How to register your startup?
STARTUP INDIA SCHEME
To help small and budding businesses in India succeed, or sustain themselves for further growth, the govt of India has decided to provide a booster scheme of sorts.
This is the STARTUP INDIA scheme.
This scheme intends to help and promote startups by providing a variety of benefits and easing the process for entrepreneurs.
This has been immensely helpful so far and continues to be, and here’s how you can utilize it!
PROCESS OF REGISTRATION
To number it, there are approximately six steps that you need to go through to successfully register your business with the scheme.
1. Incorporate your business
Firstly, you need to register your business with the MCA (Ministry of Corporate Affairs) by visiting their portal and filling out the provided application form.
Your business must hence be registered as either a Private Limited Company, a Partnership Firm, or an LLP (Limited Liability Partnership).
2. Register with Startup India
Visit the Startup India website and register your startup for the scheme.
For this, you will need to meet certain eligibility criteria which are listed further.
3. Upload documents
While registering, you will be required to submit the following necessary documents:
1. A letter of recommendation. This can be in any of the following forms:
a. from an incubator (from a post-graduate college) attesting to the innovative module of the business.
b. from an incubator, funded by the govt. of India in the format given by the DPIIT.
c. a letter of funding (with not less than 20% equity) by:
- a private equity fund
- an incubation fund
- accelerator
- an angel fund
registered with SEBI, endorsing, again, the innovative nature of business.
d. a letter from the Central or any State Govt of India.
2. The registration or incorporation certificate issued earlier.
3. A brief description of your business. along with this, you may attach evidence of your concepts like a pitch deck, website link, or video.
4. PAN Details.
4. Apply for tax exemption
In India, startups do not have to pay income tax for the first three years but to avail of such benefits, the company must be certified by the Inter-Ministerial Board (IMB). This is where companies registered with DIPP get relaxation as the registration is enough to get the benefits.
5. Self-certification
You need to provide adequate proof of the following to certify for the scheme and reap its benefits.
The certification must prove that:
a. You are a Private limited company, an LLP, or a partnership firm.
b. Your business must be incorporated or registered in India, not before 10 years.
c. Your company’s turnover must not be more than Rs. 100 crore.
d. The company has to keep innovating something new or making the existing system better in its way.
e. Your business must be a fresh idea and not a splitting up or reconstruction of an existing business.
6. Acquiring recognition number
After this process, the last step is to 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 within 2 days after submitting the details online and you will be given a registration number.
CAREFUL!
Any discrepancy in the data you’ve uploaded can cause you a huge fine of up to 50% of your paid-up capital or Rs.25,000 at the very least.
Hence do complete the process with care.
ELIGIBILITY CRITERIA (for Startup India scheme)
Firstly, to be able to register with the scheme you need to qualify certain eligibility criteria that shows that you are indeed a budding startup.
It includes:
1. The individuals applying for registration in the scheme must be of age 18 years and above.
2. Your company should be registered by the MCA (Ministry of Corporate Affairs) as either a Private Limited Company, a Partnership Firm, or an LLP (Limited Liability Partnership).
3. your company mustn’t have had an annual turnover of more than Rs.100 crores in any of the previous financial years.
4. Your company should not be a reconstructed one or one formed by the splitting of a larger business into smaller firms.
5. Your startup must be DPIIT (Dept for Promotion of Industry and Internal Trade) approved.
6. Your startup should not exceed the tenure of 10 years from the date of its incorporation.
7. And lastly, the scheme promotes innovation and hence your startup must meet the following criteria as stated by the Govt. of India, i.e.,
a) The start-up must be working towards innovation, development, deployment, or commercialization of a new product, process, or service driven by technology or intellectual property.
b) The start-up must aim to develop and commercialize a new product or service or a significantly improved existing product or service that will create or add value to customers or workflow.
c) The start-up must not be merely engaged in developing products or services which do not have the potential for commercialization, undifferentiated product or service with no or limited incremental value for customers or workflow.
