This document provides an overview of the legal aspects of starting a business in India. It discusses the different stages of starting a company, including company formation, taxation registration, intellectual property protection, and ongoing compliance requirements. It also covers the various business entity options available for registration in India, such as sole proprietorships, partnerships, limited liability partnerships (LLPs), private limited companies, and public limited companies. The benefits of registering a business as a company or LLP are outlined, including limited liability protection, eligibility for loans and funding, and credibility with investors, customers, and the government.

1. Legal Aspects of
Starting Up
Strategy Consultant | Founder at Le Monturé Consulting
@SajidKhetani | www.lemonture.com

2. WHO AM I?
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Strategy Consultant | Founder @ Le Monturé Consulting
Focused on SMEs & Start-ups
Where have I learnt?
Financial Technology
Equity Research
Financial Advisory
Investment Banking
What do I do?
Business Strategy | Brand Strategy |
Marketing Strategy
Fund Raising | Strategic Financial
Management
Start-up Mentor | Speaker | Educator

3. A BUSINESS STARTS WITH
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Great
Idea
Some
FundsGreat
Team

4. DIFFERENT STAGES OF A BUSINESS
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Start-up
Company
formation
Taxation
registration
(GST, etc.)
Start
NGO/Section 8
Company
Startup
Registration
Manage
Filing of
mandatory
returns with
ROC
Appointment &
resignation of
directors
Closure of
Company
Other
compliance
matters
Protect
Trademark
License or Sell
your Trademark
Copyright
Grow
Applying for
certifications
(ISO, etc.)
Getting
registered
under MSME /
SSI / Start-up
India program

5. WHAT IS A COMPANY?
A business organization that
makes, buys or sells
goods/services in exchange for
money is known as a
Company.
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6. WHAT SHOULD BE IN PLACE?
•A clear structure
•Entity should be properly incorporated
•Limited Liability Partnership or a Private Limited Company is preferred
•Memorandum of Association / Articles of Association in compliance with
the law
•Founders agreement / Shareholders agreement
•No liabilities is preferred.
•Incase of liabilities:
•It is important to record the loan agreements to avoid any potential liability claims in
the future – Individuals & Financial institutions
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7. EXPECTATION OF INVESTORS
•Clear information on Business & Stakeholders
•Clear information on all previous agreements
•Should be compliant with all applicable laws
•All arrangements need to be document
Bottom line – Should maintain complete transparency
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8. COMPANY OPTIONS AVAILABLE FOR
REGISTRATION IN INDIA?
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• Sole owners wanting to run a corporate
business.OPC
• Consulting services & professional firms
LLP
• Start-ups & Growth companies
Pvt. Ltd.
• High investment business
Public Ltd.
• Small traders & shop owners
Sole Proprietorship
• Traditional businesses for temporary
periodPartnership Firm
Legal
Business
Structure
(Organized mode of
business)
Non Legal
Structure
(Unorganized mode of
business)

9. 6 REASONS WHY YOU MUST REGISTER YOUR
COMPANY?
• To be eligible under Startup India Scheme the Startup
must be registered as a Company under the Companies
Act 2013 or LLP.
Eligibility for Startup India Scheme
• Many times startups need to borrow money and take
things on credit. In case of normal Partnerships, Partners
personal savings and property would be at risk incase
business is not able to repay its loans. In a, LLP, OPC or
private limited company, only investment in business is
lost, personal assets of the directors are safe.
Limited Liability Protection to Partner's
personal assets
• LLP or Pvt. Ltd. company enjoys wide options to raise
funds through bank loans, Angel Investors, Venture
Capitalists, in comparison to normal Partnership firm or
proprietorship.
Easy to raise funds and loans
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• Investors love to invest in Private Limited companies as
it is well structured and less strings attached. Most
important it is very easy to exit from a private limited
company.
Preferred Business structure for Investors
• For startups putting together a team and keeping them
for long time is a challenge, due to confidence
attached to private limited structure, it is easy to hire
people as well motivate them with corporate
designations and stock options.
Easy to attract Quality Team
• Private Ltd. is easy to sell, very less documentation and
less cost is involved in selling a Pvt. Ltd. company.
Easy to Sell

10. REGISTERING A COMPANY IN INDIA
Arrange
basic
documents of
Directors
Apply for
DSC (Digital
Signature)
for Directors
Prepare
MOA, AOA
& other legal
documents
Filing of
incorporation
of documents
with ROC
Get your
company
incorporation
certificate
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Company
name
approval
Company
PAN card
Company
TAN/TDS
number
Corporate
bank
account
Get

11. WHY REGISTER LLP?
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• Many times startups need to borrow money
and take things on credit. In case of normal
Partnerships, Partners personal savings and
property would be at risk incase business is not
able to repay its loans. In an LLP, only
investment to start a business is lost, personal
assets of the Partners are safe.
Limited Liability Protection to
Partners personal assets
• Limited Liability Partnership (LLP) is a popular
and well known business structure in the world.
Corporate Customers, Vendors and Govt.
Agencies prefer to deal with LLP instead of
proprietorship or normal partnerships.
Better image and credibility in
Market
• LLP is easy to manage and statutory
audit is not required for Limited Liability
Partnership. LLP is most ideal for small
enterprises. Tax Audit is also not
required for LLPs with capital less than
Rs. 25 lac and turnover not exceeding
Rs. 40 lac.
No Audit Requirement &
Minimal Compliances
• LLP continues to exist beyond the
existence of its Partners. This is not
possible in traditional partnership firms.
Continuity of Business

12. DO I NEED TO REGISTER FOR GST?
Upon Reaching
Turnover of 20
Lac
Inter-State Sales
or Service
provider
E-commerce
operator
Vendors selling
through
Ecommerce
Portals
Non- Residents
& Importers
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13. BENEFITS OF MSME REGISTRATION
Easy Bank Loan up to 1 Crore
without collateral / mortgage
Preference in procuring
Government tenders
1% exemption on interest
rate on Bank Over draft (OD)
Concession in Electricity bills
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Protection against the delay in
payment from Buyers
Tax Rebates
Special 50% discount on Govt.
fees for Trademark & Patent
Fast resolution of disputes

14. FAQS
What documents required to set up a Startup Company in India?
You need to arrange very simple documents of directors like photograph, Pan card
and one address proof.
Do I have to have office (commercial) space to start a Company?
No, commercial office space is not required. You can show your own residential or
rented home address as the registered office address of the Company. This office
address can be changed at any time after incorporation of the company. Once your
startup is set up, stable and ready to move on to a nice corporate space you can
change the registered office address by informing to the ROC office.
Who is Registrar of Companies (ROC)?
ROC is a Government office with whom companies get registered. Every State has
one ROC office except Maharashtra and Tamilnadu where there are two ROC offices.
In Maharashtra companies are registered with Mumbai & Pune ROC. In Tamilnadu
companies are incorporated at Chennai and Coimbatore ROCs. In all other States like
Delhi there is only one ROC office, like at Bangalore, Hyderabad and so on.
Is Startup Incorporation to be renewed every year?
No. Once the company is formed, it will be valid till it is officially closed down by the
owners. No renewal or fees is required. However, every year companies have to file
very basic returns with ROC office.
What is a DIN?
Director Identification Number (DIN) is a unique identification number required for a
person to become a director of a company. DIN is issued by ROC office (Ministry of
Corporate Affairs). It is similar to a PAN Card number. DIN is to be mentioned in
documents while appointing a person as a director of a company.
What is a DSC?
A digital signature is electronic signature, which is in the form of codes. It is used for
signing the electronic forms, filed with ROC for incorporation of Company. Digital
Signature cannot be used in physical documents.
What is Company name search? Why it is important for new company
registration?
Company name is very important part in registration of company. For Incorporation
of company, the suggested name should not match with existing companies or
trademark.
What is MOA & AOA of company?
MOA means Memorandum of Association and AOA means Articles of Association.
These are the byelaws or rules based on which important matters like main business
of the company or meetings is decided. These are standard legal documents
prepared by Company Secretaries during registration of the Startups.
What is capital of the Company?
Capital means investment made by shareholders into the company. Authorised capital
is an amount up to which company can issue shares. This capital is mentioned during
incorporation of the company based on which ROC registration fees and stamp duty
is paid. Paid up capital is an actual investment which goes from shareholders into
company bank account, against which share certificate is issue by the company.
Do we have to deposit Share Capital in a Bank at the time of Incorporation?
No. After company is registered, it need to open a company bank account and then
anytime within two months of incorporation, capital can be deposited into Company
bank account.
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15. The conversation continues…
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