Mistake #2: I Started Three Companies Before I Understood What One Actually Meant
This is the second post in a series about the mistakes I made starting up — and what I'd tell myself if I could go back.
Nobody warns you about the paperwork.
When you decide to start a company in India, everyone talks about the idea, the market, the team. The fun stuff. Nobody sits you down and says: “Before you do anything else, understand that you are about to create a legal entity that is extremely easy to start and extremely hard to stop.”
I learned this the hard way. Three times.
How It Started
Within a month of incorporating my first company, a friend came to me with an idea in the real estate space. He had the domain expertise. I had the technical capability. It seemed obvious. Let’s build together.
So we incorporated a second company.
A year later, I started a third, this time in HR tech. Different space, different collaborator, same pattern: enthusiasm first, paperwork second, consequences much later.
Three companies. One common founder. Me. Zero understanding of what that actually meant on paper.
The Logic That Made Sense at the Time
I wasn’t being reckless. There was actual reasoning behind each decision.
The thinking went something like this: one product, one company. Cleaner co-founder dynamics. Cleaner cap table if we ever went to raise money. Each venture would stand on its own. No cross-contamination of equity, no messy shared structures.
On paper, that logic holds. In practice, what it meant was that I was a single individual carrying the compliance obligations of three separate legal entities, simultaneously, while trying to build product, find customers, and figure out what I was actually doing.
That’s where the logic broke down. Not in the structure. In the execution capacity of one person.
Looking back, I think part of it was jetlag from my corporate journey. At Microsoft, there were entire teams for legal, finance, compliance. You filed a form and someone else handled it. Structure felt like infrastructure: invisible, always there, always working. I carried that assumption into a world where I was the infrastructure.
Where Those Three Companies Ended Up
Company one is my current company, which I’m still building. Eight years in. Real customers, real revenue.
Company two, the real estate venture, is still alive. Not active. Just... alive. Every year, nil returns. Every year, a CA invoice. Every year, the intention to finally initiate the strike-off process. That intention is now in its sixth year.
Company three, the HR tech venture, we managed to shut down during COVID. That was the first time I actually understood what a proper wind-down looks like.
What “Running a Private Limited Company” Actually Means
When you incorporate a Pvt Ltd in India, you’re not just creating a business. You’re creating a compliance obligation that runs independently of whether the business is active or not.
Every year, regardless of whether you have a single rupee of revenue, you need to:
File annual returns with the MCA
File income tax returns
Maintain a registered office address
Hold a board meeting (yes, even if it’s just you)
File audited financial statements
This is manageable when you have an active business and a CA who handles it routinely. It becomes a recurring low-grade headache when the company is dormant and you keep telling yourself you’ll deal with it properly next quarter.
And dissolving a Pvt Ltd in India? That’s a separate ordeal. Strike-off applications, NOCs, clearances, timelines that stretch for months. Most founders I know with dormant companies have made the same quiet calculation: it’s easier to just keep filing nil returns than to go through the process of shutting down properly.
The compliance burden of a private company in India doesn’t scale with your revenue. It runs on its own clock, regardless of how the business is doing.
That asymmetry is brutal in the early days. And surprisingly persistent years later.
What You Actually Need When You’re Starting Out
Here’s the thing nobody tells you clearly enough: when you’re in the early days of building something, what you need is users. People who are even remotely interested in what you’re making. Signal that the idea has any pull at all.
What you don’t need, at least not yet, is papers on papers of documentation, board resolutions, MCA filings, and registered office maintenance for two companies you haven’t had time to build anything inside of.
The compliance overhead isn’t fatal. But it consumes the one resource early-stage founders have least of: attention. Every hour spent on administrative obligations for a dormant entity is an hour not spent talking to customers, shipping product, or figuring out whether the business has any reason to exist.
I underestimated this completely. And I think the reason I did is that I came from a world where compliance was someone else’s problem.
What I’d Tell Myself Now
Start with an LLP or a sole proprietorship for early experiments. Unless you’re raising institutional money from day one, the Pvt Ltd structure is overkill for a company that hasn’t found product-market fit. An LLP has significantly simpler compliance. A sole proprietorship even more so. You can always convert when the business justifies the structure. There are reasons you might not even want to start a company in India, and incorporate elsewhere, but that’s for a later blog.
Treat company formation like a hiring decision. You wouldn’t hire someone without understanding the full commitment: salary, notice period, obligations on both sides. Think about incorporating the same way. What are you signing up for, not just this year, but every year this entity exists?
Don’t co-found a company out of convenience. Convenience and genuine alignment are different things. Shared enthusiasm in the first conversation is not the same as shared vision over five years. If you’re going to carry the compliance burden of a co-founded company, make sure the foundation is real.
If a company is genuinely dead, kill it properly. This sounds obvious. It isn’t. There’s always a reason to delay. The process is annoying, you might need the entity someday, nil returns are cheap. But cheap and free are different things. Every dormant company is an open loop. Multiply that by years and it becomes real cognitive overhead.
Eight Years Later
My primary company (Hyperleap) is still going and strong. The HR tech company is cleanly shut down. The real estate company exists in a permanent state of administrative limbo. Not dead enough to bury, not alive enough to matter.
This isn’t a story with a clean resolution. It’s a story about a class of mistake that compounds quietly. Not the kind that threatens the business in a visible, dramatic way. The kind that drains time and attention in small, regular doses, year after year, until the cost is too distributed across time to even add up properly.
The first mistake in this series, not having a product idea before starting, is visible. You can point to it. This one is invisible. It hides in a CA’s calendar, in MCA portal reminders, in the annual ritual of signing documents for a company that hasn’t done anything meaningful in years.
But invisible mistakes have a way of becoming visible at the worst times.
The bottom line: Starting a company creates obligations that run independent of whether the business works. What early-stage founders need is users and signal, not administrative complexity across multiple entities. Understand what you’re creating before you create it, and think hard before creating more than one.
Have you dealt with dormant companies as a solo founder? Still in the “just file nil returns” stage? I’d genuinely like to hear how others have handled this.
I’m Gopi Krishna, founder of Hyperleap AI, where we build enterprise-grade conversational AI for businesses across India. This is part of an ongoing series on the mistakes I made in my journey as a founder, written for anyone thinking about starting something of their own. Subscribe to Second Order AI on Substack to follow along.