What Are The Legal Aspects Involved In Setting-up A Startup?

Hundreds of ideas must be evolving in your mind when you want to start a new business. But, if you aren’t aware of the legal aspects involved in this whole process of building a Startup, It may land you into a trouble. Even though, you have capital, great idea and other capabilities, your business would tend to fall by avoiding legal formalities required for starting a business. Today, many of us, especially youths, have a dream to start a new business but a significant proportion falls short due to lack of finance, experience and legal knowledge.

This article focuses on the legal aspect involved while setting up a startup.

What is a Startup?

Before all the legal formalities, the first thing we need to know is ‘What is a Startup?’.  In order to avail exemption from the industrial–business laws applicable to the business entities, an entity needs to fall under the definition of ‘startup’ as defined by the Government. A Start Up is not defined under any law in force. But, Government of India by notification in its Official Gazette, has specified what startup is. Your organization fall under the category of start up, only if, it fulfils following essentials–

• Up to five years from the date of its incorporation/registration, if it is incorporated or registered in India;
• In any preceding financial year its annual turnover has not exceeded Rs. 25 crore;
• And it is devoted towards innovation, deployment, development, or commercialization of new products, processes or services driven by technology or intellectual property.

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