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A Comprehensive Guide to Startup India Registration: Eligibility, Benefits, and Procedure

A Comprehensive Guide to Startup India Registration

A Comprehensive Guide to Startup India Registration: Eligibility, Benefits, and Procedure

Startup India, a flagship initiative of the Indian Government, aims to foster innovation and entrepreneurship by providing a platform for aspiring entrepreneurs to realize their dreams, create jobs, drive economic growth, and access government resources, guidance, and support. The present article provides a detailed overview of the Startup India Registration process.

Join the ever-growing community of successful entrepreneurs by registering with Startup India! IndiaFilings is here to assist you in a quick and efficient Startup India Registration process, allowing you to embark on your journey toward success.

Startup India

Startup India is an endeavor of the Indian Government to promote and nurture the growth of startups in the country. The ultimate goal of Startup India is to make India one of the most vibrant startup ecosystems worldwide. By registering with the Startup India program, startups can enjoy numerous benefits, including tax exemptions, financial assistance, and access to incubators.

The scheme, introduced in 2016, has been instrumental in building a robust startup ecosystem in India, encouraging innovation, and creating job opportunities. Under the Startup India scheme, the Government has taken several vital steps to support and uplift startups, fostering an environment where entrepreneurs can thrive. The Department for Industrial Policy and Promotion (DPIIT) plays a crucial role in managing the programs and initiatives of the Startup India Scheme.

The objective of the Startup India Scheme

The Startup India Scheme aims to foster a thriving startup culture and establish a robust and inclusive ecosystem that encourages innovation and entrepreneurship in India.

What is Startup?

A startup is a business that introduces innovative products or services to address existing problems or needs within society. It may also revamp an existing product or service, improving it to offer a better solution. The essence of a startup lies in its commitment to bringing fresh ideas and creative solutions to the market.

What distinguishes it from other new companies is that a startup offers a novel product or service that is not currently available elsewhere in the same manner. The driving force behind startups is innovation and the pursuit of growth and development.

Eligibility Criteria for Startup India Registration

To be eligible for Registration with Startup India, an entity must meet specific criteria. Here is a detailed breakdown of the eligibility requirements for the Startup India Scheme:

  • Age of the Applicant: Any Indian citizen aged 18 or above can apply for the scheme.
  • Age of the Firm: The company’s Incorporation date should be at most ten years.
  • Type of Company: The company should have been incorporated as a Partnership Firm, Private Limited Company, or a Limited Liability Partnership (LLP).
  • Annual Turnover: The company’s turnover should be at most Rs.100 crore in any financial year since Incorporation.
  • Original Entity: The entity should have been formed initially by the promoters and not by splitting up or reconstructing an existing business.
  • Innovative & Scalable: The startup should have a plan for developing or improving a product, process, or service and have a scalable business model with a high potential for creating wealth & employment.

Companies working towards developing a new product or service can avail of benefits under the Startup India policy if they fulfill the following conditions:

  • Concerned startups must work to develop, deploy, or commercialize any product or service that is driven by the latest technology or intellectual property.
  • Startups must aim to improve an existing product or create a new one to enhance customer value or workflow.
  • Startups must involve solely in developing and commercializing a unique product to enrich customer value or increase workflow.

For Registration and approvals, startups are required to obtain approval from the Department for Promotion of Industry and Internal Trade (DPIIT) based on the following criteria:

  • Recommendation of an incubator from any post-graduation college.
  • Recommendation from an incubator recognized by the Central Government.
  • A patent filed and published in the Journals of the Indian Patent Office in the specific area of the product or service.
  • Registration with SEBI for startups providing funding and equity services.
  • Funding letter from the state or central Government of any scheme to promote innovation.

Regarding partnership startups, 51% of the shares should be owned by women or individuals in the Scheduled Caste and Scheduled Tribe categories. Additionally, they should not have defaulted on any credit payments.

Benefits of Startup India Registration

The Startup India scheme offers several critical benefits to registered startups, including:

  • Self Certification: Startups can easily self-certify compliance for 6 Labour and 3 Environmental Laws through a simple online procedure.
  • Tax Exemption: Recognized startups enjoy income tax exemption for three consecutive financial years out of their first ten years since Incorporation. They can also apply for exemption from angel tax under Section 56 of the Income Tax Act.
  • Easy winding up of Company: Startups can shut down their business within 90 days from the date of application.
  • Patent Application and IPR Services: DPIIT-recognized startups receive significant benefits while processing patents and other intellectual property rights services at a considerably lower fee. Startup India provides an 80% rebate for filing patents and a 50% rebate for filing trademarks.
  • Access to Funding: Startup India offers two funds to support registered startups: a. Fund of Fund for Startups (FFS) b. Startup India Seed Fund Scheme (SISFS)
  • Easier Public Procurement Norms: Government ministries, departments, and public sector undertakings have been authorized to relax norms in all public procurements for startups recognized by DPIIT.

Procedure for Registering a Startup in India

Step 1: Incorporate Your Business

The first step is to incorporate your business as a Private Limited Company, Partnership firm, or Limited Liability Partnership (LLP). This involves following the standard procedures for business registration, such as submitting the registration application and obtaining the Certificate of Incorporation or Partnership registration.

Step 2: Register with Startup India

After incorporating your business, the next step is to register it as a startup. The process is straightforward and can be completed online. To begin, visit the Startup India website and click the ‘Register’ button. Provide your name, email ID, and mobile number, and create a password, then click ‘Register.’

Next, 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 recognized as a startup under the Startup India scheme, making it eligible for various benefits and support.

Step 3: Obtain DPIIT Recognition

After creating the Startup India website profile, the next crucial step is to obtain recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition offers startups access to various benefits, such as high-quality intellectual property services, relaxation in public procurement norms, self-certification for labor and environmental laws, easy winding up of the company, access to Fund of Funds, and tax exemption for three consecutive years, including tax exemption on investments above fair market value.

To apply for DPIIT Recognition, log in with your registered profile credentials on the Startup India website and click the ‘Apply for DPIIT Recognition’ option under the ‘Recognition’ tab. On the following page, choose ‘Apply as Company or LLP’ or ‘Apply as Partnership Firm.’

If you select ‘Apply for Company or LLP,’ you will be redirected to the National Single Window System (NSWS) website. Companies and LLPs should register on the NSWS website and add the ‘Registration as a Startup’ form to initiate the DPIIT recognition process. This step will officially recognize your startup under DPIIT, making it eligible for the range of benefits and support the Startup India scheme provides.

Step 4: Submit the Documents for Registration

To complete the registration process and obtain DPIIT recognition for your startup, you need to submit the following documents:

  • Incorporation/Registration Certificate of your startup.
  • Proof of funding, if any.
  • Authorization letter of the company’s authorized representative, LLP, or partnership firm.
  • Proof of concept, such as a website link, a pitch deck, or a video (applicable for validation/early traction/scaling stage startups).
  • Patent and trademark details, if any.
  • List of awards or certificates of recognition, if any.
  • PAN (Permanent Account Number) Number.

Step 5: Self-Certification of Eligibility Conditions :

Self-certify that your business meets the following conditions:

  • Your business is a Private Limited company, LLP, or partnership firm.
  • Your business has been incorporated or registered in India for at most five years.
  • Your company’s turnover is at most Rs. 100 crore.
  • Your company is constantly innovating or improving existing systems.
  • Your business is based on a fresh idea, not splitting up or reconstructing an existing business.

Step 6: Obtain Your Recognition Number

Upon application for Registration, you will receive a recognition number immediately. The certificate of Registration or Incorporation is issued after the authority reviews all your uploaded documents.

Note: Ensure accuracy while uploading data to avoid discrepancies, as errors may lead to fines of up to 50% of your paid-up capital or a minimum of Rs. 25,000.

By fulfilling the eligibility and registration criteria, your company can enroll in the Startup India scheme and access various benefits provided by the Government.

Benefits Provided under Startup India Scheme

As mentioned above, Startup India offers a wide array of benefits to startups, which are detailed below:

Patents, Trademarks, and Design Registration

If your startup requires a patent for its innovation or a trademark for its business, you can easily approach any facilitator from the Government’s list. By doing so, you will only need to bear the statutory fees, allowing you to benefit from an 80% reduction in fees.

Funding Support

Accessing finance is a significant challenge for many startups due to factors like lack of experience, security, or existing cash flows, which can deter potential investors, given the high-risk nature of startups. To address this, the Government has established a fund with an initial corpus of Rs. 2,500 crore and a total corpus of Rs.10,000 crore over four years (i.e., INR 2,500 crore per year). The fund operates as a Fund of

Funds, participating in the capital of SEBI registered Venture Funds, indirectly providing financial support to startups. Self Certification Under Employment and Labour Laws: Startups can self-certify compliance under labor and environment laws, reducing compliance costs. Self-certification minimizes the regulatory burden, allowing startups to focus on their core business. For three to five years from the date of Incorporation, startups are permitted to self-certify their compliance under six labor and three environment laws.

Environment-Related Acts Exemption

Units under thirty-six white category industries, as published on the Central Pollution Control Board website, are exempted from clearance under three environment-related Acts for three years.

Tax Exemption

Startups are eligible for income tax exemption for three years. To avail of this benefit, they must be certified by the Inter-Ministerial Board (IMB).  

IndiaFilings can help you quickly obtain Startup India Registration, providing expert assistance and ensuring a smooth and efficient registration for your startup.