup has to hire staff at some level in order to expand itself, say for example, while launching new product or services or product, increasing business space or while opening any new branch. Even if you plan to outsource or employ independent consultants, every such employee-employer relationship will be directed by labour rules and laws. Violating these will not only harm you financially but also spreads a negative review about the startup at initial stages.
4. Securities and Exchange Board of India
One should be aware of Securities laws regulated by the Securities and Exchange Board of India (SEBI) which will aid in easing out the process of listing. As we suggested, CA can be consulted for such guidance. One should try to keep a track of various updated regulations issued by SEBI on regular bases which can help in managing the various stages of nurturing a new business, including fund-raising.
FDI, angel investors, crowd funding, venture capitals and even joint ventures are areas that a new entrepreneur must be aware about.
5. Corporate governance laws
Some basic knowledge about corporate governance rules and regulations also help entrepreneur to manage and execute further expansion plans effectively.
6. Digitization laws
Last month a ‘Digital India’ campaign was launched by Indian prime minister across the country. So no one can afford to avoid ‘Digitization’ these days. We are living in a technologically advanced era where things like e-contracts, cloud computing, digital signatures, securing confidential data from hackers, privacy protection are extremely important. Knowledge of IT laws will help in exploring your wings and thus, growing your business.
7. Contract laws
Many organizations survive on contracts. Nevertheless, broke-up such contracts or disputes may be one of the unavoidable consequences sometimes as it may occur commonly. Therefore, fundamental knowledge regarding contracts, arbitration, mediation, conciliation can smoothen the progress of a successful business. There are also few law that enforce organization to enroll personal accident or med-claim policies for their employees or labor persons.
8. Intellectual property laws
Legally protecting intellectual property is of supreme importance to any business. Timely IP audits, filing the accurate trademark/copyright/ patent claims will not only protect your business but increase profits too. However it is never a necessity for a startup to own a property. One can start doing business from home.
9. Knowledge of government schemes and policies
This might not be extremely necessary but a successful venture depends upon a steady flow of funds. Bidding for government contracts can create wonderful opportunities for growth, revenues and reputation building. One should frequently try to gather such information regarding current as well as upcoming policies so right decisions can be taken at right time.
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