What is a Start-Up Registration?
Startup India is a flagship initiative by the Indian Government aimed at promoting and nurturing the growth of startups in the country. The primary objective of Startup India is to position India as a leading global hub for startups. Through enrollment in the Startup India program, startups can avail themselves of a plethora of advantages, such as tax incentives, financial aid, and access to incubators.
What is Startup?
A startup is a venture that introduces groundbreaking products or services to tackle prevalent societal problems or needs. It can also revamp existing offerings, enhancing them to provide superior solutions. The core of a startup is its dedication to introducing new concepts and inventive solutions to the market.
What sets it apart from other new enterprises is its provision of a unique product or service that is not presently accessible elsewhere in a similar manner. Innovation and the quest for progress and advancement serve as the driving forces behind startups.
Eligibility Conditions for Startup India Registration
An entity must meet specific criteria to be eligible for Registration with Startup India. Below is a complete breakdown of the eligibility Conditions for the Startup India Scheme:
- Age of the Applicant: Applicants must be Indian citizens aged 18 or above to apply for the scheme.
- Age of the Firm: The firm’s incorporation date should not exceed ten years.
- Type of Company: The company must be incorporated as a Partnership Firm, Private Limited Company, or a Limited Liability Partnership (LLP).
- Annual Turnover: The company’s annual turnover must not surpass Rs. 100 crores in any financial year from its commencement.
- Innovative and Scalable: Startups should have a plan for developing or enhancing a product, process, or service and possess a scalable business model with high potential for generating wealth and employment.
- Original Entity: The entity should have been initially formed by the promoters and not through the division or reconstruction of an existing business.
Companies striving to innovate and develop new products or services can access benefits under the Startup India policy provided they meet the following criteria:
- Incorporation of the Latest Technology or Intellectual Property: Startups must focus on developing, deploying, or commercializing products or services that leverage cutting-edge technology or intellectual property.
- Enhancement of Existing Products or Creation of New Ones: The primary objective of startups should be to either enhance existing products or introduce entirely new ones that add value to customers or streamline workflows.
- Sole Focus on Unique Product Development and Commercialization: Startups should primarily engage in the development and commercialization of unique products aimed at enriching customer value or enhancing workflow efficiency.
For startups seeking registration and approvals, compliance with Department for Promotion of Industry and Internal Trade (DPIIT) requirements is essential. These criteria include:
- Recommendation from an incubator affiliated with any post-graduate college.
- Recommendation from a government-recognized incubator.
- Publication of a patent within the Indian Patent Office’s journals, specifically related to the product or service domain.
- SEBI registration for startups offering funding and equity services.
- Receipt of a funding letter from the state or central government supporting innovation initiatives.
Furthermore, partnership startups must adhere to certain conditions. They should ensure that 51% of shares are owned by women or individuals belonging to Scheduled Castes or Scheduled Tribes. Additionally, maintaining a clean credit payment history is imperative.
Process to Register a Startup
- Step 1: Incorporate Your Business
The initial stage involves incorporating your business as either a Private Limited Company, a Partnership firm, or a Limited Liability Partnership (LLP). This requires adhering to standard procedures for business registration, including submitting the registration application and obtaining the Certificate of Incorporation or Partnership registration.
- Step 2: Register with Startup
Once your business is incorporated, the subsequent step involves registering it as a startup, which is a straightforward process and can be done online. Here’s how:
- Visit the Startup India website and click on the ‘Register’ button.
- Fill in your name, email ID, and mobile number, and create a password. Then, click ‘Register.’
- Enter the OTP (One-Time Password) sent to your email and provide additional details, such as the type of user, name, and startup stage.
- Click on the ‘Submit’ button to create your Startup India profile.
By completing this registration, your business will be officially recognized as a startup under the Startup India scheme, rendering it eligible for various benefits and support.
- Step 3: Obtain DPIIT Recognition
Once you’ve set up your profile on the Startup India website, the subsequent pivotal task involves securing recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition unlocks a plethora of advantages for startups, encompassing top-notch intellectual property services, relaxed public procurement norms, self-certification for labor and environmental regulations, streamlined company dissolution procedures, access to the Fund of Funds, and a three-year tax exemption, including tax relief on investments exceeding fair market value.
To kickstart the process of obtaining DPIIT Recognition, simply log in using your registered profile credentials on the Startup India website and navigate to the ‘Recognition’ tab, where you’ll find the ‘Apply for DPIIT Recognition’ option. Upon clicking, you’ll be prompted to choose between ‘Apply as Company or LLP’ or ‘Apply as Partnership Firm.’
Opting for ‘Apply for Company or LLP’ directs you to the National Single Window System (NSWS) website. Companies, and Limited Liability Partnerships (LLPs) need to complete registration and incorporate the ‘Registration as a Startup’ form to initiate the DPIIT recognition procedure. This pivotal step formalizes your startup’s acknowledgment under DPIIT, rendering it eligible for an array of benefits and support offered through the Startup India initiative.
- Step 4: Submit the Documents for Registration
To finalize the registration and secure DPIIT recognition for your startup, you must furnish the following documents:2
- Incorporation or Registration Certificate of your startup.
- Proof of funding, if applicable.
- Authorization letter from the company’s authorized representative, partnership firm, or LLP.
- Proof of concept, which could include a website link, a pitch deck, or a video (pertinent for startups in the validation/early traction/scaling stages).
- Details of trademarks as well as patents, if any.
- Documentation of any awards or certificates of recognition received.
- PAN (Permanent Account Number).
- Step 5: Self-Certification of Eligibility Conditions
You are required to self-certify that your business meets the following criteria: Your business is structured as a Private Limited company, LLP, or partnership firm. Your business has been incorporated or registered within India for a maximum period of five years. Your company’s turnover does not exceed Rs. 100 crores. Your company consistently engages in innovation or enhancing existing systems. Your business model revolves around a novel concept, distinct from merely splitting up or reconstructing an existing business.
- Step 6: Obtain Your Recognition Number
Upon submitting your application for registration, you will promptly receive a recognition number. The issuance of the Registration or Incorporation certificate occurs after the authority’s review of all your uploaded documents.
It’s crucial to maintain accuracy while uploading your data to prevent any discrepancies. Errors in submission may result in fines ranging from up to 50% of your paid-up capital or a minimum of Rs. 25,000.
By meeting the eligibility and registration requirements, your company becomes eligible to enroll in the Startup India scheme, thereby gaining access to a plethora of benefits offered by the Government.
Benefits of Startup India Registration
The Startup India scheme extends a range of pivotal benefits to enrolled startups, including:
- Self-Certification: Startups can effortlessly self-certify compliance with six labor laws and three Environmental Laws through a streamlined online process.
- Tax Exemption: Recognized startups are entitled to income tax exemption for three consecutive financial years within their initial ten years since incorporation. Additionally, they can seek exemption from angel tax under Section 56 of the Income Tax Act.
- Simplified Company Dissolution: Startups have the flexibility to wind up their operations within a mere 90 days from the date of application.
- Patent Application and Intellectual Property Rights (IPR) Services: DPIIT-recognized startups receive substantial benefits during the patent application process and other intellectual property rights services, all at significantly reduced fees. Startup India offers an 80% rebate for patent filings and a 50% rebate for trademark filings.
- Access to Funding: The Startup India initiative provides support through two dedicated funds:
› Fund of Funds for Startups (FFS)
› Startup India Seed Fund Scheme (SISFS) - Streamlined Public Procurement Norms: Government ministries, departments, and public sector undertakings are empowered to relax norms across all public procurements for startups acknowledged by DPIIT.
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FAQ’s for Start-Up Registration
The Indian government has implemented a number of Schemes to provide financial aid to entrepreneurs. Startups can access these funds for research, marketing, and other purposes to aid in their business expansion.
Launched on January 16, 2016, Startup India plays a significant role in providing financial support and mentorship to entrepreneurs. It also serves as a networking hub for entrepreneurs to engage with industry experts, investors, and stakeholders. Moreover, the scheme promotes research, development, and technology transfer, contributing to job growth and economic prosperity.
If you have a Private Limited Company, Limited Liability Partnership, or Registered Partnership firm, you can get a Startup recognition certificate.
The DPIIT (Department of Industrial Policy and Promotion) provides companies with the opportunity to gain recognition, which in turn offers them tax benefits, simplified compliances, faster processing of intellectual property rights, and more.
After enrolling in this initiative, the entity will have the opportunity to receive certain tax incentives. However, a separate application must be submitted on the portal to access them.
Once your registration is complete, you’ll gain access to the startup India portal, where you can connect with fellow startups, investors, or incubators.
Over a span of 10 years starting from the date of incorporation, the turnover must exceed Rs.100 crore in any financial year.
It generally takes about 7-10 business days for the government officers to meticulously go through and verify all the information and documents provided.