People who start their own business have a different mental set up and professional approach than those who have never gone off to create something different and completely of their own. Entrepreneurs see a problem and think of an innovative and original way of addressing it or resolving it. They delve into the various roads available and then make their choices based on their requirements and suitability.

Benefit of going for a startup:

A lot of different things can be done using self ideas rather than going for a cliche sort of activities and following predetermined/ set methods

People who have entered into a structured framework or a developed corporate zone, are generally stuck with their main task and don’t get to branch out into other areas. Whether it’s writing, designing, filling out spreadsheets, or any other task, it’s usually a one-person-fits-one-task kind of position. Working at a startup will allow you to try on a lot of different things that you didn’t think you would ever do, but for a startup you did.

Legal mistakes/points overlooked when as a startup are as follows :

Amongst all benefits and advantages, startups many a times overlook very many important issues which are as follows:

1. Lack of documentation

Each and every interaction, be it meeting minutes or anything else, must be on the record. It is important to have all documents in order at all times. Legal due diligence can make or break an investment deal.

2. Not tracking expenses

Another mistake commonly made by startups is not keeping track of their expenses, however big or small it maybe, throughout the year. Many try and gather all receipts only when tax returns have to be filed! What is not documented is not deducted, and therefore, it is like leaving money in the open. There are many options available to record and manage expenses. Entities can also hire accountants to manage these records, if volumes are high. Thus proper maintenance of expenditure records doesn’t become as the responsibility is transferred so it is better to employ a professional concern in order to avoid any sort of penalties and non-compliance.

3. Non-compliance with securities laws

Startup founders commonly issue stocks to fresh investors, family, and friends. However, stocks issued without complying with specific disclosure regulations and filing requirements under securities law, can lead to serious legal issues later on which will further lead to huge financial losses and attract penalties.

4. Missing regular tax payments

Businesses, be it sole proprietors or otherwise, are required to pay taxes in advance. This means they need to determine their taxes for the year in advance and pay as prescribed installments. They can get into problems for not paying the taxes on time. It is therefore important to take a regular note of stock, profit/loss statement at each quarter and thus frame and pay the advance taxes. Also it is important to clear up the dues/ arrear taxes on time.

5. Not ensuring professional help for tax-related issues

A startup must appoint a tax consultant/ compliance professional to ensure all regulations are being followed. Thus, this will give more time to focus on building the company, various strategic relationships, and development of other things. It’s essential to make sure all regulations are being followed to the ultimate. Taxes and compliances are also not something that a company should take a look only once in a year but must keep them updated every month, quarter as and when possible.

CONCLUSION:

Thus, in order to focus for the upliftment of the new entrant, one must disburse the responsibility of compliances and tax issues to some professional head and be rest assured of this part, while focusing on the other aspects.

A startup overlooks very many vital aspects and thus lands up in non-compliances, so it’s far better for a startup to take a professional help right from the beginning so that the journey as a “startup” doesn’t begin in a negative manner.

We at Taxmantra.com can assist you in Incorporating the Company. You may reach us at info@taxmantra.com or contact at +91 92300 33070.