STARTUP INDIA REGISTRATION PROCESS STEP BY STEP GUIDE – TRIJURIS
In this blog, we will read about Startup India registration process step by step. After reading this blog we
Since the country’s Prime Minister, Narendra Modi, established the Startup India programme, the number of businesses has exploded.
With government tax breaks, incentives, and assistance, an increasing number of people are starting their own businesses. The most intriguing aspect is that the vast majority of the firms are led by youthful founders and owners, which says volumes about India’s great creative talent.
Because they previously lacked government support and had to accomplish everything on their own, few people threw themselves into it wholeheartedly. However, since the initiative began, people have become more courageous, knowing that the government will support them in the process, and as a result, they are coming up with new ideas.
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People have ideas, but many of them have no idea how to start a business or how to turn their idea into profitable operations. People are unsure on how to register their business as a startup.
Furthermore, some people are unsure whether or not their business qualifies as a startup. Keeping all of the aforesaid things in mind, we’ve written a blog post to assist you in this respect, outlining the criteria for being classified as a startup as well as the process for registering your business as one.
Let us first define what a startup is before delving into the mechanics of eligibility and procedure.
WHAT EXACTLY IS A STARTUP?
A startup is a business that addresses a problem and is run by a small group of people. Such businesses are formed when the founders identify flaws in the present system in which they have been working and decide to address the issues by starting their own business.
Apart from that, a company can be formed when one or more founders have a potentially fantastic concept. The services that such firms offer are those that they believe are currently unavailable or of poor quality.
The most significant benefit of a startup is that it increases employment in the country as a direct result of more and more businesses being established. With the prospect of more job prospects, the Indian government has attempted to assist young businesses in growing and succeeding in the Indian market. The Startup India project assists you in innovating and improving long-term economic development.
WHAT IS THE CONCEPT OF STARTUP INDIA?
The Government of India’s flagship initiative, Startup India, was launched in January 2016. The government of India has adopted this step in order to strengthen the ecosystem in India that supports innovation and entrepreneurs. The government hopes that by implementing this policy, it will be able to promote long-term economic growth and increase job possibilities in India. To address the criteria of this effort, the Indian government has unveiled the Startup India action plan.
WHAT ARE THE BENEFITS OF STARTUP INDIA?
The following are some of the advantages for startups in India:
- Startups will be able to self-certify that they are complying with nine labour and environmental rules. For a period of three years, no inspections will be done in the event of labour laws.
- Startup India’s mobile application allows businesses to register and upload necessary paperwork. Approvals, registrations, and filing compliance will all be handled through a single window.
- The process of filing a patent will be simplified. The Startup will receive an 80 percent discount on the patent application fee. The Startup will only be responsible for statutory fees, while the government will be responsible for all facilitator fees.
- Seven new research parks will be established to provide facilities for startups in the R&D industry as part of the Startup India programme, which will foster research and innovation among students who are aspiring entrepreneurs.
- Both new and experienced entrepreneurs will be given equal opportunity. This was formerly impossible because all applicants were expected to have either “prior experience” or “prior turnover.” However, public appropriation rules for startups have recently been loosened.
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WHAT QUALIFIES YOU AS A STARTUP INDIA PARTICIPANT?
- A private limited company or a limited liability partnership must be formed.
- For the first 10 years after registration, the company remains a startup. The Indian government has increased this to ten years from seven years in order to provide firms with more chances and tax breaks in the long run.
- If the annual turnover does not exceed Rs 100 crore in any of the ten years, the company is still considered a startup. Once a company reaches this threshold, it is no longer considered a startup. The Indian government has recently increased the threshold to Rs 100 crore from Rs 25 crore.
- The Department of Industrial Policy and Promotion must approve the company (DIPP)
- An Incubation Fund, an Angel Fund, or a Private Equity Fund should fund the company.
- The Indian Patent and Trademark Office must provide patron assurance.
- You must obtain a letter of recommendation(LoR) from an incubator.
- The company must come up with new concepts and concepts.
- All information about the funding must be filed with SEBI (Securities and Exchange Board of India)
PROCEDURE FOR STARTUP INDIA REGISTRATION
STEP 1: INCORPORATE YOUR BUSINESS
First and foremost, you must establish your company as a Private Limited Company, a Limited Liability Partnership, or a Partnership organization. To obtain registration, you must simply follow the standard procedure, which includes filling out a form.
STEP 2: CREATE AN ACCOUNT WITH STARTUP INDIA
Now you must register your organization or company as a startup under the government’s Startup India initiative. All you have to do is fill out the form on the Startup India website. You must complete all of the fields and upload a specified amount of documents.
STEP 3: DOCUMENTS YOU NEED TO SUBMIT (YOU MUST ONLY SUBMIT DOCUMENTS IN PDF FORMAT)
- Along with the registration form, you’ll need a letter of recommendation. You can obtain any of the letters of recommendation listed below.
- In a format recognized by the DIPP, a recommendation letter from an Incubator was recognized at a post-graduate college in India. This is about the business’s innovative nature; OR
- A recommendation letter from an incubator that the Government of India finances as part of any specific programme to foster innovation; OR
- A letter in DIPP format from any of the Government of India’s authorized incubators.
- A letter of funding from a SEBI-registered Incubation Fund, Private Equity Fund, Angel Fund, Accelerator, or Private Equity Fund that supports the innovative nature of the business; OR
- A recommendation from the Central or State Governments of India; OR
- A patent was filed and published in the Indian Patent Office Journal in areas related to the nature of the business.
- Certificate of Registration or Incorporation
- You must upload your business’s or LLP’s certificate of incorporation or the registration certificate for a partnership company.
- A brief description of your company.
STEP 4: INDICATE WHETHER YOU REQUIRE A TAX EXEMPTION.
In India, startups are exempt from paying income tax for the first three years, but they must be certified by the Inter-Ministerial Board to receive these benefits (IMB). Companies that have registered with DIPP are exempt from this requirement because registration is sufficient to receive the advantages.
STEP 5: SELF-CERTIFICATION OF THE CONDITIONS LISTED BELOW
- You are a limited liability company (LLC), a limited liability partnership (LLP), or a partnership firm.
- Not earlier than 5 years, your company must be incorporated or registered in India.
- Your company’s annual revenue must not exceed Rs 100 crore.
- The company must continue to come up with new ideas or improve the old system in its own unique way.
- Your company must be a new concept, not a division or reconstruction of an existing one.
STEP 6: OBTAIN YOUR IDENTIFICATION NUMBER
You will receive an instantaneous recognition number after submitting this registration. Only once the authority has reviewed all of your uploaded documents will you receive a certificate of registration or incorporation.
NOTE: You must be cautious when submitting the data since any discrepancy might result in large penalties of up to 50% of your paid-up capital, or at the very least Rs 25,000.
Now that you’re aware of the Startup’s eligibility and registration requirements, you can enroll your company in the Startup India programme and take advantage of all of the government’s perks.
REQUIRED DOCUMENTS FOR STARTUP INDIA REGISTRATION
- A company entity’s registration certificate, often known as a Certificate of Incorporation.
- Memorandum of Association(MOA) or Articles of Association for LLP or partnership firm Copy of PAN card
- Names, contact information, and images of the directors.
- The social media profile or website link of the entity.
- If there is any information about intellectual property rights, please include it.
- In the event that an entity seeks funds from investors, the fund details must be provided.
- If you have any awards or certificates of recognition, make a list of them.
WHAT IS THE BEST WAY TO GET FUNDING?
Access to capital has been one of the most difficult issues for many entrepreneurs. Entrepreneurs are unable to attract investors due to a lack of experience, security, or established cash flows. Furthermore, many investors are put off by the high-risk character of startups, as a significant number fail to take off.
To give financial assistance, the government established a fund with an initial capital of INR 2,500 crore and a total corpus of INR 10,000 crore over a four-year period (i.e., INR 2,500 crore per year). The Fund is structured as a ‘Fund of Funds,’ which means it will not invest directly in startups but will instead contribute to the capital of SEBI-registered Venture Funds.
We can see that the government is working hard to promote startups in every way possible, including making the process of registering them easier and faster. In this approach, it is also assisting young entrepreneurs by providing them with a platform to display their new ideas and, as a result, contributing to the country’s economic progress.
The advantages provided by our government in the startup registration process have altered the general picture of startups. The govt. of India has allocated a total corpus or capital of Rs. 2500 crore to startups as an initial investment and Rs. 10,000 crore over the next four years. Startups receive perks such as a three-year tax exemption, a capital gain tax exemption, and an 80 percent rebate on patent costs.
It has gotten very simple to calculate any startup registration in India from beginning to end. From registration to incubation support, government funding, and tax breaks, the government has done a lot to help the sector grow. By making it easier to do business in India, this government programme is assisting in the development of a bright future for Make in India and preventing brain drain to foreign countries.
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Read our other articles:
- ROC compliance checklist for Private Limited companies 2021: https://www.trijuris.com/annual-compliance-for-private-limited/
- Trademark registration process (step by step) in India: https://www.trijuris.com/trademark-registration/
- A Step-by-Step Guide to GST Registration Procedure in India: https://www.trijuris.com/gst-registration/
- One Person Company (OPC) Registration: https://www.trijuris.com/opc-registration/
- HR policies for a startup company in India: https://www.trijuris.com/hr-policies/