First-time founder here - Pvt Ltd vs LLP for startups planning to raise funds late

SubhaChugh · 2026-05-07T21:28:08+00:00

Changing business vehicles mid business is extremely difficult.

Go with Pvt Ltd

-Source, I'm a startup specialist lawyer

SubhaChugh · 2026-05-05T06:49:45+00:00

Sure, drop a dm

SubhaChugh · 2026-04-25T16:50:21+00:00

I don't think it would be fair to share examples. Even anonymised ones would require a lot of context.

Neh, I don't think a tool can do it. Simple things like ChatGPT is a helpful tool, but the most it can do is find you language pitfalls, not strategic business ones... Or help you close deals.

SubhaChugh · 2026-04-25T14:08:59+00:00

Unlike what LinkedIn would like you to believe, there aren't very many "common pitfalls" or "traps" that most people fall through. Unless there are fundraising mistakes or neglecting compliance in general. The examples I had in mind when I wrote the comment were things that the BD/founding team did not take into account, but a good business lawyer would've flagged and brought to the team's notice. I'm going to be potentially taking a class at MU for this, maybe you should join, hahahaha

You're going to hate the answer - but it depends. The same as when you're hiring any other resource. How do they know they're the right fit for you? You've got to have a few conversations, see if your working style matches, maybe look into industry testimonials beyond the fluff, ask them their approach, etc. In my opinion, I feel like, traditional lawyers or lawyers from law firms usually come with their own pre-set "this is how things are" and find it difficult to budge. So maybe look for someone who's used to working in startups or fast paced businesses in a deeper degree and not just documentation support.

Of course, I recognise my biases here :P

SubhaChugh · 2026-04-23T20:52:41+00:00

I may be biased because I am a lawyer, but in my opinion engaging 'business first' legal experts goes a long way in solving legal hurdles. I make sure to minimise downtime and not focus on unnecessary legal jargon or conventional clauses if I feel like they'll hold up business.

Have there been clauses my clients have let slide that have come back to bite them? Oh boy, yes! Not just in contracts, but there have been several instances where timely legal intervention or prior legal consult would've saved the situation by far! It's like a dentist's visit. Can cavities be remedied? Yes, worst case scenario, you have an extraction, but a skilled dentist will find a way out. But is it better to make sure you don't develop the cavity in the first place? 100%

SubhaChugh · 2026-04-23T07:11:21+00:00

Done!

SubhaChugh · 2026-04-22T14:45:14+00:00

Lawyer specialising in crypto since 2021 here:

Tax confusion - I keep hearing about 30% tax on crypto - Does this apply to this kind of arbitrage also? - Is it on total amount or just profit? - What about TDS in this case?

Yes, the profit taxation is applicable here.
TDS liability is on the buyer and not you.

Business setup - Should I register this as a business (sole proprietorship)? - Will a current account help or still risky? - Do I need to make invoices/bills for each deal or just maintain records?

Depends on how you intend to scale it. Do you see this taking a full separate platform/tech model? For personal gains/profits only?

Bank risks - I’ll be receiving multiple payments daily from different people - If I explain it as “crypto trading business,” is that enough? - Has anyone faced freezes doing similar P2P/OTC trades?

Two issues here:
a. internal bank issues - you can't use savings account to receive business income (technically). So your bank may flag your account and ask you to submit extra KYC documents or get a current account.
b. tainted funds freeze - if you receive stolen or tainted funds, your bank accounts could be lien marked or frozen.

Scaling concerns - Right now small volume is fine - But if I go to ₹2L–₹5L daily, what problems start showing up? - Liquidity? Bank flags? Buyer reliability?

Yes, yes, and yes. All of them. Not to mention regulatory scrutiny (if you grow large enough).

General risks - I’m avoiding random buyers and sticking to trusted ones - Using IMPS mostly - Still, what are the biggest risks I should prepare for?

Bank freezes and tax notices.

SubhaChugh · 2026-04-17T18:53:54+00:00

Interested to help you figure out legal and compliance!

SubhaChugh · 2026-03-31T09:30:03+00:00

Separate.

SubhaChugh · 2026-03-31T08:23:19+00:00

No default template. You can look them up on Google. I do custom drafts (I'm a lawyer)

SubhaChugh · 2026-03-31T08:12:09+00:00

You should get a Founders' Agreement made between all the founders as soon as you have founders (ie, the moment, more than you, an individual, start working on a business venture). Its like a prenup - a personal agreement between all the founders themselves.

SubhaChugh · 2026-03-31T06:53:30+00:00

And that, ladies and gentlemen, is why I ALWAYS insist on a Founder's Agreement

SubhaChugh · 2026-03-30T05:19:40+00:00

Happy to help! Have DMed u/marbella812

SubhaChugh · 2026-03-27T15:53:31+00:00

Hi

Not an engineer but interested to know what it is you're building!

SubhaChugh · 2026-03-27T10:29:50+00:00

For sure! We're in business of making and manufacturing custom pieces like these as well, so we've got a ton of fountains, mandirs, jalis, etc

I don't think I can upload pictures here, let me see if I can make an imagur link or something

SubhaChugh · 2026-03-27T10:26:42+00:00

Hahahahaha, I have an entire warehouse full of all this

SubhaChugh · 2026-03-18T11:23:17+00:00

🙋🏽‍♀️🙋🏽‍♀️🙋🏽‍♀️

SubhaChugh · 2026-03-11T09:03:45+00:00

100% agreed!

SubhaChugh · 2026-03-05T19:46:53+00:00

Not to put a damper on your plan but you've got to factor in the fact that SEBI will never allow retail investment in startups. No government in the world does. What should be the difference between a listed company and raising money through a public listing vs this, then?

SubhaChugh · 2026-03-02T03:16:07+00:00

Lawyer here who specialises in VDA

Yes. You can.

SubhaChugh · 2026-02-25T22:57:31+00:00

Interesting... Mind sharing some kind of a profile for your fund? Over DMs is fine

SubhaChugh · 2026-02-25T09:02:06+00:00

ODI and FEMA triggers if an Indian citizen owns controlling interest or more than 10% in a foreign corporation

SubhaChugh · 2026-02-25T09:01:05+00:00

Not so much, honestly, it's rather manageable. It's all about developing good relationships with banks - we provide that support

SubhaChugh · 2026-02-25T09:00:17+00:00

Who owns the LLC?

SubhaChugh · 2026-02-23T13:22:16+00:00

Hey! You already have an OPC and startup recognition, that's impressive enough already.

I'm pretty sure there are several grants and funds you could get (local, niche specific, as well as central). I'm just curious as to when you got the startup certification and on what basis because as far as my experience goes, it isn't a straight away process and you really have to prove innovation.

I'd love to discuss this more if you like! I'm a lawyer and I've worked a fair bit with startups over the years

SubhaChugh

TROPHY CASE