Thinking to start your business? Then go for startup India in which there are special schemes by the government, generation of employment, and wealth creation, it was launched on the 16th of January 2016, by PM Narendra Modi, New Delhi.
What is a startup?
A startup is a newly established company, generally small which is started by 1 or a bunch of people. What differentiates it from other new businesses is that a startup offers a new service or product that is not being given elsewhere in the same way; the business either develops a new service/product or redevelops a current service/product into something better.
What is Startup India?
In India, startups are becoming very popular and in order to expand the Indian economy and attract capable entrepreneurs, the Government of India and it was launched on the 16th of January, 2016 by Prime Minister Narendra Modi at Vigyan Bhawan, New Delhi.
Startup India Registration Process
Step 1: Incorporate your business
You should first incorporate your business as a Partnership firm, a Limited Liability Partnership or a Private Limited Company. You have to pursue all the usual processes for registration of any business like obtaining the certificate of Incorporation, PAN, and other compulsory compliances.
Step 2: Register with Startup India
Business should be registered as a startup and the entire process is very easy and online, all you have to do is log on to the Startup India site and fill-up the form with suitable particulars of your business and upload certain documents.
Step 3: Documents must be uploaded (in PDF format only)
- A letter of recommendation
It should be submitted along with the registration form and any of the following will be valid-
- Advice (regarding the innovative nature of business) from an Incubator recognized in a post-graduate college in India, in a particular format by the Department of Industrial Policy and Promotion (DIPP); OR
- A letter of support by an incubator, which is funded by the Government of India as part of any specified scheme to promote innovation; OR
- A letter of recommendation (regarding the modern nature of business), from an Incubator, recognized by the Government of India in DIPP specified design; OR
- A note of money should not be less than 20% in equity, by any Incubation Fund/Private Equity Fund/Accelerator, accordingly registered with SEBI that endorses the modern nature of the business; OR
- A letter of funding by the Government of India or any State Government as part of any particular scheme to endorse innovation; OR
- A patent should be filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of the business being promoted.
Registration Certificate – You are required to upload the certificate of incorporation of your company/LLP (Registration Certificate in case of partnership firm)
Description of your business in brief:- A brief explanation of the innovative nature of your services/products.
Step 4: Answer whether you would like to avail tax profits
Do you have any queries about finance or tax you need help with?
CA Startups are exempted from income tax for 3 years, but to avail of these profits, they must be certified by the Inter-Ministerial Board (IMB). Start-ups renowned by DIPP, Govt. of India can now openly avail of IPR-related benefits without requiring any additional certification from IMB.
Step 5: Finally, you should self-certify that you satisfy the following conditions
- You must register your new company as a Limited Liability Partnership, Partnership firm, or a Private Limited Company
- Your business should be incorporated in India, not before 5 years.
- Income should be less than 25 crores per year.
- Innovation is a must– the business must be working towards innovating something new or improving the existing used technology.
- Your company must not be a consequence of splitting up or reconstruction of an existing company.
Step 6: Without delay get a recognition number
On applying the right way you will get a recognition number/ID for your startup and the certificate of recognition will be issued after the inspection of all your documents.
Stay alert while uploading the credentials online, if on subsequent verification, it is found to be obtained that the mandatory document is not uploaded/wrong document uploaded has been uploaded then you shall be legally responsible for a fine of 50% of your paid-up capital of the startup with a minimum fine of Rs. 25,000.
Step 7: New areas
1. Trademarks, patents, and design registration
If you require copyright for a trademark or innovation for your business, you can easily move toward, any from the list of facilitators issued by the government. You will have to bear only the statutory fees thus getting an 80% reduction in fees.
One of the key challenges faced by many startups has been accessing to money and due to lack of knowledge, safety, or existing cash flows, entrepreneurs fail to attract investors. As well, the high-risk nature of startups, as an important percentage fail to take off, puts off many investors.
In order to offer funding support, the Government has set up finance with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period of 4 years (i.e. INR 2,500 crore per year). The Fund is in the nature of a Fund of Funds, which means that it will not spend directly on Startups, but shall contribute to the capital of SEBI registered Venture Funds.
Key features of the Fund of Funds:
- The Fund of Funds shall be managed by a Board with professionals from industry bodies and successful Startups.
- The Life Insurance Corporation (LIC) shall be a co-banker in the Fund of Funds
- The Fund of Funds shall donate to a maximum of 50% of the SEBI registered Venture Funds (“daughter funds”). In order to be able to obtain the contribution, the daughter fund should have already raised the balance by 50%. The Fund of Funds shall have government representatives on the board of the venture fund based on the contribution made.
- The Fund shall ensure support to a broad mix of sectors such as education, manufacturing, agriculture, health, etc.
It’s very simple to register as a startup thanks to the various government initiatives. However, you can focus on your key area while we at Finance Bazaar help you from start to finish right from incorporating your company to getting your startup recognition.