India is now a land of promising entrepreneurs. All over the country, there are pioneering businesses. There are always new ideas. Unsurprisingly, a shocking number of businesses fail due to their mistakes at the start-up stage.
The following are 7 business registration mistakes you should avoid
A Bad Business Entity Choice
It is critical to select the appropriate legal entity from the start. A Registered Company (Public/Private Limited), LLP, proprietorship, partnership, and OPC are some of the business types available. A registered business is the more frequently accepted option. If the entrepreneur does not want their personal assets to be put at risk, they can form an LLP. To avoid legal complications and greater taxes, business owners should choose the appropriate legal entity.
Having Insufficient Legal Representation From the Beginning.
From the start of a new business, legal aid is essential. Filing essential documents for incorporation/registration, tax filings, filing for approvals, trademark or patent filing, and so on are all things that only a lawyer or company secretary can handle. Because of the attention to detail and accuracy required for positive results, these are difficult operations that require expert guidance.
As a result, in order to avoid financial disasters and disgrace, the entrepreneur should get all legal assistance available from the best in the industry.
Not Telling Your Lawyer or Your Partner’s Vital Information
Your partners and lawyers need to be aware of everything that is happening in the business. There will undoubtedly be a disaster if this does not happen.
Combining Personal and Professional Costs
The most significant investments in a company are time and money, and the boundary between personal and corporate expenses is frequently blurred. This might cause confusion when filing taxes because some deductions may be prohibited on an ad hoc basis by the revenue authorities, resulting in a greater tax bill. At the outset, the company should have a financial account and separate documents.
Documentation Is Inadequate
Every encounter, whether it’s a meeting’s minutes, an expense report, a petty cash register, or something else, must be documented. It’s critical to keep all of your documents in order at all times.
Obtaining a Phony Incorporation Agent
We notice agents on the internet making numerous big claims, such as “complete up to a single form and start your business.” In truth, starting a business necessitates a large amount of paperwork. Despite the fact that INC 29 allows for single-form incorporation, it is a compacted 5-1 form that permits businesses to be formed in as little as 15-20 days.
The process of incorporation/registration is lengthy and cannot be accomplished simply by filling out a form.
Though the government is attempting to achieve this goal by integrating all departments into a web and mobile app.
Failure to Make Regular Tax Payments
Businesses, whether sole proprietorships or corporations, must pay taxes in advance. This implies they must calculate their taxes for the year ahead of time and pay them in instalments. They may face penalties if they do not pay their taxes on time. As a result, it’s critical to review the profit/loss account on a quarterly basis and pay the advance taxes.
We all make mistakes, but the quicker we fix them, the more money we make.