Colloquially, a start-up is a company or a project in its nascent stages, brainchild of a single or a set of entrepreneurs. Start-ups usually seek to innovate and tap into the unexplored sectors of the market, holding the potential to host a scalable business venture.

Start-up India Scheme

It was launched by Prime Minister Narendra Modi in 2016 to promote and develop the start-up culture in India. It aims to generate wealth and employment by encouraging people to employ themselves through the means of innovative start-ups. The scheme simplifies the registration process and compliance provides a host of financial and income tax benefits and IPR fast-tracking for new start-ups. These are further enumerated below: –

1. The tedious processes of registration, incorporation and grievance management of a start-up have been eased and facilitated by the government through remote online portal.
2. The government has established a corpus to Ten thousand crores (to be distributed equally over the course of the next four years) for providing financial aid to start-ups. It will also allow eighty percent rebate on patent registration costs and bears the facilitator fee for the start-ups to patent the unique goods or services they wish to deliver.
3. The start-ups so registered will be allowed an income tax exemption for three years post the incorporation year (for this, they must be certified by the Inter-Ministerial Board (IMB). Start-ups recognized by the Department of Industrial Policy and Promotion (DIPP) can directly avail the benefits without requiring any additional certification from IMB) They will be allowed exemption from tax on capital gains when investing in certain sectors. They also get a priority in winning governmental tenders.
4. They will be allowed fast-tracked winding up in ninety days under the Insolvency and Bankruptcy Bill, 2015.
5. The scheme also educates and offers networking opportunities to the entrepreneurs by hosting start-up fests and events.

Under the scheme, eligible start-ups can register themselves as one of the three types of organisations: 

1. Partnership Firm
2. Limited Liability Partnership Firm
3. Private Limited Company

Register your Startup under Startup India Scheme at-  https://www.startupindia.gov.in/

Registration Process

1. Incorporation

A start-up needs to incorporate its business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership.

2. Registration Under the Start-up India Scheme

The so incorporated start-up should register itself online on the Start-up India website and upload the following required documents in pdf format.

a. Letter of recommendation and support (recognising the innovative nature of the start-up) in the format specified by the Department of Industrial Policy and Promotion (DIPP) from an approved incubator established in a post-graduate college in India or is funded and established by the government of India.

b. A certificate of incorporation (to be obtained through filing a simplified proforma for incorporating company electronically (SPICe -INC-32), with e-MoA [electronic memorandum of association] (INC-33), eAOA (INC-34) to ministry of corporate affairs) or a partnership registration certificate (to be obtained through an application to the registrar of firms of the state in which partnership is to be situated)

c. A letter of equity funding of at least twenty percent by a SEBI registered incubation/angel/private equity fund or an accelerator or angel network or by the central/state government of India.

d. Statement of purpose of the business

3. Self-Certification of following eligibility criterion

A start-up to be registered under the scheme –

1. Should be a new firm or less than five years old. Moreover, should not be reconstituted form of a firm that was already in existence.

2. Should not be a proprietorship or a public limited company.

3. Should aim to deliver, develop or commercialise innovative products, processes or services

4. Should not have a turnover exceeding twenty-five crores.

5. Should have obtained prior approval of the Department of Industrial Policy and Promotion (DIPP). Further, it should have a recognition letter by a start-up incubator like SIDBI Innovation & Incubation Centre (SIIC) [It is the approved incubator of DIPP to undertake proper due-diligence and provide recognition certificate to start-ups in India]

One person companies (OPC) are allowed under the scheme. Further, a foreign entity having at least one registered office in India can also register under the scheme. A foreign national can enter into a Limited Liability Partnership (LLP) under LLP Act, 2008 and get it registered under the scheme.

 4. Get a unique recognition number issued for the start-up

After an examination of compulsory formalities is done and approved, a certificate of recognition is issued to the start-up. The registration of the start-up under the scheme is now complete. Applications to avail other benefits like IPR fast-tracking or patent rebate may now be filed with the government. [If upon subsequent inquiry, it is found that wrong or misleading information/documents have been submitted, the start-up will be liable to pay fifty percent of its paid-up capital as a fine, minimum fine being Twenty-five thousand rupees]

Register your Startup under Startup India Scheme at-  https://www.startupindia.gov.in/

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