Starting a New Business While Working in IT: What Legal Steps and Risks Should I Consider?

Hi,

I need suggestions and ideas for my plan. I am planning to start a company on my own. I have acquired a conversion project from one of my friends. It involves converting PDF files to XML format. He mentioned that I need to demonstrate a small setup with about 15-20 members and infrastructure to secure the project from his MD. Consequently, I have partnered with three of my friends for this project.

Together, we have planned and finalized the necessary details to kickstart the project. Now, I am seeking guidance on the legal formalities required to establish the company. Do I need to register it? What procedures should I follow to ensure the business runs successfully? Where can I find resources to develop the business? What are the do's and don'ts that I should be aware of?

Considering that we all currently work in different IT companies, is this venture risky? I would appreciate hearing your thoughts on this matter. Please feel free to email me at raja.stylo09@gmail.com for further discussions and information.

Cheers! Raja.

Hi Stylo,

Congratulations on your new venture. One suggestion I would give you is to check the credibility of the company that agrees to pay you upon the completion of the project. Some of my friends had an idea of starting a domestic BPO as they were approached by a Mumbai-based company that promised huge returns upon successful completion of the projects. However, when they enquired with some known lawyers about the authenticity of the company, they found out that the company had actually closed three years ago. Now, they have initiated a Section 420 case against them, which is still pending.

I urge you to check for the authenticity of the company, their previous payment history, their credibility, etc., and then proceed. I am attaching a document that would give you some idea about starting a Private Ltd Company. Read it through and post your queries. I will try to answer them.

All the best.

Regards,
Raghav V