How to register a startup in India?

Meaning of Startup

A startup is a company that solves a problem and is managed by a small group of people.

The founders of such firms find weaknesses in the current system in which they have been working and resolve to remedy the problems by founding their own company.

A firm may also be founded when more founders have a potentially brilliant idea. Such businesses provide services they feel are presently unavailable or of low quality.

The most important advantage of a startup is that it promotes employment by allowing additional firms to open. The Indian government has endeavoured to aid young enterprises in developing and prospering in the Indian market, with the potential of greater employment opportunities. The Startup India programme assists you in inventing and growing your business over time.

What qualifies you as a Startup India participant?

The company must be registered as a private company, limited liability partnership, or partnership firm:

To be eligible for this plan, a startup must be established as a Private Limited Company (PLC) under the Indian Companies Act, 2013, as a Limited Liability Partnership (LLP) under the Indian Limited Liability Partnership Act, 2008, or as a partnership under the Indian Partnership Act, 1932.

1. The Startup must not be a product of restructuring: It is not advisable to create a new business by cutting or rebuilding a current one. This procedure will not work for a company formed by splitting an organization into two or more separate organizations.

2. The Startup must not be older than five years: This plan will be available to any Indian companies founded during the past five years of the policy’s introduction. Said, any businesses founded or registered after February 15, 2011, are eligible for this government starting the program.

3. Turnover does not exceed 100 crores: The company is still regarded as a startup if its yearly turnover does not surpass Rs 100 crore in any of the ten years. A company is no longer considered a startup after it achieves this level. The Indian government has raised the limit from Rs 25 crore to Rs 100 crore.

4. The business must be involved in a new product or service: Only startups developing a novel product, service, or approach are eligible for this programme. For this criteria, there are three requirements:

a) The Startup must be working on developing, deploying, or commercialising a new product, method, or service based on technology or intellectual property.

b) The Startup must create and commercialize a new product or service or a substantially upgraded current product or service to produce or add value to customers or processes.

c) A startup cannot simply concentrate on generating low-margin goods or services or undifferentiated products or services that deliver little or minimum additional value to customers or enterprises.

5. The Startup must have obtained approval from DIPP that the business is innovative: The Department of Industrial Policy and Promotion’s (DIPP) Inter-Ministerial Board must approve any new firm (2). To validate its firm’s innovative nature, a startup must apply to the DIPP’s Inter-Ministerial Board, together with the necessary supporting documents:

• Recommendation from a Post-Graduate College-based Indian Incubator
• Recommendation for a strategy to stimulate innovation from a government-funded incubator in India.
• Recommendation from a Government of India-approved incubator
• A letter of at least 20% equity capital from an Incubation Fund, Angel Fund, Private Equity Fund, Accelerator, or Angel Network registered with the Securities Exchange Board of India (SEBI). Such funds will not be included in the negative list of funds available to DIPP in future letters of support from the federal government or state governments as part of any innovation strategy.
• A patent is filed and published in the Indian Patent Office Journal in areas about promoting the company’s nature.

Procedure for registering a startup in India 

Step 1: Incorporate your Business:

To begin your company, you must first create a Private Limited Company, a Partnership Firm, or a Limited Liability Partnership. You must complete all of the regular stages for forming a company, including obtaining a Certificate of Incorporation/Partnership Registration, obtaining a PAN, and meeting other legal criteria.

Step 2: Register with Startup India:

After that, the business must be registered as a startup. The whole process is simple and may be performed entirely online. Go to the Startup India website and fill out a form with information about your business. Next, enter the OTP sent to your email address and other information such as Startup as the user type, the company’s name and stage, and so on. When these details are supplied, the Startup India profile is created.

After establishing a profile on the website, startups may apply for various acceleration, incubator/mentorship programmes, and other challenges and have access to resources like the Learning and Development Program, Government Schemes, State Policies for Startups, and pro-bono services.

Step 3: Get DPIIT Recognition:

Following creating a profile on the Startup India website, the Department for Promotion of Industry and Internal Trade (DPIIT) Recognition is the next stage. Benefits include access to high-quality intellectual property services and resources, relaxation of public procurement rules, self-certification under labour and environmental laws, ease of company winding up, access to Fund of Funds, three-year tax exemption, and tax exemption on investments above fair market value.

To receive DPIIT Recognition, click the ‘Acquire Recognized’ button if you’re a new user. Go to the ‘Dashboard button’ and then to ‘DPIIT Recognize’ if you’re already a user.

Step 4: Recognition Application:

‘Recognition Application Detail’ shows on the screen. Click ‘View Details’ in the Registration Details section of this screen. After filling out the ‘Startup Recognition Form,’ click the ‘Submit’ button.

Step 5: Documents for Registration:

• Incorporation/Registration Your Startup’s Certificate
• Directors’ Contact Information
• In the event of a validation/early traction/scaling stage company, a proof of concept such as a pitch deck/website link/video is required.
• Details about patents and trademarks (Optional)
• PAN (Personal Identification Number)

Step 6: Get your recognition number:

After completing this registration, you will be given an immediate recognition number. You will obtain a certificate of registration or incorporation only once the authorities have verified all of your provided documentation.

You must be careful while providing the information since any errors might result in significant fines of up to 50% of your paid-up capital, or at the very least Rs 25,000.

Now that you’re aware of the Startup India program’s eligibility and registration criteria, you can register your company and take advantage of all of the government’s benefits.

Conclusion

The Startups India Scheme contributes to the economy’s growth by creating a large number of jobs in a variety of sectors. The initiative is intended to encourage firms to propose innovative and unique business ideas that might otherwise be hard to pursue due to a lack of funding. When a firm joins this scheme, it has access to many government bids and tax breaks, assuring smooth corporate development. Please get in touch with our experts to help with the Startup India Registration Process.