Startup Business Registration and Benefits
Dear Business Starter/Businessman/Investors,
Most of us has listen about the Start-Up Scheme of Govt. of India. But in absence of basic knowledge of such scheme, we can’t take advantage of this.
In this blog we are going to explore some basic know -how of this scheme and its benefits for a new businessman or existing businessman.
- Start-up Meanings:
A Business shall be know as Start-up if it has meet out the below mentioned conditions as:
- It should be registered as A Private Limited Company or A Registered Partnership Firm or A LLP.
- Turnover of business should be less than Rs. 100.00 Crore in any previous financial years. In other word, for a start-up business turnover should not be more than One Hundred Crore in any last years.
- An entity shall be considered as a Startup up to 10 Years from the date of its incorporation.
- The Startup should be :
- Working for any Innovation of New Product or Services
- Improvement in any Existing Products/Services/Process
- Have the Potentiality to Generate more Employments
- Potential to Create Wealth
- Any Entity formed by splitting up or reconstruction of any running business shall not be considered as “Startup”.
So if you are meet out the above said condition then your business shall be treated as “Startup Business” and you will be eligible to take benefits of said scheme.
- How Get Your Business Recognized as “Startup”:
Once it is determined that your business has met out the basic condition of Startup then the next step is to ensure its Recognition as “Startup Business”.
For ensuring your business recognized as “Startup Business” you have to apply with the Department For Promotion of Industry and Internal Trade of Ministry of Commerce and Industry of Govt of India. It is known as “DPIIT Recognition”.
- DPIIT Recognition:
For getting DPIIT Recognition, you have to submit Startup Form with the following basic documents and Information with the department website as:
- Incorporation/Registration Certificate of Your Company/LLP/Partnership Firm
- Directors/Partners details
- Proof of concept like pitch deck/website link/video (in case of a validation/early traction/scaling stage startup) respectively.
- Patent and trademark details (Optional)
- PAN Number of Your Company/LLP/Partnership Firm
Further you need not to submit any:
- Letter of Recommendations
- Sanction Letters
- Udyam/MSME Certificate
- GST Certificate
If your business idea is still under progress then in that case you can also apply for it without any proof of concept and get recognized. You can Update later when you reach validation/early traction/scaling stage.
In case if you are facing any difficulty in getting such DPIIT Recognition then you can approach with us and We at KIP will facilitate to you in taking such recognition.
- Benefits of DPIIT Recognition:
Once you got such recognition, your business shall be eligible to take the following basic benefits and advantage as:
- Patent Application and IPR Protection:
Your application of Patent and Trade Mark shall be deal in Fast Track Mode. You will be provided a special rebate of 80% in Patent Filling Fees and 50% in Trade Mark Fees. It will help you in cut down your initial cost of Business.
- Relaxation in Public Procurement Norms:
Government of India has authorized its Ministries, Departments and Public Sector Undertakings to relax norms in all public procurements. Startups are entitled to avail exemption on the following conditions as:
- Prior Turnover
- Prior Experience
- Earnest Money Deposit
DPIIT recognized Startups can now get listed as Sellers on the Government of India’s largest e-procurement portal Government e-Marketplace (GeM). Further startup can also become preferred bidder on CPPP (Central Public Procurement Portal) at eprocure.gov.in
- Self-Certification under Labor and Environment Laws:
To reduce the regulatory burden on startup, Startups are allowed to self-certify their compliance under 6 Labors and 3 Environment laws for a period of 3 to 5 years from the date of incorporation.
A Start up do not require clearance under 3 Environment related Acts for 3 years. It will save times and that time can be utilized for set up business.
- Easy Windup the Company:
A startup company can easily wind up its operation in case failure of business. Ministry of Corporate Affairs has notified Startups as ‘fast track firms’ and enabling them to wind up within 90 Days while it will take 180 days for other company.
- Tax Exemption:
The recognized Startups that are granted an Inter-Ministerial Board Certificate are exempted from income-tax for a period of 3 consecutive years out of 7 years since incorporation.
Startups incorporated on or after 1st April 2016 can apply for income tax exemption.
A DPIIT recognized Startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act. Under this section startup can avail the exemption of capital gains & on investments above Fair Market Value.
- Funds of Funds for Startup:
To provide equity funding support for development and growth of innovation driven enterprises, the Government has set aside a corpus fund of INR 10,000 crores managed by SIDBI. The Fund is in the nature of Fund of Funds, which means that the Government participates in the capital of SEBI registered Venture Funds, who invest twice the amount in Startups.
- Others Benefits for Startup:
Once your business has got DPIIT Recognition, there are so many other indirect benefits are provided by Govt in order to boost your business efforts. Some out of these are as:
- State Specific Benefits:
Each state has framed and implement state specific policy for promotion of startup business. Such benefits may be in form of Interest Subsidy, Seed Grant, SGST Refund etc.
- Pro Bono Services:
Department has made MoU with some big company in order to facilitate the startup business such as Amazon, LinkedIn, Hub stub etc. These companies will provide to business training free of cost and help you in customized services of their specific field.
- Networking and Discussion:
Startup India will provide a platform for connect with Corporate that give the opportunities of business networking and help in startup to solve their business problems.
- Tools and Templates:
Assists by providing some common business tool and template that required for routine business operation such as Sample of NDA, Deed, Agreement and Contract etc.
- International Bridges:
Startup India has enabled Global Market Access through making bilateral tie up with other countries. It will help startup in meet out with international standard with knowledge exchange and Capacity Building.
- Special Benefits for Startup in Haryana:
If you are going to set up startup business in Haryana then you can also take the special benefits given by Haryana State through its Entrepreneur and Startup Policy 2017.
State Govt has notified some special provision related to startup in his new Policy of Haryana Enterprises Promotion Policy, 2020. These are as:
- Interest subsidy of 8%, maximum up to INR 20 lakh per year for a period of 5 years.
- Reimbursement of 30% of lease rental subsidy for general and 45% for start-ups with only women founders, period of 1 year up to INR 5 lakh.
- Seed Grant up to INR 10 Lakh per start-up for 100 start-ups in ‘A’ category blocks, 200 start-ups for ‘B’ category blocks, 300 start-ups for ‘C’ category blocks and 400 start-ups for ‘D’ category blocks (idea selection by special committee to be formulated by State Government).
- 100% Net SGST Reimbursement for 7 years with cap of 150% FCI.
- Support start-ups up to INR 2.5 lakh to attend national acceleration programs and INR 5 lakh for international acceleration programs.
- Mentoring assistance of INR 1 lakh per incubator will be given to Government sponsored incubators up to a maximum of INR 15 lakhs per annum.
- 100% reimbursement of expenses incurred for cloud computing/ storage on Haryana based Data Centers up to INR 1 lakh per start-up per annum for a period of 3 years.
So if you are in process of some new business idea and think about to start up your new business then it is the right time to get advantage of Startup India Schemes.
We at KIP, will assist to you in exploring your business capabilities and Helps you in:
- Business Modeling
- Company Registration
- LLP Registration
- Partnership Registration
- MSME Registration
- Import Export Code (IEC)
- GST Registration
- Registration with DPIIT
- Taxation Consultancy
- Detail Project Report
- Bank Financing
- Subsidy Viability Report (Applicable on your Business Natures)
- Filling Subsidy Application
- Accounting and GST Services
- Other Statutory Compliances applicable on your Business.
For Startup Registration submit your response at: https://forms.gle/VXK1UC8KFS7a3bev6
For more details, you can share your business idea and plan with us at:
Jitender Kumar (90171-51780)
KIP Financial Consultancy Pvt. Ltd.
DSB – 38, KIP Complex, Red Square Market, Hisar – 125001 (HR)