Startup Sector on the Brink: Stricter Regulations on the Horizon

The Indian government is considering the implementation of stricter regulations on startups to strike a balance between facilitating ease of doing business and maintaining a compliance-oriented regulatory approach

Up until now, startups have operated with a sense of freedom akin to a free bird, but the impending regulations are likely to change the landscape significantly

The CLC will deliberate on the necessity of a stricter regulatory framework for startups to address corporate governance concerns while ensuring that the regulations do not impose undue compliance burdens on these smaller entities

Startups are currently classified as private companies and are eligible for certain relaxations, including exemptions from certain procedural compliance requirements

Small businesses can register using only their Aadhaar numbers, eliminating the need for paperwork and certifications in the online registration process For startups in India, registration involves incorporating as Private Limited, Partnership firm, or Limited Liability Partnership, following standard processes.