Indian startup registration takes 3-5 months in practice despite 10-day regulatory minimum
Indian company incorporation officially takes 7-10 working days through the Ministry of Corporate Affairs, but first-time founders report 3-5 month timelines in practice. The gap comes from payment gateway documentation requirements, CA coordination delays, and banking setup friction.
The choice between Limited Liability Partnership (LLP) and Private Limited structures carries real operational consequences. LLPs suit co-founder teams prioritizing speed over immediate fundraising, with lower compliance burden and faster setup. Private Limited companies remain necessary for venture capital, as investors struggle with LLP equity structures.
Recent policy changes matter here. The government extended the incorporation window from 7 to 10 years and raised the startup eligibility turnover threshold from ₹25 crore to ₹100 crore in 2026, meaningfully expanding which entities qualify for benefits. The three-year income tax exemption under Section 80 IAC represents material runway extension for cash-burning ventures, though this requires separate DPIIT recognition beyond MCA incorporation.
A new structural option has emerged: One Person Company (OPC) allows single founders liability protection without requiring a co-founder, though mandatory compliance audits apply regardless of turnover. This addresses the sole proprietorship liability gap while avoiding the LLP partner requirement.
Total incorporation costs run ₹25,000-40,000, including virtual office addresses (₹17,000-25,000), CA fees, and government charges. GST registration can be completed independently to reduce costs. Annual compliance for Private Limited companies adds ₹10,000-30,000 in audit fees.
The payment gateway barrier remains genuine. International transaction acceptance requires complete documentation that sole proprietorships can't provide, forcing product-ready founders to pause revenue collection during incorporation. Some founders report Razorpay enabling international payments for sole proprietorships after failed transaction tickets, though this appears inconsistent.
The regulatory minimum versus real-world timeline gap suggests process friction beyond policy. Outdated CA practices, virtual office provider upselling, and banking coordination extend what should be straightforward incorporation. The Startup India portal centralization helps, but doesn't solve practitioner coordination issues.