Possessing a business concept is excellent, but the process of initiating it can be perplexing. What considerations should be taken into account before commencing a business or establishing an LLP/PLC? Whether you’re contemplating the launch of a new venture or seeking to enhance the operations of your existing small business, guide to Legal Considerations for Launching a Business.

• Business Concept and Strategic Planning: Develop an intricate business plan that delineates your objectives, strategies, budget, and financial forecasts. Crafting a robust business plan necessitates comprehensive market research and ensuring alignment with your passions and skills.
• Legal Framework: Selecting an appropriate legal structure is a pivotal decision in establishing your business. Here are some common legal structures: Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company, Public limited company and One Person Company.
• Financing: Investigate various avenues such as small business loans or grants from government agencies or private lenders. Seek investment from angel investors or venture capitalists if your business exhibits high growth potential. Self-funding is also a viable option for small businesses.
• Financial Management: Develop a budget encompassing initial startup expenditures, including equipment, inventory, marketing, and legal costs. Establish a dedicated business bank account to maintain a clear separation between personal and business finances. Implement a robust system for monitoring income and expenses, and contemplate the utilisation of accounting software or the services of an accountant.
• Premises and Equipment: Evaluate the necessity of a physical location for your business and, if required, identify an appropriate space.
• Promotion & Brand Development: Construct a distinctive brand identity incorporating a logo and a business website. Formulate a marketing strategy encompassing both online and offline tactics to effectively reach your target audience.
• Operational Excellence: Set up streamlined workflows and standard operating procedures (SOPs) to enhance operational efficiency. Deploy inventory control systems for effective stock management. Emphasise exceptional customer service to cultivate a loyal customer base.

In addition to the previously mentioned essentials, when establishing a PLC, certain mandatory compliance requirements must be fulfilled throughout the journey of launching a business.

• Verify the availability of your preferred business name and secure its reservation through the Registrar of Companies (RoC).
• Obtain a digital signature certificate for the prospective directors of the company, as it is essential for the online filing of documents with the RoC.
• Drafting the Memorandum of Association (MOA) and Articles of Association (AOA), which delineate the company’s objectives, rules, and regulations, is a crucial step. These documents are required to be filed with the Registrar of Companies (RoC) as part of the registration process.
• RoC Registration: Submit the necessary documents to the RoC to register your company. This typically includes filing the MOA, AOA, and the application for incorporation.
• Acquire a PAN card from the Income Tax Department, as it is crucial for tax-related matters and financial transactions.
• Ensuring accuracy and compliance in these documents is essential for a smooth registration process and legal standing of your company.
• If your business is involved in tax deduction or collection, such as TDS (Tax Deducted at Source), initiate the application process for a TAN (Tax Deduction and Collection Account Number) from the Income Tax Department.
• For businesses surpassing the prescribed annual turnover threshold, it is essential to enrol for GST (Goods and Services Tax), a value-added tax applicable to the sale of goods and services.
• Ensure compliance with professional tax obligations by registering with the pertinent state authority. The registration process and tax rates may vary depending on the state.
• For businesses engaged in international trade, secure an Import Export Code from the Directorate General of Foreign Trade (DGFT).
• Secure a Shops and Establishment License from the local municipal corporation or panchayat, as applicable to your business’s location.
• Adhere to labour laws and regulations, encompassing aspects such as minimum wages, working conditions, and employee benefits. Keep detailed records of employee attendance, salaries, and other pertinent data in compliance with regulatory requirements.
• For businesses with the potential to impact the environment, obtain the requisite environmental clearances and permits from the relevant authorities. Ensuring compliance in this regard is crucial for sustainable and responsible business operations.
• Register trademarks, patents, or copyrights with the relevant authorities.
• Establish a separate business bank account to manage finances and transactions independently of personal accounts.
• To ensure organised accounting data and comprehensive transaction recording, businesses adhere to a monthly closing procedure, involving a series of steps to review, record, and reconcile account information.
• Take note that the annual financial books closure date is set for March 31st, with the Income Tax Return filing due date scheduled for July 31st, or as per the prescribed due dates for different entity types.
• Regularly remit undisputed statutory dues such as Goods and Services Tax, provident fund, employees’ state insurance, income-tax, Professional Tax, customs, cess, and any other statutory dues to the appropriate authorities.
• GST, PF, ESI, PT, and TDS necessitate monthly remittances, while Income Tax has an annual deadline.
• Companies incorporated under the Companies Act 2013 must, as part of the Annual Filing, submit eForms to the Registrar of Companies (ROC).
• Companies are obligated to maintain registers such as the Register of Members, Register of Directors/KMP, Register of Loans, Contracts, and Arrangements, Register of Related Party Transactions, and more.
• A company is required to conduct a minimum of four board meetings in a financial year, ensuring that the maximum gap between consecutive meetings does not exceed 120 days.
  Each director is required to provide their Disclosure of Interest to the company using form MBP-1, as stipulated by the Companies Act, 2013.
• Every director of the company must submit an annual disclosure of non-disqualification in form DIR-8. This declaration asserts that the director has not been disqualified from acting as a director during the preceding year.
• The Audited Financial Statement for the financial year ending March 31st should be prepared and approved in a Board Meeting by September 30th.
• All companies are mandated to conduct their Annual General Meeting (AGM) once a year, within six months of the closure of the accounting year.
• Companies are required to file the MSME Return (Half-yearly) in Form MSME-I, providing information about all outstanding dues to Micro or Small Enterprises suppliers that have been pending for more than 45 days.

Engaging consultants in the early stages of launching a business ensures that legal considerations are addressed proactively, reducing the risk of legal challenges and providing a solid foundation for sustainable growth. At BCL India is into consultancy services, our expertise can save time, prevent costly legal issues, and allow entrepreneurs to focus on core business operations.