Startup Advisory — Business Structuring
The entity you choose shapes everything that follows.
Tax treatment, fundraising ability, liability exposure, compliance costs, co-founder rights — every one of these is determined by the legal structure you choose at incorporation. Avaron makes sure you choose right, the first time.
4 <br> Structures Evaluated
Tax<br> Liability Compared
Lakhs<br> Conversion Cost Avoided
Day 1<br> DPIIT Activated
What Is This Service
Structure first. Scale without regret.
Choosing between a Proprietorship, Partnership, LLP, and Private Limited Company is not just a legal formality — it is a strategic decision with multi-year financial consequences. Get it wrong, and converting later costs lakhs in stamp duty, capital-gains tax, and regulatory friction.
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A data-backed entity recommendation across all four structure types — comparing tax treatment, liability exposure, fundraising capability, and compliance cost before you incorporate.
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Full incorporation service including Shareholders' Agreement, Founders' Agreement, vesting schedules, and all required licences — handled end-to-end by Avaron.
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Day-one DPIIT Startup India recognition and Udyam registration filed immediately on incorporation, activating tax holiday eligibility and government scheme benefits from the start.
The hard truth: Most founders pick their entity structure because it’s the cheapest or simplest to set up — not because it fits what they’re building. Converting an LLP to a Private Limited Company later costs lakhs in stamp duty and months of delay, often right when a VC is ready to invest. Getting it right on day one costs a fraction of getting it wrong.
What Investors Look For
The 10 questions every deck must answer
| # | Investor's Question | Slide |
|---|---|---|
| 1 | What problem do you solve? | Problem |
| 2 | How does your solution work? | Solution |
| 3 | How big is the opportunity? | Market |
| 4 | Why will you win? | Why Us |
| 5 | What's the business model? | Revenue |
| 6 | Is there real traction? | Traction |
| 7 | Who is the team? | Team |
| 8 | Where are you going financially? | Financials |
| 9 | Who is the competition? | Competitive |
| 10 | How much and for what? | The Ask |
How Avaron Adds Value
Four steps to the right structure
Quick Answers
Should I start as an LLP or a Private Limited Company?
The answer depends entirely on what you intend to build. If you are starting a professional services firm — consulting, accounting, legal, or similar — an LLP is often sufficient and carries lower compliance overhead. If you intend to raise equity capital from angels or VCs, hire employees using ESOPs, or build a product company aimed at scale, a Private Limited Company is the only viable choice. VCs structurally cannot invest in LLPs under SEBI’s AIF regulations. Converting an LLP to a Private Limited Company later triggers stamp duty on asset transfer and can create tax complications. For any growth startup, the compliance cost of a Private Limited Company from day one is significantly cheaper than the conversion cost later.
When should we apply for DPIIT Startup India recognition?
You should apply as soon as your company is incorporated and has an active business — ideally within the first 90 days. DPIIT recognition must be obtained while the entity is less than 10 years old and has turnover below ₹100 crore. Applying early activates significant benefits:
- Section 80-IAC tax holiday: Three consecutive years of zero income tax on profits, applicable for eligible startups (must be applied for separately but requires DPIIT recognition first)
- Self-certification under labour and environmental laws
- Access to government scheme benefits including SIDBI Fund of Funds, state government startup incentives, and public procurement preference
Avaron files for DPIIT recognition on the day of incorporation as standard practice.
Can we convert our LLP to a Pvt Ltd later?
Yes, conversion is legally possible under Section 366 of the Companies Act, 2013. However, it is not a simple process. The conversion requires filing with both the MCA and the Registrar of Companies, consent from all partners, a valuation report, and stamp duty on asset transfer — which varies by state but is often material. There may also be capital gains tax implications if the LLP holds significant assets. The process typically takes 3 to 5 months. More importantly, in the period before conversion is complete, you cannot raise equity investment from structured investors. Founders who want to raise in the next 12 to 18 months should simply incorporate as a Private Limited Company from the start rather than plan for a conversion.
Do we need a Shareholders' Agreement?
Yes, if there are two or more founders. The Shareholders’ Agreement (SHA) governs the relationship between founders and, later, between founders and investors. It covers equity split and vesting schedules, decision-making rights and reserved matters, transfer restrictions (right of first refusal, drag-along, tag-along), anti-dilution protections, and exit mechanics. Without an SHA, disputes over equity, decision-making, or exits are resolved by the default provisions of the Companies Act — which rarely reflect what founders intended. The time to draft it is at incorporation, not when a dispute arises or when an investor asks to see it during due diligence. Avaron drafts SHAs as part of the incorporation process, not as an afterthought.
Our Process
Founder Deep-Dive
(Day 1–2)
We conduct a structured session covering your business model, target customers, traction to date, competitive landscape, and funding thesis. We extract what makes your story compelling.
Step 01
Narrative Architecture
(Day 2–3)
We build the story arc — the sequence of slides, the flow of logic, and the emotional hooks that turn an information deck into a conviction-building presentation.
Step 02
Financial Slide Integration
(Day 3–6)
Our CA team integrates the financial model into the deck — revenue projections, unit economics, burn rate, and use-of-funds — with every number traceable to underlying assumptions.
Step 03
Review & Refinement
(Day 7–10)
We share a draft, incorporate your feedback, and conduct a mock Q&A to anticipate the questions investors will ask. The final deck is investor-ready before it leaves our hands.
Step 04
What You Receive
Your complete pitch package
Business Structuring
Structure your startup right from day one.
Book a free 30-minute consultation. We’ll identify the critical gaps, and outline exactly what we’ll build together.