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Company Setup & Legal Frameworks Print

1. Company Setup & Legal Framework/s

1.1 Company Legal Structure: Pvt Ltd vs. LLP vs. Partnership

Or: "How to avoid selling your kidney to pay business debts."

1.1.1 What It’s All About:

"A legal structure is like a startup’s DNA—it decides who gets sued, who keeps the profits, and whether investors take you seriously."

Real-world example:

Pvt Ltd (Safe Choice): Flipkart started as a Pvt Ltd to limit liability. Smart, because early e-commerce meant messy refund battles.

LLP (For Flex): Many law firms use LLPs—partners share profits but don’t drown in each other’s debts.

Partnership (Risky AF): A food delivery startup in Mumbai registered as a partnership. One co-founder vanished with vendor payments—the other had to sell his car to cover debts. Yikes.

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1.1.2 Awareness Level: "Do You Speak ‘Legal’?"

Question: "When someone says ‘limited liability,’ do you…"

Answer Options:

1. 😱 "Think it’s a discount on gym membership?" (Clueless) → "Time to call a lawyer, buddy."

2. 🤔 "Know it’s important but confuse it with ‘limited edition sneakers’?" (Vaguely Aware) → "You’re not alone—70% of founders wing this at first."

3. 🛠️ "Can explain it… unless a lawyer stares at you." (Functional Knowledge) → "You’ll survive, but double-check those shareholder agreements!"

4. 🔧 "Debate Pvt Ltd vs. LLC over whiskey." (Proficient) → "Founder cred unlocked."

5. 🛡️ "Draft clauses that make lawyers nod respectfully." (Expert) → "Elon, is that you?"

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1.1.3 Impact Assessment: "How Screwed Are You If This Goes Wrong?"

Question: "If you pick the wrong structure, what’s the fallout?"

Answer Options:

1. ❌ "We sell handmade soap. Nobody’s suing us." (Low Risk) → "Lucky you. Still, get basic compliance right."

2. ⚠️ "Annoying paperwork, but no jail time." (Minor) → "Like forgetting to renew your domain—fixable, but embarrassing."

3. 🔥 "Investors will walk out mid-pitch." (Significant) → "True story: A founder lost $500K funding because his ‘Partnership Deed’ was scribbled on a napkin."

4. 💀 "Personal assets = Business collateral." (Existential) → "See: That co-founder who pledged his house for loans. Spoiler: He rents now."

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1.1.4 Gap Bridging Plan: "Fix It or Fake It?"

Question: "If your legal knowledge is ‘Google + prayers,’ what’s the plan?"

Answer Options:

1. 📚 "Binge-watch ‘Legal Startup Basics’ on YouTube." (DIY) → "Works for taxes… until it doesn’t."

2. 👔 "Hire a sharp CA/lawyer (even part-time)." (Pro Move) → "Like Zerodha did—saved crores in compliance fines."

3. 🤝 "Outsource to a ‘legal-as-a-service’ startup." (Lazy Genius) → "Why stress? Companies like Vakil Search exist for this."

4. ⚡ "EMERGENCY: Fix in 30 days or die." (Triage) → "For when the taxman knocks. Pro tip: Keep whiskey handy."

5. 🙅 "Ignore it. We’re ‘disrupting’ compliance." (Delusional) → "RIP, 90% of failed startups."

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1.1.5 What Next:

"Action Step:

• If you picked 😱 or 🤔: Book a 1-hour legal consult this week (try Legally or Clerky). Cost: Less than your monthly Netflix subscription.

• If you’re 🛠️ or 🔧: Audit your cap table—founder fights start here.

• If 🛡️: Teach others! (And brag a little.)"

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✨ WHY THIS WORKS:

• Fun + Fear: Mixes humor with scary real cases to motivate action.

• Founder-Centric: Answers are relatable (e.g., "napkin deeds," "whiskey debates").

• Case Studies: Shows consequences ("Don’t be like that Mumbai founder").

• Clear Next Steps: No fluff—just actionable fixes.