‘Startup’ is one term in the business world that we hear about more nowadays, particularly after the Prime Minister of India introduced startup-based schemes in the year 2016. Theoretically, a startup is a business venture which is not older than five years and started by a person or a group of people. What segregates a startup from an organization is the goods or services offered by them as a startup must offer an innovative product to stimulate innovation and development in India.
The primary motive behind the startup scheme is the growth of new entrepreneurs and thriving business people to build a robust ecosystem and make India a country of job creators. Let’s have a look at what a startup looks like, the benefits behind company registration for startup, eligibility, and the registration process.
Benefits of company registration for start-ups
The startup formation and registration process have indeed opened new doors for young and aspiring entrepreneurs besides creating job opportunities. The government of India further offers many benefits to the startup that get themselves registered under the Companies Act 2013 and the startup India program. Some of the significant benefits offered by the Startup India Registration Scheme are:
Startups who have registered themselves under the new scheme can get an exemption from tax for three consecutive years. The income tax exemption benefits are available under Section 80IAC and section 56 for Angel Tax Relief.
Participation in acquiring government tenders
Public Sector Units and government offers many relaxations for startups while issuing tenders. Startups are allowed to take part in the public procurement job through tenders. They also get relaxation in criteria for turnover and other aspects.
Chances of getting government funding
The government allows crores of funds to accelerate Alternative Investment Funds which they invest in Startups. Every startup is eligible for applying under such quotas, which are managed by SIDBI.
Participate in Government Scheme
The Indian government issues several policy initiatives to encourage entrepreneurs to participate. For example, raw material support, an infrastructure spending program, and bank credit facilitation, to name a few.
Simple winding up
The procedure of winding up a business becomes simple, and it only takes 90 days under the Insolvency and Bankruptcy Code of 2016.
Startups can self-certify their adherence to distinct labour rules and nine different environmental laws.
In the process of filing a patent, you may be eligible for a rebate
Startups registered under the Startup India initiative would receive an 80 per cent discount on patent application fees.
Trademark Filling Rebate
The government offers to provide start-ups engaging in this plan a 50% discount on trademark application fees.
Eligibility for Startup India Registration
- A company can be qualified as a startup if it has not completed a period of 5 years from the date of its registration or incorporation.
- The company has been registered as a Private Limited Company under the Companies Act 2013 or Limited Liability Partnership or Partnership firm under the Indian Partnership Act 1932.
- The annual turnover of the company has never exceeded a hundred crores in any financial year since its incorporation.
- The company works for development, innovation and product and service improvement. The company must have a scalable business model with employment or wealth generation quality.
- The company is not formed after splitting with another or reconstructed with an already existing business.
The company Registration process for Start-ups in India
Business Incorporation Stage
This is the primary stage of an organization which have never been registered or incorporated under the proprietorship form. All the companies have to register themselves either as a Limited Liability Partnership, Private Limited Company or Registered Partnership Firm. However, to avail of the Startup India Scheme benefits, no additional registration is required other than the above-mentioned business structures.
Filling up the application form and other details
To make it simple, the government of India has made an online portal where an applicant can download the application form and start the registration process while sitting in the comfort of their home. You can find the application form on the official website of the Startup India Scheme. Once you log in, just fill in the necessary details and follow every instruction in detail. Should any of the details be mismatched with the original ones or are found to be forged, the applicant can be fined a minimum of 25,000 INR.
Get The DPIIT Recognition
Once you have created your profile on the Startup India website. You will get a DPIIT recognition certificate. This will act as proof and help you in securing benefits such as intellectual property services.
Documents required for Startup India Registration
- Certificate of Incorporation or Partnership Registration Certificate.
- A summary concerning how the business can create wealth, employment and innovation.
- Pan card
- Details about the company profile deck or website, if any.