diff --git a/pkg/plugins/golang/v4/init.go b/pkg/plugins/golang/v4/init.go
index 278f5f3bdf3..23e35b140b0 100644
--- a/pkg/plugins/golang/v4/init.go
+++ b/pkg/plugins/golang/v4/init.go
@@ -22,7 +22,6 @@ import (
 	"os"
 	"path/filepath"
 	"strings"
-	"unicode"
 
 	"github.com/spf13/pflag"
 
@@ -167,45 +166,49 @@ func checkDir() error {
 			if err != nil {
 				return fmt.Errorf("error walking path %q: %w", path, err)
 			}
-			// Allow directory trees starting with '.'
-			if info.IsDir() && strings.HasPrefix(info.Name(), ".") && info.Name() != "." {
-				return filepath.SkipDir
-			}
-			// Allow files starting with '.'
-			if strings.HasPrefix(info.Name(), ".") {
-				return nil
-			}
-			// Allow files ending with '.md' extension
-			if strings.HasSuffix(info.Name(), ".md") && !info.IsDir() {
-				return nil
-			}
-			// Allow capitalized files except PROJECT
-			isCapitalized := true
-			for _, l := range info.Name() {
-				if !unicode.IsUpper(l) {
-					isCapitalized = false
-					break
-				}
-			}
-			if isCapitalized && info.Name() != "PROJECT" {
+
+			// Only care about top-level files and directories
+			if strings.Count(path, string(os.PathSeparator)) > 0 {
 				return nil
 			}
-			disallowedExtensions := []string{
-				".go",
-				".yaml",
-				".mod",
-				".sum",
+
+			// Do not allow kubebuilder reserved directories or files
+			reservedNames := []string{
+				".devcontainer",
+				".github",
+				"api",
+				"bin",
+				"cmd",
+				"config",
+				"dist",
+				"hack",
+				"internal",
+				"test",
+				".dockerignore",
+				".gitignore",
+				".golangci.yml",
+				"Dockerfile",
+				"Makefile",
+				"PROJECT",
+				"README.md",
+
+				// plugins
+				"grafana",
+
+				// The go.mod is allowed because user might run
+				// go mod init before use the plugin it for not be required inform
+				// the go module via the repo --flag.
+				// "go.mod",
 			}
-			// Deny files with .go or .yaml or .mod or .sum extensions
-			for _, ext := range disallowedExtensions {
-				if strings.HasSuffix(info.Name(), ext) {
-					return nil
+			for _, name := range reservedNames {
+				if info.Name() == name {
+					return fmt.Errorf("target directory contains kubebuilder reserved directory or file: %q (%s)",
+						path, strings.Join(reservedNames, ", "))
 				}
 			}
-			// Do not allow any other file
-			return fmt.Errorf("target directory is not empty and contains a disallowed file %q. "+
-				"files with the following extensions [%s] are not allowed to avoid conflicts with the tooling",
-				path, strings.Join(disallowedExtensions, ", "))
+
+			// Allow everything else
+			return nil
 		})
 	if err != nil {
 		return fmt.Errorf("error walking directory: %w", err)