LEGAL CHALLENGES BEFORE STARTUPS IN INDIA
The professional team of Advocates & Lawyers of My Lawyers Advice has been dealing with numerous Startups and been rendering their legal advice to them. Startups have become the go-to option to start any business, however, they are not prepared for the challenges which has become the cause for their failure. One of the biggest challenges faced is in identifying the right business structure. The necessary legal compliances depend on the structure of the business, further the business structure must be compatible with the business that is ought to be conducted. Once the business structure is identified, they must ensure that it is properly regulated wherever necessary. The business structure also determines the liability of the start-ups.
Another challenge is identifying the right personnel to operate the company and entering into employment agreements in order to protect themselves and their employees. The Startups must also focus on maintaining all their agreements and contracts in a written form which would provide them a better stand in case of breach of contract and in doing so they should follow the Corporate laws and/or Commercial laws of the land in their entirety. The Startups need to make sure that they know the relevant tax provisions applicable to them specially with the new GST regime that has been implemented in India.
Further, Startup fails to properly secure their Intellectual Property i.e. Trademarks & Patents, which is one of the biggest assets to the company. Maintaining a commercial relationship with the founders is an essential to a successful Startup. This can be ensured by entering into agreements with the founders and listing down the rights and duties of both the parties. It is also ideal to have a compensation plan for the founders to avoid any such issues that may arise later on. The focus of the Startup should be hassle free continuance of the business by taking steps to any possible conflicts and in doing so they should take the assistance of Startup Lawyers & Accountants.