A newly established business initiated by an individual or a group of people. It differentiates from others with a unique new product or service which doesn’t exist similarly. Moreover, the key to a successful startup is innovation. This business either develops a fresh new product or service or redevelops an existing product or a service into something better. Generally, startup registration is the first step towards beginning your Startup in India.
Startup India Means
In brief, one of the best business trends in India is Startups. Thus, the Government of India is promoting Startup India Initiative Startup recognition and promotion. Whereas, the objective of the Startup India Initiative is to develop the economy and attract talented entrepreneurs.
Firstly, pick a type of registration for your business incorporation as a Private Limited Company, Partnership firm or a Limited Liability Partnership.
Moreover, the usual company registration processes are followed. In this case, obtaining the certificate of Incorporation or Partnership Registration, Permanent Account Number – PAN, and other essential compliances.
Step 2: Register with Startup India
The business should have a startup registration in India. The entire process is quick and online. To begin with, simply log on to the Startup India website and fill-up the form with details of your business and upload the required documents.
Step 3: Upload Documents (in PDF format only)
a) Recommendation or Support Letter
A letter of recommendation must be filed with the Registration Form. Following are valid document options:
a. Innovative Business Recommendation Letter – Explaining the nature of the business, from an incubator at a Post-graduate college/institute. It is submitted in a specified format by the Department of Industrial Policy and Promotion (DIPP), or
b. Innovative Business Support Letter – Describing the nature of the business, from an incubator at a Post-graduate college/institute. To be submitted in a format specified by the Department of Industrial Policy and Promotion (DIPP), or
c. A letter of recommendation (explaining the nature of business), from an incubator established in Post-graduate college/institute. It should be submitted in a format specified by the Department of Industrial Policy and Promotion (DIPP), or
d. Funding Letter with not less than 20% Stake in Equity by any incubation Fund or Angel Fund or Private Fund or Accelerator or Angel Network, duly registered with SEBI who promotes innovative businesses.
e. Funding Letter by Government of India or any State Government as a part of a directed scheme promoting innovation, or
f. A patent filed and published in the Indian Patent Office’s Journal in areas affiliated with the nature of the business to be promoted.
b) Certificate of Incorporation or Registration
Upload your Company/LLP’s Certificate of Incorporation – Registration Certificate for Partnership Firm
c) Description of your business in brief
A description of the innovative nature of your Products or Services.
Step 4: Would you like to avail tax benefits
As a rule, the Startups get income tax exemption for 3 years from the date of incorporation. In order to avail these benefits, they have to be certified by the Inter-Ministerial Board (IMB). Start-ups affiliated by DIPP (Startup Registration), Government of India can avail IPR related benefits without any additional certification from IMB.
Step 5: Self-certify your compliance with the following:
a. Register your Startup as a Private Limited Company, Partnership Firm or a Limited Liability Partnership
b. Your Business should not be incorporated or registered in India for more than 5 Years.
c. Less than 25 Crore Turnover every year.
d. The business must work for innovating something or simply improving existing technology.
e. The business should not be a consequence of splitting up or reconstruction of an existing business.
Step 6: Avail Recognition Number
Once applied you will instantly receive the Recognition Number for your startup. The certification of recognition is issued once all your documents are verified.
Upload documents very cautiously. During verification, if the required documents are not uploaded, wrong or forged it may result in a fine of 50% of your paid-up capital with a minimum fine of Rs. 25,000/-
Step 7: Other Elements of Startup Registration in India
a) Patents, trademarks or design registration
For patent registration of your innovation or a trademark for your business, you can access anyone from the list of government-issued facilitators. By only paying the Statutory Fees you can get a reduction of 80% in fees for Patent Registration.
Particularly, one of the major challenges of Startup remains access to finance. Due to Lack of experience, security or existing cash flows many stop entrepreneurs from attracting investors. Similarly, the high-risk nature of startups keeps investors away from them.
For proper funding support, the Government has created a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore for a time frame of 4 years (i.e. INR 2,500 crore per year). This fund is in the nature of Fund of Funds. It would not directly invest in startups. These funds help participating in the capital of SEBI registered Venture Funds.
The requirement of Government Recognition for Your Startup Registration
Startup India brings benefits for your startup from the government.
Key elements of the Fund of Funds
The professional from Industry bodies, academia and successful startups will manage the Funds of Funds under a Board.
Life Insurance Corporation (LIC) should co-invest in the Fund of Funds
The Fund of Funds must contribute a maximum of 50% of the SEBI registered Venture Funds (Daughter Fund). To get the contribution, the daughter fund must have already raised the balance of 50%. Based on the contribution made the Fund of Funds must have representatives on the board of the venture fund.
The Fund shall ensure assistance to a broad mix of sectors such as manufacturing, agriculture, health, education, etc.
Due to various government initiative, it has become very simple and easy to register your Startup. Consequently, Startups will boom in the coming times changing the way businesses happen. Thus, for a smooth registration process connect with the experts from the Legal, Financial and Taxation industry.