The ‘Startup India Initiative’ was launched by the Department for Promotion of Industry and Internal Trade [DIPP], Ministry of Commerce and Industry in the year 2015, to foster the entrepreneurship spirit among the Indians and simplify the process of formation of businesses, allocating funding support and to further provide a host of benefits.
The organisations satisfying the below mentioned conditions are eligible to sign up as a Startup under the guidelines.
The Startup India platform shall only register an “Eligible Startup”.
Any entity shall be considered as an “Eligible Startup”;
1. The following form of organisations are eligible to sign up as a startup:
|Private Limited Company||Limited Liability Partnership [LLP]||Partnership Firm|
|Section 2 (68) of the Companies Act, 2013, defines a’ ‘Private Limited Company’ as:
“Private Company” means a company which by its articles,
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred.
|Section 2 (1)(n) of the Limited Liability Partnership Act, 2008, defines a, ‘Limited Liability Partnership’ as:
A partnership formed and registered under this Act.
|A ‘Partnership Firm’, registered under the Partnership Act, 1932.
Persons who have entered into partnership with one another are called collectively “a Partnership Firm”.
2. It should not be older than 10 years from the date of its incorporation.
3. The Annual Turnover for any of the financial years since incorporation should not exceed INR 100 crores.
4. It should be working towards innovation, improvement or development of any product or its processes/services, or if it is a scalable business model with high potential of job and wealth creation.
Note: The entity should not have been formed as a result of splitting up or reconstruction of an existing business.
DOCUMENTS NEEDED FOR STARTUP REGISTRATION [DPIIT RECOGNITION]
Following documents are mandatory to sign up as a recognized startup:
Following documents are not required:
STEPS FOR REGISTRATION
Step 1: Visit http://www.startupindia.gov.in
Step 2: If you’re a new user then register yourself on the portal providing very basic details such as type of user, name and stage of the startup, etc. If you’re an existing user then just login with your credentials.
Step 3: New users can go to get recognized tab directly and existing users have to visit dashboard and click on DPIIT recognition.
Step 4: On the ‘Recognition Application Detail’ page, click on ‘View Details’ under the Registration details section.
Step 5: Then fill up the ‘Startup Recognition Form’ and click on submit.
TIME TAKEN TO PROCESS THE APPLICATION
The authority will process the application within 48-72 working hours [typically it takes around 3-5 working days].
PROOF OF CONCEPT [PoC]
A PoC is a concrete proof of whether the idea will actually work or not and how it will be executed with the target audience. PoC is a demonstration of the idea or method to prove its feasibility. It is a way of testing whether a particular business idea can be turned into a profitable venture or not. Depending on the type of business, a PoC can take any form, be it a video representing the idea, described in a document, or an early prototype of the product.
Some tips to frame a PoC:
MAJOR BENEFITS OF BEING A RECOGNIZED STARTUP
The DPIIT recognized Startups will be eligible for the following benefits:
i. Funding support via Startup India Seed Fund Scheme
ii. Relaxation in public procurement norms
iii. Self-Certification under the Labour & Environment Laws
iv. Fund of fund for Startups
v. Intellectual Property Rights
vi. Programs on Startup India Website
vii. Faster exit routes for Startups on Fast Track Basis
viii. Income tax exemption for a period of 3 consecutive years out of 10 years since incorporation. [Section-80IAC of the Income Tax Act]
ix. Exemption from taxability of share premium [Section 56(2)(viib) of the Income Tax Act]
x. Capital Gain on transfer of residential property [Section 54GB of the Income Tax Act]
xi. Carry forward and set off of losses [Section 79 of the Income Tax Act]
xii. Deferment of tax liability on ESOPs [Sections 156, 191 and 192 of the Income Tax Act]