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Startup Registration
What exactly is a startup?
A startup is a brand-new business that promotes innovation. These organisations are more likely to rely on distinct business objectives to differentiate themselves from the competition. Almost all startups begin with a unique business idea, but most of them fail after a few months due to a lack of resources.
What is Startup India?
Startup India is an Indian government initiative that aims to create a strong ecosystem for nurturing advancements and startups in the country to drive long-term economic growth and create large-scale job opportunities. The government hopes to empower startups to grow through innovation and design through this initiative.
The Startup India Movement’s goals are outlined below. The action plan includes the following elements:
- Improved infrastructure, including incubators
- Facilitation of intellectual property rights, including easier patent filing
- The better regulatory environment, including tax benefits, easier compliance, improved company formation, quickest mechanism, and more.
- Increasing funding opportunities is a goal.
- Provide a large networking database for entrepreneurs and other startup ecosystem stakeholders.
Eligibility
To be eligible for the DPIIT Certificate of Recognition, the startup must meet the following criteria:
- Entity Period of Existence: The company’s period of existence and processes should not exceed ten years from the date of formation.
- Entity Classification: The DPIIT Certificate of Recognition is issued to companies that are formed as a Private Limited Company, a Limited Liability Partnership (LLP), or a Registered Partnership Firm.
- Annual Turnover: To be eligible for the DPIIT Certificate of Recognition, the firm must have an annual turnover of Rs. 100 crores in any fiscal year since its inception.
- Original Entity: To be eligible for the DPIIT Certificate of Recognition, the company must have been formed by splitting up or recreating an existing entity.
- The entity that is innovative and scalable: The entity should be working on the development or advancement of a product, process, or service.
The entity should have a scalable business model with a high potential for wealth and employment creation. The company should have the potential to create jobs or wealth.
How to Get a DPIIT Certificate
To obtain the DPIIT certificate of recognition, the entity should follow the simple steps outlined below.
Incorporation of the Company
As previously stated, the entity must first incorporate as a Private Limited Company, a Partnership firm, or a Limited Liability Partnership (LLP).
Using the Startup India Scheme to Register a Business
To obtain the DPIIT certificate of recognition, the company must be registered with the Startup India Scheme.
Apply for Startup Recognition
To obtain the DPIIT Certificate of Recognition for Startups, the applicant unit must first register with Start-up India via the Start-up India Recognition portal.
Fill out the Start-up Recognition application with the following information:
- Entity Specifics: Entity Type, Industry, Sector, Categories, Company Incorporation Number, and Registration Date
- Entity’s Complete Address
- Authorized Representative Directors or Partner Information
- Specifications of Intellectual Property Rights Specifications of Funding
- The entity has received recognition.
Obtain the Startup Identification Number
Following an examination of the application and documents submitted, the DPIIT Certificate of Recognition for Startups will be issued.
The startup can be registered for tax benefits once the ministry approves the application and provides the unique startup recognition number.
Advantages for DPIIT-Recognized Startups
After receiving the DPIIT Certificate of Recognition for Startups, startups can take advantage of the following benefits:
Certification by Oneself
Following receipt of the DPIIT Certificate of Recognition for Startups, the entity will be able to self-certify compliance with three environmental laws and six labor laws.
Patent Application for a Startup
Startups recognized by the DPIIT will be required to pay only 80% of the fees on patents, trademarks, copyrights, and design, and fast-tracking of a patent application will be available.
Easier Public Procurement Regulations
DPIIT-recognized startups will be able to list their products on the Government e-Marketplace.
DPIIT-recognized startups are exempt from submitting an earnest money deposit. Start-ups in all Central Government ministries and departments are exempt from prior experience/turnover.
Company dissolution is simple.
The company can be wound up within 90 days of filing for insolvency, according to the Insolvency and Bankruptcy Code of 2016.
Mutual Funds
The startups will be eligible for funds of Rs.10000 crore from Alternative Investment Funds.
Fund for Credit Guarantee
Over a four-year period, startups can access an Rs.2000 crore Credit Guarantee fund from the National Credit Guarantee Trust Company or SIDBI.
Exemptions from taxes
Following the receipt of the Certificate of Recognition, the startup may apply for tax exemption under section 80 IAC of the Income Tax Act.
Startups recognized by the DPIIT may apply for Angel Tax Exemption.
After receiving tax exemption approval, DPIIT-recognized startups are exempt from income tax for three consecutive fiscal years out of the first ten years since formation.