diff --git a/lib/membrane/bin/callback_context.ex b/lib/membrane/bin/callback_context.ex
index aaebc1bc4..f8be1ae3d 100644
--- a/lib/membrane/bin/callback_context.ex
+++ b/lib/membrane/bin/callback_context.ex
@@ -24,7 +24,7 @@ defmodule Membrane.Bin.CallbackContext do
           :pads => %{Membrane.Pad.ref() => Membrane.Bin.PadData.t()},
           :playback => Membrane.Playback.t(),
           :resource_guard => Membrane.ResourceGuard.t(),
-          :setup_incomplete? => boolean(),
+          :setup_completed? => boolean(),
           :utility_supervisor => Membrane.UtilitySupervisor.t(),
           optional(:pad_options) => map(),
           optional(:members) => [Membrane.Child.name()],
diff --git a/lib/membrane/core/bin/callback_context.ex b/lib/membrane/core/bin/callback_context.ex
index bf5272e4a..584a921ca 100644
--- a/lib/membrane/core/bin/callback_context.ex
+++ b/lib/membrane/core/bin/callback_context.ex
@@ -23,7 +23,7 @@ defmodule Membrane.Core.Bin.CallbackContext do
       name: state.name,
       playback: state.playback,
       resource_guard: state.resource_guard,
-      setup_incomplete?: state.setup_incomplete?,
+      setup_completed?: state.setup_completed?,
       utility_supervisor: state.subprocess_supervisor
     })
   end
diff --git a/lib/membrane/core/bin/state.ex b/lib/membrane/core/bin/state.ex
index 2a42eefd6..5faa31c6a 100644
--- a/lib/membrane/core/bin/state.ex
+++ b/lib/membrane/core/bin/state.ex
@@ -43,7 +43,7 @@ defmodule Membrane.Core.Bin.State do
           initialized?: boolean(),
           terminating?: boolean(),
           resource_guard: Membrane.ResourceGuard.t(),
-          setup_incomplete?: boolean(),
+          setup_completed?: boolean(),
           stalker: Membrane.Core.Stalker.t()
         }
 
@@ -69,7 +69,7 @@ defmodule Membrane.Core.Bin.State do
             synchronization: nil,
             initialized?: false,
             terminating?: false,
-            setup_incomplete?: false,
+            setup_completed?: false,
             stalker: nil,
             resource_guard: nil,
             subprocess_supervisor: nil,
diff --git a/lib/membrane/core/element/callback_context.ex b/lib/membrane/core/element/callback_context.ex
index 19daa0dbf..0d25c6f9a 100644
--- a/lib/membrane/core/element/callback_context.ex
+++ b/lib/membrane/core/element/callback_context.ex
@@ -19,7 +19,7 @@ defmodule Membrane.Core.Element.CallbackContext do
       name: state.name,
       playback: state.playback,
       resource_guard: state.resource_guard,
-      setup_incomplete?: state.setup_incomplete?,
+      setup_completed?: state.setup_completed?,
       utility_supervisor: state.subprocess_supervisor
     })
   end
diff --git a/lib/membrane/core/element/lifecycle_controller.ex b/lib/membrane/core/element/lifecycle_controller.ex
index 6f7c231cf..44e7b7a1c 100644
--- a/lib/membrane/core/element/lifecycle_controller.ex
+++ b/lib/membrane/core/element/lifecycle_controller.ex
@@ -67,7 +67,7 @@ defmodule Membrane.Core.Element.LifecycleController do
         state
       )
 
-    with %{setup_incomplete?: false} <- state do
+    with %{setup_completed?: true} <- state do
       Membrane.Core.LifecycleController.complete_setup(state)
     end
   end
diff --git a/lib/membrane/core/element/state.ex b/lib/membrane/core/element/state.ex
index 0e03e4038..f9f8939fd 100644
--- a/lib/membrane/core/element/state.ex
+++ b/lib/membrane/core/element/state.ex
@@ -38,7 +38,7 @@ defmodule Membrane.Core.Element.State do
           resource_guard: Membrane.ResourceGuard.t(),
           subprocess_supervisor: pid(),
           terminating?: boolean(),
-          setup_incomplete?: boolean(),
+          setup_completed?: boolean(),
           effective_flow_control: EffectiveFlowController.effective_flow_control(),
           popping_auto_flow_queue?: boolean(),
           pads_to_snapshot: MapSet.t(),
@@ -70,7 +70,7 @@ defmodule Membrane.Core.Element.State do
             effective_flow_control: :push,
             initialized?: false,
             terminating?: false,
-            setup_incomplete?: false,
+            setup_completed?: false,
             delay_demands?: false,
             popping_auto_flow_queue?: false,
             stalker: nil,
diff --git a/lib/membrane/core/filter_aggregator/context.ex b/lib/membrane/core/filter_aggregator/context.ex
index 2ddf6b8b4..7642149c2 100644
--- a/lib/membrane/core/filter_aggregator/context.ex
+++ b/lib/membrane/core/filter_aggregator/context.ex
@@ -44,7 +44,7 @@ defmodule Membrane.Core.FilterAggregator.Context do
       parent_clock: nil,
       playback: :stopped,
       resource_guard: agg_ctx.resource_guard,
-      setup_incomplete?: true,
+      setup_completed?: false,
       utility_supervisor: agg_ctx.utility_supervisor
     }
   end
diff --git a/lib/membrane/core/lifecycle_controller.ex b/lib/membrane/core/lifecycle_controller.ex
index 8c713ea30..d31a8f0f6 100644
--- a/lib/membrane/core/lifecycle_controller.ex
+++ b/lib/membrane/core/lifecycle_controller.ex
@@ -12,12 +12,12 @@ defmodule Membrane.Core.LifecycleController do
   @spec handle_setup_operation(setup_operation(), Component.state()) ::
           Component.state()
   def handle_setup_operation(operation, state) do
-    :ok = assert_operation_allowed!(operation, state.setup_incomplete?)
+    :ok = assert_operation_allowed!(operation, state.setup_completed?)
 
     cond do
       operation == :incomplete ->
         Membrane.Logger.debug("Component deferred initialization")
-        %{state | setup_incomplete?: true}
+        %{state | setup_completed?: false}
 
       Component.pipeline?(state) ->
         # complete_setup/1 will be called in Membrane.Core.Pipeline.ActionHandler.handle_end_of_actions/1
@@ -30,7 +30,7 @@ defmodule Membrane.Core.LifecycleController do
 
   @spec complete_setup(Component.state()) :: Component.state()
   def complete_setup(state) do
-    state = %{state | initialized?: true, setup_incomplete?: false}
+    state = %{state | initialized?: true, setup_completed?: true}
     Membrane.Logger.debug("Component initialized")
 
     cond do
@@ -44,13 +44,13 @@ defmodule Membrane.Core.LifecycleController do
   end
 
   @spec assert_operation_allowed!(setup_operation(), boolean()) :: :ok | no_return()
-  defp assert_operation_allowed!(:incomplete, true) do
+  defp assert_operation_allowed!(:incomplete, false) do
     raise SetupError, """
     Action {:setup, :incomplete} was returned more than once
     """
   end
 
-  defp assert_operation_allowed!(:complete, false) do
+  defp assert_operation_allowed!(:complete, true) do
     raise SetupError, """
     Action {:setup, :complete} was returned, but setup is already completed
     """
diff --git a/lib/membrane/core/parent/lifecycle_controller.ex b/lib/membrane/core/parent/lifecycle_controller.ex
index 1aa481d49..748bafdb4 100644
--- a/lib/membrane/core/parent/lifecycle_controller.ex
+++ b/lib/membrane/core/parent/lifecycle_controller.ex
@@ -32,7 +32,7 @@ defmodule Membrane.Core.Parent.LifecycleController do
         state
       )
 
-    with %{setup_incomplete?: false} <- state do
+    with %{setup_completed?: true} <- state do
       Membrane.Core.LifecycleController.complete_setup(state)
     end
   end
diff --git a/lib/membrane/core/pipeline/callback_context.ex b/lib/membrane/core/pipeline/callback_context.ex
index f48fe59b4..74b009935 100644
--- a/lib/membrane/core/pipeline/callback_context.ex
+++ b/lib/membrane/core/pipeline/callback_context.ex
@@ -20,7 +20,7 @@ defmodule Membrane.Core.Pipeline.CallbackContext do
       module: state.module,
       playback: state.playback,
       resource_guard: state.resource_guard,
-      setup_incomplete?: state.setup_incomplete?,
+      setup_completed?: state.setup_completed?,
       utility_supervisor: state.subprocess_supervisor
     })
   end
diff --git a/lib/membrane/core/pipeline/state.ex b/lib/membrane/core/pipeline/state.ex
index cd9c2c9eb..e235b8a45 100644
--- a/lib/membrane/core/pipeline/state.ex
+++ b/lib/membrane/core/pipeline/state.ex
@@ -31,7 +31,7 @@ defmodule Membrane.Core.Pipeline.State do
           initialized?: boolean(),
           terminating?: boolean(),
           resource_guard: Membrane.ResourceGuard.t(),
-          setup_incomplete?: boolean(),
+          setup_completed?: boolean(),
           stalker: Membrane.Core.Stalker.t(),
           subprocess_supervisor: pid(),
           awaiting_setup_completition?: boolean()
@@ -54,7 +54,7 @@ defmodule Membrane.Core.Pipeline.State do
             synchronization: nil,
             initialized?: false,
             terminating?: false,
-            setup_incomplete?: false,
+            setup_completed?: false,
             stalker: nil,
             resource_guard: nil,
             subprocess_supervisor: nil,
diff --git a/lib/membrane/element/callback_context.ex b/lib/membrane/element/callback_context.ex
index de6289842..1e33faa02 100644
--- a/lib/membrane/element/callback_context.ex
+++ b/lib/membrane/element/callback_context.ex
@@ -26,7 +26,7 @@ defmodule Membrane.Element.CallbackContext do
           :parent_clock => Membrane.Clock.t() | nil,
           :playback => Membrane.Playback.t(),
           :resource_guard => Membrane.ResourceGuard.t(),
-          :setup_incomplete? => boolean(),
+          :setup_completed? => boolean(),
           :utility_supervisor => Membrane.UtilitySupervisor.t(),
           optional(:incoming_demand) => non_neg_integer(),
           optional(:pad_options) => map(),
diff --git a/lib/membrane/pipeline/callback_context.ex b/lib/membrane/pipeline/callback_context.ex
index 962bd912a..5edf0b1dc 100644
--- a/lib/membrane/pipeline/callback_context.ex
+++ b/lib/membrane/pipeline/callback_context.ex
@@ -20,7 +20,7 @@ defmodule Membrane.Pipeline.CallbackContext do
           :module => module(),
           :playback => Membrane.Playback.t(),
           :resource_guard => Membrane.ResourceGuard.t(),
-          :setup_incomplete? => boolean(),
+          :setup_completed? => boolean(),
           :utility_supervisor => Membrane.UtilitySupervisor.t(),
           optional(:from) => [GenServer.from()],
           optional(:members) => [Membrane.Child.name()],