Embarking on your exciting entrepreneurial journey to build a brand in this competitive business landscape? If so, considering the ” Don’t ” of company registration is as crucial as DOs. There are some common mistakes that most entrepreneurs make while registering their company, which can lead to delays in business registration, penalties, or sometimes rejection of their application. Here in this article, we’ll discuss some common mistakes that each entrepreneur should avoid to prevent issues that may arise as a result. Sometimes, the company incorporation mistakes can have an adverse impact on the businesses, long-term or sometimes, in the short term.
Common mistakes to avoid while company registration in India
- Use of Restricted or Already Trademarked Words in Company Name
It is one of the most commonly made mistakes by entrepreneurs in which they use words or a set of words that are prohibited for use or already registered/trademarked by any other business. This mistake can cause a delay in the process and even legal consequences. To avoid this mistake from occurring, it’s crucial to do sufficient research, like searching the name and also lists of trademarks. This practice will help avoid using already registered names as well as restricted words.
- Selection of Inappropriate Business Structure
It is also one of the most common mistakes that occur while incorporating a business as a company in India. Choosing the wrong business structure will not only affect a business for a short period but also has a long-term impact pertaining to various significant aspects like profit distribution, transfer of shares later, and even this mistake could affect the scalability of the business. Therefore, accessing your business requirements and choosing a suitable structure accordingly is crucial.
- Providing Incorrect Office Address Details
It’s crucial to provide correct information in the business registration application form, so double-check all your filled out information before the final submission. It is found that many applicants fail to provide the right address details, as two types of addresses are required in the application form; the first one is for the main office or headquarters where business activities take place, and the other is the personal address of the company director.
This is where the entrepreneurs get confused or take this form lightly. Another reason behind this mistake is providing co-working space addresses that are not approved, as they fail to provide sufficient documents of address proof. If you are planning to or already operating from a co-working space, make sure to collect proper address details and documents from the owner before going for business registration.
- Neglecting Applicable Laws and Regulations
It is found that in their early phase, most businesses show negligence towards Indian laws and regulations related to businesses, and thus, they have to suffer significantly in the later stages of their business. Making this mistake can take a toll on the financial health of a business, pushing it into debt. Therefore, you can understand that this mistake can significantly impact the business growth rate and put a halt to it; sometimes it may lead to its closure or winding up, if not corrected in a timely manner.
It’s always important to keep track of the changing rules to ensure that your business seriously complies with them and is fully compliant. By avoiding/correcting this mistake by taking the law seriously, you can prevent the aforementioned consequences and ensure that your business is thriving well.
- Inadequacy of Documentation
Another frequent error that takes place during the business registration process in India is the insufficiency of proper documentation.
There are certain documents that are crucial while registering your business; Memorandum of Association (MOA) and Article of Association (AOA) are to name a few, as they consist of the company’s objectives and its internal rules of operation.
While the company registration process, providing incorrect or incomplete documents for incorporation can be responsible for delay or even rejection of the application; sometimes it may lead to legal implications. Therefore, make sure that you have sufficient and proper documents before initiating the business registration procedure.
- Not Seeking Professional Consultation
Seeking professional assistance for business registration is still underrated, but let us tell you that it’s the most feasible way to register your business quickly, hassle-free, and also at an economical cost. Delay or rejection in business registration may cause you more financial burden, while consulting a professional can help get it done the first time by assisting in preparing required documents and filing correct information in the application process to avoid chances of delay or even rejection.
Hence, consulting a business registration service for a firm/company is always a wise decision to make in your entrepreneurial journey.
CONCLUSION
Taking into consideration these common company incorporation mistakes while registering your business can help avoid them, along with getting your business registration done smoothly. Consulting a business incorporation service providing firm/company can help get your business registration done in the shortest possible time, and kickstart your entrepreneurship hassle-free!
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About Setindiabiz: Setindiabiz is a leading taxation and compliance service provider in India, serving PAN-India clients. With qualified professionals (CAs, CSs) having years of experience, it has gained specialisation in catering to all kinds of business registrations in India. By adopting digitized tools and software, it offers fully online company incorporation services within the shortest period at the most competitive market rates!
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