The Government of India started a new initiative of Startup Scheme in 2016. Its primary objective is to promote the growth of the start-ups in India. Under this scheme, the government’s main motive is to robust the start-ups in India as they want to create jobs for others instead of job seekers. It is under the control of the Department for Industrial Policy and Promotion (DPIIT). India is experiencing a significant rise in the number of Startups, with the government actively encouraging and assisting young entrepreneurs in establishing their ventures. These Startups play a crucial role in stimulating the country’s economy.
What is a Startup in India?
A startup is a new initiative to start a business in which you can start a small business with a single or group of people in India. In this, you can start a business of another item, product, or service that is unique from others and it allows creating something new and innovative for their startup business. Startup-India is a good initiative to develop the Indian economy.
The objective of the Startup India Scheme
The Startup India Scheme aims to foster a thriving startup culture and establish a robust and inclusive ecosystem that encourages innovation and entrepreneurship in India.
- mproved infrastructure, which includes the establishment of good centers.
- Streamlined facilitation of Intellectual Property Rights (IPR), making the process of patent filing more accessible.
- Creating a favorable regulatory environment that encompasses tax benefits, simplified compliance procedures, streamlined company setup, and efficient mechanisms.
- Aiming to enhance funding opportunities for Startups.
- Providing an extensive networking database for entrepreneurs and other stakeholders involved in the Startup ecosystem.
What is Startup?
A startup is a business that introduces innovative products or services to address existing problems or needs within society. It may also revamp an existing product or service, improving it to offer a better solution. The essence of a startup lies in its commitment to bringing fresh ideas and creative solutions to the market.
What distinguishes it from other new companies is that a startup offers a novel product or service that is not currently available elsewhere in the same manner. The driving force behind startups is innovation and the pursuit of growth and development.
The following features fall under the Startup-India:
- Company Age: The company’s incorporation does not exceed 10 years.
- Type of Company: If you want to enjoy the start-up scheme benefits then your company must be a Private Limited Company under the Company Act 2013 or a Limited Liability company registered under the Act 2008 or registered under the Indian Partnership Act, 1932 as a Partnership Firm.
- Turnover capital : The company’s yearly turnover shall not exceed Rs.100 crore.
- A new business company: In this startup scheme, the company needed to be new and didn’t restructure any existing entity to avail of the DPIIT Certificate of Recognition.
- Unique and creative innovation: The startup should have unique and creative ideas from other companies. The business should generate revenue and employ the people.
- Benefits of Startup India Registration: Startups that have required the DPIIT Certificate of Recognition can enjoy various benefits, which are as follows:
- Self-Certification: Once you get the DPIIT Certificate of Recognition, Startups can self-certify their compliance with Three Environmental Laws and Nine Labour Laws.
- Start-Up Patent Application: Recognized Startups are entitled to pay only 80% of the fees for patents, trademarks, copyrights, and designs. Additionally, they can avail of fast-track processing for their patent applications.
- Simplified Regulations for Government Purchasing: Startups managed by the DPIIT can showcase their products on the government e-marketplace.
- Easy winding up of Company: As per the Insolvency and Bankruptcy Code, 2016, Startups can complete the process of winding up their company within 90 days from the date of applying for insolvency.
- Funds: Startups are eligible for Rs. 10,000 crore funds from Alternative Investment Funds.
- Rs. 2,000 crore of Credit Guarantee Fund: Over four years, Startups have the opportunity to access a credit guarantee fund provided by the National Credit Guarantee Trust Company or SIDBI.
- Tax Exemptions: Upon getting the Certificate of Recognition, Startups can apply for tax exemption under Section 80 IAC of the Income Tax Act.
Documents Required For Startup India Registration
The required documents for Startup India Registration include:
- Incorporation/Registration Certificate of your Startup
- Proof of funding, if applicable
- Authorization letter of the owner of the company, LLP, or partnership firm
- Proof of concept, such as a pitch deck, website link, or video (for Startups in the validation, early traction, or scaling stage)
- Details of patents and trademarks, if any
- List of awards or certificates of recognition, if received
- PAN Number (Permanent Account Number)
Process of Startup India Registration
Step 1: Incorporate Your Business- The first step is to incorporate your business as a Private Limited Company, Partnership firm, or Limited Liability Partnership (LLP). This involves following the standard procedures for business registration, such as submitting the registration application and obtaining the Certificate of Incorporation or Partnership registration.
Step 2: Register with Startup India- After incorporating your business, the next step is to register it as a startup. The process is straightforward and can be completed online. To begin, visit the Startup India website and click the ‘Register’ button. Provide your name, email ID, and mobile number, and create a password, then click ‘Register.’
Next, enter the OTP (One-Time Password) sent to your email and provide additional details, such as the type of user, name, and startup stage. Click on the ‘Submit’ button to create your Startup India profile. By completing this Registration, your business will be recognized as a startup under the Startup India scheme, making it eligible for various benefits and support.
Step 3: Obtain DPIIT Recognition- After creating the Startup India website profile, the next crucial step is to obtain recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition offers startups access to various benefits, such as high-quality intellectual property services, relaxation in public procurement norms, self-certification for labor and environmental laws, easy winding up of the company, access to Fund of Funds, and tax exemption for three consecutive years, including tax exemption on investments above fair market value.
To apply for DPIIT Recognition, log in with your registered profile credentials on the Startup India website and click the ‘Apply for DPIIT Recognition’ option under the ‘Recognition’ tab. On the following page, choose ‘Apply as Company or LLP’ or ‘Apply as Partnership Firm.’
If you select ‘Apply for Company or LLP,’ you will be redirected to the National Single Window System (NSWS) website. Companies and LLPs should register on the NSWS website and add the ‘Registration as a Startup’ form to initiate the DPIIT recognition process. This step will officially recognize your startup under DPIIT, making it eligible for the range of benefits and support the Startup India scheme provides.
Step 4: Submit the Documents for Registration- To complete the registration process and obtain DPIIT recognition for your startup, you need to submit the following documents:
- Incorporation/Registration Certificate of your startup.
- Proof of funding, if any.
- Authorization letter of the company’s authorized representative, LLP, or partnership firm.
- Proof of concept, such as a website link, a pitch deck, or a video (applicable for validation/early traction/scaling stage startups).
- Patent and trademark details, if any.
- List of awards or certificates of recognition, if any.
- PAN (Permanent Account Number) Number.
Step 5: Self-Certification of Eligibility Conditions :- Self-certify that your business meets the following conditions:
- Your business is a Private Limited company, LLP, or partnership firm.
- Your business has been incorporated or registered in India for at most five years.
- Your company’s turnover is at most Rs. 100 crore.
- Your company is constantly innovating or improving existing systems.
- Your business is based on a fresh idea, not splitting up or reconstructing an existing business.
Step 6: Obtain Your Recognition Number- Upon application for Registration, you will receive a recognition number immediately. The certificate of Registration or Incorporation is issued after the authority reviews all your uploaded documents.
Note: Ensure accuracy while uploading data to avoid discrepancies, as errors may lead to fines of up to 50% of your paid-up capital or a minimum of Rs. 25,000.
By fulfilling the eligibility and registration criteria, your company can enroll in the Startup India scheme and access various benefits provided by the Government.
Validity of Startup India Registration
The Startup India Registration certificate remains valid for 10 years starting from the registration of the company, but it must be considered that the validity may also cease if the company achieves a turnover of more than 100 Crores before the expiration of the 10 years.
FAQs
What are the features of Start-up India?
Following are the benefits of Start-up India Registration:
- Self-Certification
- Application of Start-Up Patent
- Simplified Regulations for Government Purchasing
- Credit Guarantee Fund Rs. 2,000 crore
- Tax Exemptions
What is the main objective of establishing a startup scheme in India?
These are the main objective of establishing a startup scheme in India:
- Improvement of the infrastructure, which includes the establishment of good offices.
- Simple the facilitation of Intellectual Property Rights (IPR), making the process of patent filing more accessible.
- Making a good regulatory environment that encompasses tax benefits, simplified compliance procedures, streamlined company setup, and efficient mechanisms.
- Its main goal is to enhance funding opportunities for Startups company.
- Providing an extensive networking database for entrepreneurs and other stakeholders involved in the Startup ecosystem.
When Start-up India is established in India?
The Government of India started a new initiative of Startup Scheme in 2016.
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