Definition of a Startup
Startup means an entity, incorporated and registered in India which fulfils the following conditions:
1. The entity is in any of the following:
- Private Limited Company
- Public Limited Company
- Limited Liability Partnership
- Partnership Firm
2. The annual turnover of the applicant shall not be more than INR 100 crores for any financial years since its incorporation.
3. Shall be working towards innovation / development / improvement products / processes / services. It can also be a scalable business model with a high potential for wealth creation or employment generation.
4. An entity which has come into existing by splitting up or reconstruction of any existing business entity shall not be considered a ‘Startup’.
5. Shall not be more than 10 years old.
6. Shall not be incorporated before April 2016 in order to claim the Tax Exemption certificate.
When shall an entity cease to be a Startup?
1. When it completes 10 years from the date of its incorporation.
2. As and when the turnover of a Startup exceeds Rs. 100 crores in any of the previous financial year.
Documents and Information Required for Startup India Registration
âž² Certificate of Incorporation/Registration along with the PAN of the applicant entity
âž² Email ID and Phone number of the Director / Owner
âž² Details of Revenue Model and Unique Features of the Product/Service
âž² Details of the Website of the business
âž² Pitch Deck of the business
âž² Video or Patent registered in the name of the Company
âž² Details of the Business:
- Industry
- Sector of Operations
- Category of Products/Services
- Registered Office Address
âž² Details of the Directors/Partners and authorised Representatives
- Name
- Photo
- Gender
- Mobile No.
- Email ID
- Full Address
Benefits of Startup India Scheme
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Tax Exemption
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Once your company get Startup recognition, you can further apply for Income Tax Exemption benefits available u/s 80IAC and U/s 56 relief for Angel Tax relief (Tax on Share Premium).
Profits received by approved start-ups that have given an inter-departmental board certificate are exempted from income tax for three consecutive years.
Such an exception shall be provided in order to promote business development as well as to meet the criteria for working capital during the initial years.
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Tender Participation
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In many Tenders, Govt. and PSU gives relaxation for Startups to Participation in public procurement job through tenders. Relaxation in Prior experience, EMD or Turnover criteria.
In order to comply with quality and technical requirements, all Indian government departments, ministries and PSUs have been granted the authority to ease public procurement standards. Thus, the start-up will make use of the exemptions on:
Severe money deposit prior to turnover and skill criteria in the case of government tenders.
In addition, startups can now be listed as sellers on the largest e-Procurement portal of the Government of India – Marketplace (GeM)
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Govt. Funding Opportunity
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The government allotted Rs 10,000 crores funds for investment into startups through Alternate Investment Funds. SIDBI is managing this fund. Startups can apply under this quota.
The Government of India has set aside the Corpus Fund for Rs . 10,000 Crore. This fund is managed by SIDBI and is intended to provide support for the development and growth of innovation-driven enterprises through equity financing.
Fund of funds is the nature of such a corpus. This means that the government is contributing to the capital of SEBI registered funds. These funds are also investing in startups.
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Participate in various Govt. Scheme
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Government issues day to day various schemes for a Startup to participate. For example, sustainable finance scheme, bank credit facilitation, raw material assistance, etc.
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Participate in Startup Grand Challenges
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Many reputed companies encourage Startup entrepreneurs for their solutions. Here gives an opportunity for a startup to participate in the scheme and win funding. In the wake of growing Startup ecosystem, more & more established business and organisations have come forward in collaboration with startup India to extend their financial support towards budding startups.
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IPR Govt. Fee Concession
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In IPR Registration 50%-80% Govt. fee concession available. Example in Trademark, Patent application.
Startup India offers high-quality intellectual property services and tools to help entrepreneurs secure and commercialize their IPRs. This contains the following:
Quick tracking of start-up patent application, offering 80 per cent discount on patent filing compared to other companies offering 50 per cent discount on trademark filing compared to other companies panel of facilitators helping to file IP applications and government support to bear facilitation costs
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Self-Certifications
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Eligible for Self-certification and compliance under 9 environmental & labour laws.
Startups are required to self-certify their compliance with six labor laws and three environmental laws. This is allowed for a period of five years from the date of incorporation of the company.
In addition, this benefit is provided in order to reduce the regulatory burden on start-ups so that they can focus on their core business and keep compliance costs low.
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Easy Winding-up
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A Startup enjoys a fast track winding up within 90 days under insolvency & Bankruptcy code 2016.
Startups also known as fast track companies may be wound up within 90 days as to 180 days for other firms.
In addition, the insolvency practitioner shall be named to liquidate the properties and pay the creditors. This will be accomplished within a span of six months from the date of filing of an application for such an exit.
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Connect Networks
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Startup India Registration enables the startups to connect with various startups, incubators, mentors and organisation and with investors and industries.
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GEM Portal Seller Registration and Bid
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Startups registered with Startup India Scheme (DPIIT) are eligible to register on the GEM Portal of govt. https://gem.gov.in/
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| Investment tax deduction over fair market value |
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In case of a start-up:
Has an inter-Ministerial Certificate and receives consideration from the issuance of shares exceeding the face value of such shares after consideration up to Rs. 10 Crores received from such shares exceeding the fair market value of such shares are exempt from tax.
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What is startup India Scheme?
Startup India is a flagship initiative of the Government of India aimed at catalyzing the community of startups and creating a healthy and inclusive ecosystem for innovation and entrepreneurship in India. After the launch of the initiative on 16 January 2016, Startup India has launched many initiatives aimed at empowering entrepreneurs and turning India into a nation of job-creators instead of job-seekers.
A Business will be regarded as a startup, under the updated statement that was issued on May 23, 2017, if it is incorporated in India as a private limited company (as defined in the Companies Act, 2013), registered as a partnership corporation (under Section 59 of the Partnership Act, 1932), or registered as a limited liability partnership (under the Limited Liability Partnership Act, 2008), and for ten years following the date of its incorporation/registration.
The broad scope of the Startup India programs is outlined in the Action Plan below and handled by the dedicated Startup India Team, which reports to the Department of Industrial Policy and Promotion (DPIIT).
The 19-Point Action Plan calls for the following sources of start-up support, and more:
1. Enhanced facilities including incubation centres
2. Facilitation of simpler IPR, including faster patent filing
3. The better regulatory environment, including tax advantages, simpler enforcement, improved business setting up, quicker exit mechanisms and more
4. Economic stimulus in the form of the INR 10,000 Crore Fund of Funds controlled by SIDBI, with the goal of growing funding opportunities.
5. The Startup India Portal, which provides a variety of useful tools and a comprehensive networking database for entrepreneurs and other stakeholders in the Startup ecosystem;
6. A toll-free helpline and fast e-mail query resolution for startups
Process of Registration
The Modi administration emphasises the achievement of financial objectives as one of the centres of attention for the administration. The government for the betterment aims to encourage entrepreneurship, skill development, foreign investment, and the creation of new jobs. The Startup India Action Plan was established in order to bring about the culmination of each of these advantages.
Startups are entitled to a range of perks, some of which include administrative and tax breaks, capital gains exemptions, and government funding assistance. Startups would profit from a self-certification compliance framework with regard to labour and environmental standards in addition to tax benefits. This indicates that any inspections of the place of business would not include the startup's businesses.
Registration Process:
Step 1. Create login
Create Login on Stratup India Portal and provide the required details like company name, Unique Mobile Number & Email Id
Step 2. Create entity profile
The next step is to create the profile of the entity, provide input like company name. CIN, address, objective of the company for creating a proper profile.
Step 3. Fill up the registration form
Fill up the stratup forms and provide clarificatiohow your startup is different from other, what's its uniqueness , how it is beneficial for society and other required justifictions.
Step 4. Attach the required documents
Attach the required docs in the form like COI copy, MSME registration (if have), and other required docs.
Step 5. Submission of application:
After reviewing the form submit the application.
Syep 6. Issuance of Certificate
The application check and verified by DIPP department and if department needs any addition clarification they raise the query or else issue the certificate within 7-10 working days.