Startup India Registration

India is also a land where every single individual tends to be a jobseeker, and hardly a few are job creators. Startup India registration online can also be a game-changer. The idea of setting up a business doesn’t come even in the rarest of dreams, considering it a self-destructive option. The government of India, to end this fearful atmosphere and develop an ecosystem where entrepreneurship, risk, ideas, and profit like words do not raise eyebrows, has introduced concepts such as ease of doing business, Make in India, and StartupIndia.

Why Startup India Registration?

The general meaning of the word startup is ‘’the act or an instance of setting in operation or motion.’’ In the context of Startupindia, the term was coined for an eligible business entity. Recognized by the Department for Promotion of Industry and International Trade (DPIIT). Recognition means considering and acknowledging it as a startup. Startup India registration is also equally important in the product market as well as the service industry. Anyone who is also a professional expert in a particular field can start their practice with a Startup India certificate. The common examples are Chartered Accountants, Doctors, and architects who convert their practice area into a business idea for startup. Registration of startup in India is also very user-friendly and provided by the DPIIT to encourage the startup community.

Scope of Startup India Registration: Eligible Business Entity

The scope of the Eligible Business Entity is also narrow and covers only the following entities:

1. Private limited companies (including one-person companies),
2. Limited Liability Partnership firms (LLPs).
3. Registered Partnership Firms.
4. Foreign companies that have registered offices in India.

This means a single individual can also launch Startup India registration by creating a one-person company (OPC) as per relevant provisions of the Companies Act. It excludes all other conventional forms of doing business, i.e. sole proprietorship or unregistered partnership firm. The rationale behind excluding other entities may be the burden of unlimited liability, lack of legal supervision, an unstructured form of management, and unaware stakeholders.

Process of Startup India Registration Recognition:

The Startup India registration process is simple, so first we must incorporate an eligible entity. Secondly, ensure that this newly incorporated entity and the existing one are satisfied by following the prescribed conditions:

• The Company should not be older than 10 years from the date of Incorporation.
• An annual turnover should not exceed Rs. 100 crores for any of the financial years since its Incorporation.
• entity should not have been formed by splitting up or reconstructing an already existing business.
• Should work towards the development or improvement of a product, process, or service and/or have a scalable business model with high potential for the creation of wealth & employment.
• There are no government fees for Startup India registration It is totally free, and you can do it online as well. Therefore, we can say that the startup India certificate cost is totally free.
• After successful registration with Startup India, you will receive a Startup India registration certificate.

Thus, it is clear that an existing entity which meets all the above-mentioned norms can be registered with Startup India. It is not always mandatory to incorporate new entity.

Then, the next step is to register an eligible entity with the Startup India Registration website by creating an account.

The Documents Required for Startup India Registration Certificate Website are

• Incorporation/Registration Certificate.
• Proof of funding, if any.
• Authorization letter of the company’s authorized representative, LLP, or partnership firm.
• Applicant Aadhar.
• PAN (Permanent Account Number).

The next step is getting recognition from the DPIIT by clicking “Apply for DPIIT recognition “.If an application is rejected and marked incomplete, there is a facility to edit the existing application three times after a new application is required. DPIIT, on examination, if satisfied that Startup India Registration is qualifying for recognition, will issue a certificate of recognition. In the ordinary course, a certificate is issued within 2 days, and there is no fee for that.

Eligible Entity which can’t get Recognition by DPIIT:

• Entity or entities formed due to merger, demerger, acquisition, amalgamation, or absorption will not be recognized as startups except merger or amalgamation under Section 233 of the Companies Act, 2013 between any of the following classes of companies: Startup India Registration is subject to the fulfillment of the norms of DPIIT.
• two or more start-up companies;
• one or more start-up companies with one or more small company
• Entities formed due to compromise or arrangement as provided under the Companies Act, 2013 will not be recognized as Startup.
• An entity can avail of recognition, subject to fulfilling the conditions provided in sub-section (3) of Section 80-IAC of the Income-tax Act, 1961, regardless of its conversion from one form to another.
• Holding and subsidiary companies will not be permitted for recognition.
• Any startup becoming holding/subsidiary of any company after recognition will be derecognized.
• A joint venture-formed entity will not receive recognition. Any Startup entering into any Joint Venture will be derecognized.
• Changes in the name of a recognized startup necessitated under the relevant provisions of the applicable Act will be permitted.
• Recognition of an entity having common director, designated partner, or partner with any other entity shall be allowed to the extent permissible under the Companies Act, 2013.
• Entities operating in a prohibited area are not eligible for recognition

Schemes and Policies of the Center and States/UTs Concerning Startups.

After being recognized, startups become beneficiaries of the schemes and policies of centers, states, and UTs designed for startups. Such schemes are not just one more Sarkari yojna that looks appealing and transforms only into files. Because they are practical and industrial, they are not only apt with time but with certain parameters beyond time.

In collaboration with DPIIT, other ministries and departments introduced schemes for registration in Start up India their respective areas. Such as the Ministry of Electronics and Information Technology (MeitY) brought EHTP (Electronic Hardware Technology Park) scheme aimed promoting software and electronics hardware development for exports in India. So these schemes provide benefits by giving incentives, rebates, assistance, and platforms for networking.

Some schemes are designed to develop women’s entrepreneurship, especially women of rural and socio-economic backward classes.So, the goal of these schemes is to simplify and hold the hands of startups for further growth through funding, mentoring, and networking. These schemes act as a ladder for startups to find their identity in cut-throat competition.

The benefits of recognition can be summarized as follows:

The various types of benefits of Registering a startup in India can be given below for your further understanding:

Self-Certify Compliance

It is a unique practice where Startup India Registration can certify compliance under labour and environmental laws through the mobile app by registering them in the Shram Suvidha Portal of the Ministry of Labour and Employment. Going further, there will be no inspection under labour law for three years.

Single App

The government introduced a single app for all the multiple requirements of business entrepreneurs, viz., registration, tracking of applications, information on approvals, and platforms to connect stakeholders, investors, and mentors.

IPR Rights

It helps and promotes Startup India Registration to acquire intellectual rights, viz., trademarks, patents, and designs, by offering rebates and concessions.

Relaxation on Procurement

Procurement is obtaining or purchasing goods or services. Here, procurement refers to participation in public tenders floated by the government or PSUs by startups. The norms are relaxed to facilitate participation.

Easy Exit

It means a simple method to close the business in case of any misfortune.

Funding

Funds are the biggest hurdle to converting an idea into a Startup India registration. In order to remove the same government support funding through fund of funds. The government opens a fund of funds with a substantial corpus to finance startups.

Credit Guarantee

The government, to encourage a formal banking system for financing Startups India registration, has set up a credit guarantee mechanism by the National Credit Guarantee Company.

Tax Exemption on Capital Gain

To promote investment in start up India registration by exempting capital gains accrued on the sale of capital assets.

Tax Holidays

The profits of the startup are exempt from tax for 3 years.

Under Company Act

If a startup is a private company, then it gets the following exemption under the regulatory provisions of the Company Act:

• The inclusion of a cash flow statement in the financial statement is not mandatory.
• The procedural requirement of accepting deposits from the public is not applicable to startup registration in India for 5 years, subject to prescribed conditions.
• The director can sign the annual return in the absence of the company secretary.
• Only one board meeting in each half-calendar year with not less than a 90-day gap between two meetings is deemed to comply with the provisions related to board meetings.

Meaning and Support of Incubators

The system has also evolved so that startups get the support of incubators. Generally, the term incubator is used for an apparatus which maintains constant temperature. In the context of startups Business incubators are institutions that support entrepreneurs in developing their businesses, especially in the initial stages. They are hand-holders whose support includes providing technological facilities and advice, initial growth funds, networks and linkages, co-working spaces, lab facilities, mentoring, and advisory support to Startup Registration India.

Industry-Academy Partnership

There should be constant communication to register a startup in India industry to accelerate growth. To serve this purpose, DPIIT organizes one festival at the national and international levels each year. Under this initiative, the government set up incubators in the public-private partnership mode (PPP). The government expressed special interest in the register for start up India of the biotechnology sector and introduced an innovation-focused programme among students to develop a culture of innovation.

ATAL Innovation Mission (AIM)

The NITI Aayuog has brought the ATAL Innovation Mission (AIM) to promote the culture of innovation and entrepreneurship in the country by developing policies and programmes for fostering innovation, providing a platform for collaboration of different stakeholders and creating awareness. In this path ahead, the government established around 10,000 ATL (Atal Tinkering Lab) at schools to develop innovative attitudes in young minds, around 72 Atal incubation centers (AIC) across India and 14 Atal Community Innovation Centres (ACIV) for the socio-economic and geographically disconnected area to bring them into the mainstream of innovation revolutionization. To ensure the success of the AIM programs and initiatives, it launched Mentor India: The Mentor of Change program, by which more than 6,000 mentors were registered across the country Apart from this, Atal Research and Innovation for Small Enterprises (ARISE) is for innovation and research in the MSME industry.

Startup Seed Fund Scheme

Funding is the most pivotal step in the journey of an idea to a commercial venture.So even if we kept aside formal banking channels, other classes of investors would also not put their hard-earned money into the idea. The funding at this stage is so crucial to saving an idea from dying. startup seed fund scheme is designed. This helps to convert an idea into a proof of concept. It provides financial assistance to startups for proof-of-concept, prototype development, product trials, market entry, and commercialization. Prototype development refers to a working model of a product considering an original idea.

Eligibility Criteria for the Startup to avail of the Benefits of the Scheme:

• Its incorporation should not be older than 2 years from the date of application for recognition.
• Its idea is to create products and services that are market-fit and commercially viable.
• It is solution-oriented.
• Priority would be given to startup in sectors like social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, etc.
• It does not avail an amount of more than 10 lakh under the Central/Government scheme.
• Indians held At least 51 % of shares.

Misconception

The words startup and innovation seem to be inseparable, which creates a perception in the mind of young entrepreneurs, particularly those who belong to rural and socio-economic backward areas, that every startup is bound to work on something innovative.

It is the need of the hour to make it clear to young minds that StartupIndia promotes innovation, novelty, and unusual. So, a startup can be founded on a simple idea that is market-fit and commercially viable and can align with the schemes and policies needed to flourish one’s business.

Writer: Rahul Ingole wrote this article.

Edited and SEO: Legal Chalo team.

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