Startups are booming in India. The government also helps young entrepreneurs start businesses by Start up India initiatives. Startups help boost the country’s economy. This blog will give you a complete idea on Startup India Registration in simplified way.
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What is a Startup under Startup India scheme?
A startup is a company that offers innovative products or services that provide a solution to an existing problem in society. A startup can also redevelop an existing product or service into something better. The Government of India, under the leadership of Prime Minister Narendra Modi, has launched and promoted the Startup India initiative to develop the Indian economy, recognize and promote startup businesses as well and attract talented entrepreneurs.
What are the procedure in Startup India Registration?
- Step 1: Incorporate your business
- First, you need to incorporate your business as a Private Limited Company (PLC), Public partnership, or Limited Liability Company. You must follow all the usual procedures for registering any business, such as submitting an application and obtaining a certificate of Incorporation/Partnership Registration.
- You can form a PLC or a Limited Liability Partnership (LLP) by filing an application with the Registrar of Companies (ROC) in your area. You can form a partnership by applying to register your company with the ROC in your area.
- Along with the application, the required documents for registration and fees need to be submitted to ROCs.
- Step 2: Register with Startup India
- Next, the business should be registered as a Startup. The entire process is simple and online. Visit the Startup India website click on the ‘Register’ button.
- Fill out the name, email ID, mobile number, and password, and click on the ‘Register’ button.
- Then enter the OTP sent to your email address and other details like user type, name startup stage, etc., and click the “Send” button. Startup India profile will be created.
- Once your profile is created on the site, startups can apply for various accelerators and incubation/mentoring programs on the site, as well as gain access to learning resources training, financing options, government programs, and market access.
- Step 3: Get recognition from the Department of Planning and Investment
- The next step after creating a profile on the Startup India website is to get recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition helps startups enjoy benefits such as access to high quality intellectual property resources and services, relaxation of government procurement standards, and self-certification under labor laws, and environment, easy liquidation of the company, access to capital funds, tax exemption for 3 consecutive years and tax exemption on investments above fair market value.
- Log in with your registered profile (account) credentials on the Startup India website and click on the ‘Apply for DPIIT Recognition’ option under the ‘Recognition’ tab to get DPIIT Recognition.
- On the next page, click on ‘Apply Now’. You will be taken to the National Single Window System (NSWS) website. Companies and LLPs should register on the NSWS website, add the form ‘Registration as a Startup’, and fill in ‘Startup Recognition Form’ to get DPIIT recognition.
- Step 4: Recognition Application
- On the ‘Startup Recognition Form’, you need to fill in the details such as the entity details, full address (office), authorized representative details, directors/partner details, information required, startup activities, and self-certification. Click the plus sign to the right of the form and enter each part of the form.
- After completing all sections of the “Startup Accreditation Form”, agree to the terms and conditions and click the “Submit” button.
- Step 5: Documents for Registration
- Incorporation/Registration Certificate of your startup
- Proof of funding, if any
- Authorization letter of the authorized representative of the company, LLP or partnership firm
- Pitch deck/website link/video (in case of a validation/ early traction/scaling stage startup) as a proof of concept.
- Patent and trademark details, if any
- Awards or certificates of recognition, received, if any
- PAN Number
- Step 6: Recognition Number allocation
- That’s it! On applying, a recognition number will be allotted for your startup. After the examination of all your documents, usually done within 2 days after submitting the details online, the certificate of recognition will be issued.
- Step 7: Other Areas
- Patents, Trademarks, and/or Design Registration:
- The government listed facilitators can be approached If you need a patent for your innovation or a trademark for your business. You will need to bear only the statutory fees thus getting an 80% reduction in fees.
- Funding:
- Access to finance has been one of the key challenges faced by many startups. Lacking experience, guarantees, or existing cash flow, entrepreneurs fail to attract investors.
- Furthermore, the high-risk nature of startups, a significant proportion of which fail, discourages many investors.
- Patents, Trademarks, and/or Design Registration:
Self certify under Labor and Employment laws
Startups can self certify under labor and environmental laws to reduce compliance costs. Self certification is offered to reduce regulatory burden, allowing them to focus on their core business. Startups are allowed to self-certify compliance with 6 labor laws and 3 environmental laws within 3 to 5 years from the date of establishment.
4,444 operating units in 36 white-listed industries, according to the announcement on the website of the Central Pollution Control Board, do not require customs clearance under 3 laws related to the environment for 3 years.
Is there any income tax exemption for Startups?
For 3 years Startups are exempted from Income Tax. But to benefit from these advantages, they must be certified by the Inter Ministerial Board (IMB). Startups established on or after April 1, 2016 can apply for income tax exemption.
What are the key features of fund of funds?
- The Fund of Funds shall be managed by the Small Industries Development Bank of India (SIDBI).
- The Fund of Funds will have Life Insurance Corporation (LIC) as a co-investor.
- The Fund of Funds shall contribute to a maximum of 50% of the SEBI registered Venture Funds (daughter funds). The daughter fund should have already raised the balance 50% for being able to receive the contribution. Representatives of the Fund of Funds shall be on the board of the venture fund based on the contribution made.
- The fund supports a broad mix of sectors such as manufacturing, agriculture, health, education, etc.
Various government initiatives have been introduced to make it easy to register as a startup. However, you can focus on your key area and seek help from start to finish right from incorporating your company to getting your Startup recognition.
What are the importance of registering a Startup?
Registering a startup has a number of advantages, such as:
- Credibility with customers and partners:
- Registering a startup brings legal recognition and prestige to the company, this can help attract customers and partners.
- Access to Capital and Government Incentives:
- Registered startups are eligible for various government programs and incentives, such as tax exemptions, grants, and financing opportunities.
- Tax Benefits:
- Registered startups can enjoy various tax benefits, such as exemptions, deductions, and tax exemptions.
- Easier acquisitions and exits:
- Registered startups have a higher chance of being acquired or merged with other companies. They also have an easier exit process in the event of a shutdown or bankruptcy.
- Fast Processing of Startup Patent Applications:
- Registered startups can benefit from fast processing of their patent applications.
- Discounts on patent and Trademark filings:
- Registered startups can benefit from reduced patent and trademark filing fees.
In India, the government launched the Startup India initiative to promote the growth of startups in the country. To be eligible for registration under this initiative, a startup must be incorporated or registered in India for a maximum of 10 years from the date of incorporation. Be a PLC or be registered as a Public Company, Partnership or PLC, having an annual turnover not exceeding INR 100 crore for any financial year from its incorporation.
Endeavoring towards innovation, development or improvement of its products product, process or service or whether it is a scalable business model with high potential to create jobs or create wealth. Registering your startup can give it a competitive advantage, legal certainty, tax savings and reduced liability. You can also easily register your startup in India through the Startup India mobile app or website.
Conclusion
In conclusion, the Startup India initiative plays a pivotal role in fostering innovation and economic growth in India. The simplified Startup India Registration process outlined above not only provides legal recognition but also opens benefits, including access to capital, government incentives, and faster patent processing. By registering, startups gain credibility, tax advantages, and increased opportunities for acquisition or merger, contributing to the vibrant and thriving startup ecosystem in the country.
FAQs
1. Who can register with Startups in India?
An entity incorporated as a Partnership or PLC can register under the Startup India scheme. The annual turnover of such business entities should not exceed INR 100 crore and they should be in existence not more than ten years from the date of incorporation.
2. What are the benefits of registering with a startup in India?
Startups enjoy several benefits under the India Startup Initiative. However, to benefit from these benefits, the unit must be recognized by the Department of Planning and Investment as a startup enterprise.
Compliance self-certification is required with six labor laws and three environmental laws for the Startups. This is allowed for a total period of 5 years from the date of incorporation/registration of the entity. Startups benefit from a three-year tax holiday as well as best-in-class intellectual property services and resources designed solely to help startups protect and commercialize intellectual property and their wisdom.
3. What type of business structure should I choose for my startup?
The most preferred business structures when starting a business are limited liability companies and LLPs. Limited liability companies are legally recognized and often popular with investors. However, its compliance is stricter, and establishment costs can be higher.
In addition, LLPs have limited liability and are also recognized by investors around the world.
4. What can I do to attract investors to my startup?
To attract investors, you not only need an exceptional product with a scalable model, but you also need visibility. Make sure your product gets healthy engagement and traction.
5. Can a foreign company register with Startup India center?
Any entity with at least one headquarters in India can register on the hub, as currently, the location option is created only for Indian states.
6. What is the difference between an accelerator and an incubator?
Startup incubators are generally organizations that help entrepreneurs grow their businesses, especially in the early stages. The incubation function is often performed by organizations with experience in business and technology.
Startup Accelerator supports early-stage and growth-oriented businesses. These programs typically have a term where individual businesses spend anywhere from a few weeks to a few months working with a team of trained advisors who can also provide financial support.
7. How long is a company recognized as a startup?
Any business entity that has completed 10 years from the date of incorporation/registration and has exceeded the turnover of INR 100 crores of the previous year shall cease to be a start-up enterprise after 10 years from the date of registration/registration.
8. Can an existing entity register as a Startup on the Startup India portal?
Yes, under the law, an existing entity can register as a startup, provided it meets the prescribed criteria for a startup. They will also be able to benefit from various tax and IPR incentives available to startups. The criteria are the same as what is mentioned in the article above.
9. How do I know if my registration is complete?
Once the application is complete and the startup process is recognized, you will receive a system-generated recognition certificate. You can download this certificate from the Startup India portal.
10. What are the forms of business registration?
In India, there are different types of business structures that startups can register for. The following are the most common types:
• Sole Proprietorship
• Limited Company
• Sole Proprietorship
• Partnership
• Limited Liability Company
11. Can I register with Startup India?
Yes, you can register yourself with Startup India which is simple process and can be done online.
12. Can I start a business without registration?
Yes, you can start a business in India without registration. The simplest form of business structure is a Sole Proprietorship, which does not require registration.
