To meet different needs from time to time, startups often reinvent the wheel and can probably fail at it. While an in-house, dedicated team manages IT and Hiring, other departments often don’t. Being in the professional services business, we finally take care of all their compliance. We help them focus on critical aspects of their business, from company registration to accounting bookkeeping and even GSTR filing.

Startups are prone to overlook a plethora of things when they just begin their journey. Make sure you avoid the pitfalls that can jeopardize your startup journey.

Here are the top five things that you should avoid to ensure the success of your startup:

1. Choosing an unsuitable business structure. 

Some businesses fail to pick up the right business structure when starting up. Most of them would go for LLP even if they plan to have third-party investors. It is best to go for private limited when getting a new company registration as a business can benefit from the investment in such cases. 

If you are looking to get the legal business registration, then there are three significant structures you will have to deal with:

As a Body Corporate:

Register under the Companies Act as a corporation. You can do the following:

 Private Limited Company Registration

 One Person Company Registration 

 Registering a Public Company

 One Person Company Registration

· Sole Proprietorship: It is registered if the enterprise is owned and less compliant by a single individual. While registered, this entity remains an informal structure as well as a legal entity.

· Partnership: This is a corporate structure formed for a group of people to share profit. There are three ways of doing this; limited partnership (LLP) or general partnership, if the former acts as an entity that gives all legal rights.

The choice of structure involves taking into account the size, type and growth of your business. The correct structure depends on your business’ type and size and your planned growth. A single-member would generally prefer a proprietorship company or an OPC. However, some founders rely on family members or friends to meet the structural demands to benefit from another structure.

2. Getting contracts and agreements done

Such operational dependencies may bring you to make startup agreements for employment policies and standards.

A contract of employment contains employment commitments, deliverables and payment details along with the ESOP details when offered. If you start, it will clarify these aspects and help with a contract. This will eventually reduce the risk of uncertainty to help measure effectively.

Although the vendor agreement is not compulsory, it is best to do so too. This ensures business trading and promotes long-term synergies to match the symbiotic relationship between demand and supply.

There is also a trend amongst startups, in which the agreement between co-founders and shareholders is concluded. Such agreements will help to distinguish between the business roles and responsibilities of co-founders and others.

3. Business Licensing

Some companies require licenses to commence as part of compulsory conformity. For example, the FSSAI licensing for food business. Startups have to be cautious in complying with licensing requirements because they fail to do so can put them in great danger.

Make sure that your startup has all the necessary licenses or registrations, including Udhyog Aadhar and MSME registration to raise the funding opportunities.

An ideal solution is to consult business professionals and ask if your company needs a license. Make sure documents are ready and apply. One important document is a certificate of company incorporation on which the necessary licenses can be obtained.

4. Intellectual Property Protection

The Ministry of Labor and Employment has defined a range of safety, health, and work environment. If your startup has a hazardous substance or if employees are exposed to some chemicals or air, these standards must be met. Do not put your business in danger by avoiding such measures. 

The 2005 Minimum Wage Act also provides for minimum wage payment by industry standards. Again, startups employing workers for various jobs have to comply with this criterion to comply because a startup is responsible for their employees’ health and safety at work.

Risk evaluation is recommended to assist in identifying potential risks and actions against them.

5. Work safety and Minimum Wages

The Labor and Employment Ministry has set out some safety, health and environmental measures at work. If your startup is dealing with prohibited substances or if employees are exposed to some chemicals, then it means you are not complying with the standards. It is best to follow government safety standards, including the new CoVID-19 ones, to ensure smooth business operations.

The Minimum Wage Act of 2005 also provides for the minimum wage payment according to industry standards. Again, startups employing workers for diverse work have to meet this criterion to keep themselves compliant because a startup is responsible for its staff’s safety and health at work.

A risk assessment is recommended to help identify potential hazards and measures to combat them.


Many other things are not to be overlooked by startups when they are compliant. The best way to get started with keeping a Compliance Partner on board is to focus on doing business. From enterprise registration to tracking company accounts day-to-day to monthly compliance, we do everything.

The key is to avoid these burdens and to do business without reinventing the wheel of an entirely new department for the branch.


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