Start-up India Registration
The Startup India campaign is a welcome initiative to boost entrepreneurship in India. It promotes bank financing, simplifies the incorporation process and grants exemptions to startups. But, you need to qualify as an “Eligible Startup” to avail all these benefits.
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Startup India is an Indian Government initiative that is intended to build a strong ecosystem for nurturing innovation and startups in the country to drive sustainable economic growth and generate large-scale employment opportunities. Through this initiative, the government aims to empower Startups to grow through innovation and design.
The objectives of the Startup India Movement are outlined below. The action plan envisages supporting the startups and more:
- Enhanced infrastructure, including incubation centers
- IPR facilitation, including easier patent filing
- The better regulatory environment, including tax benefits, easier compliance, improved setting up of a company, fastest mechanism, and more.
- A goal to increase the funding opportunities
- Provide a vast networking database for entrepreneurs and other stakeholders in the startup ecosystem.
Benefits of Startup India Recognition
DPIIT recognized Startups are eligible to get the following benefits under the Startup India Initiative:
- Self-Certification:- Startups shall be allowed to self-certify compliance for 6 Labour Laws and Environmental Laws through a simple online procedure to reduce the regulatory burden on Startups and keep compliance costs low.
- Tax Exemption under 80-IAC:- Pvt Ltd Companies and LLPs are exempted from paying income tax for three consecutive financial years under Section 80- IAC out of their first ten years since incorporation.
- Easy Winding of a Company:- As per the Insolvency and Bankruptcy Code, 2016, Startups with simple debt structures or those meeting certain income-specified criteria can be wound up within 90 days of applying for insolvency.
- 4. Fast-tracking of Startup Patent Applications:- Patent applications filed by Startups shall be fast-tracked for examination to realize their value sooner.
- Rebate on filing of Patent Application:- Startups shall be provided an 80% rebate on patent filing costs to help them pare costs in the crucial formative years. The objective is to reduce the cost and time taken for a Startup to acquire a patent, making it financially viable to protect their innovations and encourage them to innovate further.
- Easier Public Procurement Norms:- DPIIT recognized Startups can register on GeM as sellers and sell their products and services directly to Government entities. It is a great opportunity for Startups to participate in the public procurement process and access another potential market for their products. Moreover, entities can apply for NSIC registration to act as an assessed vendor on GEM
DPIIT recognized Startups are exempted from submitting Earnest Money Deposits (EMD) or bid security while filling government tenders. The Government shall also exempt Startups in the manufacturing sector from the criteria of “prior experience/ turnover” without any compromise on the stated quality standards or technical parameters.
- Exemption under Section 56:- Investments into eligible Startups by Accredited Investors, Non-Residents, AlFs (Category l), & listed companies with a net worth of more than 100 crores or turnover of more than *250 crores are exempted under Section 56(2)(VllB) of Income Tax Act. Also, consideration of shares received by eligible Startups shall be exempt up to an aggregate limit of crores.
- Panel of facilitators to assist in the filing of IP applications:- The Central Government will bear the entire fees of the facilitators for any number of patents, trademarks, or designs that a Startup may file. The Startups have to bear the cost of the statutory fees only.
Documents required for DPIIT recognition
The following documents are needed to be submitted by the entities for recognition of Startup India by DPIIT.
- Authorization Letter
- Companies’ PAN Card
- Certificate of Incorporation
- Director’s Aadhar & PAN card
- Passport-size photograph of the directors
- Website or companies profile deck (if available)
- Photo & video of products/services
- Brief write-up on how the business is working towards
- Innovation in the industry
- High potential for wealth creation
- Potential for employment generation
- Other certificates, if required
- GST registration
- Trademark registration
- Copyrights registration for IPR
- MSME registration, if available
Procedure to Get DPIIT Certificate
The entity should follow the below-mentioned simple steps to get the DPIIT certificate of recognition.
- Incorporation of the Business: As stated above, the entity must first incorporate the business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership (LLP).
- Registering Business with the Startup India Scheme: The business needs to be registered with the Startup India Scheme to get the DPIIT certificate of recognition.
- Apply for Start-up Recognition: The applicant unit needs to access the Start-up India Recognition portal to Register with Start-up India to get the DPIIT Certificate of Recognition for Startups.
- Provide the following details in the Start-up Recognition application: Entity Details, Nature of Entity, Industry, Sector, Categories, and Company Incorporation Number and Registration Date
- Full Address of the Entity
- Details of the Authorized Representative
- Directors or Partner Details
- Details of Intellectual Property Right
- Details of funding
- Recognition received by the entity
- Get the Startup Recognition Number
The DPIIT Certificate of Recognition for Startups will be issued after the examination of the application and documents submitted.
Once the ministry approves the application and provides the unique startup recognition number, the startup can be registered with tax benefits.
1- Originality of the entity:- The business entity/startup must be a new entity; it should not be split from the existing company.
2- Type of business structure:- To get the startup India registration business should be registered under the following forms of business.
- Private Ltd Company
- One-Person Company
- Partnership Firm
- Limited Liability Partnership
3- Annual Turnover:- As per the guidelines of DPIIT the business entity should have an annual turnover of less than 100 crore rupees.
4- Incorporation Period:- To get recognized under the DPIIT Startup India initiative the entity should not be older than 10yrs from the day of its incorporation.
5- Innovation & Scalability:- The entity must be innovative and scalable. It’s one of the most important criteria to be considered by DPIIT before startup India registration. Because the program aims to promote innovation and generate business and jobs in the country.
How we can assist?
- Guiding the legal structure of the startup: We can advise on the most suitable legal structure for the startup, such as a limited liability partnership (LLP), private limited company, or a sole proprietorship, based on the business objectives and long-term goals.
- Drafting legal documents: We can draft various legal documents required for the registration of the startup, such as the memorandum and articles of association, shareholder agreement, employment contracts, and non-disclosure agreements.
- Assisting with registration formalities: We can assist with completing the registration formalities for the startup, such as obtaining the digital signature certificate, filing the incorporation documents with the Registrar of Companies (ROC), obtaining a permanent account number (PAN), and registering for Goods and Services Tax (GST).
- Ensuring compliance: We can advise on the legal compliances that the startup needs to follow, such as maintaining proper books of accounts, filing annual returns with the ROC, and complying with tax regulations.
- Intellectual property rights (IPR) protection: We can assist with registering and protecting the intellectual property rights of the startup, such as trademarks, patents, and copyrights.