Corporate Governance In Indian Startups: Challenges And Opportunities

Divesh Chauhan & Shreya Nautiyal, LLM Scholar at the University of Petroleum and Energy Studies

ABSTRACT

The startup ecosystem in India has grown exponentially in recent years, attracting investors and entrepreneurs from around the world. Corporate governance is based on the idea that there should be adequate harmony between the interests of various parties, including promoters, shareholders, workers, and clients. Accountability, honesty, transparency, and duty make up its four pillars. The 2013 legislation of India's new Companies Act, which replaced the country's previous Companies Act, was built on these ideas. However, the lack of adequate corporate governance practices in many startups has raised concerns about their long-term sustainability and the protection of stakeholder interests. This research paper aims to study what is corporate governance and how it is incorporated in startup companies in India, it further identified the key challenges and opportunities for improving governance standards. The paper also discussed how various startups have implemented good governance practices, many still lack proper board structures, internal controls, and disclosure practices by using doctrinal research methodology. The study also highlighted the importance of practices and pillars that helps in ensuring effective corporate governance. The research contributes to the understanding of corporate governance practices in the Indian startup ecosystem and provides a foundation for further research in this area.

Keywords: Corporate Governance, Startups in India, Companies Act, Accountability, Transparency.