Who Offers The Best Company Registration Services In Delhi?

 

What is company registration or company incorporation?
Company Formation or Company Incorporation is that the process of registering a business as per the procedures defined by the Ministry of Corporate Affairs (MCA). The owner has the freedom to make a decision the sort of company under which the business are going to be registered. Further, Post-approval of the corporate registration process, a Certificate of Incorporation (CoI) are going to be issued to the corporate by the Registrar of Companies (RoC).

Company Registration in Delhi is viable for company formation. Additionally, registration for the corporate is completed online lately . Additionally, the registration of business may be a prerequisite to initiating business activities.

Company Incorporation or Company Registration is that the legal process to register a corporation . Once the corporate formation process has completion, the corporate becomes a separate legal entity from its owners. Moreover, after the corporate registration, it can enjoy the advantage of indebtedness , Perpetual Existence, and transferability of shares. Therefore, to avail of those benefits, the owner has got to register the corporate online.

What are the Type of Business Entities in India?
The following types of Business entitles are available in India:

• Private Limited Company in India
• Public Limited Company in India
• Unlimited Company
• Partnership
• Sole Proprietorship

Each type of company has its advantages and disadvantages. A business owner can decide according to different factors like capital availability and decision-making capabilities etc.

Process of Company formation in India can be illustrated in following steps:
Incorporation Procedure of a private limited company is governed as per Companies Act 2013

Minimum requirement for the Private Limited Company

• Minimum 2 Directors
• Minimum 2 Shareholders (Directors & Shareholders can be same)
• Minimum paid-up capital of Rs. 1,00,000/-
• DIN for both Directors
• Digital Signatures for all Directors
• Consent from subscriber or director
• Proof of Registered Address
• NOC from the owner of the premises

The procedure for company registration can be divided into following steps :
Obtain Digital Signatures
One director must apply for the Digital Signature Certificate (DSC), which is necessary to file the company registration documents. For this, only a few scanned documents and details will be required. It is compulsory to obtain DSC for at least one Director to sign E-forms relating to incorporation life Form INC-1 and other documents.

Application for DIN in the form DIR-3
Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number in form DIR-3 to the Central Government in such form and manner and along with such fees as may be prescribed

Check for company name availability
Select, in order of preference, a few suitable names, not less than four, indicative of the main objects of the company. Ensure that the name does not resemble the name of any other company already registered and also does not violate the provisions of Emblems and names (prevention of improper use) Act, 1950

Application for Name Availability

• Apply to the concerned ROC to ascertain the availability of name in INC-1 of General Rules and Forms along with a fee. If proposed name is not available apply for a fresh name on the same application the digital signature of the applicant proposing the company has to be attached in the form. MCA has prescribed certain rules for name availability, so it is advisable to check guidelines for the same before applying for name. Refer Rule-8 of Companies (Incorporation) Rules, 2014
• After the name approval of the applicant ROC will issue Name availability Letter w.r.t. approval for availability of name for a proposed company. The name will be valid for a period of 60 days from the date on which the application for reservation was made. The applicant can apply for registration of the new company by filing the required forms INC-1 within six months of name approval.

Drafting MOA & AOA

• Arrange for the drafting of the Memorandum and Articles of Association by the solicitors, vetting of the same by ROC and printing of the same.
• Arrange for stamping of the Memorandum and Articles with the appropriate stamp duty.
• Get the Memorandum and Articles signed by atleast two subscribers in his own hand, his father’s name, occupation, address and the number of shares subscribed for and witnessed by atleast one person.
• Ensure that the Memorandum and Article is dated on a date after the date of stamping.
• The main objects should match with the objects shown in e-form INC-1.
• The memorandum should be in respective forms as prescribed in Table A, B, C, D and E in Schedule-1 as applicable to a company.
• The articles should be in respective forms as prescribed in Table F, G, H, I and J in Schedule-1 as applicable to a company.

Filing various forms in ROC

• The following documents are required to be filed with the Registrar of Companies:
• Memorandum of Association (duly stamped) and a duplicate thereof.
• Articles of Association (duly stamped) and a duplicate thereof.
• Declaration by Professional in INC-8
• Affidavit from the subscriber to the Memorandum in Form no. INC-9
• Residential Proofs
• Identity Proofs
• Verification of Signature of subscribers in Form INC-10
• A copy of the letter of the Registrar of Companies intimating the availability of the proper name.
• e-Form №1 (with prescribed stamps) for incorporation of a Company.
• Document evidencing payment of prescribed registration and filing fee.

Payment of form fees and stamp duty
After filing the documents of MCA online portal, we need to pay the necessary fees.

ROC verifies the forms and attachments
After the receipt of the forms along with applicable fees ROC, verifies and scrutinizes all the documents and attachments and suggests necessary changes, if require.

ROC issues the Certificate of Incorporation
If the registrar is satisfied that all the requirements have been complied with by the companies, it will register the company and issue a Certificate of Incorporation of the company. The date mentioned in the certificate is the date of incorporation of the company.

Source: Who Offers The Best Company Registration Services In Delhi?

Benefits Of Filing Income Tax Return

 

The rules & regulations concerning tax return filing in India are enumerated within the tax act, 1961. These rules are to be followed by every registered taxpayer who possesses a legitimate PAN card and files ITR during a fiscal year . ITR must be filed during a prescribed format and will be submitted with the tax department before the maturity so on avoid a penalty.

Gone are the times when it had been a sophisticated process of online ITR filing but now with the arrival of technology, the tax department is continuously modifying the tax return filing interface.

Different types of ITR forms which a taxpayer has got to file & benefits related to online ITR filing:

1.) Dodge the penalties & scrutiny by tax authorities
From FY 2018–19 & 2019–20; Rs 10,000 would be levied for non-filing of ITR. This penalty levy will always be there in your ITR filing record. To strengthen your ITR, one must avoid penalties and check out to file tax return on or before maturity .

2.) Improve your credit documentation process
Filing ITR will assist you in your loan application; all major banks invite a replica of tax returns prior reviewing your application for a automobile loan , consumer loan or home equity credit . as an example , the depository financial institution of India asks two-wheeler or four-wheeler loan applicants for documents just like the latest salary slip that reflects all deductions, TDS certificate/Form 16, and replica of ITR for the last two financial years. Keeping a replica of your ITR receipt handy may be a good idea if your application is rejected or if you’re getting a loan amount much lesser than what you had applied for. If you’ve got a refund due from the tax department, you’ll need to file returns so as to say the refund.

3.) Compensate losses within the next financial years
Filing of the ITR is vital as you can’t recompense your expenses & losses within the previous fiscal year to the present fiscal year . As per the income-tax provisions, if tax returns aren’t filed on time, unadjusted losses (with some exceptions) can’t be carried forward to future years.

4.) Processing of VISA
Foreign embassies, especially those of the US, UK, Canada or Europe, invite your ITR receipts of the last few years at the time of the visa interview. Some may even invite receipts of the last three years, while some others may invite the foremost recent one. ITR receipts help them assess your income and indicate that you simply are going to be ready to lookout of the expenses on the trip. They also indicate that you’re someone who isn’t leaving the country permanently but will return. Before undertaking visit a particular country, ask the respective embassies on documents that you simply should keep it up your foreign visit that country-salary slip, Form 16, and ITR receipts. These requirements may vary from one consulate to a different .

5.) Legal document
Having an ITR receipt is vital because form 16 is nothing but a politician document, entailing your income & tax charged there upon, along side revenue from other various sources. ITR receipt is shipped to your registered address, which acts as a residential proof for the taxpayer. Therefore there are multiple uses of ITR filing viz. address proof, income proof & proof of tax filing.

6.) Tax refund
There are various instances during a fiscal year during which there has been tax deducted at source (TDS) on investment. So so as to say TDS refund, one will need to file the ITR to say refund of an equivalent ,”

Source: Benefits Of Filing Income Tax Return

Winding Up of Companies

Winding up of a company is defined as a process by which the life of a company is brought to an end and its property is administered for the benefit of its members and creditors. Winding up ultimately leads to the dissolution of the company.

In other words, it refers to the situation by which the dissolution of a company is brought about, and its assets are realized and applied in the payment of its debts. After satisfaction of the debts, the remaining balance, if any, is paid back to the members in proportion to the contribution made by them to the capital of the company.

In between winding up and dissolution, the legal entity of the company remains and it can be sued in a Tribunal of law.

Dissolution can be achieved through any of the following:

• Through Winding up;
• Through Merger / Amalgamation Process; and
• Through Striking Off Process

Modes of Winding-Up of company

Compulsory Winding-Up: A petition for obligatory winding up of a company may be filed in the Tribunal by any of the following persons (Sec. 272):

• Petition made by the Company:
• A company can file an application to the Tribunal for its winding up when they have passed the Special majority of ¾ members to wind up the affairs of the company. The entity shall issue a written notice in this respect to conduct a general meeting of all the shareholders for approving a resolution for the same.
• Managing Director or the directors itself cannot file any petition of winding up on their own account unless they do it on behalf of the company and with the proper authority of the members in the General Meeting, conducted in a prescribed manner.
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• Petition made by the Central Government or a State Government: On the ground that company has acted against the welfares of the independence and integrity of India, the security of the state, and friendly relations with foreign states, public order, decency or morality.
• Petition made by the Contributories: A contributory shall be permitted to present a petition for the winding up of the company, notwithstanding that he may be the holder of fully paid-up shares or that the enterprise might not have assets available, or might not have surplus assets remaining for distribution among the holders after the fulfillment of its all due liabilities. It is no more required of a contributory making petition to have tangible interest in the assets of the company
• Petition made by the Registrar: Registrar may with the prior authorization of the Central Government file petition to the Tribunal for the winding up the company only in the following cases:
• If the company has made any avoidance in filing with the Registrar, its financial records, or yearly returns for immediately previous five consecutive financial years;
• If the entity has performed against the interests of the independence and integrity of India the security of the State friendly relations with foreign Countries, public order, decorum, or morality; or
• If on an request made by the Registrar or any other person ratified by the Central Government by notification under this Act, the Tribunal is of the opinion that the matters of an entity have been conducted in a deceitful manner or the company was formed for deceitful and unlawful purpose or the persons concerned in the formation or management of its matters have been mortified for fraud, misfeasance or misconduct in connection therewith and that it is proper that the company be wound up.
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• Any person authorized by the Central Government in that behalf.

Voluntary Winding-Up: The Insolvency and Bankruptcy Code, 2016 relates to re-organization and insolvency resolution of companies, partnership firms and individuals in a time bound manner.

The Insolvency and Bankruptcy Code, 2016 relates to substances relating to the insolvency and liquidation of a company where the minimum amount of the defaulting is Rupees one lakh as of now but it may be raised up to Rupees one crore by the Government, by notification).

Code lays down two stages

• Insolvency Resolution process: Insolvency is a commercial condition, where an entity or an individual is unable to meet the financial obligations due to excess of liabilities over assets. Whereas bankruptcy is a legal procedure where the court of law passes orders with respect to insolvency of an individual or entity and consequently passes orders for its resolution. It is the stage during which financial creditors assess whether the debtor’s business is viable to continue and the options for its re-organization and re-structuring are suggested.
• Liquidation: Once the insolvency resolution process get fails, the liquidation processshall begin in which the assets of the company are realized at their realized value to pay off the creditors. There is a process of liquidation which is as follows:
• Illustrating or defending any action, suit, prosecution, or any legal proceedings on behalf of the company
• Carrying out the business of the company as far as it is beneficial for the company
• Paying the creditors
• Constructing any settlement or arrangements regarding the creditors
• Compromising all the calls, debts, and liabilities, which may result in further debts on the company
• Selling all the mobile and immobile assets of the company by conducting public auctions or by private contracts, with power to transfer the assets to a single person or to various persons in parcels
• Performing all the acts and deeds needed for the winding up with receipts and documents using the company’s seal and name
• Drawing, accepting, making, and endorsing any bill of exchange or promissory note in the name and on behalf of the company
• Raising the security of the properties and money of the company
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Modes of Dissolution
Dissolution of an enterprise could be brought around in any of the subsequent ways:

• Through transfer of a company’s undertaking to another under a scheme of reconstruction or amalgamation, in that case, the transfer or entity will be liquefied by an order of the Tribunal without being wound up; and
• Through the winding up of the company, wherein assets of the company are realized and applied towards the payment of its liabilities. The remaining, if any is circulated to the members of the company, in accordance with their rights.

We assist our clients with all the compliances related to winding up of the company, company incorporation, business setup, ROC filings etc. If you have any questions or want to know more about winding up of companies, kindly contact us.

Statutory Registers & Records to be maintained by a Company

A company incorporated in India is statutorily required to maintain certain registers and records to comply with the provisions of the Companies Act, 2013.

What are statutory registers?
A Company’s statutory registers contains information regarding specific records of its shareholders, directors, deposits, loan & guaranty, etc. and are kept at the registered office of the company. They also depict the company’s current position.

Why maintaining statutory records & registers is important?
To work effectively and adhere to the statutory requirements, it is necessary to maintain proper records and registers. Maintaining records ensures the smooth and systematic functioning of operations. To avoid huge penalties attracted due to non-maintenance of records, it is always advisable to maintain the registers.

Statutory Registers required to be maintained

• Register of Members: Every company is required to maintain registers, such as the register of members separately for equity & preference shares, register for debenture holders, and other security holders, concerning its members. In the case of companies without share capital, the register must-have details like Name, Address, PAN, CIN, occupation, date of commencement & cessation of membership, etc., of each member. Inspection of the register can be done by a member (no fee) or by a non-member (fee Rs. 50/- per inspection).
• Register of Directors & Key Managerial Person (KMP): Register of Directors & KMPs describing the Details of Directors such as Name, Address, PAN, etc. and their shareholding in the Company itself, and also in its Associate & Subsidiary Companies, etc. must be maintained. The Register can be inspected during Business Hours & members have the right to take extracts on request (without any fee) within 30 days of making the request and it shall be open for inspection in the AGM of the Company.
• Register of Charges: The register contains details of the charges registered with the registrar on assets, property, companies, along with particulars of property that was acquired and which was subject to charges. It must be maintained by a company in Form No. CHG-7. Also, the register must be permanently preserved at the company’s registered office.
• Register of Sweat Equity Shares: Register of Sweat Equity Shares is required to be maintained in format SH-3. These registers shall be kept at the Registered Office of the Company or any place approved by the Board.
• Register of Duplicate Share Certificates: Share certificates issued in exchange for certificates that are consolidated or sub-divided or in replacement of certificates which are mutilated; or in place of certificates which are destroyed or lost, particulars of such shares must be entered in a Register of Renewed and Duplicate Share Certificates. It is required to be maintained in the Form No SH.2 and to be kept at the company’s registered office.
• Register of Securities Bought Back: This includes:
• The details which are required to be included in the register are, Date of passing the special resolution to authorize the buy-back of securities, Date of approval by the board, Quantity & Price of shares or other securities authorized for buyback, Date of opening and closing of the buy-back offer, Date of completion of buy-back.
• The register must be maintained by a company in Form SH 10.
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• Register of Deposits: A company is required to maintain the Register of Deposits containing the details of deposits, interest thereon, tenure, etc. These registers shall be kept at the Registered Office of the Company.
• Register of Employee Stock Option Plan (ESOP): A company must maintain the Register of Employee Stock Options in Form no. SH.6. The register must contain particulars of an option granted and it shall be kept at the Registered Office of the Company or any place approved by the Board.
• Register of Loan & Guarantee: The Register of Loan and Guarantee must contain the details of the guarantee given, Security provided, Acquisitions made in Format MBP-2. The members can ask for extract of the register for inspection for free of cost. They are required to be kept at the Registered Office of the Company.

Although there are various registers, other than the above mentioned, required to be maintained as per the provisions of the Companies Act, 2013, companies must maintain only those statutory registers which apply to them as per their business and operations.

Other Records to be maintained

• Minutes of the Board Meetings/ General Meeting/Committee Meeting held
• Notice and Agenda of the Board Meeting/Annual General Meeting/Extra-Ordinary General Meeting held
• Proof of sending notice of meetings held and its delivery
• Attendance Register of meetings held
• Special notices, if any, received by the company
• Consent and Resignation Letters received from the KMP/Auditors
• Forms duly filed with the Registrar of Companies
• Documents on which the common seal has been affixed
• Other documents, forms, certificates, etc. under the Companies Act, 2013

We assist our clients in services related to compliances of Companies Act, 2013 provisions, along with providing adequate guidance through a team of highly skilled professionals. If you wish to know about the services offered, kindly contact us.

 

Companies Fresh Start Scheme, 2020

Government of India has been making tremendous efforts in clearing backlogs/disputes/appeals under direct and indirect taxes which has resulted in the launched settlement schemes under Direct Tax (Vivaad Se Vishwas Scheme) & Indirect tax (Sabka Vishwas Scheme). On the similar lines, MCA i.e Ministry has come up with the scheme called Companies Fresh Start Scheme 2020 (also called CFSS -2020) vide its General Circular №12/2020 for one-time application of condonation of delay of filing the various forms, documents and returns.

APPLICABILITY OF THE SCHEME:
This Scheme shall be applicable to any “Defaulting Company”, Defaulting Company here means any company which made a default in filing of any of the documents, statement, returns, etc. including annual statutory documents on the MCA-21 registry on due time and under this scheme is permitted to file all belated documents which were due for filing without any Additional Fees except for two documents and out of which, some permitted documents are as follows:

Annual Forms:

• Annual Return -MGT-7
• Financial Statements — AOC-4

Event-based Forms:

• INC-22A (Active Company Tagging Identities and Verification)
• INC-20A (Declaration for the commencement of business)
• PAS-3 (return of Allotment)
• ADT-1 (Appointment of Auditor)
• MGT-14 (Filing of Resolutions and agreements to the Registrar)
• DIR-12 (Particulars of appointment of Directors and the key managerial personnel and the changes among them)

Two Exceptions which is out of the purview of this Scheme:

• Increase in Authorised Share Capital (SH-7)
• Charger related documents (CHG-1, CHG-4, CHG-8, and CHG-9)

SCHEME VALIDITY:
The Scheme shall come into force on 01st April 2020 and shall remain in form till 30th September 2020.
Read More Blogs: Types of Business Entities in India

BENEFITS OF SCHEME

• One-time opportunity to enable defaulting companies to complete their pending compliances regarding: annual filings forms, other returns, documents and statements without paying any additional fees.
• Immunity Certificate to save from launching of prosecution or proceedings for imposing a penalty on account of delay associated with such filings.

PROCEDURE TO AVAIL BENEFITS AND IMMUNITY IN RESPECT OF DOCUMENT(S) FILED UNDER THE SCHEME:
STEP 1. File all pending forms, documents, returns, statements, etc. as mentioned above with the MCA-21 registry during the currency of the Scheme without paying any additional fees.
STEP 2. File Form CFSS-2020 for seeking immunity in respect of belated documents filed under the scheme, after the closure of scheme and after the documents are taken on file or on record or approved by the designated authority as the case may be but not after the expiry of six months from the date of closure of the scheme.
STEP 3. An immunity certificate in respect of documents filed under this scheme shall be issued by the designated authority.

SCHEME FOR INACTIVE COMPANIES
The defaulting inactive companies, while filing due documents under CFSS-2020 can, simultaneously, either:
(a) Apply to get themselves declared as Dormant Company under section 455 of the Companies Act, 2013 by filing e-form MSC-1 at a normal fee on the said form; or
(b) Apply for striking off the name of the company by filing e-form STK-2 by paying the fee payable on form STK-2.

Get New Company Registration in India

Source: http://www.newcompanyregistrationindia.com/blog/companies-fresh-start-scheme-2020/

Differences Between GST And VAT

 

The introduction of the products and Services Tax was one among the foremost significant and most fundamental changes within the Indian taxation system since Independence. Further, it brought an outsized sort of taxes under one umbrella and helped simplify the method of taxation. The GST effectively replaced the older versions of the Central and State taxes, that included the VAT, Excise and repair Tax. Since coming into effect in July 2017, the GST has revolutionised the Indian taxation system. Similarly, here’s a glance at the difference between GST and VAT, the advantages of GST, and the way the GST has transformed the method of taxation.

What’s Value Added Tax or VAT?
Value Added Tax, better referred to as VAT, is an tax that came into effect in April 2005. As an idea , the VAT replaced the sooner system of taxation referred to as nuisance tax . VAT came into practice during a bid to integrate and make one market within India for products and services. From June 2014, VAT became a norm within all states and union territories within the country, barring the Andaman and Lakshadweep islands. VAT applicability depends on the character of the merchandise , as since it’s a State tax, the laws regarding VAT applicability believe the State laws.

Disadvantages useful Added Tax
Leads to the cascading effect of tax
End-consumer finishes up paying more for the merchandise or service
Suppliers couldn’t claim an Input decrease for services under VAT
Hard to implement and compute thanks to differences in VAT rates within different states in India
Difficult to standardise as different states had different VAT laws

Goods and Services Tax
The Goods and Services Tax (GST) has consolidated a plethora of indirect taxes levied by the Centre and states into a common tax. It eradicated multiplicity of taxes thereby reducing the complexity and removing the cascading effect of taxes. Present taxes levied on the sale of goods or services by either Central or State Government are embraced under the GST regime.
Goods and Services Tax came into effect on July 1, 2017. Businesses are required to file monthly, quarterly and annual returns and those with turnover exceeding INR 2 crore will also have to file audit reports.

Impact of GST
The disadvantages brought on by VAT applicability led to the formation and inception of the products and Services Tax. The GST may be a comprehensive, extensive and easy taxation system that unifies the state . Moreover, GST is additionally a destination-based concept of taxation that eliminates the cascading effect, resulting in better prices for consumers and suppliers. Additionally, the GST had a huge impact on the Indian economy because it removed several of the disadvantages and limitations brought on by VAT applicability.

Benefits of GST
Eliminates the cascading effect of taxation
Further, simple and easy process
Easier accessibility because the entire process is online
Lesser compliance norms and procedures
Additionally, the defined and clear treatment of e-commerce companies
Unified laws throughout the country
Easier to implement, monitor, and check for compliance

GST and Cascading Effect
One of the most important benefits of GST is that it removed the concept of cascading taxes. The cascading effect of taxation is that the process by which a tax is levied on top of another tax levied on a product or service. thanks to taxation at every step of the sale, certain times, products get taxed on their taxed values, resulting in consumers and suppliers having to pay quite what’s truly required. In such cases, tax is processed on a worth that has tax paid by the previous consumer, resulting in double taxation. Hence, the top consumer has got to pay tax on paid tax, called the cascading effect. However, since the inception of the products and Services Tax, such effects are eliminated.

If you have any questions or want to know more , please contact us.

Mistakes that a start-up should avoid

 

A booming out-pour of Startups in India is the recent trendsetter. Recently, we have witnessed many low and high profile Start-Ups landing up in the Court of law fighting legal battles and sabotaging their reputation publicly. In order to avoid such mistakes, here are “quick tips” that a Start-Up must do to avoid such ugly legal battles.

TO HAVE A STRONG LEGALLY BINDING AGREEMENT:
One of the major concerns that a Startup should look into is the Founders’ Agreement. One should in a way think of the Founders’ Agreement as a form of “pre-nuptial agreement”. It should be clear, comprehensive, unambiguous agreement between the Founders of the Start-Up in order to cut down the chances of litigation.

TO ABIDE WITH COMPLIANCES:
A successful Start-Up should have a good, vigilant and knowledgeable team of Advocates, Company Secretaries and Chartered Accountants in order to comply with all the Legal and Government compliances, to avoid litigation by the Government, Income Tax, ED, EOW, etc.

TO HAVE A ROBUST CUSTOMER REDRESSAL SYSTEM:
Treat your Consumers/customers with utmost importance and care by providing them good services/products. This would decrease the chances of the consumer/customer to approach the Consumer Forum for redressal.

TO MAKE TIMELY PAYMENTS TO VENDORS:
One should make sure you pay your vendors on time failing which the vendor would opt and approach the Court of Law for recovery of debts.

TO HAVE SECURE IP (Intellectual Property) POLICY:
All the Intellectual Property like Copyright, Trade Mark, Designs, Patents should be registered and should be specifically registered in the name of the Company/Founders and not on the name of the employee.

LACK OF EMPLOYEE DOCUMENTATION:
Make sure that the documentation with the employees are done properly. Business Start-Ups often encounter problems when they do not maintain adequate employment documentation. Consequently, Start-Ups should prepare a core group of employment documents to be signed by most, if not all, employees such as Employees Handbook, Offer letter, Confidential Information, Non — Disclosure Agreement etc.

NOT HAVING A GOOD TERMS OF USE AGREEMENT AND PRIVACY POLICY FOR YOUR WEBSITE/MOBILE APP:
A Terms of Use Agreement sets forth the terms and conditions for people using your Website/Mobile App. Your Privacy Policy is a legal statement on your website/mobile app. setting forth what you will do with the personal data collected from users and customers/consumers of the site/mobile app., and how such data may be used, sold, or released to third parties.

NOT HAVING THE RIGHT LEGAL COUNSEL:
In a misguided effort to save on expenses, Start-up businesses often hire inexperienced legal counsel. Rather than spending the money to hire competent legal counsel, founders often hire lawyers who are friends, relatives or others who offer steep fee discounts. In doing so, the founders deny themselves the advice of experienced legal counsel who can help the founders in avoiding many legal problems

Source: Mistakes that a start-up should avoid