Registration Mistakes By Entrepreneurs & Start-ups

With any opportunity before getting too far, it is essential that you go through small things first, then take big steps with the right foot.

To have a new start-up on board, everything must be on time and well planned. It is recommended to probably go for the right advice if you want your Start-up business to ignite fire since inception.

The initial step for any entrepreneur is to bring his idea to existence by shaping it to a legal entity. Multiple registrations have to be obtained by a business to operate in the Indian legal framework. For different registrations, entrepreneurs also require knowledge of some basic compliances and ethical issues before jumping off to entrepreneurship.

In this article, you will get to know what all common registration mistakes startup entrepreneurs do when they legalize their Startup business.

  1. Uncordial Legal Structure

It is not about only choosing the structure of business which can be sole proprietorship, partnership, company, LLP or any other form but it is about opting the structure with a prior planning of time-bound compliances, statutory responsibilities and legal duties which the entrepreneur will be required to comply with, after choosing a particular legal structure.

Choosing a wrong entity type can burden the entrepreneur with a list of compliances to be followed, even when the business is at its developing stage. On the other hand entry through an easy registering entity type, will also bring competition and could even lead to the entry of more competitors.

With consultation of a business expert pick a legitimate structure for your business, according to your business needs keeping in mind the involved costs and compliances.

  1. Ignoring crucial legal registrations 

Start-ups lack the required professionals or personnel who hold the knowledge of business legal issues. Entrepreneurs themselves with no prior knowledge, ignore the aspect of registrations required under different legislations made by the government.

Authorities in India do check for compliance/registration of Start-ups with all the regulatory laws applicable to them like Securities Law, Employment law, Labour Laws, Income Tax law, State laws, etc. So, entrepreneurs must focus on placing all ancillary registrations along with the core registration of business as an entity.

  1. Diligent documentation

Documents are always the biggest asset for an entity. Like MOA or AOA  or any other registration document like a joint venture or partnership agreement should always be drafted and presented before professionals to make them legitimate.

Due diligence of a business entity with all legal norms, necessary forms, declarations and compliance requirements of government before going for registration under any particular law is beneficial.

  1. Marking out scheduled expenses

Registering to a particular entity type or under any law will not only bound the business for the regular compliance cost but will also add up more cost of hiring legal experts, setting up advisory boards, documentation costs, etc all pilling pressure on the limited income of the Startup in the initial years.

So, it’s better to make a definite plan of action matching the expected cost, expenses of incorporation, investment and compliance to be built before opting for any registration.

  1. Defying need for agreements

An agreed MOA or AOA for the company, director policy document, partnership agreement, liquidity agreement, insolvency & bankruptcy document s, incubation agreement, employee agreement, intellectual agreements, etc all these have to be there in place in case any dispute happens in business.

Most entrepreneurs ignore the aspect of statutory agreements to be crafted for Startup Business. Agreements drafted and placed before the authorities smoothen the operations of a business and free’s entrepreneurs from long litigations. Know what all legal agreements you need for your business from our business expert, email us at

So, each time you get into a legal registration under any law, do check for preparation of related agreements to keep your entity safe of legal penalties’.

  1. Ignoring intellectual property

Business registration or multiple registrations under different laws is not an assured mark over complete protection of the Startup entity. Initiating a Startup is more challenging but it is always into a threat of getting copied.

Most entrepreneurs ignore the aspect of intellectual property which otherwise if opted will safeguard their business from duplication of business ideas and infringement of business rights. So, registering products or services for the appropriate Trademark/copyright/patents should also be adopted along with other registrations.

  1. Mis-managing bars of taxation

For businessmen keeping up with taxation is not an exception in India. Startups have to keep up with all tax laws determining their tax liability just soon as they start their business after registration.

Most entrepreneurs ignore the aspect of tax provisions applicable to their Start-up entities in the initial years. It is the duty of the entrepreneur to ensure due to compliance of all tax laws with the necessary registrations (GST Registration, TDS Registration, etc) and consultations to be held with tax agencies determining tax liability in advance.

  1. Delaying registrations and related compliance  actions

Delaying any of the registration application on your Startup business will not only hold the entrepreneur but also the entity to big legal trouble.

An entrepreneur might not be proficient enough to know about all registrations or he might not be equipped with the required expertise before getting into a particular business but there is no exception for ignorance of laws and it is a necessity in the legal environment for every entrepreneur to know all registration types and the compliances to avoid penalties and legal actions. The best way to do that is by hiring a legal consultancy.

  1. Going without advisory

Never think of becoming a self vigilant person of your enterprise or Startup Concealment of even single information during any legal registration from the authorities can lead to severe penalties on your business

Better go for hiring a legal expert as a business asset and take prior advice before opting for any business decision. This will nearly reduce half of your business worries.

For Startup, advisory email our corporate consultants at

Also Read: Obtaining Drug License in India