Register Your Firm Under Startup India Program
Startup India Program
The Startup India Program is a 2016 initiative launched by the Government of India. The primary goal of Startup India is to promote startups, generate employment, and create wealth. Startup India has launched a number of initiatives aimed at developing a robust startup ecosystem and transforming India into a country of job creators rather than job seekers. The Department of Industrial Policy and Promotion is in charge of these programmes (DPIIT).
Definition of “Startup”
Any company that falls into the following categories will be referred to as a “startup” and will be eligible to be recognised by the DPIIT in order to receive benefits from the Government of India.
- The firm’s age – the date of incorporation – should not be more than ten years.
- Type of Company – The company should have been formed as a private limited company, a registered partnership firm, or a limited liability partnership.
- Annual Turnover – Its annual turnover should not exceed Rs.100 crore in any of the fiscal years since its incorporation.
- Original Entity – The company or Entity should have been formed from the ground up by the promoters and should not have been formed by dividing or reconstructing an existing business.
- Scalable and innovative – Should have a plan for the development or improvement of a product, process, or service, as well as a scalable business model with a high potential for wealth and employment creation.
Benefits from DPIIT
Companies registered with DPIIT are able to receive the following benefits under the Startup India Initiative:
- Simplifying and guiding – Easier compliance, a smoother exit process for failed startups, legal assistance, faster patent application processing, and a website to reduce information asymmetry.
- Exemptions from income and capital gains taxes for eligible startups – a fund of funds to imbue more capital into the technology business; and a credit guarantee scheme.
- Incubation and Industry-Academia Collaborations – The establishment of numerous incubators and innovation labs, as well as events, competitions, and grants.
The goal of the self-certification procedure is to reduce the regulatory burden on startups. Additionally, Startups could concentrate on their core business.
What are the Benefits of Startups India?
- Startups can self-certify compliance with six labour laws and three environmental laws using a simple online procedure. (For more information on the laws, see the section below.)
- There will be no inspections for labour laws for a period of five years. Startups will only be inspected if the inspecting officer receives a credible and verifiable complaint of a violation in writing.
- For environmental laws, startup India is categorised under the ‘white category. It would be able to self-certify compliance, with only random checks conducted in such cases.
What are the Simple Steps to Register Your Firm With Startup India?
Step 1: Incorporate your Company
To establish a firm under startup India program you must incorporate your company as a Private Limited Company, a Partnership firm, or a Limited Liability Partnership. You must follow all of the standard procedures for registering a business, such as obtaining a Certificate of Incorporation/Partnership registration, a PAN, and other required compliances.
Step 2: Sign up with Startup India
The company must then be registered as a startup. The entire procedure is simple and can be completed online. All you have to do is go to the Startup India website and fill out the form with information about your business. Next, enter the OTP that was sent to your e-mail address, as well as other information such as startup as the type of user, startup name and stage, and so on. The Startup India profile is created after these details are entered.
Step 3: Obtain DPIIT Approval
Following the creation of a profile on the Startup India website, the next step is to obtain Department for Promotion of Industry and Internal Trade (DPIIT) recognition. This recognition enables startup India to benefit from advantages such as access to high-quality intellectual property services and resources, relaxation of public procurement norms, self-certification under labour and environmental laws, easy company winding, access to Fund of Funds, tax exemption for three consecutive years, and tax exemption on investment above fair market value.
If you are a new user, click the ‘Get Recognised’ button to obtain DPIIT Recognition. If you are an existing user, select ‘Dashboard’ and then ‘DPIIT Recognition.’
Step 4: Application for Recognition
The page ‘Recognition Application Detail’ appears. On this page, under the Registration Details section, click ‘View Details.’ Fill out the ‘Startup Recognition Form’ and press the ‘Submit’ button.
Step 5: Registration Documents
- Incorporation/Registration Your startup’s certificate
- Directors’ Contact Information
- Proof of concept, such as a pitch deck/website link/video
- Specifics about patents and trademarks (Optional)
- PAN (Personal Identification Number)
Step 6: Identification Number
That’s all! When you apply, you will be given a recognition number for your startup. The certificate of recognition will be issued following the examination of all your documents, which is usually completed within two days of submitting the information online.
However, exercise caution when uploading documents. If it is discovered during subsequent verification that the required document was not uploaded, the incorrect document was uploaded, or a forged document was uploaded, you will be fined 50% of your startup’s paid-up capital, with a minimum fine of Rs. 25,000.
Step 7: Other Concerns
Registration of patents, trademarks, and/or designs: If you require a patent for your invention or a trademark for your business, you can easily approach any of the government-issued facilitators. You will only have to pay the statutory fees, resulting in a fee reduction of 80%.
Access to finance has been one of the most difficult challenges for many startups. Entrepreneurs fail to attract investors due to a lack of experience, security, or existing cash flows. Furthermore, many investors are put off by the high-risk nature of startups, as a significant percentage fail to take off.
To provide funding assistance, the government has established a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a four-year period (i.e. INR 2,500 crore per year). The Fund is a Fund of Funds, which means it will not invest directly in startups but will participate in the capital of SEBI-registered Venture Funds.
Self-certification under work policies: Startups can self-certify under labour and environmental laws to reduce compliance costs. Self-certification is available to reduce the regulatory burden, allowing them to concentrate on their core business. Startups have three to five years from the date of incorporation to self-certify their compliance with six labour laws and three environmental laws.
Units operating under the 36 white category industries, as published on the Central Pollution Control Board’s website, do not need clearance under three environment-related Acts for three years.
Startups are exempt from paying income taxes for three years. However, in order to receive these benefits, they must be certified by the Inter-Ministerial Board (IMB). Startups formed on or after April 1, 2016, are eligible to apply for income tax exemption.
Which Documents Required for Startup India Registration?
- A business entity’s enrollment certification or Certificate of Incorporation
- Copy of PAN card Memorandum or Articles of Association for LLP or partnership firm
- Names, contact information, and photographs of the directors are provided.
- The social profile or website link of the entity.
- Information about intellectual property rights
- Fund information in the event that an entity seeks funding from investors.
- List of any awards or certificates of recognition.
Arranging funds is probably the most difficult task for most startups. Business owners frequently fail to reap FDI due to a lack of resources, experience, and cash flow. Because startups are inherently more vulnerable to failure, they frequently fail in the early stages. So, in order to provide fiscal assistance, the Indian government has established an initial corpus of funds worth Rs 10,000 crore for a four-year period. The available funds, however, will not be directed directly to startups. It will instead be available through SEBI-registered Venture Funds.
Startup India Program contributes significantly to the economy by creating a significant number of jobs in all sectors. The scheme is intended to welcome modern and innovative business ideas from startups that are unable to pursue their venture due to a lack of resources. As soon as an entity registers for this scheme, they will gain access to a plethora of government tenders as well as tax exemptions to ensure smooth business growth. Feel free to consult with MUDS if you require assistance with the Startup India program Registration Process.