ADVANTAGE OF HAVING STARTUP INDIA REGISTRATION
A Startup India regime has been initiated by the Government of India to support innovation and entrepreneurship in India. A Startup is a small new business environment initiated by one or a group of people leading to innovation of products/services. To be known as a startup, the entity must get registered with the Startup India. This is what distinguishes start from other companies. In India, maximum educated population intend to seek jobs in various multinational companies, in order to promote job creator attitude instead of job seeker attitude, the Government of India has introduced a Startup India scheme. The basis of is introduction is modernization and idiosyncrasies.
On 16 January 2016, the Indian government launched the Startup India initiative. This is done to help entrepreneurs create a dynamic start-up ecosystem and to focus India on job creation rather than looking for them. The real aim of the Startup India program is to build a strong ecosystem to promote innovation and entrepreneurship in the country.
FEATURES AND ADVANTAGES
1. Self-declaration of conformity under various laws
As part of the Startup India programme, startups can self-certify their compliance with various labor and environmental laws, as communicated by the government. This benefit is given to startups to ensure the efficiency and effectiveness of their business and to focus on the core business with relatively low compliance costs.
In addition, start-ups are excluded from the labor law audit for 3 (three) years, so no testing for start-ups is carried out for the specified period.
2. Benefits of Intellectual Property Rights
To promote startups and recognize their business model, Startup India offers new startups several intellectual property advantages, which are listed as follows:
• Patent applications filed by startups are quickly pursued for review and dismissed by the government.
• Entitlement to discounts of up to 80% compared to other companies applying for patents.
• Entitlement to 50% discount when registering a trademark compared to other companies.
• Entitlement to 50% discount when registering a Design compared to other companies.
The federal government bears all funding costs for start-ups.
3. Tax exemption
Startups recognized by DPIIT may apply for 100 percent income tax exemption under Section 80-IAC (Business-Specific Deductions) of the 1961 Income Tax Act for 3 (three) years out of 10 (ten) years from company incorporation/registration, provided that- certain conditions that may be communicated by the government from time to time.
Start-ups are also entitled to an exemption under Section 56(2)(viii) (income from other sources) of the Income Tax Act 1961 if the start-up company receives remuneration for issuing shares in excess of the market value of this. shares, the total reward for these Shares in excess of the market value of the Shares will not be taxed by filing a simple Form 2 return and subject to the following conditions:
This is a DPIIT Approved Launch or as previously announced; and
The aggregate amount of paid-up share capital and share premium of the startup after issue or proposed issue of a share, if any, does not exceed, twenty-five crore rupees. Provided that in computing the aggregate amount of paid-up share capital, the amount of paid-up share capital and share premium of twenty-five crore rupees in respect of shares issued to any of the following persons shall not be included:
(a) a non-resident; or
(b) a venture capital company; It is further provided that considerations received by such startup for shares issued or proposed to be issued to a specified company (as defined in the Notification) shall also be exempted and shall not be included in computing the aggregate amount of paid-up share capital and share premium of twenty-five crore rupees.
The Startup shall not invest in any of the assets as promulgated in the Notification for 7 (seven) years from the end of the latest financial year in which shares are issued at a premium.
4. Relaxation of procurement norms
It should be noted that for tenders conducted by state-owned or public companies, the eligibility criteria only require companies with previous experience or sales at the job site. This practice prohibits or even restricts start-ups from participating in tenders for such bids.
Through Startup India Scheme and General Financial Rules, 2017, Startups are given the opportunity to list their products or services on the state’s e-market portal, where the portal offers the aforementioned “previous experience” exemption, along with earnest money deposit (EMD) submissions to new entrepreneurs encouraging and giving them a chance and to provide them with equal opportunity.
5. Fast Track Exit Option/ Winding-up
The Startups are also known as “fast track firms” as notified by the Ministry of Corporate Affairs are granted permission which enables the Startups to wind up their operations within 90 (ninety) days.
An insolvency professional shall be appointed for the Startup, who shall be in charge of the company for liquidating its assets and paying its creditors after applying about the same.
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