Startup India Scheme is an initiative by the Government of India for the generation of employment and wealth creation.
The goal of Startup India is the development and innovation of products and services and increasing the employment rate in India.
Startups are becoming very popular in India. The government under the leadership of PM Narendra Modi has started and promoted Startup India.
It aims to empower startups to achieve growth through innovation and technology.
With an objective to reduce the fiscal burden on start-up companies and enable them to maximize profits while keeping compliance expenses down, the Government of India has launched an initiative called Startup India.
What is the Startup India Scheme
The Startup India scheme was launched by the Indian Government in 2016. With the main goal of wealth generation and increasing employment opportunities across the country, Startup India benefits millions of aspiring entrepreneurs.
All programs initiated within the Startup India scheme are managed by an exclusive team that reports to DPIIT (Department for Industrial Policy and Promotion).
The introduction of the Startup India initiative by the Government of India is a major milestone. The benefits of the Startup India program are many and have been crucial in the growth of entrepreneurship culture in India.
Start-ups and the eligibility for Registration under Startup India
A startup is a newly established business, usually small, started by a single person or a group of individuals.
What differentiates it from other new businesses is that a startup offers a new product or service that is not being given elsewhere in the same way.
The Startup India Scheme has been established to recognize and promote startups in India.
This initiative allows aspiring entrepreneurs to register their startups with a simple and less time-consuming online procedure.
Step 1 – Incorporate your Business – In order to create a start-up, it is important to register your business first as a Private Limited Company or Partnership Firm or a Limited Liability Partnership.
This can be done by following all the normal procedures of registration of any business such as obtaining the certificate of incorporation or making a partnership deed along with obtaining a Permanent Account Number for the company or firm and fulfilling other necessary requirements.
Step 2 – Registering with Startup India Scheme – The second step is to register your business as a startup. The process to register a startup has been made tremendously easy under the Startup India Scheme and you can do it online, sitting at home.
All that is required to be done is to log into the Startup India website and fill up the registration form. In the registration form, details of the business are to be provided along with uploading certain relevant documents.
Step 3 – Gather Required Documents – The following documents are required to register your startup on the Startup India website:
(a) Letter of Recommendation: The following documents can be obtained as a letter of recommendation:
- A recommendation regarding the innovative nature of your business from an Incubator established in a post-graduate college in India, in a format specified by the Department of Industrial Policy and Promotion (DIPP); OR
- A letter of support by an incubator, which is funded in relation to the project by the Government of India as part of any specified scheme to promote innovation; OR
- A letter of recommendation regarding the innovative nature of the business, from an Incubator, recognized by the Government of India in DIPP specified format; OR
- A letter of funding of not less than 20% in equity, by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network, duly registered with SEBI that endorses the innovative nature of the business; OR
- A letter of funding by the Government of India or any State Government as part of any specified scheme to promote innovation; OR
- A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of the business being promoted.
(B) Incorporation/Registration Certificate: Along with the registration form, you are required to upload the certificate of incorporation of your company/LLP (Registration Certificate in case of a partnership).
(C) Description of your business in brief: A brief description of the innovative nature of your products/services is also needed.
Step 4: Certifying yourself – The final step before you can get a recognition number is to certify that you fulfill the following terms:
- You have registered your new company as a Private Limited Company, Partnership firm, or Limited Liability Partnership.
- Your business was incorporated/registered in India, not before 5 years.
- Turnover is less than 25 crores per year.
- Innovation is a must – the business must be working towards innovating something new or significantly improving the existing used technology.
- Your business is not a result of splitting up or reconstruction of an existing business.
Step 5 Immediately get a recognition number – On applying you will immediately get a recognition number for your startup.
The certificate of recognition will be issued after the examination of all your documents.
If everything is in order, you will receive an official recognition certificate from the government.
However, be careful while uploading the documents. If on subsequent verification, it is found that the required document is not uploaded or a wrong or forged document has been uploaded then you shall be liable to a fine of 50% of your paid-up capital of the startup to a minimum of Rs. 25,000
Step 6: Tax benefits – Under the Startup India scheme, you can start availing the benefits offered by the initiative, including tax exemptions, funding opportunities, intellectual property support, and more.
Startups incorporated after April 2016 are exempted from income tax for 3 years in a block of 7 years provided that their annual turnover does not increase Rs. 25 crores.
This will also help the start-ups to meet their requirements of working capital in their initial operational years.
CONCLUSION
As we All Know, by providing startups with a range of benefits and support mechanisms, the initiative aims to create a vibrant startup ecosystem that contributes to economic growth, job creation, and technological advancement.
We can see that the Government is making efforts in order to support startups in every way, including making the procedure to register these easier and less time-consuming.
This way, it is also helping young entrepreneurs by providing them with a platform to showcase their innovative ideas and overall aiding the development of the economy of the country.
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