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The startup ecosystem has been evolving at a break-neck pace in our country. With improving access to knowledge and resources, we have seen an enormous number of startups launched in the last decade. While getting a business idea out to the market can be exciting, it is important to stay legally safe while launching your business. Many startups solely focus on the financial aspect of the company thereby discounting the legal aspect. Here are 5 legal mistakes that you should avoid as a startup.
- Intellectual Property
Make sure that you protect your intellectual property as it would impact the future value of your business. Apart from trademarks and patents, consider having founders and employees sign intellectual property rights agreements.
- Be Clear With Co-Founders
Make sure that you discuss all the details regarding your business including the number of shares they hold, founder rights, founder benefits, etc., with your co-founders. This can help avoid legal complications in the future.
- Work With a Lawyer
While there is plenty of legal information available online, make sure that you work with a lawyer to have your legal procedures in place.
- Be Strategic
While building your startup, make sure that you have a long-term goal and vision for the company. Consider the advantages of the S-Corporation structure so that you can minimize the taxes on your payroll. Make sure that you save expenses anywhere possible.
- Build Contract Templates
With your business growing, you would have many stakeholders and clients involved. Make sure that you follow good legal processes with all of them. Maintaining contract templates can help speed up this process while staying legally smart.
Once you have kept the above points in mind, it is also important to ensure that your startup has substantial working capital to sustain your initial push towards expansion. To support your business operating costs and other expenditures, you can opt for a startup business loan. While choosing a startup business loan, it is best to consider a few parameters during the decision-making process. Make sure that the lender is reliable and offers a high loan limit. This would allow you to have a transparent process throughout your business loan. In addition, make sure that the processing is fast and a flexible tenure is offered on your business loan. A flexible tenure is key as it avoids financial stress during the repayment process.
Eligibility
Before applying for a startup business loan, make sure that you meet the eligibility criteria.
- The applicant’s age should be between 25 years and 65 years.
- A minimum business experience of 3 years is required in the current business. Overall, a total of 5 years of business experience is required.
- The applicant should be a self-employed professional such as a doctor, chartered accountant, etc. or a self-employed non-professional such as manufacturers, traders, etc.
- The minimum ITR should be Rs. 1.5 Lakhs.
- The business unit must be a partnership, private limited company, or a limited liability partnership.
Final Thoughts
Make sure that you avoid these simple startup legal mistakes as they can add to your costs. While applying for a business loan, make sure that you understand the eligibility criteria and keep the required documents ready. You can also calculate the amount of EMI by using the business loan calculator. If you are looking to apply for a business loan, Finserv MARKETS can offer plenty of benefits such as need-based offerings, high loan amounts, flexible repayment tenure, and other exciting offers.
