By registering your startup with the Startup India program, you open the door to a myriad of opportunities. From access to funding and mentorship to networking with industry leaders and availing of tax benefits, the program provides a robust support system that can propel your business to new heights.
In this blog, I have told you how to register your startup in the Startup India Program. From understanding the benefits and eligibility criteria to providing a step-by-step registration process and offering tips for success, we’ve got you covered.
So, let’s dive in and unlock the vast potential that awaits you:
What is a Startup?
A startup is a company that has just started and is in the first stage. This usually involves one person or several co-founders starting a company to solve a problem with their product or service. Startups are usually specialized and focused on solving a specific problem.
Currently, in India, there are programs like the Startup India Program that encourage and empower people to start startups. People can avail the benefits of the program by registering their startup in this program.
What is the Startup India Program
The Startup India Initiative is a Government of India program launched in January 2016 to foster entrepreneurship and nurture startups across the country. The key goals of Startup India are to:
- Support early-stage startups through funding schemes, incubators, mentoring, and training programs.
- Simplify regulations and bureaucratic processes so startups can focus on growth.
- Empower youth to create innovative startups rather than just seek employment.
Additional measures include facilitating intellectual property rights, providing tax exemptions, and other incentives to boost the startup ecosystem. The overarching vision is for India to emerge as a global hub for highly successful startups across sectors that can contribute significantly to economic growth.
The Department of Industrial Policy and Promotion (DPIIT) drives the execution of the Startup India initiative through various targeted programs. It coordinates with other agencies and stakeholders as well to ensure the smooth delivery of services aimed at catalyzing the startup revolution in India.
Eligibility Criteria for the Startup India Program
If you wish to register your company under the Startup India program your company must meet these criteria:
- Age: The company must not have been incorporated more than 10 years ago. This period restriction allows only truly new ventures to qualify.
- Type: The business must be privately held as a private limited company, registered partnership firm, or limited liability partnership. This excludes publicly traded companies.
- Turnover: Annual turnover for any financial year since incorporation should not exceed 100 crore rupees. This keeps the focus on small, early-stage ventures.
- Original: The entity should not have been created by just splitting or reconstructing an existing business. It must be an original idea and venture.
- Innovative & Scalable: Fundamental startup traits like pursuing innovation in products, services, or business processes should be evident. The model should also lend itself to large-scale growth and expansion. This ensures true innovation focus.
Benefits of Registering in Startup India Program
- Regulatory Compliance Facilitation: Startups can self-certify their adherence to labor and environmental regulations, streamlining the compliance process.
- Fiscal Incentives: Eligible startups can avail income tax exemptions for three consecutive years within the first decade of their operations, providing financial relief during the crucial early stages.
- Hassle-free Exit: In the event of unfavorable circumstances, startups can wind down their operations within a span of 90 days, minimizing prolonged operational burdens.
- Intellectual Property Support: Substantial rebates are offered on filing patents (80%) and trademarks (50%), encouraging innovation and protecting intellectual property rights.
- Funding Access: Startups gain access to dedicated funding sources, including the Fund of Fund for Startups (FFS) and the Startup India Seed Fund Scheme (SISFS), facilitating capital acquisition.
- Preferential Public Procurement: Relaxed norms enable startups to participate more easily in government procurement processes, fostering entrepreneurial opportunities.
- Dedicated Funding Pool: A substantial government fund with a corpus of ₹10,000 crore is available, providing financial backing for promising startups.
- Labor Compliance Relief: For the initial five years, startups can benefit from reduced compliance costs associated with employment and labor laws, alleviating regulatory burdens.
- Environmental Clearance Exemption: Startups can avail exemptions from specific environmental clearances for three years, expediting their operations during the formative stages.
- Certification and Recognition: The Inter-Ministerial Board (IMB) certifies eligible startups, conferring recognition and facilitating access to various incentives and support mechanisms.
Registering Your Startup in India
Registering your startup under this program is very easy. You can follow these simple steps to register your company under the Startup India Program.
Step 1: Incorporate Your Startup
- Choose Business Structure: The first step in incorporating your startup is deciding on the appropriate business structure. You can choose to register as a Private Limited Company, Limited Liability Partnership (LLP), or One Person Company (OPC). Each structure has its benefits, so select the one that best suits your business needs.
- Name Approval: Choose a unique and appropriate name for your business. Verify its availability on the Ministry of Corporate Affairs (MCA) website to ensure it is not already taken. A unique name helps in establishing your brand identity.
- Director Identification Number (DIN): Every director of the company must obtain a Director Identification Number (DIN). This can be done by submitting an online application through the MCA portal.
- Digital Signature Certificate (DSC): A Digital Signature Certificate (DSC) is required for filing electronic documents. Directors need to acquire a DSC from a certified authority to ensure the authenticity of the documents submitted online.
- Draft MOA and AOA: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which define the company’s objectives, rules, and regulations. These documents are essential for the incorporation process.
- File Incorporation Documents: Submit the incorporation documents, including the MOA, AOA, and other required forms, to the Registrar of Companies (RoC) through the MCA portal. This step also involves providing details about the company’s directors and shareholders.
- Payment of Fees: Pay the registration fees based on the company’s authorized capital. The fee structure varies depending on the capital and business structure chosen.
- Certificate of Incorporation: Once the RoC verifies and approves your documents, you will receive a Certificate of Incorporation. This certificate serves as proof of your company’s existence and legal status.
- PAN and TAN Application: Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for your company. These are necessary for tax-related purposes and can be applied for through the relevant government portals.
- Open Bank Account: Use the Certificate of Incorporation and PAN to open a business bank account. This account will be used for all financial transactions related to your startup.
- GST Registration: Register for Goods and Services Tax (GST) through the GST portal. GST registration is mandatory if your business turnover exceeds the prescribed limit.
- Professional Tax Registration: Check if your state requires professional tax registration and comply accordingly. This tax is applicable in certain states for professionals and business entities.
- Compliance with Regulatory Requirements: Depending on your business type, you may need additional licenses and permits. Ensure you obtain all necessary regulatory approvals to operate legally.
- Post-Incorporation Compliance: After incorporation, maintain compliance with annual filings, audits, and other regulatory requirements. Staying compliant helps avoid legal issues and penalties.
Step 2: Register with Startup India
Learn about the Startup India Scheme, which aims to support and promote startups in India. Understand the eligibility criteria and benefits, including tax exemptions, funding opportunities, and access to resources. Click here to begin the process.
Step 3: Get DPIIT Recognition
- Recognition Application: Apply for recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition is essential for availing the benefits offered under the Startup India Scheme.
- Documents for Registration: Prepare and submit the necessary documents for the recognition process, including your company’s incorporation certificate, proof of funding, authorization letters, proof of concept, and any relevant patents or trademarks.
- Recognition Number: Upon successful verification of your documents, you will receive a unique recognition number. This number signifies your startup’s official recognition under the Startup India initiative.
Step 4: Other Registrations
Depending on your industry, you may need additional registrations and licenses. Research and comply with industry-specific requirements to ensure your startup operates smoothly and legally.
FAQ
1. How long does the incorporation process typically take?
The incorporation process can take anywhere from a few days to a few weeks, depending on the accuracy and completeness of the submitted documents and the processing time of the Registrar of Companies.
2. Can I change the business structure after incorporation?
Yes, it is possible to change the business structure after incorporation, but it involves a legal process and compliance with regulatory requirements. Consult a legal expert for guidance.
3. Is DPIIT recognition necessary for all startups?
DPIIT recognition is not mandatory for all startups but is highly beneficial. It provides access to various benefits, including tax exemptions, funding, and other support mechanisms under the Startup India Scheme.
4. Do I need a physical office for startup registration, or can it be a virtual office?
You can register your startup with a virtual office address. However, ensure that the virtual office provider offers all necessary documentation and support for compliance and legal purposes.
Wrapping Up
Registering your startup in India is a strategic move that can set the foundation for your business’s success. By following the detailed steps outlined in this guide, you can ensure that your startup is legally compliant and well-positioned to benefit from the various incentives and support systems offered under the Startup India initiative.
