Startups are booming in India. The government is also supporting young entrepreneurs to establish startups. Startups help to boost the country’s economy. A startup is a business that offers innovative products or services that provide solutions to a problem existing in society. A startup may also redevelop a current product or service into something better.
The Government of India, under the leadership of PM Narendra Modi, has started and promoted the Startup India initiative to develop the Indian economy, recognize and promote startups and attract talented entrepreneurs.
Steps to Register Your Startup With Startup India
Step 1: 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 to follow all the normal procedures for registration of any business like submitting the registration application and obtaining the Certificate of Incorporation/Partnership registration.
You can incorporate a Private Limited Company or a Limited Liability Partnership (LLP) by filing the registration application to the Registrar of Companies (ROC) of your region.
You can establish a Partnership Firm by filing the application for registration of your firm with the Registrar of Firms of your area. You need to submit the required documents and fees to the Registrar of Companies or Registrar of Firms along with the registration application.
Step 2: Register with Startup India
Then the business must be registered as a startup. The entire process is simple and online. Visit the Startup India website and click on the ‘Register’ button as shown below. Enter your name, email ID, mobile number, password and click on the ‘Register’ button. Next, enter the OTP which is sent to your email and other details like, the type of user, name and stage of the startup, etc and click on the ‘Submit’ button. After entering these details, the Startup India profile is created.
Once, your profile is created on the website, startups can apply for various acceleration, incubator/mentorship programmes and other challenges on the website along with getting access to resources like Learning and Development Program, Government Schemes, State Polices for Startups and pro-bono services.
Step 3: Get DPIIT Recognition
The next step after creating the profile on the Startup India Website is to avail the Department for Promotion of Industry and Internal Trade (DPIIT) Recognition.
This recognition helps the startups to avail benefits like access to high-quality intellectual property services and resources, relaxation in public procurement norms, self-certification under labour and environment laws, easy winding of company, access to Fund of Funds, tax exemption for 3 consecutive years and tax exemption on investment above fair market value.
For getting DPIIT Recognition, log in with your registered profile (account) credentials on the Startup India website and click on the ‘Apply for DPIIT Recognition’ option under the ‘Recognition’ tab.
On the next page, click on ‘Apply as Company or LLP’ or ‘Apply as Partnership Firm’. When clicked on the ‘Apply for Company or LLP’ button, it will redirect to the National Single Window System (NSWS) website. Companies and LLPs should register on the NSWS website and add form ‘Registration as a Startup’ to get DPIIT recognition.
Step 4: Recognition Application
On the ‘Startup Recognition Form’, you need to fill the details such as the entity details, full address (office), authorised representative details, directors/partner details, information required, startup activities and self-certification.
Click on the plus sign on the right-hand side of the form and enter each section of the form.
After entering all the sections of the ‘Startup Recognition Form’, accept the terms and conditions and click on the ‘Submit’ button.
Step 5: Documents for Registration
Incorporation/Registration Certificate of your startup Proof of funding, if any Authorisation letter of the authorised representative of the company, LLP or partnership firm Proof of concept like pitch deck/website link/video (in case of a validation/ early traction/scaling stage startup) Patent and trademark details, if any List of awards or certificates of recognition, if any PAN Number
Step 6: Recognition Number
That’s it! On applying you will get a recognition number for your startup. The certificate of recognition will be issued after the examination of all your documents which is usually done within 2 days after submitting the details online.
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 fees.
Funding: One of the key challenges faced by many startups has been accessing 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, the 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 of 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. Self Certification Under Employment and Labour Laws: Startups can self certify under labour laws and environment laws so that their compliance costs are reduced.
Self-certification is provided to reduce regulatory burden thereby allowing them to focus on their core business. Startups are allowed to self-certify their compliances under six labour laws and three environment laws for a period of 3 to 5 years from the date of incorporation.
Units operating under 36 white category industries as published on the website of the Central Pollution Control Board do not require clearance under 3 environment-related Acts for 3 years.
Tax Exemption: Startups are exempted from income tax for 3 years. But to avail these benefits, they must be certified by the Inter-Ministerial Board (IMB). The Startups incorporated on or after 1st April 2016 can apply for the income tax exemption.
Need Government recognition for your Startup?
Startup India helps you to enjoy benefits from the government. register for Startup India now.
Key Features of the Fund of Funds
The Fund of Funds shall be managed by the Small Industries Development Bank of India (SIDBI) 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. It’s very easy to register as a startup thanks to the various government initiatives. However, you can focus on your key area while we at ClearTax help you from start to finish right from incorporating your company to getting your startup recognition.