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.
Startup Registration with Startup India
Step 1: Incorporate your business
To get registered on Startup India, you must first incorporate your business as a Private Ltd Company or in a Partnership Company. You can also incorporate your company through Limited Liability Partnership.
You will now have to follow every usual procedure for registration of any business, which involves getting a certificate of Incorporation, PAN, and other required compliances.
Step 2: Register with Startup India
Do remember to register your business as a startup. The entire process can be done online and is very simple. You just need to log in on the startup India site and fill up the form with details of your business.
Fill in the details like, startup as type of user, name and stage of the startup, etc. After entering these details, the Startup India profile is created.
Once it’s done, now you can apply for various acceleration, incubator/mentorship programme and other challenges on the website along with getting access to resources like Learning and Development Program, Government Schemes, State Polices for Startups and pro-bono services.
Step 3: Get DPIIT Recognition
After creating the profile on the Startup India Website now you have to avail Department for Promotion of Industry and Internal Trade (DPIIT) Recognition.
This recognition helps the startups to avail benefits like access to high quality intellectual Property services and resources, relaxation in public procurement norms, self-certification under labor and environment laws, easy winding of company, access to Fund of Funds, tax exemption for 3 consecutive years and tax exemption on investment above fair market value.
Step 4: Recognition Application
On Recognition Application Detail page click on ‘View Details’ under the Registration Details section. Fill up the ‘Startup Recognition Form’ and click on ‘Submit’.
Step 5: Documents to be uploaded for Registration
- Incorporation/Registration Certificate of your startup
- Details of the Directors
- Proof of concept like pitch deck/website link/video (in case of a validation/ early traction/scaling stage startup)
- Patent and trademark details (Optional)
- PAN Number
Step 6: Immediately get recognition number
While 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 which is usually done in 2 days after submitting the details online.
However, be careful while uploading the documents. If on subsequent verification, it is found to be obtained that the required document is not 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 Rupees 25,000.
Step 7: Other areas
- a) Patents, trademarks and/or design registration
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.
One of the key challenges faced by many startups has been accessing to finance. Due to lack of experience, security or existing cash flows, entrepreneurs fail to attract investors. Besides, the high-risk nature of startups, as a significant percentage fail to take-off, puts off many investors.
In order to provide funding support, Government has set up a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR 2,500 crore per year). The Fund is in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.
c) Self Certification Under Employment and Labor Laws
Startups can self-certify under labor laws and environment laws so that their compliance costs are reduced. Self-certification is provided to reduce regulatory burden thereby allowing them to focus on their core business. Startups are allowed to self-certify their compliances under six labor laws and three environment laws for a period of 3 to 5 years from the date of incorporation.
Units operating under 36 white category industries as published on the website of Central Pollution Control Board do not require clearance under 3 environment related Acts for 3 years.
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.