Startup India is a major project by the Indian government to support innovation, create jobs, and boost economic growth by helping startups thrive and innovate.
What is Start-up India?
Startup India is a plan started by the Indian government to help new businesses and ideas grow. They want to make the economy stronger and create lots of jobs. They do this by supporting innovation and smart planning.
Self-Certification: After getting a certificate from DPIIT for being a startup, you can certify your compliance with certain environmental and labor laws.
Discounted Patents: Recognized startups only need to pay 80% of the fees for patents, trademarks, copyrights, and designs. They can also fast-track their patent applications.
Easy Public Procurement: Recognized startups can list their products on the Government e-marketplace and don't need to deposit money when bidding for contracts.
No Experience or Turnover Requirement: Startups don't need a track record of experience or income to work with government ministries and departments.
Quick Company Closure: Under the Insolvency and Bankruptcy Code, a startup can shut down within 90 days of applying for insolvency.
Access to Funds: Startups can access Rs. 10000 crore from Alternative Investment Funds.
Credit Guarantee: They can also get Rs. 2000 crore in credit guarantees over four years through the National Credit Guarantee Trust Company or SIDBI.
Tax And Process
Tax Exemptions for Startups: Startups enjoy 100% tax exemption (except Minimum Alternate Tax) for their first three years. This relief, available to businesses registered with DIPP, eases initial financial burdens.
Funds of Funds (FOF): Startups registered with DIPP benefit from a dedicated fund of ₹2,500 crores (with a final corpus of ₹10,000 crores over four years). Administered by SEBI, this FOF accelerates the growth of early-stage ventures, addressing financial shortages.
Capital Gain Tax Exemption: Startups receive a 20% exemption on capital gains from stock, bond, and share sales. This reduces the tax burden on profits derived from such transactions.
Angel Investment Tax Relief: To facilitate access to capital, the government exempts angel investments from taxation. Amendments in the Income Tax Act allow entrepreneurs to issue shares at values higher than book value, aiding fundraising.
Additional Provisions for Support: Special funds, totaling ₹500 crores, aid Scheduled Tribe, Scheduled Caste, and Women Entrepreneurs. Lowered long-term capital gains period from three to two years. Amendments in the Motor Vehicle Act encourage entrepreneurship. Presumptive tax schemes apply to businesses with turnovers below ₹2 crores (previously ₹1 crore). Employee Provident Fund provisions for the first three years benefit startup employees.
Authorization Letter: A formal document granting permission.
Aadhar Card Copy: Copy of the Aadhar Card.
Contact Information: Details for communication.
Registration Proof: Evidence of legal registration.
Partner/Key Personnel Contact Info: Information about Directors/Partners.
Business Activity Details: Information about your company's plans.
Intellectual Property Information: Details about patents and trademarks.
Step 1: Business Incorporation
Register your business as a Private Limited Company, Partnership, or LLP. Complete standard registration procedures and obtain a Certificate of Incorporation/Partnership registration.
Step 2: Register with Startup India
Visit the Startup India website and click 'Register. Fill in the details and create a profile. Access resources and programs.
Step 3: DPIIT Recognition
Apply for Department for Promotion of Industry and Internal Trade (DPIIT) Recognition. Apply online through your Startup India profile.
Step 4: Recognition Application
Fill entity details, address, authorized representative info, and startup activities. Accept the terms and apply.
Step 5: Documents for Registration And Recognition Number
Provide incorporation certificate, proof of funding, authorization letter, proof of concept, patents/trademarks, awards, and PAN number. Receive a recognition number. Certificate issuance after document examination, normally within 2 days.
Who can register with Startup India?
Any entity that is a Private Limited Company, Partnership Firm, or Limited Liability Partnership (LLP). The entity should not have an annual turnover exceeding Rs. 100 crores. It should have been in existence for up to ten years since its incorporation/registration. The entity should be focused on innovating, developing, or improving products, services, or processes.
What business structure is suitable for a startup?
The most preferred business structures for startups are Private Limited companies and LLPs.
What is the difference between an accelerator and an incubator?
Incubators help entrepreneurs develop their businesses, especially in the early stages. Accelerators support early-stage, growth-driven companies and involve a program where companies work with mentors and may receive financial assistance.
For how long is a company recognized as a startup?
A business entity is recognized as a startup until it completes ten years from the date of its incorporation/registration and exceeds an annual turnover of Rs. 100 crores.
Does a startup need to be registered in India?
Yes, to sign up for Startup India the startup must have at least one registered office in India.