Steps To Register A Startup In India. Check Eligibility, Documents & Benefits

Many people in this world dream about business ideas, but only a handful of people have knowledge regarding the procedure to start a business and turn it into a profitable venture. 

Registering as a startup company in India is quite simple, and one can get a fair idea about the same after going through this article.

Advantages of Starting a Business In India

Startups have become very common in India. One major reason for this is the introduction of the Startup India programme by Prime Minister Narendra Modi. It is a programme that aims at encouraging entrepreneurs to create more job opportunities in the country. Hence, it aims to create a robust work ecosystem in India.

The programme encourages people to brainstorm new business ideas and assists them to start their businesses. The advantages of starting a business in India are:

• Straightforward process – India has launched a mobile app and website for startup registration. People who are interested in starting a business can fill out a form and upload papers online. 
• Cost-cutting – Government lists patent and trademark facilitators. They offer high-quality IP services at lower costs, including rapid patent examinations. The government will pay all facilitator fees and the startup only statutory fees. They will save 80% on patent filings.
• Simple Funding – The government sets aside 10,000 crore rupees for venture funding for entrepreneurs every year. It guarantees and encourages banks and other financial institutions to provide venture capital.
• Three-year tax holiday – Startups will be exempt from income tax for three years with IMB certification (IMB).
• Tenders – Government tenders are open to startups. They are free from “previous experience/turnover” standards for typical government bidders.
• R&D labs – Seven new Research Parks will house R&D startups.
• Minimum compliances – Startups save time and money by simplifying compliance. Startups can self-certify compliance with nine labour and three environmental rules with the Startup app.
• Investor tax breaks – Capital gains are exempt for those who participate in government-created venture funds. Startups will get more investors.
• Investor choice – Startups will be able to choose their VCs under this arrangement.

Also Read: MSME Registration – Small Business & SSI Application Online In India

Eligibility To Be Recognized As A Startup 

1. The business must be organised as either a PLC or LLP.
2. After it has been registered, the company is considered a startup for the first ten years. In order to provide businesses with lengthier tax advantages, the government of India has extended that period of time from 7 to 10 years.
3. A business is considered to be a startup once its yearly income has not yet reached Rs. 100 crore in any of the first ten years of its existence. Once the barrier has been reached, the company is no longer considered a startup. Recently, the government of India upped the amount to 100 billion rupees from 25 billion rupees.
4. The company needs approval from the Industrial Policy and Promotion Department (DIPP).
5. Supporter confidence is required at the Indian Patent and Trademark Office.
6. You must have a letter of recommendation in order to incubate.
7. SEBI requires all funding data (Securities and Exchange Board of India).
8. GST regulations need to be adhered by, by new businesses.

Also Read: An Overview Of MSME Registration In India: Process & Benefits Discussed

Startup Registration Process and the Documents Required

Step 1: Incorporation of Business

The first step is to establish a partnership, a limited liability partnership, or a private limited company. Hence, one is required to complete the registration form to get started. 

Step 2: Registration under Startup India

In order to participate in the Startup India programme, you need to register your business as a startup. Please fill out the form for Startup India. You are required to fill out the form and provide supporting documentation.

Step 3: Uploading of documents (only in PDF format)

• Registration requires a recommendation letter. These recommendation letters are available.
• A recommendation letter written in a format that is approved by the DIPP, provided by an incubator in India for post-graduate students. The innovative nature of the company; a letter of endorsement from a government-funded incubator that is a participant in a programme designed to encourage innovation; or a letter from any government-recognized incubator that is formatted in DIPP.

Also Read: Evolution of SME Lending In India

OR 

• A recommendation from the Central or State Government of India; OR A letter from an Incubation Fund, Private Equity Fund, Angel Fund, Accelerator, or Private Equity Fund registered with SEBI endorsing the innovative character of the firm; OR A letter from an Incubation Fund, Private Equity Fund, Angel Fund, Accelerator, or Private Equity Fund registered with SEBI; OR
• A patent application in the company’s industry that was accepted and published in the Journal of the Indian Patent Office.
• You are required to upload either the certificate of incorporation or registration for your company or LLP, along with a brief description of your business.

Step 4: Mention tax exemptions

If an Indian startup receives certification from the Inter-Ministerial Board, the government exempts the company from paying its income taxes for the first three years of its existence (IMB). Companies who register with DIPP are automatically eligible for various benefits simply by registering.

Step 5: Self-Attestation/Certification of Conditions

• You are either a public limited company or a limited liability partnership.
• Within the next five years, either incorporate or register your business in India.
• The income of your organisation can’t be more than 100 crores of rupees.
• The organisation is required to consistently work toward establishing and enhancing its system.
• Your company has to be an original concept; it cannot be a spin-off or a reorganisation.

Step 6: Acquisition of Recognition Number

You will promptly be assigned a number after opening an account with us. Before providing the registration or incorporation certificate, the authorities examine the documents that you have uploaded to their system. Any mistake in the data could cost you either 50% of your paid-up capital or INR 25,000. 

Enrol your business now that you are familiar with the requirements for participation in Startup India, and the registration process, so you can receive benefits from the government.

Also Read: An Overview Of MSME Registration In India: Process & Benefits Discussed

Conclusion

The process of registering as a startup company under the Startup India Programme is quite simple and the verification process for the same has also been simplified to speed up the incorporation of startups. The startup ecosystem is very advantageous to promoters since there are lots of tax exemptions and other incentives for them to operate in India. Being in the MSME sector, they would be able to compete with larger existing companies in India with the help of cutting-edge technology tools. There are thousands of investors too, who are seeking investment opportunities in startups.