Start Up India Registration

Prime Minister Narendra Modi introduced the Startup India campaign in 2016 to boost entrepreneurship in India.

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A start up is an entrepreneurial venture which is typically an emerging, fast-growing business that aims to solve an unmet need by developing a viable business model around an innovative product, service, process or a platform. A startup is usually a company designed to effectively develop and validate a scalable business model.

Eligibility to Get Registered as Startup

As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as Startup

Has not yet completed a period of ten years from the date of incorporation/registration.
Is a private limited company or registered as a partnership firm or a limited liability partnership.
Has an annual turnover not exceeding Rs. 100 crores for any of the financial years since incorporation/registration.
Is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
It is not formed by splitting up or reconstructing a business already in existence.

Required documents for registration

A copy of Certificate of Incorporation or Registration, as the case may be
A write-up about the nature of business highlighting how it is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation

Startup Registration process

The following is the process registration as startup

A Startup shall make an online application over the mobile app or portal set up by the DPIIT.
The application shall be accompanied by
1. A copy of Certificate of Incorporation or Registration, as the case may be, and
2. A write-up about the nature of business highlighting how it is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.
Once the applicant has self-certified the above-mentioned conditions and all the documents are verified by the concerned authority, a certificate of recognition will be issued.

Application for tax exemptions

Sec 80 IAC Exemption (Tax holiday for 3 years):

Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act.

Eligibility Criteria for applying to Income Tax exemption (80IAC):

The entity should be a recognized Startup
Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC
The Startup should have been incorporated after 1st April, 2016

Application for 80IAC exemption:

Application for exemption under section 80IAC can be made by logging in the Startup India Portal and filing Form-1.

Angel tax exemption

Post getting recognition a Startup may apply for Angel Tax Exemption u/s 56 of Income tax Act.

Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act:

The entity should be a DPIIT recognized Startup
Aggregate amount of paid-up share capital and share premium of the Startup after the proposed issue of share, if any, does not exceed INR 25 Crores.

Application for sec 56 exemption:

Application for exemption can be made by logging in the Startup India Portal and filing Form-2.

Benefits under Start up India Scheme

Access to funds

A 10,000 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 to encourage banks and other financial institutions for providing venture capital.

Tax Holiday

Startups will be exempted from income tax for 3 years provided they get a certification from Inter-Ministerial Board (IMB).

Government tenders

Startups can apply for government tenders. They are exempted from the “prior experience/turnover” criteria applicable for normal companies answering to government tenders.

R & D facilities

Six new Research Parks have been set up to provide facilities to startups in the R&D sector.

No time-consuming compliances

Various compliances have been simplified for startups to save time and money. Startups shall be allowed to self-certify (through the Startup mobile app) with 9 labour and 3 environment laws.

Tax saving for investors

People investing their capital gains in the venture funds setup by the government will get exemption from capital gains. This will help startups to attract more investors.

Easy exit

In case of exit – A startup can close its business within 90 days from the date of application of winding up

Meet other entrepreneurs

The government has proposed to hold 2 startup fests annually both nationally and internationally to enable the various stakeholders of a startup to meet. This will provide huge networking opportunities.