What is Required for a Startup to Take Off?

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A startup is a company in the initial stages of a business. Startups are founded by entrepreneurs who develop a product because there is a demand for it. These startups usually have little revenue and are looking to save money. One of the ways to save money and get benefits is to register your company with the Startup India scheme.

Your company has to be eligible to avail of this registration. There are service providers who can handle the legalities and the registration for your startup. They offer services to entrepreneurs like business setup, trademark protection, ROC filing, tax filing, and funding legal support.

Eligibility for registration

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The following are required if you want to register your company:

  • Your company should be a Private Ltd. Co/LLP/Partnership firm.
  • The company will be considered to be a startup for not more than 10 years.
  • The company is offering innovative products or services OR
  • The company is using a business model which has a high potential for employment generation.
  • The turnover of your company does not exceed 100 crore.
  • The company is using a business model with a high potential for wealth creation.

There are a few documents required for Startup India registration. You will need a company PAN card,  website or company profile deck, certificate of incorporation/partnership registration certificate, and brief information about how your business is working towards innovation, employment, and wealth creation. You will have to give the proof of funding of the company if it was funded before, details of the Trademark and the patents, and the list of awards or certificates received by the startups.

Registration process

  • The person who wants to register a startup has to apply for the incorporation of the entity to the jurisdictional Registrar of Companies (ROC) to get a certificate.
  • The Startup India scheme requires that the business be registered as a startup. This can be done easily online. You have to create your account and enter the required details.  A startup India profile is created for further processing. You have to complete your registration process.
  • Once your company is registered you can avail the various benefits. Next, you need to get recognition from the Department for Promotion of Industry and Internal Trade (DPIIT). This recognition helps your startup to avail various benefits.
  • Next, you will have to fill out the Recognition of Startup form. You read all the terms and conditions provided with the form. Submit the form to register your startup.

This can be done through a company registration services provider. All you have to do is fill out the form online. The company’s experts will connect with you and guide you on the documents required. The experts will help you get the Startup India certificate within 3 – 4 working days.

Benefits of the Startup India Scheme

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A company registered with the Startup India Scheme is eligible for the following benefits:

  • A company is entitled to a tax exemption for three consecutive years out of the first 10 years.
  • You become eligible for availing funds from the Funds of Fund for Startups scheme. Money is already invested in 251 startups and you can be one of them. The government of India has formed a fund of Rs. 10,000 crore to help the Indian startup ecosystem.
  • Your company gets exempted from the prior experience or turnover and deposits when you file for tenders. You also get the opportunity to list your startup products on the government e-market for visibility.
  • Eligible startups can get investments from accredited investors. Non-residents, AIFs and closely held listed companies get exempted from the Income Tax under Section 56(2).
  • There is no Labour Law inspection for startups. Recognized startups can manage the PF, ESIC, Gratuity, and environmental law compliance through self-declaration.
  • You can get a 50% discount on Trademarks and an 80% rebate on Patent fees.
  • Recognised startups can avail loans from non-resident investors up to $ 3 million every financial year through the RBI’s compliance procedure.
  • The company can take deposits from its members for 5 years from its date of incorporation.
  • You are eligible for availing the State government incentives like GST rebate scheme and other loan and rebate incentives which are announced by the state government.

How are startups funded?

Startups have become popular in India and the Startup India scheme will help to attract and promote startups. One of the challenges the startup faces is difficulty in getting access to funding. They fail to attract investors due to a lack of experience and security. Startups carry a high risk and cannot draw enough percentage and therefore investors do not prefer them.

To help the startups the government of India has set up a fund of INR 10,000 crore over four years. This gives INR 2,500 crore per annum to fund the startups. The funds are in the form of a Fund of Funds and do not invest directly but participate in the capital of SEBI-registered Venture funds.

Startups also get tax benefits but they have to be certified by the Inter-Ministerial Board (IMB). Startups included from April 2016 can be eligible to apply for income tax relief.

Source: entrepreneur.com

What benefits does DPIIT Recognition offer?

DPIIT or Department of Industrial Policy, Promotion, and Internal Trade Recognition offers Startups access to high-quality Intellectual and Property services and resources. The startup’s patent application is fast-tracked for examination and disposal. The process is much faster for recognized startups.

It offers advisories on different Intellectual Property Rights (IPRs). It also offers information on promoting IPRs in other countries. The central government pays the fee for any number of patents, trademarks, and designs. The startup only pays for the statutory fees.

When the startups file patents they get an 80% rebate and this brings down the cost to Rs. 1.600 from Rs, 8000. This will help the startup to cut down on the cost in the initial years. Startups are also offered a 50% rebate when they file for Trademarks. This brings the cost down to Rs. 5000 from Rs. 10,000.