Three Expensive Mistakes Founders Make During Incorporation

1. Defaulting to a Private Limited Company Too Early

A Private Limited Company is great if you are raising venture capital next month. If you are bootstrapping a service business, the compliance overhead will eat you alive. You have to conduct board meetings, file annual returns, and get your accounts audited regardless of your revenue. An LLP gives you the exact same liability protection but cuts compliance burden significantly. Discuss your exact needs with our Company Registration experts before filing.

2. Unequal Equity Splits Without a Vesting Schedule

Two founders start a company. They split it 50/50. Six months later, one gets a high-paying corporate job and stops working. But they still own half the company. We see this constantly. If you don't put a vesting schedule in your founders' agreement, you are setting a time bomb. Our Startup Accounting & CFO division can help structure clean, VC-friendly cap tables.

3. Ignoring the Authorized Capital Trap

When you register a company, government fees are tied to your authorized capital. Founders often set this number incredibly high, thinking it makes them look bigger, and end up paying lakhs in unnecessary stamp duty upfront. Start small. You can always increase it later via our Corporate Secretarial Services.