Complete guide
How to Start a Startup in India
Step-by-step guide to launching a startup in India in 2026 — entity choice, registration, funding, compliance, ESOPs, and the path to US expansion. Written by a CA-led advisory firm running these mandates daily.
Step 1: Validate
Validate the idea.
Before incorporating, validate. The biggest startup-killer in India is product-market-fit failure, not regulatory issues.
- Talk to 30+ potential customers
- Build an MVP in 30 days or less
- Define your ICP (Ideal Customer Profile)
- Validate willingness-to-pay (not just interest)
- Estimate unit economics — CAC, LTV, contribution margin
Step 2: Co-founder
Find a co-founder.
India's most successful startups have 2-3 co-founders. Solo founders raise less and struggle more.
- Complementary skills (tech + business + sales)
- Equity split: typically 50-50 or 60-40 with vesting
- Founders' Agreement: roles, equity, vesting, dispute resolution
- Founder ESOP pool: 8-12% of post-money cap table
- Pre-incorporation IP assignment
Step 3: Incorporate
Register the company.
Pick the right entity and register via MCA SPICe+. For VC-fundable startups, Private Limited (Pvt Ltd) is the default.
- Choose entity: Pvt Ltd (default for VC), LLP, OPC, Sole Prop
- Reserve name via RUN/SPICe+ Part A
- Get DSC + DIN for 2+ directors
- File SPICe+ Part B with MOA + AOA
- Receive Certificate of Incorporation + PAN + TAN (5-10 days)
- Total cost: ₹10,000-₹50,000 government + professional
Step 4: Bank account
Open bank account.
Within 30 days of incorporation, open current account and infuse capital.
- Use Certificate of Incorporation + PAN to open
- Indian banks: ICICI, HDFC, Axis, Kotak (fastest)
- Founders subscribe to shares + infuse capital
- File INC-20A (commencement of business) within 180 days
- Issue share certificates to subscribers
Step 5: GST + Compliance
GST + post-incorporation.
Most startups need GST registration, plus a compliance baseline.
- GST registration if turnover > ₹40L (goods) / ₹20L (services)
- First board meeting within 30 days
- Appoint first auditor under Section 139
- Statutory registers: members, directors, charges
- Professional tax + ESIC + EPFO (auto via SPICe+)
- Annual compliance budget: ₹50k-₹2L
Step 6: DPIIT Startup India
Get DPIIT recognition.
Free, easy, valuable. Eligible startups get tax exemptions, IPR rebates, easier government contracts.
- Apply on Startup India portal
- Eligibility: incorporated < 10 years, turnover < ₹100cr
- Benefits: Section 80-IAC tax exemption (3 of 7 years)
- Angel tax exemption under Section 56(2)(viib)
- 80% patent fee rebate, expedited IPR
- Self-certification under 9 labour laws
Step 7: Fundraising
Raise capital.
Most Indian startups raise in stages — angel, seed, Series A. Plan capital structure carefully.
- Pre-seed/Angel: ₹50L-₹2cr from family, friends, angels
- Seed: ₹2-15cr from seed funds, micro-VCs
- Series A: ₹15-50cr from VCs
- Cap table: keep founders at >60% through Series A
- ESOP pool: 8-12% pre-Series A, 12-15% pre-Series B
- FEMA reporting: FC-GPR within 30 days of foreign share allotment
Step 8: ESOPs
Set up ESOPs.
Critical for hiring. Set up early, value correctly, manage tax.
- ESOP plan approved by board + shareholders
- Pool size: 8-15% of fully-diluted
- Vesting: 4 years, 1-year cliff (standard)
- FMV / 11UA valuation at grant
- Tax: at exercise (perquisite) and sale (capital gains)
- Annual ESOP committee + grant administration
Step 9: US expansion
Expand to US.
If your customers, capital, or talent is in US — set up Delaware C-Corp. We run this end-to-end.
Step 10: Compliance, always
Stay compliant.
Indian regulation is heavy. Get a CA, get a CS, set up SOPs.
- Income tax: TDS quarterly, ITR annually, advance tax
- GST: monthly/quarterly returns + annual
- ROC: AOC-4, MGT-7 annually
- FEMA: FC-GPR, FC-TRS, ODI reporting
- Companies Act: board meetings, statutory registers
- Audit: mandatory above thresholds; annual financials