Startup India registration: Check how to register your startup, step by step guide
Startup India Scheme is the Central government's initiative, whose primary objectives are the promotion of startups, generation of employment, and the creation of wealth.
Startup India Scheme is the Central government's initiative, whose primary objectives are the promotion of startups, generation of employment, and the creation of wealth. Launched on the 16th of January, 2016 by PM Narendra Modi. It is intended to build a strong ecosystem that is conducive for the growth of startup businesses. The new-entrants are granted a tax-holiday for three years and the Government through this initiative aims to empower startups to grow through innovation and design.
Here are the steps to get register startup register with Startup India Scheme, in order to avail all the benefits:
Step 1: Incorporation of your startup business
The first step is to register your business or get it incorporated as an entity. It can be a Private Limited Company or a Partnership firm or a Limited Liability Partnership depending upon certain criteria like the staff, scale, operations, partners willingness and other aspects.
The procedures for incorporation is normal for registering any business. Before registering your business with Startup India, you must obtain the certificate of Incorporation/Partnership registration, PAN, and other required compliance.
Step 2: Get your business register with Startup India
The next step is to get your business or a company registered as a startup. The entire process of registration is online and has been made simple. The startup owner is required to visit the official website of Startup India i.e startupindia.gov.in and fill up the form in the prescribed format with all the necessary details of your business along with uploading of certain important documents.
Step 3: Necessary documents to be uploaded
a) A letter of recommendation or support
A letter of recommendation needs to be submitted with the registration form on the website and it could be from any of the following:
(i) A recommendation letter (describing nature/innovation of business) from an Incubator established in a post-graduate college in India, in a prescribed format specified by the Department of Industrial Policy and Promotion (DIPP); OR
(ii) A letter of support by an incubator, which is funded (in relation to the project/business) by Government of India as part of any specified scheme to promote innovation and that particular nature of business; OR
(iii) A recommendation letter (describing nature/innovation of business), from an Incubator, recognised by the India Government in specified format by DIPP; OR
(iv) A letter of funding of minimum 20% in equity, by any Incubation Fund or Angel Fund or Private Equity Fund/ or Accelerator/ or Angel Network, who is registered under SEBI; OR
(v) A letter of funding issued by the Government of India or any State Government as part of any specified scheme that supports or promotes innovation; OR
(vi) A patent filed and published in the Journal by the Indian Patent Office in specific areas that are connected with the nature of the business being promoted.
b) Incorporation or Registration Certificate
The other document which needs to be uploaded is the certificate of incorporation of your company/LLP or the Registration Certificate in case of partnership firm.
c) Business or startup description in detail
A detailed description of the business, describing the innovative nature of your products/services also needs to be uploaded.
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Step 4: Now answer, if you want to avail tax benefits or not
The government is exempting the startups from income tax for the first 3 years. But in order to avail these benefits, they must be certified by the Inter-Ministerial Board (IMB). While the start-ups recognised by DIPP or Govt. of India can directly avail IPR related benefits.
Step 5: Now certify further necessary things
a) The startup must be registered as a Private Limited Company, Partnership firm or a Limited Liability Partnership
b) The business must be incorporated/registered in India, not before 5 years, meaning it should be not older than 5 years.
c) The turnover of the business must be less than Rs 25 crores per year.
d) Innovation is a must for the business– It should be working towards innovating something new or towards improving the existing technology.
e) The new business must not be formed after splitting up or reconstruction of any existing business.
Step 6: 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, in case the required document 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.
Other important areas like funding, patents etc:
1. 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.
2. One of the key challenges faced by several startups has been accessing to finance. Because of lack of expertise, security or existing money flows, entrepreneurs fail to draw in investors. Besides, the speculative nature of startups, as a major share fails to take-off, puts off several investors.
3. In order to produce funding support, Government has established a fund with an associate initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over an amount four years (Rs 2,500 crore per year). The Fund is within the nature of Fund of Funds, which suggests that it'll not invest directly into Startups, however, shall participate within the capital of SEBI registered Venture Funds.
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