Apply for Start-up Registration
A startup is a newly established business, usually small, started by 1 or a group of individuals. What differentiates it from other new businesses is that a startup offers a new product or service that is not being given elsewhere in the same way. The keyword is innovation. The business either develops a new product/ service or redevelops a current product/service into something better. Start-up is very popular in India in order to flourish the Indian Economy. PM Narendra Modi has started Start-up scheme in India.
How to register for Start-up in India
A letter of recommendation/support A letter of recommendation must be submitted along with the registration form. Any of the following will be valid.
One of the key challenges faced by many startups has been accessing to finance. Due to lack of experience, security or existing cash flows, entrepreneurs fail to attract investors. Besides, the high-risk nature of startups, as a significant percentage fail to take-off, puts off many investors.
In order to provide funding support, Government has set up a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR 2,500 crore per year). The Fund is in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.
Features of the Fund of Funds
The organizations namely, Private Limited Company, Partnership Firm, and limited liability partnership can register with the Start-up Scheme.
Any organization from anywhere is willing to register with Start-up but must have at least one office in India.
According to the rules, any organization up to ten years from the date of registration.
Once the application is completed, you will receive a system-generated certification of reorganization and you can download it from the website of Start-up Portal.
There are a number of benefits startups receive by the Startup India Scheme. Nevertheless, in order to avail these benefits, an entity is needed to be set up by the DPIIT as a startup.
Startups are allowed to self certify their compliance for six labour laws and three environment laws. This is allowed for a total period of five years from the date of incorporation/registration of the entity. Startups are allowed a three-year tax exemption and the best intellectual property services and resources solely built to help startups protect and commercialise their IPRs.
The most preferred business structures for a startup are Private Limited companies and LLPs. A Private Limited company is legally recognized and generally favoured by investors. However, it has stricter compliance and may have a higher cost of incorporation.
Whereas incorporation cost is lower for LLPs and they tend to have relaxed compliance in comparison to Pvt. Ltd. Co. In addition to that, LLPs have limited liabilities and are equally recognised by investors and all over the world.
Startup incubators are typically institutions that help entrepreneurs by developing their business, especially in the initial stages. Incubation function is usually carried out by institutions who have experience in the business and the tech world.
Startup accelerators support early-stage, growth-driven companies. These programmes usually have a timeframe in which individual companies spend anywhere between a few weeks and a few months working with a group of mentors who are educated and may also provide financial help.
Any business entity that has completed 10 years from the date of its incorporation/registration, and has exceeded the previous years turnover of 100 crores shall stop to be a startup on completion of 10 years from the date of its registration/incorporation.
Yes, as per the law an existing entity can register itself as a startup, provided that it meets the prescribed criteria for a startup. They will also be able to avail various tax and IPR benefits that are available to startups. The criteria are the same as those mentioned in the article above.