Startup India Scheme is an initiative by Government of India that offers financing and handholding support to Startup entities for growth and expansion. Additional key functions include promotion of Startups, wealth creation and employment generation.
What is a Startup?
Startup is known to be a newly formed company, usually small which is started by one or more individual. The primary purpose of a Startup is to grow rapidly and offer something to fulfill market gap in any sector or industry. There are no fixed parameters set for a Startup, as they are independent to certain level. Startups initiate with a product concept and strive to grow at pace. It is not necessary that all Startups make profit in the initial stages. For example: Facebook had to wait for four long years to be profitable.
Steps for Startup India Registration
Step 1: Establishing the business
The applicant needs to incorporate his/her business as a Limited Liability Partnership, Private Limited Company or a Partnership firm. The applicant further needs to follow the basic tasks for registration that include obtaining company’s PAN, Certificate of Incorporation or Certificate of partnership registration.
Step 2: Registering with Startup India
To register as a Startup, the applicant needs to visit the official website of Startup India and fill in the application form online followed with all the required business details and finally uploading of certain documents.
Step 3: Uploading of Documents (PDF format only)
a) Letter of Recommendation/Support
- Letter of recommendation issued by an incubator from post graduate college in India and in format suggested by Department of Industrial Policy and Promotion (DIPP), or
- Letter of support from incubator funded by Government of India, or
- Letter of recommendation from incubator recognized by Government of India, or
- Letter of funding by Government of India or State Government
b) Incorporation/Registration Certificate
Applicant needs to upload certificate of their LLP or company and in case of partnership, registration certificate is required.
c) Business description in brief
Applicant needs to provide description of the nature of his/her business.
Step 4: Avail Tax Benefits
For first 3 years, Startups are exempted from Income Tax. However, to avail such benefits, Startups must be certified by Inter-Ministerial Board (IMB). Those startups that are recognized by DIPP and Government of India can avail IPR benefits without taking any additional certificate from IMB.
Step 5: Following conditions needs to be Self-certified for registering as a Startup Enterprise:
- Register the company as Private Limited Company, Partnership firm or a Limited Liability Partnership
- Business incorporation in India should not be older than 5 years
- Company turnover should be less than Rs. 25 crore
- The business should not have split and reconstructed in any scenario
Step 6: Finally, get the recognition number
Once the applicant has self-certified the above mentioned conditions and all the documents are verified by the concerned authority, certificate of recognition will be issued. Applicant must ensure that all the authentic and valid documents shall be uploaded. No wrong document should get uploaded as it will result in the applicant paying fine of 50% of paid-up capital of the Startup or minimum fine of Rs. 25,000.
Once the applicant gets the recognition number, he/she can apply for trademarks, patents and design registration by approaching any of the facilitators issued by Government of India.
Also Read: Company Registration Process in India
Eligibility for Companies to get Startup Recognition
- Business existence should not be more than 5 years from the date of incorporation
- Company should be incorporated as Private Limited Company, Limited Liability Partnership or Registered Partnership
- Annual turnover should not be exceeding Rs. 25 crore for any financial year since the date of its incorporation
- Company should not have been formed by restructuring existing business or by splitting up
How can an entity avail benefits under various Government schemes, including Startup India Scheme?
To avail benefits of government schemes, entity needs to be recognized as a Startup by applying on Startup India Mobile App/portal and obtaining the certificate of recognition.
For how long is Startup Certificate valid?
The startup certificate is valid for 5 years from the date of incorporation.
Do I need to submit the physical copy of the application?
No, you just need to apply for the registration online.
How soon I can get the certificate of recognition?
You can get the certificate of recognition instantly by downloading it online from the official website after form submission.
If my entity does not have a PAN card, can I still register as a Startup?
Yes, your entity can be registered as a Startup, if you do not have your entity’s PAN.
For existing entities, what is the tenure for getting certification of IMB for availing tax benefits?
Application process for getting certificate from IMB completes within 10-25 working days.