Start-ups – Legal Contracts ( Questions and Answers )



Start Up’s
Start Up’s are growing fast and there are tremendous opportunities for young entrepreneurs to try to solve problems facing consumers in different fields. There are many choices to be made for first time promotors of businesses , but the simplest and most cost effective solutions are the best.

Q1. What Legal Procedure Are Required for start-up in india?

  1. a) Sole Proprietorship Firm :-

Requirements :- Need 1 Person for the Registration as you or on the name of any family member if you are doing the job.

Costing – Nearby 3000 INR for the Service tax registration or Shop Act License as Sole Proprietorship Firm and takes min 6 to 7 days or more.

Advantage –  Easy to Start with less costing and less compliance.

  1. b) Private Limited Company :-

Requirements :- Need 2 Person for the Registration as you or else you can include your any family member on the paper.

Costing – Nearby 15000 INR with the Government Charges in most of the states except Punjab, Kerala and MP.

Advantages :- Raise the funds from banks, angel investor and VC Firms.



  1. c) Limited Liability Partnership :-

Requirements :- Need Min 2 Person for the Registration as you or else you can include your any family member on the paper.

Costing – Nearby 9000 INR with the Government Charges.

Advantages :- Doing the Business with the limited liability and above private limited company features in less costing.

  1. d) Partnership Firm Registration with the Registrar of Firms :-

Requirements :- Need Min 2 Person for the Registration as you or else you can include your any family member on the paper.

Costing – Nearby 7000 INR to 8000 INR with the Government Charges.

Advantages :- Its a best for the Family Business.


Q2. What are the legal steps required to start a ecommerce business in india?

  1. Ecommerce Startups are trend in India. so mostly E Commerce Startups want to do these 3 things –
  2. a) Building a Marketplace :- Tie up with the Sellers and provide them platform for selling their products as  marketplace , earn the commission and closing fee.
  3. b) Our Products, Our Portal :- Inventory based model and sell products through their portal and most popular other marketplace like flipkart or snapdeal.
  4. c) Sell on Marketplace :- want to sell on Popular other ecommerce marketplace like Flipkart or Snapdeal


Q3. Types of Business registration?

  1. a) Proprietorship Firm – In Simple words proprietorship is single man firm. its not a company so your liability is the unlimited in any case. so its a best way to start the business or you can say simplest way. In the case of proprietorship you need service tax registration certificate or VAT Registration certificate and open a current bank accounts. so its recommend to startups when they are just testing their ideas.
  2. b) Partnership Firm – In Simple words partnership firm is same as proprietorship firm as a feature but its need 2 person. so in the partnership firm same as liability is the unlimited. its need a registered partnership deed with current bank account again VAT or Service Tax Registration depend on the nature of the business.
  3. c) Private Limited Company – In Simple words private limited company is the major business formation for the startups and from now in the 2015 there is very simple to register private limited company due to INC 29 Form and no requirements of minimum capital i.e 1 lac rupees. its need minimum 2 Director and best for the growing startups and want to funding from angel investor or VC Firms.
  4. d) Limited Liability Partnership – In Simple Words its a mixture of Private Limited Company and Partnership firm so feature also as same. its need minimum 2 partners. before 2015 Startup choose this business formation more because in the pvt ltd company cost of formation is more as compare to LLP and second thing i.e is minimum requirements of 1 lac Rupees Capital.
  5. e) One Person Company – In Simple Words OPC is same like as Private Limited Company. but its need just one person. so feature are also same as Private Limited Company.

 Q3. Legal registration of a company.

  1. Legal Registration of the Company– To register an eCommerce business a company must have complete these formalities:
  • A valid address – The team must provide a valid address for the business. It can be a private address of a team member too. Nevertheless, to rent a certain office space is advised.


  • A sum of 100,000 Rs Capital – At the end of financial year, the company must show a capital of 100,000 Rs in its books.


  • Other Laws – Certain laws are to be taken care of by a company. Laws like labour laws, taxes like VAT and GST might be applicable on the company and a competent chartered accountant is often required to take care of these.


  • A valid company name – A valid company name has two components. The first word denotes the unique name of the company. The second word denotes the nature of the company. For example Tata Consultancy Services, Reliance Telecom, Sapient Consulting etc.


Q4. Legal contracts required for a start-up.


  1. Articles of Incorporation
  2. Business Proposal
  3. Purchase Agreement
  4. Corporate By-laws
  5. Share holders agreement
  6. Term Sheet
  7. Investor Agreement
  8. Liquidation Agreement
  9. Non-Disclosure Agreement
  10. Subscription Agreement
  11. Arbitration Agreement
  12. Consignment Agreement
  13. Marketing Agreement
  14. Employment Agreement
  15. Copyright Agreement
  16. Financial Services Agreement
  17. Indemnity Agreement
  18. Intellectual property agreement





Need to talk to us?