HOW TO REGISTER A STARTUP IN INDIA – ELIGIBILITY AND PROCEDURE| DIPP START-UP REGISTRATION

START-UPS IN INDIA

After the country’s Prime Minister, Narendra Modi, launched the Start-up India initiative, the number of start-ups has exploded. With government tax breaks, incentives, and assistance, an increasing number of people are starting their own businesses. The most intriguing aspect is that the vast majority of start-ups are led by young entrepreneurs and owners, demonstrating India’s incredible artistic talent.

Since they previously lacked government support and had to do it on their own, few people threw themselves into it wholeheartedly. However, since the initiative began, people have become more courageous, recognizing that the government will support them in the process, and as a result, they are coming up with new ideas.

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WHAT IS A START-UP

A start-up is a business that solves a problem and is managed by a small team. When the founders see shortcomings in the existing environment in which they have been working, they decide to resolve the issues by starting their own company.

A start-up may also be created when one or more founders come up with a potentially brilliant idea. The resources that such start-ups provide are those that they believe are currently unavailable or of poor quality.

The most significant benefit of a start-up is that it increases jobs in the country as a direct result of more and more businesses being formed. With the prospect of more job opportunities, the Indian government has attempted to assist young businesses in growing and succeeding in the Indian market. The Start-up India initiative assists you in innovating and improving long-term economic growth.

Let’s take a look at what constitutes a start-up in India. The start-up eligibility criteria:

WHAT QUALIFIES YOU AS A START-UP INDIA PARTICIPANT?

  • A private limited company or any Limited Liability partnership must be formed.
  • For the first ten years after incorporation, the business remains a start-up. The Indian government recently increased this to ten years from seven years in order to provide businesses with more opportunities and tax breaks in the long run.
  • If the annual revenue does not exceed Rs 100 crore in any of the ten years, the company is still considered a start-up. If a company reaches this threshold, it is no longer considered a start-up. The Indian government has recently increased the threshold to Rs 100 crore from Rs 25 crore.
  • The Department of Industrial Policy and Promotion or DIPP must approve the business 
  • An Incubation Fund, an Angel Fund, or a Private Equity Fund could fund the business.
  • The Indian Patent and Trademark Office must have a patron guarantee.
  • You must have a letter of recommendation from an incubator.
  • The company must come up with new ideas and schemes.
  • All information about the funding must be filed with SEBI (Securities and Exchange Board of India)

HOW TO REGISTER YOUR START-UP WITH START-UP INDIA

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.

THE FIRST STEP IS TO INCORPORATE YOUR BUSINESS

You must first form a Private Limited Company, a Partnership Corporation, or a Limited Liability Partnership to start your business. You must follow all of the standard procedures for registering a company, including obtaining a Certificate of Incorporation/Partnership Registration, a PAN, and other legal requirements.

STEP 2: REGISTER WITH STARTUP INDIA.

The company must then be licensed as a start-up. The whole procedure is carried out on the internet. All you have to do is go to the Start-up India website and fill out a 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 the start-up as the type of user, the name and stage of the start-up, and so on. The Start-up India profile is generated after this information is entered.

Start-ups can apply for various acceleration, incubator/mentorship programmes, and other challenges on the platform after creating a profile, as well as gain access to resources such as the Learning and Development Program, Government Schemes, State Policies for Start-ups, and pro-bono services.

STEP 3: OBTAIN DPIIT CERTIFICATION.

The Department for Promotion of Industry and Internal Trade (“DPIIT”) Recognition is the next move after building a profile on the Start-up India website. This recognition allows start-ups to take advantage of advantages such as access to high-quality intellectual property services and infrastructure, relaxation of public procurement rules, self-certification under labour and environmental laws, ease of business winding up, access to Fund of Funds, tax exemption for three years, and tax exemption on investments above fair market value.

If you are a new user, press the ‘Get Recognised’ button to get DPIIT Recognition. If you’re already a customer, go to the ‘Dashboard button’ and then to ‘DPIIT Recognition.’

STEP 4: APPLICATION FOR RECOGNITION. 

The page titled “Recognition Application Information” appears. On this tab, go to the Registration Details section and click on ‘View Details.’ Fill out the ‘Start-up Recognition Form’ and hit the ‘Submit’ button.

STEP 5: REGISTRATION DOCUMENTS.

  • Registration/Incorporation Your start-up’s certificate
  • Directors’ Contact Information
  • In the case of a validation/early traction/scaling stage start-up, a proof of concept such as a pitch deck/website link/video is required.
  • Data on patents and trademarks (Optional)
  • PAN(Personal Identification Number)

DOCUMENTS YOU NEED TO UPLOAD IN A PDF FORMAT ONLY.

  • Along with the registration form, you’ll need a letter of recommendation. You may obtain any of the letters of recommendation mentioned below.
  • In a format accepted by the DIPP, a recommendation letter from an Incubator was recognized at a post-graduate college in India. This is in regards to the company’s creative nature; or
  • A letter of recommendation from an incubator that the Government of India funds as part of some specific scheme to encourage innovation; OR 
  • A letter in DIPP format from any of the Government of India-recognized incubators.
  • An Incubation Fund, Angel Fund, Private Equity Fund, Accelerator, or Private Equity Fund registered with SEBI that endorses the creative nature of the business; OR 
  • A recommendation letter from the Central or any respective State Government of India; or
  • Certificate of Incorporation/Registration-You must upload your company/certificate LLPs of incorporation (Registration Certificate in case of a partnership)
  • Description of your business in a brief-A brief overview of the products/services’ creative design.

STEP 6: RECOGNITION NUMBER.

You will get a recognition no. for your start-up as soon as you apply. The certificate of recognition will be given after all of your records have been examined, which normally takes two days after you upload your information online.

However, exercise caution when uploading documents. If it is discovered after further inspection that the appropriate document was not uploaded, the incorrect document was uploaded, or a forged document was uploaded, you will be fined 50% of the start-up’s paid-up money, with a minimum fine of Rs. 25,000.

STEP 7: OTHER AREAS.

Registration of patents trademarks, and/or designs: You can easily approach either of the government-issued facilitators if you need a patent for your invention or a trademark for your company. You will only be responsible for the statutory fees, resulting in a fee reduction of 80%.

Funding: Access to finance has been one of the major obstacles for several start-ups. Entrepreneurs are unable to attract investors due to a lack of expertise, security, or current cash flows. Furthermore, many investors are put off by the high-risk aspect of start-ups, as a large percentage struggle to take off.

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 to provide financial assistance (i.e., INR 2,500 crore per year). The Fund is structured as a Fund of Funds, which means it will not invest directly in start-ups but will instead contribute to the resources of SEBI-registered Venture Funds.

Self-certification under Employment and labour laws: Start-ups can reduce their enforcement costs by self-certifying under labour and environmental laws. Self-certification is available to help companies reduce regulatory pressure and concentrate on their core market.

Units operating under the 36 white category industries listed on the Central Pollution Control Board’s website do not require clearance under three environmental statutes for three years.

Tax Exemption: Start-ups are excluded from paying income taxes for three years. However, they must be approved by the Inter-Ministerial Board in order to receive these benefits (IMB). Start-ups that were formed on or after April 1, 2016, are eligible for an income tax exemption.

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DOCUMENTS THAT HAVE BEEN EXEMPTED

Since its inception, Start-up India has changed the registration process. Most of the previous conditions have now been waived. Many records that were previously needed to be filed are no longer required. The following are examples of records that do not need to be filed at the time of registration:

  • Recommendation letter.
  • Letter of funding
  • Letters of Sanction
  • Aadhar Udyog
  • Certificate of MSME
  • GST Certificate 

KEY FEATURES OF THE FUND OF FUNDS

  • The Small Industries Development Bank of India will handle the Fund of Funds (SIDBI)
  • The Life Insurance Corporation (LIC) will participate in the Fund of Funds as a co-investor.
  • A maximum of 50% of the SEBI registered Venture Funds (“daughter funds”) will be contributed by the Fund of Funds. To be eligible for the donation, the daughter fund must have already received 50% of the remaining funds. On the basis of the donation received, the Fund of Funds would have members on the board of the venture fund.
  • The Fund will provide assistance to a diverse range of industries, including manufacturing, agriculture, health, and education.

DURING THE START-UP INDIA ACTION PLAN, KEY ANNOUNCEMENTS WERE MADE AS FOLLOWS:

  • For the first three years, start-ups are excluded from paying income tax.
  • A refund of 80% would be available to start-ups when they file a patent application.
  • For patent applications, a fast-track system has been developed.
  • There will be no compliance with environmental laws or labour post self-certification for the next three years.
  • A start-up hub for India will be developed with a single point of contact that will be available after the platform is launched.
  • The government will bring in a total of 2500 crores as an initial investment, with up to 10,000 crores being pumped in over the next four years.
  • A mobile app will be released that will allow start-ups to register within one day using the app.
  • Capital gains are exempt from taxes.

SOME OF THE BENEFITS OF INDIA’S START-UPS ARE:

The following are some of the advantages for start-ups in India:

  • Start-ups would be able to self-certify that they are complying with nine labour and environmental regulations. For a term of three years, no inspections would be performed in the case of labour regulations.
  • Start-up India’s mobile application allows businesses to register and upload required documents. Approvals, registrations, and reporting enforcement can all be handled through a single window.
  • The process of filing a patent will be streamlined. The start-up would receive an 80 percent discount on the patent application fee. The start-up will only be responsible for legislative fees, while the government will be responsible for all facilitator fees.
  • Seven new research parks will be developed to provide facilities for start-ups in the R&D sector as part of the start-up India programme, which will promote research and innovation among students who are aspiring entrepreneurs.
  • Both new and seasoned entrepreneurs will be given equal opportunities. This was previously impossible since all applicants were expected to have either “prior experience” or “prior turnover.” However, public appropriation rules for start-ups have recently been relaxed.

CONCLUSION

The Indian government is providing enough assistance to start-ups in order to help them cope with the economy. Furthermore, several start-ups have registered under the start-up India regime in order to get the most benefits from the government. As a result of this programme, an increasing number of entrepreneurs are being motivated to start their own businesses and contribute to making society more productive and comfortable. The incentive we are receiving from the start-up India scheme is the creation of more and more jobs for the region. Start-up India is a one-of-a-kind initiative.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.