New to Business? Don’t Fall into These Legal Pits!
Starting a new company is an exciting experience, one that holds promises. But among all the hype of opening up a shop, new entrepreneurs miss one very significant thing: legality. Whether FSSAI for food shops, GST for web shops, or even Shop Act Licenses for physical shops — legalities get complex, and missing one is expensive.
Here, in this article, we will take you through the most typical legal pitfalls which most small business people fall into — and how you can avoid them so that your business stays trouble-free.
Trap 1: “I’ll Get the License Later”
Most business owners believe that they can start their business and get the licenses subsequently. Business first, and the papers later is the attitude. This will certainly lead to delays, fines, and even legal troubles in the future.
Licenses You Cannot Avoid:
FSSAI License (For Food Businesses)
If you are running a food business — whether online, cafeteria, or home food business — then FSSAI license is compulsory. This is something that can considerably affect your business and damage your brand image.
GST Registration (For Tax Compliance)
If your yearly turnover is more than ₹20 Lakhs for services (or ₹40 Lakhs for products), GST registration is compulsory. Even, the firms who wish to switch on online platforms like Amazon or Swiggy need to get GST registration so that the firms are consistent with tax compliances.
Shop Act License (Gumasta License for Physical Stores)
If you are having a physical shop, office, or even home office, then the Shop Act License is required. Without it, you might be fined or have trouble getting loans or opening a current account from banks.
Pro Tip:
Get your licenses before you open your business. Do not wait until you receive a notice or fine to get you going!
Trap 2: “Trademark Isn’t Urgent
Even if you believe that business name registration will protect your brand, it won’t. You must trademark your business name if you do not want to encounter possible legal problems about your brand.
Why Trademark Matters:
Legal Protection: Trademarks guarantee that no other company can use your brand name, logo, or slogan.
Brand Recognition: A trademarked business makes your business reputable and reliable.
Prevents Imitation: Keeps your business safe from others copying your name or logo to provide similar products or services.
Tip:
Always trademark your company name and logo when starting out. This will protect your brand and establish legal rights on your intellectual property.
Trap 3: Choosing the Wrong Type of Company Without Advice
Most new business people follow the course of least action available in selecting the business form. The wrong choice, nonetheless, will set you permanently and significantly differently concerning your liabilities, tax benefits, and ability to raise capital.
Most Common Business Forms:
Sole Proprietorship: Simplest to set up but might place you at individual liability.
Limited Liability Partnership (LLP): Offers limited protection from liability, which is convenient for small companies requiring formal filing.
Private Limited Company (PVT LTD): Better suited for growth prospect and room for finances but with extra paperwork and requirements.
Pro Tip:
Consult a professional to determine what type of company will best suit your business requirements. Business vision and operation identification in the context of business type is the way of achieving things in the future.
Trap 4: Missing Renewal Dates & Filings
After you have your registrations and licenses, it just doesn’t end. There are only so many companies that forget the renewal or missed deadline for filing and pay fines or lose their licenses. This is something that can happen in your company, possibly damaging your brand.
What You Need to Stay on Top Of:
GST Returns: Your business will have monthly or quarterly returns to be in compliance.
FSSAI Renewal: FSSAI licenses need to be renewed prior to expiration in order to carry on business.
Shop Act License: Keep your business in sync with the new state laws.
Tip:
Set reminders or hire someone who can take care of your renewals and filing deadlines on your behalf. Your advance work on your legal needs will keep you safe from unwarranted penalties and shutdowns.
Trap 5: Trying to Do Everything Yourself or Hiring the Wrong Person
Starting your business is exciting, but it’s easy to want to do everything yourself, considering the amount of free advice available on the internet. But overdoing it or relying on poor sources can cause mistakes that can delay your progress or introduce legal headaches.
The Risks of DIY:
Inaccurate filings or incomplete paperwork
Missing important documents
Delays in approval by officials
Pro Tip:
Feel free to consult professionals or consultancy services of business legality experts. LEGAL DALAL stands by to make it happen as it should and on time.
How LEGAL DALAL Can Prevent Such Traps
We are aware that it is challenging to take care of the legal field, especially for young businesses. For this reason, we provide all-around services to guide you step by step:
FSSAI License: We help the food industries in securing and implementing the FSSAI certification with a reasonable speed.
GST Registration: We simplify your GST registration with following all legal procedures.
Trademark Registration: We form your brand identity with proper trademark registration.
Business Structure Consultation: We help you choose the best business structure (LLP, Pvt Ltd, etc.) as per your need.
Ongoing Support: We handle renewals and filings to keep your company in compliance without the headache
Our 12-15 person in-house team has years of experience, and we’ve helped 4,500+ clients steer clear of these legal landmines.
Conclusion
It is difficult to start a business, but with proper legal foundations, it is a thrilling and worthwhile endeavor. Do not be caught in the universal trap of the majority of new business owners by keeping your filings, registrations, and licenses in check. Allow the complex procedure to fall into the hands of professionals such as LEGAL DALAL and let them focus on what is most important — organizing your business.
