Click here to know more about how to get your startup recognised under DPIIT with Startup India Registration
With an evident increase in setting up new and creative businesses, the emergence of the concept of a startup is no more a distant idea. The technological advancement blended with the aspirations of the youth has led India to be called the poster child of emerging markets. To support the newly registered Private Limited Companies/ LLPs/ Registered Partnerships, the Govt introduced the Startup India Recognition Certificate to consider them formally as a Startup and help them avail various benefits to rank India with the Global Startup Ecosystem.
Startups are being recognized as the catalyst of growth and jobs generation, and are looked upon as drivers of the socio-economic development of the nation. The government of India has also been quite passionate to boost the startup culture and therefore has brought out various schemes and platforms for the proper functioning of these organizations.
In simple terms, a startup is a new business founded by a relatively smaller number of entrepreneurs to develop a unique service or product and bring it to the market. The business generally involves an innovative solution to the consumer thirst.
'Startup India' initiative is an initiative by the Government of India for creating a conducive environment for startups in India. The Government of India launched the “Start-up India,” movement on January 16th, 2016 in New Delhi. The various Ministries of the Government of India have initiated several activities for the purpose. The initiative seeks to offer a single-window clearance for the registration and recognition of start-ups. It offers a variety of benefits post-registration like- tax exemptions, better public reputation, low compliance costs, easy accessibility of funds, better research and development facilities and many more. Ease of doing business in India has seen further improvements.
It is highly encouraged that more startups are registered and the economical development of the nation take a high pace. The various provisions and procedures relating to the establishment of a Startup are discussed below.
Definition of Start-up by Department for Promotion of Industry and Internal Trade (DPIIT)-
As per the guidelines of the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, the following entity shall be ELIGIBLE for being a Start-up-:
If it is incorporated/registered as any of the following:
Partnership Firm (registered under Partnership Act, 1932).
Limited Liability Partnership (registered under Limited Liability Partnership Act, 2008).
Period of existence and operations should not exceed 10 years since incorporation/registration as above;
Turnover for any of the financial years does not exceed INR 100 Crore;
Such an entity should be an original entity, i.e. not created by splitting up or reconstructing an already existing business;
It works towards the development or improvement of a product, process/service, and/or has a scalable business model with high potential for the creation of wealth & employment.
The introduction of Startup India Initiative by the Government of India is a major milestone in the corporate and economic regime of the nation. The benefits that the initiative seeks to offer are quite interesting and surely, attractive for potential entrepreneurs. The goals of Startup India is the development and innovation of products and services. It also seeks to increase the employment rate in India and develop an ecosystem that promotes entrepreneurial spirit.
1. SELF-CERTIFICATION
To reduce regulatory liabilities in their initial years of operation, startups are allowed to self-certify compliance with some labour and environmental laws. In such a case, no inspection will be conducted for three years.
2. TAX EXEMPTION UNDER SECTION 80IAC FOR 3 YEARS
An exemplary move in the Startup India Scheme is that the startups registered under this scheme are exempted from tax. The exemption is provided for a period of the initial three years. Any investment which is made by incubators of higher value than the market price is exempted.
EXEMPTION FOR ANGEL INVESTORS
3. SINGLE WINDOW CLEARANCE FROM MOBILE APP
One of the most essential benefits offered under this scheme is the ease of registration. The eligible companies have an option to register themselves through a single form and complete all the formalities. This can also be done through Startup India Mobile Application.
4. IPR PROTECTION
Several steps are taken under the scheme to protect valuable intellectual property. This includes a fast-track examination of patent applications. A rebate of 80% of the total value of the patent fee is also granted once the patent is filed.
5. RELAXED NORMS FOR PUBLIC PROCUREMENT
Startup India has created a platform to grant equal opportunities for both startups and experienced entrepreneurs. Now, public procurement norms have been relaxed for startups. Thereby making it easy for them to go for public procurement.
6. AN INCUBATOR SETUP
The Incubator Module endorses the public-private partnership and provides the startup the requisite knowledge and support that are required by the start-ups in the initial years of operation.
7. NETWORKING OPPORTUNITIES
One of the greatest benefits of this platform is the networking opportunities that it offers. The startups get a plethora of opportunities to connect with various stakeholders which help them develop a strong network. It increases their mediums of funding and other help them have various tangible and intangible resources.
8. RESEARCH AND INNOVATION BENEFITS
Finally, the most important of them all. Startup India encourages research and innovation among those, who have an aspiration to be an entrepreneur. Proposals are in place to set up seven new research parks. These parks will ensure that facilities are provided to students and startups to research and develop their products/services.
9. FASTER EXITRegistering with the Startup India Scheme provides easy accessibility for winding up of companies.
STARTING FACTS ABOUT STARTUP ECOSYSTEM IN INDIA
The growing number of Startups and the need to encourage entrepreneurial spirit has led the Government of India to create startup-friendly regulatory policies and schemes. The incentives and benefits of these schemes are encouraging and cost-saving for new businesses.
Following are some of the Government’s initiatives in this regard-
I. STARTUP INDIAStartup India is a Government of India flagship initiative to build Startups and nurture innovation. Through this initiative, the Government plans to empower Startup ventures to boost entrepreneurship, economic growth and employment across India.
The objective of Stand-Up India Scheme is to facilitate bank loans between 10 Lakh to 100 lakh to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one Woman borrower per bank branch of all scheduled commercial banks for setting up a greenfield enterprise.
III. MAKE IN INDIAAnother ambitious project launched by the Indian Government to stimulate the manufacturing sector is the Make in India Project. It aims at self-reliance and pushes new and existing businesses to lessen dependency on other sources. The Government has various subsidies and benefits in this regard which are available on the website of the project.
IV. INVEST INDIAInvest India is the flagship initiative of the Government of India. It is an Investment Promotion and Facilitation agency and a one-stop solution for investing in India. Invest India is the first point of contact for global companies whom they handhold from the day they start exploring India as an investment destination and at every step of the way throughout their journey in the world's most liberal investment destination.
From supporting India's expanding start-up ecosystem to harnessing the power of innovation from India's laboratories and bringing them to the market or identifying, developing, and deploying technologies on-ground, Invest India's work covers the entire gamut of India's transformational business sector.
Apart from being the most trusted platform for investment in India, it is also one of the most awarded investment agencies in the world.
It is often referred to as the ‘Government’s own Startup’!
V. VENTURE CAPITAL SCHEMEVenture Capital Assistance is financial support in the form of an interest-free loan provided by SFAC (Small Farmers Agribusiness Consortium) to qualifying projects to meet a shortfall in the capital requirement for the implementation of the project. The scheme aims in assisting entrepreneurs to make investments in setting up agribusiness projects through financial participation.
VI. SOFTWARE TECHNOLOGY PARK SCHEMEThis scheme applies to IT Services, enterprise software, analytics, and Artificial Intelligence. Providing capital risk this scheme by the Indian Government applies to IT services, analytics, enterprise software, technology hardware, etc.
VII. CREATION OF FUNDS OF FUNDSUnder the Startup India program, the Government created the ‘Fund of Funds for Startups (FFS) with a corpus of INR 10,000 crore to provide funding support for Startups. The FFS is managed by the Small Industries Bank of India (SIDBI) and contributes to the corpus of Alternate Investment funds (AIFs) for investing in equity and equity-linked instruments of various Startups.
Clearly, the benefits of recognizing and registering a startup are unmissable. Therefore, it becomes equally important to understand the procedure of registration of a startup in the present time.
The steps are listed below:-
STEP 1: CHOICE & INCORPORATION OF BUSINESS
You must first pick the kind of business structure you would like to have for your startup. It could be a Private Limited Company or a One Person Company or a Partnership Firm or a Limited Liability Partnership. You have to follow all the procedures for registration of any business like obtaining the Certificate of Incorporation/Partnership registration, PAN, and other required compliances.
STEP 2: REGISTRATION WITH STARTUP INDIA
The Government of India has a dedicated portal for the registration of startups in India. The next step would be to visit the Startup India website- startupindia.gov.in, where you are required to create a profile by entering the relevant details. After the profile is created on the website, startups can apply for various acceleration, incubator/mentorship programs, etc. on the website along with getting access to resources like Learning and Development Programme, Government Schemes, State Polices for Startups, and other services.
STEP 3: GETTING DPIIT RECOGNITION
A very important part of the Startup Application is availing the Department for Promotion of Industry and Internal Trade (DPIIT) Recognition. This recognition is quite beneficial for the budding businesses as it focuses to reduce the regulatory burden on Startups, thereby allowing them to focus on their core business and keep compliance costs low. The benefits of this recognition include access to self-certification under labour and environment laws, intellectual property services and resources, relaxation in public procurement norms, easy winding of company, access to Fund of Funds, tax exemption for 3 consecutive years, and tax exemption on investment above fair market value.
STEP 4: OBTAINING RECOGNITION NUMBER
On successful submission of application and documents under Step 3, the startup owner would be given a recognition number. The certificate of recognition will be issued after the examination of all documents which is usually done in 2 days after submitting the details online.
STEP 5: COMPLETION OF REGISTRATION
Once the application is complete and the Startup gets recognized, the user receives a system-generated CERTIFICATE OF RECOGNITION. This certificate can also be downloaded from the Startup India Portal.
As discussed above, under the Startup India initiative, eligible companies can get recognized as Startups by DPIIT, to avail tax benefits, have easier and inexpensive compliance, IPR fast-tracking & more. To apply for ‘Recognition by DPIIT’, you can process your application through the Startup India profile. To be DPIIT recognized Startup follow the given procedure:
Visit the Start-up India Recognition portal for Register with Start-up India to get the the DPIIT Certificate of Recognition for Startups.
Enter the required details like- Nature of Entity, Industry, Sector, Company incorporation Date, PAN, Registration Number, etc.
Enter the full address of the entity;
Add the details of the Authorised Representative;
Then, mention the details of the Directors or Partners
Provide the details of Intellectual Property Rights, if you are applying for that too;
Provide the details of funding, if any, received by the startup
Lastly, upload the Incorporation/registration Certificate of the Startup.
The DPIIT Certificate of Recognition for Startups will be issued after 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.
Compliance Calendar is a one-stop solution for your Startup to actually Start! With us, you can launch your business in no time with all the compliance getting covered under a single platform. Bootstrapping has been the new norms and you can read more about it. Click here to know what should you keep in mind before bootstrapping your startup.
We begin with brainstorming the Kind of Business Entity that would suit your idea, its Financing and Capital Structure, required registrations along with Statutory approvals and cater to all and any other queries that you might have. We shall then move ahead to Incorporate/Register the business entity and ensure that the relevant certificates are obtained at the earliest. If you are thinking about Private Limited Company Registration, Trademark Registration, then we have got that covered too! Yes, the tax registration for availing of tax exemptions is also our job!
Our dedicated team of professionals takes you on the path of a hassle-free process of setting up your business and ensures that all the statutory compliance are well in place before your startup is ready to soar high! Reach out to us for the most affordable and efficient compliance solutions at info@ccoffice.in or WhatsApp/Call at 9988424211. Visit https://www.compliancecalendar.in/startup-india-registration to learn more about DPIIT Recognition for your Startup company/ LLP.
