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Procedures to create a startup

I’m a postdoc and I’m working on an idea of startup based on my research and work experience. However, I’m completely unaware of any legal procedures that may (may not) be required to create a startup. I might also need funding for setting up the infrastructure.

How could I go about it? Where can I find some guidelines? I would be returning to India, while I target global customers, so are there any specific guidelines with respect to India (incl. bribes, if required) Any relevant information is highly welcome.

Answer 8202

This is very similar to the What are the steps to form a legal business in the United States? question, so I’m just copy/pasting my answer from there. Note that this answer is focused on the US; you’ll have to look up the laws in India yourself. The exact steps you need to take depend on the type of business you want to start and what state you’re in, but here are the most common ones:

  1. Hire a lawyer. You’ll need legal advice often, and no one on StackExchange can really provide it (note: IANAL!), so find someone good to work with. See What Start-ups Should Know About Hiring a Lawyer.
  2. Pick a company name. Lots of legal, marketing, and business implications here. See How to name a business.
  3. Incorporate. You’ll want to incorporate to create a separate legal entity for your company. This helps protect your personal assets in case of bankruptcy or lawsuits and you’ll need it to have co-founders, investors, employees, stock, etc. You’ll have to pick a state to incorporate in, which won’t necessarily be the state you live in (however, if you do incorporate out-of-state, you’ll have to register as a “foreign corporation” in the state where you live). For example, many startups, regardless of where they are based, are Delaware C Corporations, because Delaware has well-understood, startup-friendly corporate laws. There are lots of trade-offs to consider. The Entrepreneur’s Guide to Business Law is a good guide.
  4. Figure out equity. If you have co-founders, and especially investors, you’ll probably want to be a Delaware C Corp and issue stock on a vesting schedule. See equity resources.
  5. Licenses and permits. See What State Licenses and Permits Does Your Business Need?.
  6. Employer ID Numbers. You’ll have to file paperwork to get an EIN (it’s like an SSN or tax id for your company) from the federal government and, in some states, from the state government. See Employer ID Numbers.
  7. Insurance. See What Type of Insurance Do I Need? and 13 Types of Insurance a Small Business Owner Should Have.
  8. Contracts and IP. Work with your lawyer to draft contracts for your customers, employees, contractors, partners, suppliers, and so on. Make sure you own all the IP you need and file patents as necessary. See Intellectual property for startups.
  9. Hire an accountant. See Why Startups Need Accountants.
  10. Set up bookkeeping. See Accounting 101 for tech startups and Small Business Accounting 101.
  11. Get a business bank account & credit card. See Why, and How to Keep Your Business and Personal Banking Separate and Why You Need A Business Banking Account, And How To Get One. Typically, you just need your papers of incorporation and an EIN, and you can apply for an account at most banks.
  12. Taxes and annual reports. You have to pay taxes throughout the year (withholding taxes from employees, or paying estimated taxes) and states have annual reports (with fees) due at different times of the year. Make sure to figure these out and get them on your calendar.

For more info, check out The Startup Checklist, which is a comprehensive (163 item) list of everything you need to do to start a company.

Answer 8383

-Business plan - Understanding your business -personal objectives and business objectives

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