This is the first post of the series #100DaysFromStartups.

Let’s start with the first step. What are some of the things to keep in mind while incorporating your startup?

Step 1 - Registering a company

The most preferred business structures for a startup are Private Limited companies and LLPs since both of them have separate legal entities (that is none of your personal assets are at risk, the entity is considered as a different individual).

If you’re not sure, go for Private Limited as it offers a distinction between shareholders and directors, unlike LLPs. (In the case of LLP, investors would have to be partners and hence debt funding is the only common route). Benefits of Private Limited: Easily raise funding and Offer ESOPs. It comes at a bit more cost and additional compliance requirements (a statutory audit, annual filings and submission of IT returns, board meetings and filing of minutes of these meetings, etc)

Note that the name of the company may be separate from the brand name (Brand names need to be secured by a trademark)

Step 2: Register with Startup India

Step 3: DPIIT Recognition

This recognition will help the startups to avail tax benefits (tax exemption for a period of 3 years, etc), better IP services, self-certification for certain laws, etc. In India, startups do not have to pay income tax for the first three years but to avail this benefit, the startup needs to be certified by the Inter-Ministerial Board (IMB) (not required if you have the DPIIT recognition).

Usual disclaimer: Discuss with a CA for professional advice