Startup India Scheme -Registration, Eligibility, Features & Benefits

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What is the Startup India Scheme?

Launched on January 16, 2016, aims to establish a robust and inclusive ecosystem for entrepreneurship in India, nurturing startups and innovation.

This initiative aims to empower startups to expand and disrupt through the power of technology and design. Not only does the Startup India scheme aim to drive economic growth, but also generate ample employment opportunities.

With this scheme, the government aims to transform India from a country of job seekers to that of job creators. The scheme is managed by a skilled and experienced Startup India team, reporting to DPIIT (Department for Industrial Policy and Promotion).

Benefits of the Startup India Scheme

Here is a brief overview of the numerous advantages that the scheme offers to entrepreneurs across the nation.

Simplified Process and Support

Easy and hassle-free registration with the Startup India team ready to handhold business owners at every stage
Startups can enjoy legal support at reduced costs
Relaxed norms for the public procurement process
Launch of portal and mobile app to enable information exchange and compliance

Ample Support in the Form of Incentives and Funding

Offers financing support to startups through a Fund of Funds with an amount of up to ₹10,000 Crores
Tax exemption to startups for a period of up to 3 years
Tax benefits on capital gains invested in Fund of Funds
Startups can enjoy a Credit Guarantee fund as a part of this initiative

Industry-Academia Partnership Benefits

Startup fests to help budding entrepreneurs showcase innovation
Offers collaboration platforms to help startups expand and develop their existing line of business
Harnessing the potential of private sector companies to form incubators
Increases networking possibilities by helping aspiring entrepreneurs interact with various stakeholders on a global level
Higher precedence for Startup India scheme incumbents when they apply for government contracts

Self-certification

Startups are allowed to self-certify their compliance with 3 Environmental Laws and 6 Labour Laws with a simple online process
No inspection will be conducted for a timeline of 5 years in the case of Labour Laws
Startups included in the ‘White Category’ can self-certify compliance

Note that the category designation for every startup will be defined by CPCB (Central Pollution Control Board).

Patent and IPR Application

Fast-tracking of patent applications filed by startups
Central Government will bear the entire cost of facilitation fees
Startups can enjoy an 80% rebate when filing patents, helping them manage the initial costs with ease

Easy Termination Process

Startups can wind up their business transactions within 90 days of filing an insolvency application
Entrepreneurs easily relocate their funds to more productive avenues through simplified process

Eligibility Criteria for the Startup India Scheme

Companies must meet the following parameters to get the recognition of a DPIIT startup.

The period of existence of your startup should not exceed 10 years from the date of incorporation
Your company must be recognised as a Limited Liability Partnership (LLP), Registered Partnership Firm or a Private Limited Company
The company’s annual turnover should not exceed an amount of ₹100 Crores during any financial year since its inception
The original business entity should not have been established by reconstructing an existing business
The startup must work towards the improvement or development of a certain product or service
The firm should support a scalable business model demonstrating high potential for employment generation and wealth accumulation

Documents Required for the Startup India Scheme

Submit these documents to register your startup under the Startup India Scheme:

Certificate of Registration or Incorporation of the startup
PAN card of the company
Proof of concept, such as a website link or video, if your startup is in its early scaling phase
Proof of funding, if applicable
List of recognitions and awards, if any
Authorisation letter from the authorised company representative
Certificate of incorporation
MSME registration, GST registration, Trademark registration certificates (if available)
Company’s website or profile
Details of company directors
Revenue details

Startup India Registration Process

Follow this hassle-free process to register your enterprise under the Startup India Scheme:

Incorporate your business as an LLP, partnership firm or private limited company by filling out a registration application to the ROC (Registrar of Companies) of your region
Register the business as a startup by visiting the Shram Suvidha portal at https://shramsuvidha.gov.in/signupUser

Enter your details, such as name, email ID and mobile number, followed by a verification code
Click on the ‘Signup’ tab and register your firm on the website
Log in using the credentials after completing the registration process
Click on the link ‘Is Any of Your Establishment a Startup?’ after you log in to the website
Follow the instructions as mentioned and upload supporting documents along with self-certification before you click on the ‘Submit’ tab

Once you submit the required details, DPIIT verifies your information and gives approval if you meet the eligibility terms.

Tax Exemptions Under the Startup India Scheme

All startups registered under this flagship initiative are eligible for the following tax exemptions:

Tax Exemption Under Section 80IAC

Startups can be exempted from paying tax for a maximum of 3 consecutive financial years within their first 10 years of inception
The entity must be a DPIIT-recognised startup to enjoy these tax exemptions
The startup must be a private limited company or a Limited Liability Partnership entity
The firm must have been incorporated only after April 1, 2016

Tax Exemption Under Section 56

Investments in startups by listed public entities having a net value exceeding ₹100 Crores or a total turnover of more than ₹250 Crores can claim tax exemption.

Shares from startups up to a maximum limit of ₹25 Crores will be included within the tax exemption threshold limit
The firm should be a private limited company to enjoy tax exemption
The startup must not invest in immovable assets exceeding a limit of ₹10 Lakhs

How can I get funding for Startup India?

To acquire Startup India financing, your firm must be registered under DPIIT.

Who is eligible for Startup India?

Here are a few eligibility criteria to register at Startup India. Your firm must have received approval from DPIIT and must have an annual turnover of ₹25 Crores. The entity should not be older than 5 years and must be delivering unique services and products.

Are start-ups exempted from GST?

Private Limited Companies and Limited Liability Partnerships are eligible for tax exemption under Section 80IAC. However, it is mandatory for start-ups to register for GST.

What type of companies are eligible for the Startup scheme?

Partnership Organisations, Limited Liability Partnership Enterprises, and Private Limited Companies are eligible for the Startup India scheme.

How do start-ups get seed funding in India?

In India, seed funding for start-ups is channelled through state/centre-recognised incubators.

How can I get a certificate from Startup India?

You will be granted your Startup India certificate after DPIIT verifies the details provided along with the application form.

What are the 3 pillars of Startup India?

The three pillars include simplification and handholding, funding & incentives and incubation & industry-academia partnerships.

Can anyone invest in Startup India?

Any entity meeting the required eligibility parameters can invest in this scheme.

What is the maximum amount for the Startup India scheme?

The maximum amount applicable under the scheme is ₹1 Crore.

What is the success story in numbers of the Startup India scheme since its launch in 2016?

To date, more than 1 Lakh startups have been recognised and supported by DPIIT.

Is it mandatory for the startup to be registered in India to qualify as a DPIIT-recognised startup?

Yes. It is important for your firm to have at least one registered office in the country.

What is the most common business structure preferred to qualify under the scheme?

The most preferred formats include LLPs and private limited companies. Although partnership firms qualify, the requirements can vary compared to the other business models.

How will I know if the registration process is complete?

Once you complete your application by submitting accurate details, DPIIT verifies your startup details. After this, you will get a system-generated recognition certificate, which you can download from the Startup India website.