Overview

A startup is basically a newly established business, usually small, started by 1 or a group of individuals. A startup is differentiated from other new business on the basis that a startup offers a new product or service that is not being given elsewhere in the same way. The keyword is innovation. The business either develops a new product/service or redevelops a current product/service into something better.

Entrepreneurial aspirations among youngsters are on the rise amongst the middle class in India. Technology has opened up opportunities for business and made managing business easier. The government of India has also come up with various schemes to encourage business owner. Hence, it is highly rewarding time to start a business in India. The first step in starting a new business is the idealization stage. At this stage, the entrepreneur would look for idea to start a new business and firm up his plans. Thereafter, the related market, details of the product/service offered, existing competition, manpower availability, funds, infrastructure etc. must be thoroughly researched on. The business idea would be built on the research undertaken and Legal taxspecializes in providing startup advisory support. We have helped start over 50,000 businesses across India in every industry possible. Our advisors are available 24/7, 365 days and can help answer various questions you may have concerning the legal formalities, business licenses, funding, income tax, GST and labor law compliance.

Startup India Scheme:

The Startup India Scheme is an initiative of the Government of India in 2016. The primary objective of Startup India is the promotion of startups, generation of employment, and wealth creation. The Startup India has initiated several programs for building a robust startup ecosystem and transforming India into a country of job creators instead of job seekers. These programs are managed by the Department for Industrial Policy and Promotion (DPIIT).

Definition of Startup:

Any company which falls into below list of categories will be called as “Startup” and eligible to be recognized by the DPIIT to avail the benefits from the Government of India.

• Age of the Company The Date of Incorporation should not exceed 10 years

• Type of Company Should have been Incorporated as a Private Limited Company or a Registered Partnership Firm or a Limited Liability Partnership

• Annual Turnover Should not exceed Rs.100 crore for any of the financial years since its Incorporation

• Original Entity The company or Entity should have been formed originally by the promoters and should not have been formed by splitting up or reconstructing an existing business

• Innovative & Scalable Should have plan for 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.

Eligibility for Startup India Registration:

• Private limited Co./LLP/Partnership Firm

• Registered for not more than 10 years.

• Company must offer Innovative products or service.

• Company is having a business model with high potential of employment enumeration.

• Turnover does not exceed Rs. 100 crores.

• Company is having a business model with high potential wealth creation.

What Are the Documents Required for Startup India Registration?

• Company PAN Card

• Website or Company Profile Deck

• Certificate of Incorporation or Partnership Registration Certificate

• Very well written write up on how the business is working towards: innovation, employment, wealth creation.

What Is the Startup India Certificate of Recognition?

With the vision to enhance or uplift the economy and encourage entrepreneurship, the Government of India, under the administration of the Ministry of Commerce & Industry, had begun the Start-up India Stand-up India initiative in 2015 to uplift and grow the India start-ups.

Who Is Not Eligible for Startup India Recognition?

• Sole Proprietorship

• Firm constitute by the notary partnership deed

• Once annual turnover exceeds INR 100 crore

• Company is older than 10 years.

What Is the Process for Startup India Registration?

1. Provide the required business details and information to our web portal.

2. Choose a package and pay online with different payment modes available.

3. On placing an order, Startup India application will be assigned to one of our dedicated professionals.

4. Our professional shall carefully examine the criteria of startup recognition and file the application.

5. Our professionals do follow up with the govt. department for issuance of Startup India Certificate.

6. On successful examination, Startup India Registration certificate shall be provided to you.

What Are the Three Layers/steps to Recognise the Startup India Recognition?

• Issuance of Startup India Certificate: On receipt of an application, DPIIT issues a Startup India certificate to the newly incorporated company after validating the unique business process and other eligibility criteria.

• Angel Tax Exemption on Equity Investment: An investment made on startup by investors on the premium is exempt from tax u/s 56(2) (vii)(b) of the Income Tax Act if a startup is further approved by the Inter-Ministerial Board. This exemption is valid till startup paid-up share capital + share premium does not exceed INR 25 crore.For availing angel tax exemption, a startup needs to file a declaration under Form-2 to DIPP.

• Income Tax Exemption: The startup will get any 3 consecutive years tax holiday out of ten years tenure.For income tax exemption u/s 80-IAC, Startup needs to file a separate applicationunder Form-1 and the Income Tax authority shall grant the certificate or reject the application.This application can be filed only after the issuance of a Startup India Certificate.

Startup India Certificate Validation:

An entity shall cease to be a Startup on completion of ten [10] years from the date of its incorporation/ registration
OR
If its turnover for any previous year exceeds one hundred [100] crore. Whichever is earlier.

Startup India Certificate Vaerification:

Once applied for the startup India registration, you will receive an acknowledgment receipt number (ARN) for tracking your certificate status.

Once your Startup India application is successfully processed, you can easily download your Start-up India certificate.

Benefits of Startup India Certificate:

1. Tax exemption u/s 80 IAC: Post getting recognition under startup India scheme, you may apply for Tax exemption u/s 80 IAC of the Income Tax Act. A Startup can avail tax holiday for 3 successive financial years during its first 10 years of startup eligibility.
   Criteria for applying to 80IAC Tax exemption:

   • Must be a recognized Startup

   • Only Private limited or LLP is eligible

   • Must be incorporated on or after 1st April, 2016

2. Angel Tax exemption u/s 56: After startup India registration, you may apply for Angel Tax Exemption.
   Criteria for Angel Tax Exemption u/s 56 of the Income Tax Act 1961:

   • The entity must be a DPIIT recognized Startup

   • Aggregate amount of paid-up share capital & share premium after the proposed issue of shares, must not exceed INR 25 Crore.

3. Self-compliance for Labor laws: Startups can do self-assessment for labor law compliances and there will be no inspection or physical visit by public officers during the first 3 years. Startups can self-certify through startup India portal with given below 6 labor laws.

   • Inter-State Migrant Workmen laws

   • Gratuity Laws

   • Provident Fund Laws

   • Employees’ State Insurance laws

   • Other Constructions Workers’ laws

   • Contract Labor laws

   • Our professionals can assist in order to self-certify labor laws compliances.

4. Trademark, Patent, IPR related exemption: On obtaining startup India certificate, the startups can avail various assistance in applying for intellectual property rights e.g., Trademark registration, patent and copyright registration.
   Recognized startups can avail following reliefs in IPR:

   • Fast-track startup patent applications with 80% government fees rebate.

   • Panel of facilitators to assist in IP applications

   • Rebate on Filing of Trademark application

5. Easy winding up of the company: Startups registered under startup India scheme can avail easy exit route for winding up the company within 90 days under Insolvency & Bankruptcy Code, 2016, in case startup business model failed.

6. Funding opportunities and other government schemes: Startups registered under Startup India scheme can avail funding under various government or semi government aided schemes such as
   Venture Capital Assistance Scheme
   Under this scheme, interest free loan is provided by Small Farmers’ Agribusiness Consortium (SFAC) to projects falling short of capital requirement for project completion.
   Support to MSMEs for International Patent Protection in Electronics and IT
   Stand Up India Scheme bank loan from 10 lakh-1 crore to at least 1 SC/ST borrower and at least one women enterprise per bank branch.
   Single Point Registration Scheme (SPRS)
   NSIC registers MSEs under SPRS scheme for participation in Government Purchases.

7. Easier norm on GeM portal: Government e-Marketplace [GeM] is an e-commerce portal for public procurement where private sellers including startups can sell products and services to government buyers and participate in government e-tenders. Get registered as a seller on government e-Marketplace aka GeM portal A registered startup can enjoy privileges over others private sellers. Separate scheme launched for startup named GeM Startup Runway Scheme.
   On Gem Startup Runway scheme, Startups are entitled to avail exemption on:

   • Prior Turnover

   • Prior Experience

   • Earnest Money Deposit

   • Minimum criteria for govt. tender

8. Eligibility to apply for 3 years Income Tax exemption: Eligible Startups can be exempted from paying income tax for 3 consecutive financial years out of their first ten years since incorporation.

9. Eligibility to avail funding from Rs. 10,000 crore FOF scheme: Under Funds of Funds for Startups Scheme already more than Rs. 1600 crore is invested in 251 Startups.You may be one of the Startups for the remaining Rs. 8,400 crore corpus.

10. Priority Govt. Tender and Procurement Scheme: Exemption from prior experience or turnover and Security deposit for filing tenders Opportunity to list Startup products on Government e-marketplace for market visibility.

11. Finally, Labor Inspector Raj Gone for Startups: No more Labor Law Inspection fear for Startups. Recognized Startups can self-manage their PF, ESIC, Gratuity and Environmental Law Compliance through simple self-declaration.

12. 50% discount in Trademark & 80% rebate in Patents fees: Fast tracking of Startup Patent application, Upfront 50% discount on Trademark fees, 80% Rebate on Patent filing fees.

13. Private Limited can take deposit from its members: For a period of five years from the date of its incorporation under the Companies (Acceptance of Deposits) Rules, 2014.

14. Now Loan from Foreign Investors (ECB) is a cake walk: Recognized Startups can avail loans from Non-Resident Investors (External Commercial Borrowings-ECB) up to $ 3 million every financial year through simple RBI compliance mechanism.

15. Eligibility for availing State Govt. Incentives: Like Maharashtra State GST rebate scheme, many other Loan and Rebate Incentives are announced by different State Governments of India.

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• Due to our good services, we have five-star Google reviews.

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• We are having an incorporation of large number of companies.

• As we give one of the best services across India, there is around 3000+ registration taking place every month.

• We are having around 10+ years of Startup Centric Legal Expertise.

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