Choosing the Right Legal Structure
The foundation of your startup dictates your ability to raise capital, distribute equity, and manage liability. For 95% of tech startups aiming to raise venture capital, a Private Limited Company (Pvt Ltd) is the only viable option. VCs and angel networks require the clear equity division and limited liability that a Pvt Ltd structure provides.
Pro Tip: If you are building a bootstrapped service agency with no intention of raising outside capital, an LLP (Limited Liability Partnership) offers lower compliance costs while still protecting your personal assets.
The Incorporation Checklist
- Apply for Name Approval via the RUN (Reserve Unique Name) service.
- Obtain Digital Signature Certificates (DSC) for all proposed directors.
- Draft the Memorandum of Association (MoA) and Articles of Association (AoA).
- File the SPICe+ Form with the Ministry of Corporate Affairs (MCA).
- Open a corporate bank account immediately upon receiving your Certificate of Incorporation.