WHETHER LEGAL COMPLIANCE IS NECESSARY FOR INDIAN STARTUP?
SHORT NOTE: Of late, in India startups have seen a promising ecosystem for them to proactively evolve and prosper. Till date, 15,066 startups have been recognized according to the StartupIndia website. As per the NASSCOM report, startups in India has raised USD 4.2 billion in the year 2018. The biggest hurdle to raise funds can be envisioned during the seed funding stage. It hits the most to startups when they fail to raise funds at the seed funding stage. The alarming factor, however, is not the funding but the legal compliance which is easily swept under the rug by the entrepreneurs. The spectrum of legal compliance includes the type of business entity, founder’s agreement, taxing statutes, labour laws, environmental laws, and other plethora of statutory compliances set forth by the government. If the standard authorized by law is not in conformity with the statutory compliances from the birth of the startup, then it becomes very unlikely to get angel investors/venture capital, th...