Startup India Scheme - Eligibility, Registration and Benefits

The Startup India Scheme was introduced by the Indian government to promote entrepreneurship and increase employment.

Startup India Scheme - Eligibility, Registration and Benefits

Startup Definition (For Government Schemes) ๐Ÿ”

A startup is defined as the following:

  • If it is incorporated as a private limited company (Pvt Ltd) (as defined in the Companies Act, 2013) or registered as a partnership firm (under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India, it has a ten-year period from the date of incorporation/registration.
  • The entity's turnover for any fiscal year since incorporation/registration has not exceeded one hundred crore rupees.
  • Entity is working on product innovation, development, or improvement, or if it is a scalable business model with a high potential for job creation or wealth creation. However, that an entity formed by the division or reconstruction of an existing business is not considered a "Startup."

Provided, however, that such entity is not formed by the division or reconstruction of an existing business.

An entity ceases to be a Startup ten years after its incorporation/registration or if its turnover for any previous year exceeds INRย 100 Cr.

What is Startup India ? ๐Ÿง

The Startup India Scheme, a project of the Indian government, was launched in 2016. The advancement of status, the creation of jobs, and building future oriented business are the main objectives of this government Programme.

Numerous initiatives have been started under Startup India to build a strong startup environment and make India a nation that creates jobs and same is monitored by Department for Industrial Policy and Promotion (DIPP).

The Indian government wanted to enable startups to grow through innovation and design, thus it created this initiative. Learn more about the Startup India Scheme's main advantages, eligibility requirements, and registration process.

Eligibility Criteria for Startup India Scheme ๐ŸŽฏ

Startups must be registered as Private Limited Company (Pvt. Ltd) under the Indian Companies Act, 2013, Limited Liability Partnerships (LLP) under the Indian Limited Liability Partnership Act, 2008, or Partnership firms under the Indian Partnership Act, 1932 in order to apply for Startup India Programme.

  • The startup should be registered as a partnership firm or a limited liability partnership, or it should be incorporated as a Private limited company (Pvt. Ltd.).
  • In any of the previous fiscal years, turnover should have been less than INR 100 crores.
  • An entity is considered a startup for the first ten years after its incorporation.
  • The Startup should be focused on product innovation/improvement of existing products, services, and processes, and it should have the potential to generate employment/ wealth. An entity formed by the division or reconstitution of an existing business is not considered a "Startup."

Please see the attached notification for more information (Click Here).

To benefit from the Startup India Scheme, a company must acquire clearance from the Inter-Ministerial Board set up by the Department of Industrial Policy and Promotion. To obtain approval, the business must submit an application to verify the document's inventiveness.

How to Register Your Startup with Startup India โฐ

Step 1 : Incorporate Your Business

Start by incorporating your company as a Limited Liability Partnership or Private Limited Company. Get the certificate of incorporation/partnership registration, the Pan, and any other necessary compliances by following all the registration requirements.

Step 2 : Register under Startup India Scheme

Now is the time to enroll your startup in the programme. The procedure is simple to finish and can be done online.

After logging in, complete the form on the Startup India website. Next, enter the OTP that was sent to your email along with other important startup details like the kind of users, name, and stage.

After creating a profile on your website, you can submit applications for various acceleration, incubator/mentorship programmes, and other challenges. Additionally, you'll get access to free services, government initiatives, and resources including the Learning and Development Program State Policies for Startups.

Step 3 : Get DPIIT Recognition

Utilizing Department for Promotion of Industry and Internal Trade Recognition is the next step. With this designation, startup businesses can benefit from a variety of advantages, including easier access to Fund of Funds, relaxation of public procurement regulations, self-certification under labour and environmental laws, and tax exemption on investments that are beyond fair market value.

Click the Get Recognized button to receive DPIIT Recognition if you are a new user. Click Dashboard and DPIIT Recognition if you are already registered.

Step 4 : Recognition Application

Click the View Details button in the Registration Details section of the Recognition Application page once it has opened. Fill out the Startup Recognition Form now, then press the Send button.

Step 5 : Documents to be uploaded

  • Incorporation/Registration Certificate for your new business
  • Complete information on the directors' proof of concept, such as a pitch deck, website link, or video (in the event of a startup in the validation, early traction, or scaling stage).
  • Details of patents and trademarks (Optional)
  • PAN Number

Step 6 : Get Recognition Number

You will receive a recognition number for your startup right post application. Following the proper review of all papers, which typically takes 2 days after submitting the information online, the certificate of recognition is provided.

You must submit the document with caution. If it is discovered during the verification that the required document was not uploaded, the incorrect document was posted, or a fraudulent document was uploaded, you will be compelled to pay a fee equal to 50% of your startup's paid-up capital, with a minimum fine of Rs. 25,000.

Step 7 : Take Care of Other things

  • Patents, Trademark: If you have created something original and new and need a patent for it, contact any of the facilitators on the government of India's list. Additionally, you can register your distinctive trademark for your company. Only the statutory feeds will need to be paid by you, resulting in a charge reduction of 80%
  • Funding: The difficulty of obtaining financing is one of the biggest problems faced by new businesses. Entrepreneur soften have trouble luring investors because of insufficient experience, security, or available cash flows. Additionally, many investors are turned off by startups' high risk because a sizeable portion of them fail to take off. The Government of India has established a fund with an initial capital of Rs. 2,500crore and a total corpus of Rs. 10,000 core over a period of four years to financially encourage businesses. This fund has the characteristics of a fund of funds, which means it won't invest in startups directly but will contribute to the capital of SEBI-registered venture funds.
  • โ€Tax Exemption: For three years, startups are exempt from paying income tax. They must obtain certification from the Inter-Ministerial Board in order to use this facility.
  • โ€Self Certification: You can self-certify under the Employment and Labor Laws as a startup, which will lower your compliance costs. For a period of three to five years following the date of incorporation, startups are permitted to declare for themselves that they have complied with the six labour laws and three environmental regulations

Advantages of Registration under Startup India ๐Ÿ‘

The Startup India Scheme offers a wide range of advantages to companies. The Startup India Scheme's list of advantages is as follows:

Self-Certification

The startup is more prone to failure during the early stages of incorporation. They were constantly faced with the challenge of defending their survival against outside threats, such as government regulations. Thanks to the Startup India Initiative, which loosen sup some stringent restrictions to give founders a buffer against such turmoil. Startups are allowed to self-certify with nine labour and environmental rules under this programme.

Reduction in Cost

โ€The government gives names of trademark and patent facilitators as part of the Startup India Scheme, which is another fantastic benefit. They provide affordable, high-quality intellectual property right services, such as quick patent checks. Only the statutory costs are due from the corporation; all facilitator feeds are covered by the Government of India. This means that the cost of obtaining a patent is reduced by 80% for startups.

Tax Exemption

Taxes are not applied to firms registered under the Startup India programmes. They are granted access to this facility for the first three years. Incubators are exempt from paying taxes on investments that are worth more than the going rate. Additionally, under this programme, investments made by angel investors are also exempt. When a startup receives a tax break for the first three years or reaches a specified threshold, it can use all of the proceeds for business expansion.

Relax Norms for Public Procurement

A corporation had to have prior experience or a minimum turnover in order to apply for a public procurement. Things have changed today. Equal possibilities for established businesses and startups have been made possible thanks to Startup India, startups now have easier access to public procurement.

Research Innovation Benefits

In addition to all of these, Startup India offers enormous benefits for research and innovation. The project supports those who want to start their own business by encouraging research and innovation. There are plans to establish seven new research parks. These parks will make sure that new businesses have access to all the facilities they need for the research and development of their distinctive goods and services.

Government Tenders

Government initiatives typically have larger budgets and greater financial incentives. But due to intense competition, it is quite challenging to obtain, particularly for new businesses. However, the Startup India Scheme offers incentives to companies so they can get government contracts. Companies are eligible to submit bids for these without needing any prior expertise

Networking Operation

The Startup India programme gives startups a venue where they may communicate with other startup stakeholders at a particular time and location. These gatherings take place twice during every festival. These festivals take place both nationally and internationally.

โ€Conclusion ๐Ÿ™Œ

The Startup India Scheme was introduced by the Indian government to promote entrepreneurship and increase employment. By providing a foundation for new entrepreneurs, it promotes innovation and research activity. You must benefit from this programme if you intend to launch your own business or if you already have one up and running.

Hopefully, you found this post helpful and make your business successful with this guide.

For any doubt or questions, feel free to contact Jordensky. Our team is always there to answer your confusions.

About Jordensky ๐Ÿš€

At Jordensky, we specialize in Accounting, Taxes, MIS, and CFO services for Startups and Growing business and are focused on delivering an experience of unparalleled quality. When you work with Jordensky, you get a team of finance experts who take the finance work off your plate โ€“ โ€so you can focus on your business.โ€

โ€

Read Similar Post related to Startups

Explained What is Startup and Common Startup Terms

Various Stages of Funding for Startups and Funding Options