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Now a days, Startups are getting very popular in India. The government has initiated a Startup India under the leadership of PM Narendra Modi to recognize and promote startups by encouraging innovations & expansion of business. Startup India scheme is started to transform India into a job-providing market rather than a job-seeking market. Only eligible registered entities such as Private Limited Company, Limited Liability Partnership or Partnership firm can get recognition under Startup India Scheme and it can be done online through Startup India official website.
A startup is a newly established entity registered either as a Private Limited Company or as a Limited Liability Partnership or as a Partnership firm. Startups are usually small in size, started by 1 or a group of individuals. The key differentiation between Startups and Other New Businesses is that a Startup offers new innovation-driven products or service that is not being provided by any other existing business in the same way. The business either designs and develops new products or services or made innovations in existing products/services into something better.
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Recognised Startups can avail loan facilities from Non-Resident Investors/ Foreign Investors (External Commercial Borrowings-ECB) upto $3 million i.e upto Rs.22.5 Crores every financial year through simple RBI compliance mechanism.
Indian Govt. have the remaining balance of Rs. 8,400 crore in their corpus which they are willing to invest in Startups. Till now, Govt. has already funded more than Rs. 1600 crore in 251 Startups. This is known as FoF (Funds of Funds Scheme).
There is an Opportunity for Startups to list products on Govt e-marketplace for market visibility. There is an Exemption for Startups registered under Startup India Scheme from prior experience or turnover and Security deposit for filing tenders.
After getting Startup India Registration, Recognised Startups can manage their PF, Gratuity, ESIC and Environmental Law Compliance through simple self-declaration on their own.
Government grants 50% discount on Trademark fees, 80% Rebate on Patent filing fees, if Startups are registered under Startup India Scheme.
Eligible Startups can claim exemption for 3 consecutive financial years out of their first ten years since incorporation from paying income tax.
Many Loans, Rebates & Incentives like GST rebate scheme, taxation rebates are announced by the State Governments of India.
Under Section 56 (2) (VIIB) of Income Tax Act, 1961, Investments made by an Accredited Investors, Non-Residents, AIFs into eligible Startups are exempted from Angel Tax upto Rs.25 crores
For a period of 5 years from the Incorporation Date, Private Limited can take deposits from its members under the Companies (Acceptance of Deposits) Rules, 2014.
1. Business Structure | Startup must be registered as Private Limited Company or Limited Liability Partnership or as a Partnership firm. |
2. Turnover | Previous year’s turnover should be less than Rs. 100 crores. |
3. Time Limit | An Entity can be considered as a Startup only up to 10 years from the Incorporation Date. |
4. Activity | Objective of a Startup must be innovative. Products or Services offered by a Startup must be innovative or improvement in existing products or services and it must generate Employment and Wealth. |
The first step is to incorporate your entity as a Private Limited Company, Limited Liability Partnership, or Partnership Firm. Vakilgiri, one of India's leading legal consultancy firms, can guide you through the entire process. With our expertise, we ensure a smooth and hassle-free registration for your business. Trust us to handle all the legalities while you focus on growing your startup and achieving success.
After incorporating your Company or Firm, you can apply for Startup India. Simply log into the Startup India website, fill in your business details, and complete Email OTP verification. You’ll receive a user ID and password via email. Access resources like government schemes, state policies, learning and development programs, and pro-bono services to support your startup’s growth.
After Step 2, apply for DPIIT. This recognition offers startups benefits like access to intellectual property resources, self-certification under labor and environmental laws, access to Fund of Funds, relaxed public procurement norms, easy company winding, tax exemptions for three consecutive years, etc. These benefits significantly support the growth and sustainability of your startup.
Now, fill out the DPIIT online form with the required information:
1. Briefly describe your startup.
2.Provide the current number of employees (including founders).
3. Explain the problem your startup is solving.
4. Detail how your startup proposes to solve this problem.
5. Highlight the uniqueness of your solution.
6. Describe how your startup generates revenue.
After submission, you will get a recognition number immediately for your startup. The recognition certificate will be issued after the examination of all your documents within a week.
NOTE: It is advised to upload documents with utmost sincerity and honesty. During the verification, if the documentation is found to be forged/incorrect, a minimum penalty of Rs. 25000 and a fine of 50% of your paid-up capital of the startup will be charged.
1. Trademark & Patent: Approach us for trademark or patent filing and claim up to 80% reduction in govt fees.
2. Funding: The Government of India has set up a corpus fund of INR 10,000 crore over four years.
3. Self-Certification: Startups can self-certify under labor laws and environment laws for 3-5 years, reducing compliance costs.
4. Tax Exemption: Startups can enjoy a three-year income tax holiday.
Entities like Private Limited Company or Partnership Firm or Limited Liability Partnership can register itself under the Startup India. The annual turnover of these startups should not exceed 100 crores & they should have been in existence for upto 10 years from the registration date. Such startup should be working towards development, deployment, innovation, or commercialization of new products, processes or services driven by technology or intellectual property.
Any Foreign Entity that has at least one registered office in India can register itself under the scheme.
Yes. A One Person Company (OPC), being a private limited company is allowed to avail all the benefits under the Startup India Registration Scheme.
Yes, any existing entity can register itself as a startup only it meets the prescribed criteria’s mentioned above to call as a startup. They are also entitled to avail various tax exemptions and IPR benefits that are available to startups.
Any Startup that has completed 10 years from its incorporation date, or the turnover of the previous years exceeds Rs.100 crores shall stop being called as startup.
Once the registration is complete, and the startup gets recognised, you will receive a system-generated certificate of recognition via mail. You can also download the DPIIT Recognition certificate from the Startup India portal.
Funds are the life blood for any business. In order to seek funds, one must need to attract Investors. For this, you need a unique product with a scalable model, visibility and market presence and profitability. Make sure that your product/ services gets healthy engagement and traction. It is very important to effectively communicate your business idea, sustainability and profitability to the investor.
Startup incubators are basically organisations that help entrepreneurs by guiding them and building up their business, particularly in the underlying stages. Startup accelerators are the Development driven organisations that strengthen the Startups by boosting their products and market presence.
1. Handholding and Simplification
2. Funding and Incentives
3. Accelerator, Incubation and Industry Academia Partnership
Know more about Tax Benefits here…
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