start-up registration steps in start-up India
Start-up Registration in India – 7 Easy Steps
A start-up is a newly formed company, typically small in size, founded by one or more individuals. What distinguishes a start-up from other new companies is that it provides a novel product or service that is not available in the same way elsewhere. The operative word is “innovation.” The company either creates a new product or service or improves an existing one.
Startup India's Step-by-Step Guide to Registering Your Start-up
In India, start-ups are gaining traction. To grow the Indian economy and attract talented entrepreneurs, the Indian government, led by Prime Minister Narendra Modi, launched and promoted the Startup India initiative, recognizing and encouraging start-ups.
Startup India Registration steps:
Step 1: is to incorporate your company.
Incorporate your business as a Private Limited Company, a Limited Liability Partnership, or a Partnership firm. You must follow all of the standard procedures for business registration, such as obtaining a Certificate of Incorporation/Partnership registration, obtaining a PAN, and complying with all other relevant compliances.
Step 2: Create an account with Startup India.
Then, as a start-up, the business must be licensed. The whole process is straightforward and entirely online. All you need to do is visit the Startup India website and complete the application form with information about your company. Following that, enter the OTP sent to your e-mail address and other details such as the start-up as the type of user, the start-up’s name and stage, and so on. The Startup India profile is generated after this information is entered.
After creating an account on the website, start-ups can apply for various acceleration, incubator/mentorship, and other challenges and gain access to resources such as the Learning and Development Program, government schemes, and state policies for start-ups and pro bono services.
Step 3: Obtain DPIIT Accreditation
After building a profile on the Startup India website, the next move is to apply for recognition from the Department for Promotion of Industry and Internal Trade (DPI). This recognition enables start-ups to take advantage of advantages such as access to high-quality intellectual property services and infrastructure, relaxation of public procurement standards, self-certification under labor and environmental laws, simplified business winding up, access to Fund of Funds, tax exemption for three consecutive years, and tax exemption on investment over fair market value.
New users should click on the ‘Get Recognized’ button to obtain DPIIT recognition. If you are already logged in, click on the ‘Dashboard button’ and then on ‘DPIIT Recognition.’
Step 4: Application of Recognition
The ‘Details of the Recognition Application’ page appears. On this page, under the Registration Details section, click on ‘View Details.’ Complete the ‘Start-up Recognition Form’ and click on the ‘Submit button.
Step 5: Registration Documents
Registration/Incorporation Your start-up’s certificate
Directors’ Biographical Details
Proof of concept in the form of a pitch deck/website link/video (in the case of a start-up in the validation/early traction/scaling stage).
Specifications for patents and trademarks (Optional)
Number of the PAN
Step 6: Acknowledgement Number
That is it! You will automatically receive a recognition number for your start-up upon Application. The certificate of recognition will be given after reviewing all your records, which usually takes two days from the time you upload your information online.
However, exercise caution when uploading documents. If it is discovered that the appropriate document was not uploaded, the incorrect form was uploaded, or a forged document was uploaded, you will be subject to a fine of 50% of the start-up’s paid-up money, with a minimum fine of Rs. 25,000.
Step 7: Additional Areas
Registration of patents, trademarks, and designs: If you need a patent for your invention or a brand for your company, you can quickly contact one of the government-approved facilitators. You will be responsible for only the regulatory costs, saving you up to 80% on fees.
Access to finance has been a significant barrier for many start-ups. Entrepreneurs struggle to attract investors due to a lack of expertise, security, or current cash flows. Additionally, many investors are put off by the high-risk aspect of start-ups, as a significant percentage struggle to take off.
To provide financial assistance, the government established a fund with an initial corpus of INR 2,500 crore and a cumulative corpus of INR 10,000 crore over a four-year term (i.e., INR 2,500 crore per year). The Fund is structured as a Fund of Funds, which means it will not invest directly in start-ups but will instead contribute to the resources of SEBI-registered Venture Funds.
Self Certification Under Employment and Labor Laws: Start-ups can self-certify underemployment and labor laws, thus lowering their enforcement costs. Self-certification is available to relieve businesses of regulatory burdens, enabling them to concentrate on their core market. For three to five years from the date of incorporation, start-ups can self-certify their compliance with six labor laws and three environmental laws.
For three years, units operating under 36 white category industries as published on the Central Pollution Control Board’s website do not require clearance under three environmental statutes.
Tax Exemption: For three years, start-ups are tax-free. However, they must be approved by the Inter-Ministerial Board to receive these benefits (IMB). Start-ups formed on or after 1st April 2016 are eligible to apply for income tax exemption.
Documents That Have Been Exempted
Since its inception, Startup India has altered the registration process. It has now waived the majority of the previous criteria. Numerous papers that were previously expected to be filed are waived. The following documents are not expected to be filed with the Application for registration:
- Recommendation Letters
- Sanction Letters
- MSME Certificate
- GST Certificate
- Udyog Aadhar
The Fund of Funds' Main Characteristics
- Small Industries Development Bank of India (SIDBI) will administer the Fund of Funds.
- The Life Insurance Corporation of India (LIC) will participate as a co-investor in the Fund of Funds.
- The Fund of Funds can contribute up to 50% of SEBI-registered Venture Funds (“daughter funds”). To qualify for the donation, the daughter fund must have already collected 50% of the necessary funds. The Fund of Funds shall be represented on the board of directors of the venture fund in proportion to its contribution.
- The Fund will assist with a diverse range of industries, including manufacturing, agriculture, health, and education.
Due to various government measures, it is effortless to register as a start-up. However, you can concentrate on your primary business while we at ClearTax assist you from start to finish, from incorporation to start-up recognition. Do not hesitate to visit our website to learn more about our start-up services.
Frequently Asked Questions About Incorporating a Business in India
Question: Who is qualified to become a member of start-up India?
Answer: A private limited company, a partnership firm, or a limited liability partnership can register under the start-up India scheme. These business entities’ annual revenue should not exceed Rs. One hundred crores and they should have been in operation for at least ten years from the date of incorporation/registration. This body should be dedicated to the creativity, growth, and enhancement of products, services, and processes.
Question: What are the advantages of registering with start-up India?
Answer: The Startup India Scheme provides several benefits to start-ups. To take advantage of these benefits, however, the DPI must create an organization like a start-up.
Start-ups may certify their compliance with six labor laws and three environmental laws on their own. This is permitted for five years from the date of the entity’s incorporation/registration. Start-ups receive a three-year tax exemption and access to the best intellectual property programs and tools designed specifically to assist them in protecting and commercializing their intellectual property.
Question: Which business framework can I use for my new venture?
Answer: Private limited corporations and limited liability partnerships are the most common company models for start-ups. A Private Limited company is a legally recognized entity that investors usually prefer. However, it requires more stringent enforcement and may have a higher integration cost.
Whereas LLPs have a lower integration cost and a more relaxed compliance regime than Pvt. Ltd. Co. Additionally, LLPs have limited liability and are recognized globally by investors.
Question: What would I do to entice investors to invest in my start-up?
Answer: Not only do you need a great product with a scalable business model to draw investors, but you also need exposure. Ascertain that the product enjoys a healthy level of interaction and momentum. You’ll need to register your start-up in start-up India and search out investors proactively. Ascertain that you can effectively communicate your business concept and the viability of your business model to the investor.
Question: Is it possible for a foreign business to register with the Startup India hub?
Answer: Any organization with at least one registered office in India is eligible to register on the hub, as the location preferences are currently limited to Indian states. However, the government will soon.
Question: What does the term “accelerator” mean in comparison to “incubator”?
Answer: Start-up incubators are usually non-profit organizations that assist entrepreneurs in growing their businesses, especially in their early stages. Typically, the incubation feature is carried out by organizations with expertise in business and technology.
Accelerators for start-ups assist early-stage, growth-oriented businesses. These programs typically last between a few weeks and a few months. During this time, individual companies collaborate with a network of mentors who are trained and can also provide financial assistance.
Question: How long is a business considered a start-up?
Answer: After ten years from the date of incorporation/registration and exceeding the previous year’s revenue of 100 crores, a corporate company ceases to be a start-up.
Question: Is it possible for an established entity to register as a “Start-up” on the Startup India Portal?
Answer: Under the law, an established entity can register as a start-up if it meets the specified start-up requirements. Additionally, they would be eligible for various tax and intellectual property protection benefits available to start-ups. The parameters are identical to those listed in the preceding article.
Question: How do I know if my registration has been successful?
Answer: After completing the Application and the start-up is recognized, you will receive a certificate of recognition generated by the system. This certificate will be available for download through the Startup India portal.