Apply for Start-up Registration

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

Incorporate your business

You must first incorporate your business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership
You have follow all the normal procedures for registration of any business like obtaining the certificate of Incorporation/Partnership registration, PAN, and other required compliances.

Register with Startup India

Then the business must be registered as a startup. The entire process is simple and online. All you need to do is log on to the Startup India website and fill up the form with details of your business and upload certain documents.

Documents Required

A letter of recommendation/support A letter of recommendation must be submitted along with the registration form. Any of the following will be valid.

A recommendation (regarding innovative nature of business) from an Incubator established in a post-graduate college in India, in a format specified by the Department of Industrial Policy and Promotion (DIPP)

A letter of support by an incubator, which is funded (in relation to the project) by Government of India as part of any specified scheme to promote innovation

A letter of funding of not less than 20% in equity, by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network, duly registered with SEBI that endorses innovative nature of the business

A letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation.

A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of the business being promoted.

Process

Incorporation/Registration Certificate

You need to upload the certificate of incorporation of your company/LLP (Registration Certificate in case of partnership)

Description of your business in brief

A brief description of the innovative nature of your products/services.

Answer whether you would like to avail tax benefits

Startups are exempted from income tax for 3 years. But to avail these benefits, they must be certified by the Inter-Ministerial Board (IMB). Start-ups recognized by DIPP, Govt. of India can now directly avail IPR related benefits without requiring any additional certification from IMB.

Finally, you must self-certify that you satisfy the following conditions

a) You must register your new company as a Private Limited Company, Partnership firm or a Limited Liability Partnership
b) Your business must be incorporated/registered in India, not before 5 years.
c) Turnover must be less than 25 crores per year.
d) Innovation is a must– the business must be working towards innovating something new or significantly improving the existing used technology.
e) Your business must not be as a result of splitting up or reconstruction of an existing business.

Immediately get recognition number

That’s it! On applying you will immediately get a recognition number for your startup. The certificate of recognition will be issued after the examination of all your documents.
However, be careful while uploading the documents. If on subsequent verification, it is found to be obtained that the required document is not uploaded/wrong document uploaded or a forged document has been uploaded then you shall be liable to a fine of 50% of your paid-up capital of the startup with a minimum fine of Rs. 25,000.

Patents, trademarks and/or design registration

If you need a patent for your innovation or a trademark for your business, you can easily approach any from the list of facilitators issued by the government. You will need to bear only the statutory fees thus getting an 80% reduction in fe

Funding

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 Fund of Funds shall be managed by a Board with professionals from industry bodies, academia, and successful Startups.

Life Insurance Corporation (LIC) shall be a co-investor in the Fund of Funds

The Fund of Funds shall contribute to a maximum of 50% of the SEBI registered Venture Funds (“daughter funds”). In order to be able to receive the contribution, the daughter fund should have already raised the balance 50%. The Fund of Funds shall have 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 manufacturing, agriculture, health, education, etc.

FAQ

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.

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