Startup Advice

The obstacles if your startup doesn’t have any legal compliance

The term startup is often associated with businesses in the digital world, or high-tech businesses. This happens because most companies that call themselves startups use electronic systems based on websites or applications in running their business and dealing with their customers. Websites or applications used by startup companies are referred to as electronic systems. By utilizing an electronic system in the form of a website and application, startup companies can reach a wider range of consumers, by utilizing relationships facilitated by the internet network. In addition, with a startup website or application, consumers can easily recognize the startup’s identity. So it is not surprising that currently many companies that were still running their business offline have switched or expanded their business to include online businesses (

As a business, of course startups must complete their operational instruments in stages. Legal and compliance aspects must be well prepared, because later it will become a mature startup to move on the corporate startup scale. Legality matters become important later when dealing with venture capital investors. If the startup already has the form of a Limited Liability Company legal entity, when the investment term sheet is presented to the startup, they will negotiate the number of shares that correspond to the value of the investment in the startup (

In day-to-day startup operations, of course, you must comply with legal and compliance in force in Indonesia, starting from the aspects of licensing, labor, and taxation. Then the important thing to pay attention to is the aspect of intellectual property rights, such as brands, copyrights, and patents, because the products that are made must obtain intellectual property rights protection.

It is not enough just to establish a business entity and legal entity, there are many legal documents that must be made when you set up a business. Starting from the deed of establishment, SK Kemenkumham, and various. Of course, business entities that do not have permits violate regulations in Indonesia. Unfortunately again, you will encounter many obstacles:

1. Not protected by law: it does not preclude the possibility that business activities in the middle of the road are suddenly stopped or frozen by related agencies. With legality, business actors will be safer to run a business.

2. Difficult to get funding: of course you will find it difficult to find an injection of funds, either from investors or banks. This is because the parties who own the funds do not want to provide funds to companies whose legality is not clear.

3. Having business legality helps increase trust in the eyes of investors, partners, consumers, and others. This happens because it is more trusted and is considered more professional.

Of course, this will increase the company’s income because consumers will not hesitate in choosing the products or services offered by the company. (

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