WHAT IS A STARTUP ?
Startup refers to the new business ideas that intend to grow large beyond the solo founder. Startups are becoming very popular in India. Startups are being highly encouraged by the Government of India. On January 16, 2016 the Government of India launched the Startup India Initiative. Startups has Innovative Business model with initial funding from the founders or their friends and families.
The benefits enjoyed by them are immense, that is why more people are setting up Startups.
In simple language a Startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market.
INNOVATION ;- THE BASIC FOCUS OF STARTUPS
Innovation is the basic cause that makes the idea of Startup great. Many startups are made to change something in the world and some has completely revolutionized it. Some of the Startups have succeeded in doing this, like Microsoft (founded by Bill Gates), Ford Motors (founded by Henry Ford), and McDonald’s (founded by Ray Kroc).
CONTROLLING BODY TO STARTUPS IN INDIA
Department For Promotion of Industry And Internal Trade (DPIIT) working under the Ministry of Commerce and Industry is the controlling body to Startups in India.
DPIIT RECOGNITION TO STARTUPS :- Under the Startup India initiative, eligible companies can get recognised as Startups by DPIIT, in order to access a host of tax benefits, easier compliance, IPR fast-tracking & more.
Website : dipp.gov.in
ELIGIBILITY CRITERIA FOR STARTUPS IN INDIA
Your entity must meet the following criteria to be considered eligible for DPIIT start up recognition.
(a) Type of corporation eligible for Registration under Start up India :-
√ Private limited Company
√ Registered Partnership Firm.
(b) Existence of Entity :-
√ Period of existence and operations of the entity should not be exceeding ten years from the Date of Incorporation.
(c) Annual Turnover :-
√ Entity should have an annual turnover not exceeding Rs. 100 crore in any of the financial years since its Incorporation.
(d) Original Entity :-
√ Entity should not have been formed by splitting up or reconstructing an already existing business.
(e) Innovative & Scalable Business : –
√ Entity should work towards development or improvement of a product, process or service and/or have scalable business model with high potential for creation of wealth & employment.
GOALS BEHIND STARTUPS
It is the money that motivates someone to become an entrepreneur so profit making is a major purpose of Startups. Main goals of Startups are :-
BENEFITS TO STARTUPS GIVEN BY INDIAN GOVERNMENT
To promote growth of the Indian economy many benefits are being given to entrepreneurs establishing Startups. These benefits are
1. Simplified Registration Process
Registration to Startups is very easy through the website https://www.startupindia.gov.in/
The entire process of Registration is online or Registration can be done through Mobile Application also. The application has a single form to allow Startups to Register.
2. Rebates inPatent Application and IPR Protection
Startup India provides high quality intellectual property services and resources to startups to protect and commercialize their IPRs.
This includes :-
3. Self Certification
The process of conducting inspections shall be made more meaningful and simple. Startups shall be allowed to self-certify (through the Startup mobile app) with nine (9) labour and environment laws (refer below). In case of the labour laws, no inspections will be conducted for a period of three years.
4. Tax Relief for initial three Years
Startups will be exempted from income tax for three consecutive years. This benefit is provided to only those entities which are Incorporated on or after 1st April, 2016. Provided that the Startup gets a certification from Inter – Ministerial Board (IMB).
5. Relaxation under Companies Act, 2013
Large number of exemptions and relaxations has been given from various compliances under The Companies Act, 2013.
6. Apply for Government tenders
Startups can apply for government tenders. They are exempted from the any type of turnover thresholds and prior experience criteria applicable for normal companies applying to government tenders.
7. Easy Availability of Credit
A Ten Thousand Crore Rupees (10 Crore Rupees) fund is set-up by government to provide funds to the Startups as venture capital. The government is also giving guarantee to the lenders for providing venture capital.
8. Research & Innovation Benefits
Seven new Research Parks will be set up by the Indian Govt. to provide facilities to startups in the field of Research & Development.
9. Faster Exit for Start-Ups
Startup Company can be wound up days under Insolvency and Bankruptcy Code, 2016. For Startups, Insolvency Resolution Process to be completed within 90 days.
REASONS WHY MOST OF THE STARTUPS FAIL
Startups face high uncertainty and have high rates of failure, but a minority of them do go on to be successful and influential. Startups have no history and less profit to show. That makes investing in them risky. Some of the Investors may have no value addition in near future.
Everyone has ideas, some of these ideas may be decent, while others are probably not so good. Even if your idea is great, there’s a big difference between having a great idea and executing it. Creating a Startup company can make your dreams come true. Startups are purely a way to execute and to direct your Innovative business Ideas. The initiative of Startup India was undertaken in order to support entrepreneurs and to shift India towards creating jobs rather than seeking them.