Company Incorporation Checklist: 10 Critical Steps Most Founders Miss

18/05/2025

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Starting a company is an exciting milestone. Founders are full of vision, energy, and ambition — but amidst all the buzz, the finer details of compliance and structure often take a backseat. Incorporation is more than just filling out forms or getting a certificate from the Ministry of Corporate Affairs (MCA). It's about laying a legal and financial foundation that supports growth, attracts investors, and protects the business in the long run.

  

1. Choosing the Right Legal Structure

One of the first — and most consequential — decisions a founder makes is selecting the company’s legal form. The choice between a Private Limited Company, Limited Liability Partnership (LLP), Sole Proprietorship, or One Person Company (OPC) depends on factors such as scalability, liability, taxation, and fundraising ambitions.

A Pvt Ltd company is usually preferred for startups that seek to raise venture capital or offer employee stock options (ESOPs). LLPs are popular for professional firms and bootstrapped ventures that prefer simpler compliance.

Common mistake: Choosing a structure based purely on initial cost savings, without considering long-term operational and funding goals.

 

2. Name Approval and Brand Protection

Founders often settle on a company name that “sounds right,” only to discover later that it clashes with existing trademarks or fails MCA scrutiny. Before finalizing a name:

•   Run a name check on MCA and conduct a trademark search.

•   Secure matching domain names and social media handles.

•  Consider filing a trademark application at the time of incorporation.

What’s often missed: Registering a business name doesn’t give you legal rights to a brand. Only a trademark does.

 

3. Essential Government Registrations

Once your company is incorporated, the regulatory journey begins. Apart from the basic PAN and TAN, businesses may require:

• GST registration (mandatory if annual turnover crosses prescribed limits, or if interstate trade is involved)

• Shops & Establishments License

•  Professional Tax Registration (state-specific)

•  Import Export Code (IEC) for trading businesses   

• MSME/Udyam Registration (optional, but useful for benefits)

Delaying these can impact sales, vendor relationships, or legal standing — especially if you need to issue invoices or enter contracts early.

 

4. Founders’ Agreements and Cap Table Clarity

Many startups begin with a handshake or vague equity split. But without a proper Founders’ Agreement or Shareholders’ Agreement (SHA), even the most promising partnerships can sour. These agreements should define:

•   Roles and responsibilities

•  Equity allocation and vesting 

• Exit rights and decision-making protocols

•    Non-compete and confidentiality clauses

Also, maintain a clear capitalization table (cap table) from day one. It avoids disputes later when investors come in or co-founders part ways.

 

5. Setting Up Financial Infrastructure

Finance is often an afterthought, but early discipline can save months of clean-up later. Right after incorporation:

•   Open a dedicated business bank account

• Choose a reliable accounting system (Zoho Books, QuickBooks, or Tally)

• Ensure separation of personal and business expenses

 Many founders use their personal accounts or delay professional bookkeeping, which leads to compliance issues, especially during fundraising or audits.

 

6. Compliance Calendar Setup

 Incorporation is just the beginning. A registered entity must adhere to multiple filing deadlines:

•    GST returns (monthly or quarterly)

•   TDS filings

•     ROC filings (such as Form MGT-7 and AOC-4)

•     Income tax returns

•  Board meetings and statutory registers

Founders often think they can handle filings later or once the business grows — but penalties for non-compliance are real, and defaults reflect poorly on investor due diligence.

 

7. Intellectual Property & Data Protection

 If your startup is IP-driven — tech, content, or product design — make sure your IP is protected and properly assigned to the company. This includes:

•   Filing trademarks, copyrights, or patents

•  Ensuring IP assignment clauses are present in all employment or freelance contracts

•  Signing Non-Disclosure Agreements (NDAs) when sharing sensitive ideas

 What most founders overlook: if a freelancer or early employee creates your app or design, and there’s no IP transfer in writing, your company doesn’t legally own it.

 

8. Hiring Readiness

 Before onboarding your first employee or intern, ensure the basics are in place:

•  Legally compliant offer letters and employment contracts

•  Registration under Provident Fund (PF) and Employee State Insurance (ESI), if applicable

• A basic HR policy or employee handbook

•  Payroll setup, including TDS deduction and payslip issuance

 Failing to document employment terms can lead to labour disputes or compliance issues down the line.

  

9. Exit and Investor Readiness

 Even if you're not raising funds immediately, preparing for it from day one gives you an edge:

• Keep clean, auditable books

• Maintain a data room with incorporation documents, tax filings, and contracts

• Review shareholding patterns and board resolutions regularly

•  Have your valuation and ESOP policy ready for discussion

 When investors show interest, startups with incomplete paperwork or messy financials lose credibility fast — or worse, lose the deal.

 

10. Work With the Right Advisors Early

 Founders often try to DIY incorporation and compliance to save costs. While some steps are straightforward, overlooking tax nuances, missed deadlines, or misclassified GST transactions can cost far more in penalties, reputational damage, or lost opportunities.

 Partnering early with a trusted Chartered Accountant firm like A’countable Partners ensures:

• You get tailored advice on structure, tax, and compliance

• Your books are investor-ready from day one

• Your startup runs smoothly — legally, financially, and operationally.

 

Conclusion

Incorporation isn’t just a formality,  it’s the first strategic move in your startup journey. Founders who invest time and thought into this phase lay a strong foundation for scale, credibility, and compliance.

Don’t let paperwork delay your progress — but don’t rush through it either.

 

Want to launch right and stay compliant?

Let A’countable Partners help you navigate company setup, tax registrations, compliance calendars, and investor readiness — all in one place.