Sunday, June 23, 2024

Planning to begin your startup? – Register in five easy steps

Every startup begins with an idea. It is a thought that evolves from a question and then finds its way through to an answer, and Eureka! You have a startup idea. India has the world’s third-largest ecosystem for startups.

Fortunately, the Government of India acknowledges the power of young minds and the potential to realise their dreams in a one-room startup. Hence, in 2015, announced the development of a government-led startup ecosystem to provide initial handholding and financial support through funds, incentives and flexible policies.

Hence, aspiring entrepreneurs can begin their startup journey by enrolling in this program. You can avail initial support and nurturing that every startup requires by the government through Startup India Program.

Register your startup under Startup India Program in 5 steps

What qualifies as a startup in India? 

There are four important criteria to be an eligible startup.

  1. Firstly, your company should either be incorporated as a private limited company, a partnership firm or a limited liability partnership
  2. The company’s turnover in previous financial years should be less than Rs 100 crore
  3. A business shall be considered as a startup up to 10 years from the date of its incorporation
  4. The last and most important criterion is the ‘Innovation’ factor. Your business should be working towards an innovative solution towards existing products, services and processes and should have the potential to generate employment/ create wealth

What can not be a Startup?

Your business must qualify for all the above criteria. Any entity formed by splitting up or reconstructing an existing business shall not be considered a “Startup”.

If your business qualifies for all the above criteria, you can register five easy steps.

Step 1: Business Incorporation

The first step towards this direction is the incorporation of your business entity. At this stage, you must fulfil the first criteria listed above, i.e. incorporate your business as a Private Limited Company, Partnership firm, or a Limited Liability Partnership.

Certificate of Incorporation is the basic requirement to start any operating as a business entity. Hence, you will have to go through all the standard procedures required while registering a company in India.

Step 2: Register with Startup India

The next step is to register your business as a startup. To register your startup under the Startup India initiative is quite simple. First, you need to log on to the Startup India website to fill up the form with your business details. Then, you will have to create your profile after providing the required details on the website.

Creating a profile on the website will open many avenues for your Business Startup. For example, you can apply for various acceleration, incubator/mentorship programmes. Here, you get access to valuable resources like the Learning and Development Program, Government Schemes; State Polices for Startups and pro-bono services.

Step 3: Get DPIIT Recognition

The Government of India provides many benefits, including tax exemptions under the Startup India program. However, to avail of these benefits, startups must get Department for Promotion of Industry and Internal Trade (DPIIT) Recognition. Hence, it helps entrepreneurs to avail benefits like access to high-quality intellectual property services and resources and other relaxations.

If you are a new user, then click on the ‘Get Recognised’ button; existing users can click on the ‘Dashboard Button’ to get DPIIT Recognition.

Step 4: Recognition Application

Next, the ‘Recognition Application Detail’ page opens. Click on ‘View Details’ option under the Registration Details section. Fill up the ‘Startup Recognition Form’ and click on ‘Submit’.

Documents Required for Recognition:

a. Documents for Registration
b. Incorporation/Registration Certificate of your startup
c. Details of the Directors
d. Proof of concept like pitch deck/website link/video (in case of a validation/ early      traction/scaling stage startup)
e. Patent and trademark details (Optional)
f. PAN Number

Step 5: Recognition Number

Once you apply for the recognition certificate, you will receive a recognition number for your startup. The authority issues the certificate of recognition after verifying all your documents. Usually, the certificate is issued within two days after applying.

After receiving recognition certificate, you are registered with the government as a startup and you can officially call your business entity as STARTUP.

Word of Caution

Individuals must be careful while uploading their documents. If your documents are forged or have uploaded wrong documents, you will be charged with a fine of 50% of your paid-up capital of the startup with a minimum fine of Rs. 25,000.

Patents And Trademarks

The website also allows you to patent your innovation or get a trademark for your business. You can avail of it from the list of facilitators issued by the government. However, you will need to bear only the statutory fees, thus getting an 80% reduction.

Relaxation In The Registration Process

The government has relaxed the registration process for startups from providing certain documents. The list of documents not required to be filed at the time of the registration are-

a. Letter of Recommendations
b. Letter of funding
c. Sanction Letters
d. Udyog Aadhar
e. MSME Certificate
f. GST Certificate

Benefits from Startup India Program 

Tax Exemption

Under section 80 IAC of the Income Tax Act, the Government of India allows tax exemption for three consecutive financial years. Startups must be certified by Inter-Ministerial Board (IMB) to avail of this benefit.

Government’s Backing

The government dons the role of a venture capitalist under StartUp India. It has a set-up of Rs 10,000 crore funds to provide funds to the registered startups. It also provides guarantees to lenders to encourage banks and other financial institutions to provide venture capital.

Exemption from Tax on Capital Gain for Investors 

For easy availability of funds, the government has provided that investors who invest in venture funds set up under this program will be exempted from paying tax for their capital gains.

Self-Certification

Under Startup India Program, startups can self-certify through its website or startup mobile up with nine labour laws and three environment laws. Additionally, the authority will not conduct inspections for a period of 3 to 5 years from the date of incorporation.

Tenders From Government 

While applying for government tenders, Startups are exempted from “prior experience/turnover” criteria applicable for other companies.

The government has made registering a startup in India quite seamless. Moreover, the additional support that government provides adds flexibility to the startup ecosystem in India. Therefore, it provides pivotal support to aspiring entrepreneurs in realizing their startup dream.

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