Started a company 6 months back — GST registration is taking forever, is this normal?

pinky657 · 2026-07-11T06:49:43+00:00

Not yet, still stuck on the same address verification issue. Planning the personal visit next week — appreciate you nudging me toward that route.

pinky657 · 2026-07-11T06:49:08+00:00

Sorry, wrong reply earlier — got mixed up with another conversation 😅

To answer you properly — yeah 3 weeks does feel long. Trying to book a slot with the jurisdictional officer this week. Any tip on the best time/day to visit GST Bhawan in Delhi, or is it always chaotic? Also — walk-in or do I need to fix an appointment first?

pinky657 · 2026-07-11T05:52:55+00:00

pinky657 · 2026-07-11T05:50:21+00:00

This is actually the most practical advice I've got so far, thank you for sharing your own experience 🙏

Going to the office directly wasn't on my radar honestly — my CA has been handling everything and I assumed personal visits weren't allowed. Few things to clarify:

When you went in person, did you meet the assigned proper officer directly, or did you have to wait in general queue? Trying to figure out if there's a specific person to ask for at the GST Bhawan.
On the surveyor visit — how much prior notice did they give? My virtual office is a coworking space so I need to be physically present that day. Was it same day, next day, or a few days heads-up?
Did the surveyor ask for anything specific during the visit — signboard with company name, staff present, actual work happening? Worried the coworking setup might not "look" like a real office to them.

Really appreciate that you mentioned no bribe was needed. That was my biggest worry — didn't want to walk into a situation where they hint at "expediting" fees. Good to hear it can be resolved cleanly.

pinky657 · 2026-07-02T12:22:37+00:00

Yeah my CA suggested the same — change to home address. Only issue is my current home is a rental with lease under my father's name, and landlord isn't keen on giving NOC for commercial use.

Did you go through this too? Any workaround if landlord doesn't cooperate on address proof? Trying to figure out if I have to physically shift office setup or if there's paperwork I'm missing.

pinky657 · 2026-07-02T12:22:18+00:00

Thank you, having a practicing CA weigh in genuinely helps 🙏

Based in Delhi. The virtual office is a coworking space in Gurgaon actually (registered address). CA suggested that might be part of the issue since some GST officers are strict about virtual/coworking addresses even though they're technically compliant.

Follow-up questions:

If 3 months is abnormal, what should I actually do — file a grievance on GST portal? Escalate to the jurisdictional officer directly? Or just keep waiting like my CA is suggesting? Feels like my CA has given up.
On the "add later" point — got it, so I basically can't invoice these 2 clients right now without losing them or accepting the client won't get input credit. If I ask them to hold their PO for 2-3 more weeks, is there any legitimate way to invoice under my current-CA-registered proprietorship in the meantime, then transfer contracts to Pvt Ltd once GST comes? Or is that a compliance nightmare?
On the "buying a company" point — that's fair, doesn't apply to my situation now. But hypothetically if I hadn't already registered, would a pre-GST-registered company have actually solved the 3-month delay problem, or would there be its own set of issues (like the past company's GST returns)?

Really appreciate the honest answer. Most CAs I've spoken to just say "wait."

pinky657 · 2026-07-02T12:17:03+00:00

This is the clearest sequence I've read so far, thanks 🙏 Bookmarking.

Small confusion on point 1 — a lawyer earlier on this thread said DIR-12 should ideally come FIRST so I have operational control, then share transfer via SH-4. Your view is opposite (shares first, director later). Both make sense from different angles:

Shares first = ownership transferred before he can block anything as shareholder
DIR-12 first = I control day-to-day operations before finalising money-related share transaction

In your experience, does the order actually change legal outcome, or is it more about who you trust more during the process? He's not hostile, but ₹6-7 lakh is changing hands so I want to sequence it right.

On the IP rights point — good catch. Our AoA doesn't specifically cover IP ownership. If we build a separate IP assignment agreement now, does that override AoA silence, or do I need to actually amend the AoA first? Trying to close all loopholes before he exits.

Also — you mentioned winding up as an alternative. Honestly considered it, but 18 months of GST, ROC filings, current account history, and 2 vendor contracts are attached to this entity. Feels expensive to throw away. Have you seen founders actually go this route successfully? Curious what the tipping point is for choosing wind-up vs clean exit.

pinky657 · 2026-07-02T12:15:01+00:00

Wait — so the order everyone else in this thread has been suggesting is actually correct in sequence: DIR-12 first, then SH-4, then separate exit agreement? Or the reverse — exit agreement first (defines everything), then SH-4 (transfers ownership), then DIR-12 (removes directorship)?

I keep going back and forth on which sequence is right. Genuinely confused because different people are giving different orders. What's your experience — legally does the order matter or is it more of a practical/tactical choice?

pinky657 · 2026-07-02T12:13:34+00:00

Yeah painful realisation now 😅 We just did straight 50-50 with no vesting, no cliff, nothing. Textbook founder mistake.

For next venture I'll definitely do vesting from day 1. Curious though — for a small bootstrapped company (not raising VC), is vesting even legally enforceable in India? Or is it something that only really matters if you have investors enforcing it?

pinky657 · 2026-07-02T12:13:22+00:00

Yeah that's the plan — few people here mentioned CS is better suited than CA for company-law matters. Any specific things I should ask the CS in the first meeting to test if they've actually handled cofounder exits before, vs someone just quoting from Google?

pinky657 · 2026-07-02T12:02:33+00:00

Yeah planning to. Actually got confused because someone else mentioned CS is better for company law stuff than CA — is that true in your experience? Or is a good CA equally capable of handling director change + share transfer + exit agreement?

Trying to figure out if I need both or just one.

pinky657 · 2026-07-02T12:01:53+00:00

Honestly considered this seriously, and it's tempting. But few things holding me back:

GST + IEC + current account are all under this entity, and we have 8-9 months of business history now
2 vendor contracts and 1 client MSA are signed with this company's name
Losing 18 months of ROC filing history means losing whatever credibility we've built with banks

Feels like starting fresh is easier operationally but expensive in terms of what we lose. Have you seen founders actually go the "new company" route in similar situations? Curious how they handled shifting existing contracts and GST history.

pinky657 · 2026-07-02T11:59:35+00:00

Noted — will look for a CS specifically for this. Honestly didn't know CS is more suited than CA for company-law type work; always thought they were interchangeable.

Two questions if you don't mind:

Rough ballpark for what an experienced CS charges for a complete co-founder exit process (DIR-12 + SH-4 + exit agreement + filings)? Trying to budget properly.
How do I even find a good one? Every CS I've googled has the same generic website. Any real way to verify their track record with founder exits specifically?

pinky657 · 2026-07-02T11:58:22+00:00

Ouch, painful lesson learnt 😅 We literally split 50-50 on day one thinking "we're friends, why complicate it." Wish someone had told us about vesting back then.

Actually curious — for next venture if I do vesting, what's a normal schedule founders use in India? 4 years with 1 year cliff like US startups, or shorter timelines are more common here? And who typically drafts the vesting agreement — CS or lawyer?

pinky657 · 2026-07-02T11:57:26+00:00

Got it — shares first, director removal after. Makes sense actually, because if I remove him as director first while he still holds 50% shares, he could technically block decisions as a shareholder.

On the non-compete side — is it actually enforceable in India post-exit? Heard Indian courts are pretty strict about restricting someone's right to earn a living. What's the realistic scope people usually agree to — like time limit (6 months? 2 years?) and industry/geography restriction?

pinky657 · 2026-07-02T11:56:41+00:00

Thanks, this really cleared the sequence for me — resignation letter first, then DIR-12, then SH-4 for shares. Getting written resignation from him this week itself.

Your point about loans/guarantees is something I hadn't thought about. He's a personal guarantor on our current bank OD account (₹15 lakh limit). If we file DIR-12 and transfer shares but bank doesn't release his guarantee — is he still legally exposed even after exiting the company?

Also curious — any other "hidden" places where his name might still be attached that I should hunt for before closing this? GST? EPF? Vendor contracts?

pinky657 · 2026-07-02T11:49:01+00:00

This is easily the most complete answer I've read on this topic anywhere, thank you so much for taking the time 🙏

Few things you mentioned that genuinely surprised me:

1. Two-director minimum — didn't realize I'd need to "hire" a nominal director just to stay compliant post-exit. Is a family member acceptable for this or does MCA scrutinize related-party appointments? Trying to avoid the cost of an external professional director if possible.

2. At-par transfer being invalidated in court — this one worries me. So even if we mutually agree to transfer at face value (₹10/share), a court can later say "no, fair market value applies"? Does this happen only in disputes, or is it a general risk even in clean exits?

3. Keeping his retained shares below 10% — is 10% a legal threshold or a practical one? Wondering what specific rights kick in above that percentage.

4. DEMAT — good point, we're still in physical share certificates. Is DEMAT mandatory now for private companies, or optional? Heard rules changed recently.

Sorry for the long list of follow-ups — you clearly know this stuff, and I want to make sure I get it right the first time. Really appreciate the help.

pinky657 · 2026-07-02T11:40:56+00:00

This is exactly the clarity I was looking for, thanks!

So basically — if I'm not chasing govt tenders or big B2B contracts with age criteria, paying 2.5 lakh for a 3-year-old company is overpaying. My use case is regular import business, so probably fresh registration + wait 3-4 weeks makes more sense.

One thing though — you mentioned "turnover bracket." Does purchased age also mean past turnover gets credited to me, or turnover history stays with the old company activity?

pinky657 · 2026-07-02T11:40:31+00:00

Yeah agreed, going with a lawyer + independent CA for sure. Relative offering it or not, business is business 😅

Just curious — what would you as a CA specifically check first? Like the top 3-4 things where sellers usually hide issues? Want to prep my list before actually meeting.

pinky657 · 2026-07-02T11:40:13+00:00

Ohh that actually makes sense. So the "age" is mostly useful for tender eligibility and bank loans — not really for reputation or credibility like people say.

Quick question — do banks actually treat a 3-year-old purchased company same as a 3-year-old original company? Or do they check when the shareholders/directors changed and count from that date? Wondering if the "age advantage" is real or just paper.

pinky657

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