{"id":1703,"date":"2019-09-14T12:40:54","date_gmt":"2019-09-14T07:10:54","guid":{"rendered":"https:\/\/aktassociates.com\/blog\/?p=1703"},"modified":"2019-09-14T12:43:06","modified_gmt":"2019-09-14T07:13:06","slug":"mistake-startup-setup-in-india","status":"publish","type":"post","link":"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/","title":{"rendered":"Registration Mistakes By (ENTREPRENEUR )Startups In India"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The requirement for Startup \u2013top Huge mistakes in Registration-Difficulty in <\/span><span style=\"font-weight: 400;\">Registration-<\/span><span style=\"font-weight: 400;\">Single ownership mistake-Disregard employees-Correct legal structure-Unmanaged Taxes-Legal <a href=\"https:\/\/aktassociates.com\/blog\/5-biggest-mistake-of-small-business-owners\/\">mistakes in startup<\/a>&#8211;<\/span><span style=\"font-weight: 400;\">Missing founders\u2019 agreement-Lack of documentation-Solution for Mistakes in<\/span> <span style=\"font-weight: 400;\">Entrepreneurship-<\/span><span style=\"font-weight: 400;\">Non-compliance with securities laws-Other Legal issues in startup making-Professional compliance Issues.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-1712 aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/Mistake-In-Startup-Setup-2-1-1-1-1-1.png\" alt=\"Mistake In Startup Setup\" width=\"700\" height=\"400\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/Mistake-In-Startup-Setup-2-1-1-1-1-1.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/Mistake-In-Startup-Setup-2-1-1-1-1-1-300x171.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/09\/Mistake-In-Startup-Setup-2-1-1-1-1-1-20x11.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">A various mistake is done by Entrepreneur or Startup person\u00a0 either in complying legal laws of professional mistakes or in following Relevant laws in making Startup<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >In this article, we will discuss about...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1e73be;color:#1e73be\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1e73be;color:#1e73be\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#1_Wrong_legal_entity\" title=\"1) Wrong legal entity:\">1) Wrong legal entity:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#2_Untrackable_Expenses\" title=\"2) Untrackable Expenses:\">2) Untrackable Expenses:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#3_Lack_of_Due_Diligence_Take_care_of_Documentation\" title=\"3)\u00a0Lack of Due Diligence (Take care) of Documentation:\">3)\u00a0Lack of Due Diligence (Take care) of Documentation:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#4_Missing_founders_agreement\" title=\"4)\u00a0Missing founders\u2019 agreement:\">4)\u00a0Missing founders\u2019 agreement:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#5_confusion_between_capital_and_revenue_expenses\" title=\"5) confusion between capital and revenue expenses:\">5) confusion between capital and revenue expenses:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#6_Mixing_personal_and_business_expenses\" title=\"6) Mixing personal and business expenses:\">6) Mixing personal and business expenses:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#7_Not_protecting_intellectual_property\" title=\"7) Not protecting intellectual property:\">7) Not protecting intellectual property:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#8_Non-compliance_with_securities_laws\" title=\"8) Non-compliance with securities laws:\">8) Non-compliance with securities laws:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#9_Missing_regular_tax_payments\" title=\"9) Missing regular tax payments:\">9) Missing regular tax payments:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#10_Professional_Tax_consultant\" title=\"10)\u00a0Professional\u00a0Tax consultant :\">10)\u00a0Professional\u00a0Tax consultant :<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_Wrong_legal_entity\"><\/span><strong>1) Wrong legal entity:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">It\u2019s the main factor in which the person would have to determine the type of entity to be formed. This is important because the compliance of various Registration requirements and legal laws depends upon the type of formation of the legal entity. For this, various Appropriate arrangements to be made correctly by our Young <a href=\"https:\/\/aktassociates.com\/blog\/being-an-entrepreneur\/\">Entrepreneurs<\/a> in each field.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Untrackable_Expenses\"><\/span><strong>2) Untrackable Expenses:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The common blunder (mistake) made by startups is not keeping track of their expenses, whether its a big or small maybe, throughout the year. So while presenting the ITR (<a href=\"https:\/\/aktassociates.com\/blog\/income-tax-return-filing\/\">Income Tax Return<\/a>), many of the important documents related to expenses are lapsed in ITR that lead to misleading information and make one\u2019s business unprofitable in Profit &amp; Loss Account and the whole Financial position gets worse even distorted.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Lack_of_Due_Diligence_Take_care_of_Documentation\"><\/span><strong>3)\u00a0Lack of Due Diligence (Take care) of Documentation:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Legal due diligence can make or break an investment deal. It means that Documents are the biggest asset for any nature of an entity. So it must be completed in all aspects it may be in any form of entity (Big\/Small).<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Missing_founders_agreement\"><\/span><strong>4)\u00a0Missing founders\u2019 agreement:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Founder\u2019s Agreement meaning that Memorandum Of Association(MOA) or Article Of Association(AOA) or any other documents on the nature of entity of nature of <a href=\"https:\/\/aktassociates.com\/blog\/startup-india-scheme-registration-eligibility-procedure\/\">startup business<\/a><\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_confusion_between_capital_and_revenue_expenses\"><\/span><strong>5) confusion between capital and revenue expenses:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Major confusions for first-time business filers is about expenses. The dilemma arises among taxpayers or startups in which expenses are to be considered as\u00a0 Assets \/capital expenses, so accordingly these revenue expenses deductible in the P&amp;L A\/c. For example, the expenses on laptop purchases are not deductible as revenue expenses in the P&amp;L A\/c, but only the depreciation\/amortization on them is deductible over a period of time.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"6_Mixing_personal_and_business_expenses\"><\/span><strong>6) Mixing personal and business expenses:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Often the personal and business expenses become indistinguishable. <\/span><span style=\"font-weight: 400;\">There is doubt or can be said that confusion that expenses to be considered as personal or business expenses. If properly not evaluated then it may to distorted financial position.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"7_Not_protecting_intellectual_property\"><\/span><strong>7) Not protecting intellectual property:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Intellectual property<\/span><span style=\"font-weight: 400;\"> (IP) is a startup&#8217;s most valuable asset. <a href=\"https:\/\/aktassociates.com\/blog\/trademark-registration-india\/\">Trademarks<\/a>, patents, and <a href=\"https:\/\/aktassociates.com\/blog\/copyright-registration\/\">copyrights<\/a> are the three essential components of IP. In other words, Infringement of IP leads to the business at risk at a great extent. The solution for this problem is to not disclosing the agreements i.e Non Disclosure to ensuring this. Generally, this is the main problem arising in Startups as they often neglect the protection of their business\u00a0 IP and does not have a predetermined step thereof.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"8_Non-compliance_with_securities_laws\"><\/span><strong>8) Non-compliance with securities laws:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The startup has a lack of professional knowledge in most of the cases that may be of under securities law or other income tax provisions and this is common so it can lead to serious legal issues at a later stage. It is expected from the entrepreneur to be equipped with or have a TAX or LAW expert as the case may be.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"9_Missing_regular_tax_payments\"><\/span><b>9) <\/b><b>Missing regular tax payments:<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The businessman is required to pay taxes in advance except for certain exceptions as prescribed under the Income Tax Act, 1961. So accordingly taxpayers are required to determine their liability in advance before the beginning of the financial year for the relevant financial year. If Provision related to Tax do not comply then it might lead to severe penalty. So be regular in tax payments either of any nature by having the knowledge or hiring an expert in the relevant field thereof.<\/span><\/p>\n<p><a href=\"https:\/\/aktassociates.com\/start-your-business-in-india\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-805 aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/start-your-business-in-india.png\" alt=\"start your business in india\" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/start-your-business-in-india.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/start-your-business-in-india-300x64.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/07\/start-your-business-in-india-20x4.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"10_Professional_Tax_consultant\"><\/span><b>10)\u00a0<\/b><b>Professional\u00a0Tax consultant :<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Due to various compliance, every business would need to have a Professional expert either as a tax consultant or as Law expert, so to avoid all legal complexities that may divert the startup players to accomplish their goals.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The requirement for Startup \u2013top Huge mistakes in Registration-Difficulty in Registration-Single ownership mistake-Disregard employees-Correct legal structure-Unmanaged Taxes-Legal mistakes in startup&#8211;Missing &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Registration Mistakes By (ENTREPRENEUR )Startups In India\" class=\"read-more button\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/#more-1703\">Read more<span class=\"screen-reader-text\">Registration Mistakes By (ENTREPRENEUR )Startups In India<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":1710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Common Mistake Startup Setup In India AKT Associates<\/title>\n<meta name=\"description\" content=\"Various mistake done by Entrepreneur or Startup person\u00a0 either in complying legal laws of professional mistakes or in Relevant laws in making Startup...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/aktassociates.com\/blog\/mistake-startup-setup-in-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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