#FounderWoes: Registering a business in India

If you trace the lifecycle of a startup, at every point there is a tug of war with rules, starting from registering a business.

In the ‘Founder Woes’ series, we talk to different entrepreneurs to highlight the common issues they face while running a startup in India.

Even as India has leapfrogged from the 142nd position in the Ease of Doing Business rankings in 2015 to 63rd in 2020, the reality on the ground remains far more complex. 

Indian founders, and consumers, are rapidly embracing virtual means of conducting business, but regulations have not upgraded to the virtual world. 

If you trace the lifecycle of a startup, at every point there is a tug of war with rules, starting from registering a business.

A business in India needs an offline office for getting registered and that cannot be an incubator, accelerator or a co-working space.

Varun Krishnan, the founder of Chennai-based mobile phone and gadgets focused website FoneArena, says it took him over a year-and-a-half to register his business back in 2008.

The situation has since improved, but it is still not easy.

Tony Paul, the co-founder of Data-as-a-Service startup DataHut, recalls it took them a month to register the company. While the time may have reduced, it still took him numerous visits to the CA and a lot of paperwork to get his business registered.

Shameel Abdulla, Founder and CEO of customer experience analytics platform Clootrack believes: “The fundamental problem in our system is that it has been built to catch hold of all the crooks who twist the system, and not to ease the process.”

Shameel’s registered office is in Cochin in Kerala, but he was working out of Bengaluru for a few months when he found out he had to click his photograph in front of his registered office, geo-tag it and upload it for the purpose of completing the registration process.

He questions the need for this when the government has a system of TAN and PAN numbers to track businesses, so wrongdoing can be traced and caught with its help.

Shiju Radhakrishnan sold his first startup iTraveller in 2019 to Europe-based Lastminute.com. The regulatory challenges were among the reasons for Shiju deciding to not register his new startup, personal virtual office space provider Unremot, in India.

“There is a phenomenal difference between registering in India and the US. I still don’t have a CA for my US company that was registered in March 2020,” Shiju said. 

To share your own experiences, write to amanat@adif.in or leave a comment.

A guest post by
Writer & Content Strategist. I collaborate with startup founders and investors to tell their stories
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