
With an aim of transforming the existing image of India from a nation of job seekers to job creators, the government of India is encouraging startups through launching various schemes and plans. One of such plans is initiated by the ministry of commerce and industry in January, 2016. i.e. startup India under DIPP (Department of Industrial Policy and Promotion). This scheme provides several financial and non-financial benefits to registered startups. To get a startup registered under this scheme, the entrepreneurs have to satisfy the certain specified standards which are as below:
Considered as:
Startup up to 10 years from the date of its incorporation
Incorporated as:
Private Limited Company/ Limited Liability Partnership (LLP)/ Registered Partnership Firm
Turnover should be:
Less than INR 100 Crores in any of the previous financial years.
Business Operations towards:
Innovation/improvement in existing products or services and must be capable of generating employment or wealth creation.
Required documents for Startup India Registration:
- Incorporation certificate of business
- Proof of funding in case of startup has availed any
- Documents of award or recognition if startup has received any.
- PAN card
- List of directors/partners along with their email id, photograph and social profile links.
- Website and social media profile links of business entity
- Documents of IP (Intellectual Property) if any.
- A brief description of the innovation, nature and scalability of business.
- Recommendation letter from incubators of PG colleges/recognized by GoI.
- Support letter from one of the startups funded through central or state government authorities.
Process of registering business with Startup India Scheme in Simple Steps:
1. Business Incorporation
2. Registering business through Startup India recognition portal
3. Providing required information and documents
4. DPIIT certificate gets issued after examining the application and documents submitted.
Benefits of getting startup recognized by DIPP:
It is believed that all the startups can avail a tax benefit which actually is a myth as there is a difference between startup being recognized and startup being recognized with tax. To avail exemption from income tax payment under section 80 IAC of the Income Tax Act, the startup has to separately apply to Inter-Ministerial board of certification (IMB) as DIPP deals only with startup recognition. Under this scheme, startups can avail exemption of income tax for 3 consecutive years out of first 10 years from the date of business incorporation. This is available for startups registered on or after 1st April, 2016 but before 1st April, 2021.
Unlike other entities, a startup can apply for specified tenders even if it doesn’t fulfill criteria of minimum capital or turnover or experience. Besides, govt. has exempted startups from submitting Earnest Money Deposits (EMD) while filing tenders.
The registered startup will have privilege of claiming 50% rebate in trademark application fees and 80% in patent application fees. Also, their application will be treated on a fast track basis.
Once a startup gets recognized, it is able to clarify compliances for 6 labor laws and 3 environmental laws through a simple online procedure. Also, there will be no inspection conducted for 5 years in the matter of labor laws whereas there will be random checks for startups which fall into “white category” (defined by Central Pollution Control Board) in the matter of environment laws.
In addition to the above discussed benefits, the govt. has introduced certain more benefits which startups can avail once they get registered under DIPP. The benefits include:
- Fund of funds establishment to help starts in raising funds.
- Organizing startup fest so that startups can interact, exchange information and can form brand value together.
- Allowing startups to register on Government e-Marketplace (GeM) as sellers to sell their products and services directly to government entities.
- In case of exit, the application of startups will be treated on fast track basis for winding up in 90 days.
Thus, to stand across all the challenges, the government of India is providing remarkable support to startups. As an outcome, more and more entrepreneurs are getting encouraged to register themselves under this and take maximum advantage from government. This also contributes towards making of an effective and competent Indian economy.