Startup recognition, single window for countless benefits

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startup business recognition

Start-ups are a business model that refers to businesses started by individual founders that intend to grow to have employees and develop a scalable business model. To back innovative creators in India, the Government of India launched the ‘Start Up India’ programme where startup recognition is awarded with multiple benefits.

Start-up India is a flagship initiative of the Government of India, intended to encourage Start-ups in the country that will drive sustainable economic growth and generate employment opportunities. The majority of services is granted through the start-up India web portal. It is an all accessible platform for young and old creators in India to find investors, incubators, VCs and other start-ups in their own industry.

The portal also assists individuals with the registration process to get started in the business world. Here is a step by step online registration process for new businesses through the start-up India portal.

Check if you are an enterprise which qualifies for the Startup recognition:

If your enterprises possess the following features it will qualify as a Start-Ups (as laid down by Department for Promotion of Industry and Internal Trade (DPIIT) as defining features of a start-up):

  1. The Start-up should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
  2. Turnover should be less than INR 100 Crores in any of the previous financial years
  3. An entity shall be considered as a start-up up to 10 years from the date of its incorporation
  4. Entity 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. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Start-up”

The business shall give a self-certification for above said qualifications as an assurance of its eligibility to be treated as a “start-up”.

Steps of Registration

Step 1: incorporation

The first step is to obtain an incorporation certificate. Application for this certificate can be filed through the website of Ministry of Company Affairs.  The business shall be incorporated as a Limited Liability Partnership or a Private Limited company or a Firm.  You must follow the ordinary procedures like obtaining a certificate of incorporation, PAN CARD and other compliances related to the particular type of business. The standard procedure in the Companies Act, 2014 or India Partnership Act 1932 shall be followed. Registration must be after or on 1st April 2016.

Step 2: Registration with Start-up India:

The Department for Promotion of Industry and Internal Trade grants the startup recognition. The applicant must log on to the Start-up India web portal or the mobile App and fill the registration form with business details such as the company logo, the name of the company, start-up contact information and the category of business stage of progress, and a brief description of business and explain how your start-up is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation. The incorporation/registration certificate shall be uploaded.[1]

Recognition number:

The recognition number is granted on successful application and the certificate of recognition is issued after the examination of documents. The Inter- Ministerial Board shall review the supporting document(s) provided to ascertain if the entity qualifies as an eligible business for availing tax. For obtaining a certificate for the purposes of availing tax exemption under Section 80-IAC of the Income Tax Act, 1961 an application shall be made in Form-1 along with documents specified therein to the Board.

If on examination of documents, it is found that the documents are forged, wrong or that a required document is not uploaded, the business can be liable to a fine of 50% of start-up capital with minimum fine of Rs 25,000. In case it is found that the certificate has been obtained on the basis of false information, the Board reserves the right to revoke such certificate or approval.  If your startup gets recognized, you would be able to download a system generated verifiable certificate of recognition.

IMB Notifications

The Inter- Ministerial Board meeting typically takes place once a month. The cases in the meeting are processed in a serial order. The communication regarding the decision is sent to the registered email address of the Start-up.

The Start-up India registration provides the following benefits:

  • Self-Certification based compliance 
  • Access to Start-up India Hub for knowledge exchange and access to funding
  •  Fast-tracking Patent Examination at Lower Costs 
  • Relaxed Norms of Public Procurement
  • Faster Exit  
  •  Funding Support
  • Tax Exemptions  
  • Incubation
  • Collaboration of research and enterprise

Conclusion

Start-up India has become a popular development tool in India owing to the various tax exemptions by the government afforded to start ups in the country. Start-ups certified by the Indian Managerial Board are exempted from taxes for three years and those recognised by DIPP can avail direct IPR benefits.

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