Basic startup laws every entrepreneur needs to know

March 01, 2016

Before dreaming to break into the unicorn list of the startup world, one needs to be aware of how to safeguard the company and its matters legally. Being compliant with the legal aspects of starting a company is as important as running the company itself. Let us look at some of the laws that the startups in India have to keep in mind.

BASIC ACCOUNTING AND TAX LAWS

The start of a company means costs which have to be incurred by the CEO and the company. One of the costs is the taxes that the company pays to the Central/State govt. The taxation laws are different in different geographical areas and accordingly he company has to be aware of the laws in their own state before diving into the wide sea of tax payments. Being ignorant about the tax laws is the suicide most aspiring startups commit in today's world. Apart from taxation policies, the company also has to keep its account books in order to be in the right books of the government. Being aware of the accounting f the company also comes in handy.

LABOUR LAWS

The company in its initial few months could be managed by a few people, mostly the known people of the CEO. But in later stages, when the company acquires funding from angel investors and find it impossible to handle the workload (which is the happiest news for the CEO), the company will have to hire wokforce. In that case there are a few legal aspects that have tobe followed. Even if the company hires specialists or the man who works in the parking lot, the CEO has to have an employer-employee relationship. This relationship has to be within certain boundaries and has to comply to the labor laws present in the state. The reviews and image of the company will be reflected by the labor force. Moreover, the labor laws are pretty strict in countries like India where there is an abundance of labor as it is. Failure to be in accordance with the laws will also result in hampering the company financially.

IT LAWS

The company you start in today's age will always have a presence on the internet. Being on the internet is a dangerous business for a startup if not handled properly. There are various risks involved in setting up of the internet presence of the company. Various startups in India which have cropped up in the last few years have the customer information stored over the internet. There is a huge risk of losing the data. Otherwise too, the company and the website needs protection from cyber hacking. Cyber crimes are on the rise in India and constitue the most towards the crimes in India. Having a keen interest in these matters is essential for taking the best step forward for the company.

There are various other laws that are quintessential for ensuring legal safety of the startup. Some of the important laws are contract laws and dispute resolution, intellectual property laws and knowledge relating to government contracts.