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Startup Registration India - An Overview
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The startup registration India was introduced by the central government through the Startup India Scheme in the year 2016. The primary objective of this scheme is to encourage the establishment of start-ups in India. Under the Start-Up India scheme, the government has taken essential steps in order to build a robust startup ecosystem. It is a move towards making India a country of job creators in lieu of job seekers. All the programmes of the StartUp India Scheme are managed by the Department for Industrial Policy and Promotion (DPIIT). The Startup India scheme has broadened the scope of economic and social development by creating various job opportunities to escalate the Indian economy.
In this article, we will learn about the startup registration process, startup registration India.
What is Startup Company Registration?
A startup essentially refers to a newly established form of business, usually started by one member or a small group of individuals. What distinguishes it from other types of businesses (such as Sole Proprietorship, Partnership or a Company) is that a startup offers a new product or a service that is not being circulated elsewhere. Startups are characterized by their innovative properties which enable investors to show interest in the business. Startups may develop a new product/service or redevelop the current one into something better and refurnished.
A startup registration India is no cakewalk, and you may need to consult professionals so as to not face penalties in the later phase. This blog will assist you and guide you to the eligibility, documents and criteria for a startup registration process.
Benefits of Startup Registration India
Given below are the advantages of doing a startup registration India:
1. Tax exemption:
A startup company registration, operating under the Startup India Scheme of the government, is exempted from paying taxes for three years from the date of its incorporation. In addition to this, cash received from angel investors is not liable to be taxed. The three-year tax exemption is provided with a motive that a startup can invest the money that would otherwise be lost in paying taxes, to utilize it for the expansion of the firm. Moreover, the government also offers tax relief to startups on up-front investments that exceed well above the fair market value.
2. Obtaining a Loan and a Bank Account:
A startup registration India allows you to open a separate bank account to facilitate entrepreneurs obtaining loans from formal resources. The business bank account also acts as legal proof of startup registration India and helps build credibility. It allows entrepreneurs to obtain loans or pursue investors to fund their businesses.
3. Self-Certification:
In the early stages of startup registration India, companies are more prone to shut down. Thus, startups are allowed to self-certify themselves with the exception of nine labour and circumjacent rules of the government. As a result of the certification, authorities will not be liable to conduct any investigation for the first three years of a startup registration India.
4. Tenders from the Government:
Due to the high level of competition between businesses, every company cannot be secured by obtaining tenders from the government. However, as an attempt to allow a startup to establish itself better in the market, they are ranked higher on the priority list when government authorities give out tenders.
Checklist for Startup Registration India
1. Age of the business:
The age of a startup company shall not be exceeding ten years from the date of its inception.
2. Type of the business:
A startup shall initially be incorporated as a Partnership firm (as per Indian Partnership Act 1932), or a Limited Liability Partnership (as per LLP Act, 2008) or a Private Limited Company (under Companies Act, 2013).
3. Turnover Limit:
The company shall have an annual turnover not exceeding 100 crores since its incorporation for any financial year.
4. A new business entity:
A startup must be a separately new business entity. This implies that startup registration India must not be done as a result of restructuring or the split of an existing company.
5. Innovation-friendly:
A startup shall promote the development of a new product or service and bring in innovation in its functionality or work towards improvisation of an existing product or service.
Startup registration process
Given below are steps for the procedure of startup registration India:
Step 1: Startup Registration India through incorporation
In order to do startup registration India, an entrepreneur must first establish it as a private limited company, a partnership firm or a Limited Liability Partnership (LLP). Thereafter, one is required to follow all the procedures for registration of a business in India such as obtaining the Certificate of Incorporation (CoI), PAN, Partnership registration.
Step 2: Registering with the Startup India
After successfully incorporating the business, one must register on the Startup India portal by logging in and filling up the details of his/her business in the Form. Enter the OTP to activate your profile and select the type of user. Now, you can apply for various acceleration and mentorship programmes of the government. By registering on the Startup India portal, one can also get access to resources like the Learning and Development Program, Government Schemes, State Polices for Startups and pro-bono services.
Step 3: Attain DPIIT Recognition
The next step after creating a profile on the Startup India portal is to avail recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition allows startups to utilize leverages such as access to high-quality intellectual property services, relaxation in public procurement norms, self-certification under Labour and Environment laws, easy winding up of business, access to funds, tax exemption for three consecutive years from the date of startup registration India and tax exemption on investment over and above fair market value.
Step 4: Application for recognition
In order to get DPIIT recognition, click on the ‘Get Recognised’ button if you are a new user. The ‘Recognition Application Detail’ page opens up. On this page, fill up the Startup Recognition Form and click ‘Submit.’
Step 5: Documents for Startup registration India
1. Incorporation/Registration Certificate of the startup 2. Details of the Directors 3. Proof of concept such as website link/video (in case of a validation/scaling stage startup) 4. Patent and trademark details 5. PAN Number
Step 6: Recognition Number
Hurray! You can now receive your startup recognition number immediately. Certificate of Recognition is issued within two days of examination of all the documents. Please note that during verification, if one or more documents are found wrong or invalid, the entrepreneur may be liable to pay a fine of 50% of the paid-up capital. Thus, it is recommended to consult a professional to avoid paying the fine for non-compliance.
Owing to various government initiatives in favor of startups, it is becoming a viable option for entrepreneurs nowadays. Even though it is very easy to register as a startup, it is advisable to consult a certified professional so as to avoid the burden of fines unnecessarily. It hampers your company productivity and does not let you focus on the key aspects. We at Taxzona Consultancy help you right from incorporating your company to getting your startup recognition. In addition to this, we make sure to update you on the company profile while filing your compliances. Do visit our website to know more about startup services.
For any questions and queries, feel free to contact us:
Call: +919820444477
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FAQ's
The annual turnover of these business entities should not exceed 100 crores.
