Priyasha Sen Gupta, Flywork.io Team, Flywork.io.
Since Indian Prime Minister Narendra Modi launched the Startup India program, the number of start-ups has grown incredibly. More and more people are starting their own businesses with tax breaks, social benefits and government aid. Fascinatingly, most start-ups have young founders and owners, which says a lot about the amazing creative minds India has. These founders had no government support before and had to do everything by themselves and there were still a few people who participated wholeheartedly. But since the start of the project, people now bravely know that the government will support them.
What is a startup?
A start-up is a newly established company, usually a small business, founded by one person or a group of people. It differs from other businesses in that the start-up is offering new products or services that are not available anywhere else. This is innovation. The company develops new products/services or redesigns existing products/services to make them better.
A great significance of a start-up is that it can improve employment in our country because it is a direct result of the emergence of more and more companies. With the opportunity to expand employment, the Indian government strives to help young companies in developing and growing.
A start-up company is a legal entity incorporated in India whose eligibility criteria are as follows:
1. The firm must be a Private Limited Company or Limited Liability Partnership or Registered as a Partnership Firm.
2. The annual turnover should not exceed Rs. 100 crore rupees per fiscal year from the date of creation/registration.
3. Committed to the innovation, development or enhancement of any product, process or service, or if it is a scalable business model with great potential for job opportunities or wealth creation
4. A company that emerges from the division or restructuring of an existing company is not a "start-up".
5. The establishment of the firm must not exceed 10 years before it can be recognized as a start-up company or registered before April 2016 to obtain a Tax Exemption certificate.
Procedure for Registering a Start-up in India are as follows:
Step 1: Establish Your Business
The first thing you need to do is establish your firm as a Private Limited Company or Limited Liability Partnership. All you have to do is follow the normal procedure which involves filling out a form to get registration.
Step 2: Register under Start-ups India
Then the company has to be registered as a start-up. The whole process is easy and online. All you have to do is log into the Start-ups India website and fill in the form with your company details. Next, enter the OTP that was sent to your e-mail and further information such as start as user type, name and stage of the start, etc. After entering this information, the Start-up India profile is created.
Once the profile is created on the website, start-ups can apply on the website for various acceleration programs, incubators/mentors and other challenges, as well as access to resources such as the learning and development program, government plans, state guidelines for start-ups and pro bono services.
Step 3: Get DPIIT Recognition
The next step after creating the profile on the Start-up India website is to take advantage of the Department of Promotion of Industry and Internal Trade (DPIIT) recognition. This recognition helps start-ups gain benefits such as access to services and high-quality intellectual property resources, easing public procurement, regulations, labour and environmental self-disclosure, and easy liquidation of the company, tax exemption for 3 consecutive years and tax exemption for investments above market value. For getting DPIIT Recognition, click on the ‘Get Recognised’ button in case you are new. If you already have it, click on the ‘Dashboard button’ and then ‘DPIIT Recognition’.
Step 4: Recognition Application
The ‘Recognition Application Detail’ page appears and on the same page, click on ‘View Details’ under the Registration Details section, then fill out the ‘Startup Recognition Form’ before submitting it.
Step 5: Documents for Registration
- Certificate of incorporation/registration of start-up.
- Detailed information on the Directors.
- Proof of concept as starting platform/link to website/video (in the case of validation / early support/start of the escalation phase).
- Information in detail about Patents and trademarks, which is optional.
- PAN number.
Step 6: Get Recognition number
With the application for this registration, you will immediately receive an approval number. You will only receive the certificate of registration or incorporation after the authorities have checked all of your uploaded documents. However, you must be careful when uploading the data as any deviation could result in a heavy fine of up to 50% of your deposited capital of at least Rs 25,000.