A start-up is a newly established business structure, that is usually small, and started by just one or a group of individuals. However, what distinguishes it from other businesses format is that a start-up offers a new good or service, which is not being provided elsewhere in the same manner. Therefore, the best keyword for start-up is innovation.
Further, this business format either develops a new good/ service or re-develops/ modify an already good/ service into something better and useful.
In this article, we will discuss the concept, features, eligibility criteria, and process for registration under Start-up India Scheme.
Concept of Start-up India Registration
The term Start-up India Registration Scheme denotes a flagship initiative started by the Indian government to build a robust and vigorous ecosystem for nurturing and promoting innovation, technology, and Start-ups in the country.
Best Business Structure for Obtaining Start-up India Scheme Registration
The most favoured business structures or formats for obtaining start-up are Private Limited Company and LLPs (Limited Liability Partnerships).
A Private Limited Company has more credibility and reliability, due to which Investors tend to prefer putting more money in this business format. Also, the government too favours the incorporation of such corporate structures.
Further, Limited Liability Partnerships (LLPSs) are the next most-chosen business structure by the embryonic start-up founders. The reason for choosing is due to its distinct entity and limited liability.
Also, it shall be noted that LLP has comparatively lesser compliances and regulations than a private limited company, and therefore, the founders, who do not wish to burden themselves with unnecessary legalities go for an LLP structure.
Eligibility Criteria for Start-up India Scheme Registration
The eligibility criteria can be summarised as:
- The company need to be either a private limited company or an LLP (limited liability partnership);
- The firm should have obtained prior approval from the DIPP (Department of Industrial Policy and Promotion);
- It must have obtained a letter of recommendation by an incubation;
- The firm shall provide some innovative schemes or products;
- It must be a new firm and should not be older than five years;
- The total annual turnover of a company must not exceed Rs 25 crores;
- It must not be a result or outcome of any business, already in existence, i.e., a private limited company incorporated as an outcome of the scheme of re-arrangement;
After satisfying all the points mentioned above as eligibility criteria, a start-up can easily avail of numerous benefits.
Key Features of Start-up India Scheme
The key features of the start-up India Scheme are as follows:
- Single Window Clearance is available through the mobile application;
- Corpus fund of Rs 10000 crore to initiate the development of the start-up;
- The fee for obtaining patent registration would be 80% less in comparison the original fee;
- Provides eased out Bankruptcy Code for a seamless exit;
- 3 years of relief from any mystifying inspection;
- 3 years of relief from the payment of Capital Gain Tax;
- No levy of tax on profit for the period of first 3 years;
- The non-existence of red tape;
- Self-certification compliance;
- Innovation hub for a budding business enthusiast under the Atal Innovation Mission;
- New schemes having provisions relating to IPR (Intellectual Property Right) protection to start-ups and new firms;
- Encourages innovation and entrepreneurship at the same time;
Documents Required for Obtaining Start-up India Scheme Registration
The documents required for obtaining Start-up India Scheme Registration are as follows:
- Certificate of Incorporation or Registration of the respective start-up;
- Details of the Proposed Directors;
- Proof of concept, such as pitch deck/ website link/ video (in the case of a validation/ early traction/ scaling stage start-up);
- Details concerning Patent and Trademark Registration (Optional);
- PAN (Permanent Account Number) Card;
Process for Obtaining Start-up India Scheme Registration
The steps involved in the process for obtaining Start-up India Scheme Registration are as follows:
- In a first and foremost step, the entrepreneur requires to incorporate either a private limited company or an LLP;
- Now, get the business entity registered on the official Start-up India Portal at https://www.startupindia.gov.in/content/sih/en/registration.html, and fill-up the details asked;
- Now, an OTP (One Time Password) will be sent on the registered mobile number and email address;
- Enter the sent OTP;
- After that the account will be created on the official portal;
- Now, after creating the account, the entrepreneur requires to apply for several acceleration, incubator/ mentorship programmes, and other challenges available on the website, together with getting access to resources, such as the Learning and Development Programs, Government Schemes, State Polices for Start-ups and pro-bono services;
- Now, avail of recognition from Department for Promotion of Industry and Internal Trade (DPIIT);
- To get recognition from DPIIT, click on the option “Get Recognised” if in case the entrepreneur is a new user. However, if in case, he/ she is an existing user, then click on the “Dashboard button” and then “DPIIT Recognition”;
- Now, the person will be redirected to the “Recognition Application Detail” page;
- On this page, select “View Details” mentioned under the section of Registration Details section;
- After selecting, fill up the “Start-up Recognition Form” and press on “Submit”;
- Now, a recognition number for the start-up will be automatically generated. Further, the certificate of recognition from DPIIT will be issued after the proper examination and verification of all the documents submitted. The said process is usually done in 2 to 3 business working days after duly submitting the details online;
In a nutshell, the reason for the Indian government to launch the Start-up India scheme is to boost and amplify employment ratio in the country. Further, the government also supports innovation, novelty, and research by setting the base for new business ideas looking for funds to flourish in the competitive space.
Furthermore, being a government-driven initiative, the Start-up India scheme consists of an array of features that supports both the development and innovation, and embrace change for a better and improved future.
Also, it is likely to increase and significantly boost the rate of employment by creating more jobs and opportunities for different sectors.