Amit has a nice post about what a pain in the ass it is to do the paperwork involved in starting a company in India. The contrast between America and India in this particular aspect is really quite mindblowing, especially to people like myself who have gone through both processes.
In America starting an LLC takes almost too little time to file! It leaves you wondering what would stop you from creating a company for utterly frivolous reasons (a la Kenny Boy Lay, Ebbers and the other bad boys of finance). If memory serves, when filing LLC papers you don’t even have to tell the government who the owners of the company are!
In India, the paperwork goes on and on, as Amit describes. The worst part is that since you can’t have a bank account until you have completed filing the incorporation paperwork, your company is left in financial limbo for months! As Amit also describes, the process seems like on that could be improved by a “fixer” with the right “connections”. I’m sure that the fat-fingered desi supercapitalists of TIE don’t wait 90 days when they are starting their 15th company.
This aspect would seem to be one of the easiest ways for India to improve her economy: slowing new companies from starting has the effect of, at a minimum, putting Indian startups 90 days behind their American counterparts. 90 days of internet time is enough to guarantee that no Indian startup will ever be first to market!