Startup India Registration

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Startup India

Startups have gained significant popularity in India, and in a bid to boost the Indian economy and attract talented entrepreneurs, the Government of India, led by Prime Minister Narendra Modi, has initiated the Startup India program to recognize and nurture startups.

Startup Recognition

As part of the Startup India Action Plan, startups that meet the criteria outlined in G.S.R. notification 127(E) are eligible to apply for recognition under this program. Startups need to provide supporting documents at the time of application.

Eligibility Criteria for Startup Recognition:

  1. Company Type: The startup should be registered as a private limited company, a partnership firm, or a limited liability partnership.
  2. Annual Turnover: The annual turnover should be less than INR 100 Crores in any of the previous financial years.
  3. Company Age: An entity can be considered a startup for up to 10 years from its date of incorporation.
  4. The startup should focus on innovating or improving existing products, services, or processes and should have the potential to generate employment or create wealth.
  5. Original Entity: An entity formed by splitting up or reconstructing an existing business will not be considered a startup.

Government Schemes & Benefits

DPIIT Recognition offers several benefits listed below. Startups can also explore other government schemes offering support across various geographies and sectors.

Self Certification:

Startups can self-certify compliance with 9 Labor Laws and 3 Environment Laws through the Startup mobile app. No inspections will be conducted for labor laws for 3 to 5 years unless there is a credible complaint of violation.

Labor Laws:

  • Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labor (Regulation and Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948
  • The Industrial Disputes Act, 1947
  • The Trade Unions Act, 1926
  • The Industrial Employment (Standing Orders), 1946

Environment Laws:

  • The Water (Prevention & Control of Pollution) Act, 1974
  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
  • The Air (Prevention & Control of Pollution) Act, 1981

Income Tax Exemption Notifications:

The Inter-Ministerial Board, set up by the Department of Industrial Policy and Promotion (DPIIT), validates startups for tax-related benefits under Section 80-IAC of the Income Tax Act. This includes full deduction on profits and gains from business for private limited companies or limited liability partnerships incorporated on or after April 1, 2016, but before April 1, 2021.

  • Patent Application & IPR Protection: Startups can avail fast-track patent filing with up to an 80% rebate on filing fees.
  • Easier Public Procurement Norms: Startups can get listed as sellers to the government and benefit from exemptions on Earnest Money Deposit (EMD) and minimum requirements.
  • Easy Winding Up of Company: The Insolvency and Bankruptcy Code (IBC) 2016 allows startups to wind up their company within 90 days.

Steps to Get Startup Registration:

Step 1: Incorporate your Business:

Incorporate your business as a Private Limited Company, Partnership Firm, or Limited Liability Partnership and complete all necessary registration procedures.

Step 2: Register with Startup India

Register your business as a startup online through the Startup India website. Provide business details, enter the OTP sent to your email, and create your Startup India profile.

Step 3: Get DPIIT Recognition

After creating your Startup India profile, apply for DPIIT Recognition to access benefits such as tax exemptions, intellectual property services, and more.

Step 4: Recognition Application

Fill out the Startup Recognition Form with details including your startup’s incorporation certificate, directors’ details, proof of concept, and PAN number.

Step 5: Recognition Number

Upon successful application, you will receive a recognition number. The certificate of recognition will be issued after document verification, usually within 2 days.

Step 6: Other Areas

Explore support for patents, trademarks, and design registrations, funding opportunities, self-certification under labor and environment laws, and tax exemption.

Startup India is a government initiative aimed at fostering the growth of startups in India, offering various incentives and support to innovative and promising ventures.

Who is eligible to enroll in the Startup India program?

Any organization established as a Private Limited Company, Partnership Firm, or Limited Liability Partnership is eligible for registration under the Startup India initiative. These business entities must maintain an annual turnover of less than 100 crores and have a track record of no more than ten years from their incorporation or registration date. Furthermore, these entities should be actively engaged in innovating, advancing, or enhancing products, services, or processes.

What advantages come with enrolling in Startup India?

The Startup India Scheme offers several advantages to startups. However, to access these benefits, an entity must be officially recognized as a startup by the DPIIT.
Startups are granted the ability to self-certify their adherence to nine labor laws and three environmental laws for a period of five years starting from the date of incorporation or registration. They also enjoy a three-year tax exemption and have access to top-notch intellectual property services and resources specifically designed to assist startups in safeguarding and leveraging their intellectual property rights.

Which business structure is the best choice for my startup?

The two most commonly recommended business structures for startups are Private Limited companies and LLPs (Limited Liability Partnerships). Private Limited companies enjoy legal recognition and are often preferred by investors, although they come with more stringent compliance requirements and potentially higher incorporation costs.
On the other hand, LLPs typically have lower incorporation costs and more relaxed compliance obligations compared to Private Limited companies. Additionally, LLPs offer the advantage of limited liability and are equally recognized and accepted by investors both domestically and internationally.

How can I draw investors to my startup?

To entice investors, it’s essential to have an outstanding product with a scalable business model and to enhance your visibility. Ensure that your product garners substantial engagement and traction. Registering your startup with Startup India is a crucial step, and actively seeking out investors is also vital. Be sure you can adeptly convey your business concept and demonstrate the sustainability of your business model to potential investors.

What sets apart an accelerator from an incubator?

Startup incubators are generally organizations that aid entrepreneurs in nurturing and growing their businesses, particularly during their initial phases. Incubation is typically conducted by institutions with extensive experience in the business and technology sectors.
Startup accelerators, on the other hand, assist early-stage companies that are focused on rapid growth. These programs typically have a defined timeframe during which individual companies collaborate with a team of knowledgeable mentors who may also offer financial support.

Is it possible for an established entity to enroll as a “Startup” on the Startup India Portal?

Certainly, according to the regulations, an existing entity can indeed register itself as a startup, but it must satisfy the specified criteria for startup status. By doing so, it becomes eligible for various tax incentives and intellectual property rights benefits that are accessible to startups. These criteria align with those mentioned in the article above.

How can I confirm the completion of my registration?

Upon the successful submission of your application and the subsequent recognition of your startup, you will receive an automated certificate of recognition. You can easily download this certificate from the Startup India portal.

What exactly is the Startup India Hub?

The Startup India Hub serves as a comprehensive platform where all participants in the startup ecosystem can engage with each other, share expertise, and establish successful collaborations within a dynamic and thriving environment.

How do Investors contribute value to Startups?

Investors, particularly venture capitalists (VCs), play a pivotal role in enhancing the value of startups through various means:
Stakeholder Management: Investors oversee the company’s board and leadership, ensuring smooth operations. Their wealth of experience and domain knowledge in working with startups provides valuable guidance and strategic direction.
Fundraising: Investors serve as invaluable guides in helping startups secure subsequent rounds of funding, taking into account factors such as stage, maturity, and sector focus. They also facilitate networking opportunities, connecting founders with other potential investors.
Talent Acquisition: Attracting top-tier talent, especially for key executive positions, is crucial for startups. VCs, with their extensive networks, can assist in bridging the talent gap by identifying and recruiting the right individuals at the right time.
Marketing Strategy: VCs provide insights and support in crafting effective marketing strategies for the startup’s products or services.
M&A Opportunities: VCs actively monitor merger and acquisition possibilities within the local entrepreneurial ecosystem, enabling startups to explore inorganic growth opportunities that can add significant value to their business.
Organizational Optimization: As a startup evolves into an established company, VCs assist in structuring the organization correctly and implementing processes to improve capital efficiency, reduce costs, and facilitate efficient scaling.