“START-UP INDIA, STAND-UP INDIA”
Recognizing start-ups as a crucial contributor to the economic growth of the country is easily the most welcoming decision taken by Shri Narendra Modi since 2014. Before this, most of the laws, rules, and regulations were framed in the country without appreciating the fact that Start-ups are unique and need special considerations. This often caused hardships to Start-ups, who found it very difficult to survive in the cut-throat market with limited resources. “Start-up India! Stand-up India!” initiative aims to onboard start-ups as a key catalyst in generating employment and economic growth of the country. This initiative provides various incentives for running a start-up. But before you get excited not everyone who embarks on the entrepreneurial journey is a recognized start-up. Recognition of start-up is implemented through the Department of Industrial Policy & Promotions (DIPP). So in what way can one register start-up in India? What is the procedure to get recognized as a start-up? Here are the answers to a few of these commonly asked questions.
To be recognized as a startup, the entity has to :
a. be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India
b. have turnover lesser than Rs.100 Crores (earlier – Rs.25 Crores).
c. work towards innovation, development or improvement of products or processes or services, or in a scalable business model with a high potential of employment generation or wealth creation.
Registering as a start-up is a relatively easier process. You need to visit the www.startupindia.gov.in website; simply click register, complete the registration form, submit and you would obtain a certificate within 24-48 hours. However, in order to enjoy the perks given to start-up under the Income-tax Act, Companies Act, 2013 or any other law, you must obtain recognition from DIPP by applying for recognition here. Based on the merits DIPP would issue a recognition certificate.
Perks of being recognized start-up are :
1. Self-Certification: Self-certify and comply under 3 Environmental & 6 Labour Laws
2. Tax Exemption: Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above Fair Market Value.
3. Easy Winding of Company: In 90 days under Insolvency & Bankruptcy Code, 2016
4. Startup Patent Application & IPR Protection: Fast track patent application with up to 80% rebate in filing patents
5. Easier Public Procurement Norms: Exemption from requirement of an earnest money deposit, prior turnover and experience requirements in government tenders
6. SIDBI Fund of Funds: Funds for investment into startups through Alternate Investment Funds
7. Raising Funds through Convertible notes: The recognized start-ups can raise funds through the issuance of convertible notes.
To understand more about the benefits you may click here to download the start-up kit as hosted on Government website.