Common Mistakes Startups Make While Registering a Company in India

Starting a company is exciting — but one wrong step during registration can cost time, money, and legal trouble.

Here's a breakdown of what not to do, and how to do it right

1. Choose the Wrong Business Structure

🔍 What goes wrong:

Many startups blindly go for Pvt Ltd without understanding legal, tax, or funding implications.

✅ Fix:

Understand differences between Pvt Ltd, LLP, OPC, Sole Prop and choose based on your vision, investment needs, and compliance comfort. Consult a CA if unsure.

2. Not Conducting a Proper Name Check

🔍 What goes wrong:

Selecting a name that's already taken or too similar to another company leads to application rejection or delay.

✅ Fix:

Use the MCA name search tool and apply for name reservation through RUN (Reserve Unique Name) service.

3. Skipping Founders' Agreements

🔍 What goes wrong:

No clarity on roles, equity, IP rights, or exit policies = conflicts between co-founders during growth or funding.

✅ Fix:

Draft a Founders' Agreement early on. Include shareholding, responsibilities, dispute resolution, and vesting clauses.

4. Incorrect Documentation

🔍 What goes wrong:

Filing INC-32 (SPICe), INC-33, INC-34 with errors =

MCA rejects your application or keeps it pending.

✅ Fix:

Use a professional (CS, CA, or lawyer) to file documents properly. Double-check everything before uploading.

5. Ignoring PAN, TAN & GST Registrations

🔍 What goes wrong:

Company registered, but you can't raise invoices or pay salaries without PAN/TAN. You may also miss GST compliance.

✅ Fix:

Apply for PAN, TAN, and GST immediately after incorporation, or better – along with SPICe+ form.

6. Using Residential Address Without Consent

🔍 What goes wrong:

Using a residential address without the owner's NOC (No Objection Certificate) causes documentation rejection.

✅ Fix:

Get a signed NOC from property owner, and provide a utility bill/ownership proof along with the address.

💡 Pro Tip:

📌 Don't DIY unless you fully understand the process. Consult a CA or CS — it's an investment in a smooth beginning.

📣 Help your founder friends avoid these blunders!

💬 Which of these surprised you the most? Tell us in the comments.

🔁 Like, Share & Tag someone planning to start up soon!