TaxRegards

11 Benefits of Startup Registration By the Indian Government

11 Benefits of Startup Registration By the Indian Government
Startups are more mainstream in India nowadays. Prime Minister Narendra Modi launched Startup India Registration to recognise and promote startups by fostering innovation and commercial growth. Startup India aims to make India a job provider rather than a job-seeker. Startup India Scheme recognition is available online to qualified registered entities such as Private Limited Companies, Limited Liability Partnerships, and Partnership firms.
What is a Startup?
Startups are new businesses registered as sole proprietorships, limited liability partnerships, or partnerships. Startups are small and can be solo or group-founded. Startups are unique because they offer innovative products or services that no other firm offers. The company produces new items or improves existing ones.
Benefits of Startup Registration in India
Here are 11 significant benefits of startup registration in India:
Attracts foreign investors (ECB)
Through straightforward RBI compliance, recognized startups can borrow up to $3 million from non-resident/foreign investors (External Commercial Borrowings-ECB) per financial year.
RS 10,000 Crore for the Scheme
The Indian government is willing to invest Rs. 8,400 crore in startups. People are inspired to do great things by the government’s startup support. The government has contributed Rs. 1600 crore to 251 startups. FoF (Funds of Funds Scheme)
Priority Government Tender and Procurement processes
The government’s e-marketplace allows startups to list products for market visibility. In the Startup India Scheme, tenders are exempt from prior experience, turnover, and security deposits. Angel investors receive income tax relief.
Section 56 (2) (VIIB) of the Income Tax Act, 1961 exempts Accredited Investors, Non-Residents, and AIFs from Angel Tax on up to Rs. 25 crore in qualifying Startups.
Government Scheme Access
The Indian government has launched various startup programs. Registration allows your firm to receive tax exemptions, grants, subsidies, and other financial advantages under programs like the Firm India Scheme.
There is No Longer a Labour law inspection for startups
Startup India Registration allows recognized startups to self-declare PF, Gratuity, ESIC, and Environmental Law Compliance.
50% Trademark fee Refund, 80% Patent fee Refund
Startup India Scheme startups receive a 50% trademark discount and an 80% patent filing fee rebate.
3 Years income TAX Holiday
For three of their first 10 years after incorporation, eligible startups can avoid income tax.
Deposit from its members
Private Limited can accept member deposits under the Companies (Acceptance of Deposits) Rules, 2014, for five years after incorporation.
State Government Incentive Eligibility
States in India offer loans, refunds, and incentives like GST rebates and taxation rebates.
Worldwide Recognition
Registration boosts your startup’s reputation in India and beyond. International relationships, foreign investment, and conferences and exhibitions become easier.
Ease of Business
Startup registration streamlines administrative tasks for your business. It simplifies bank account opening, licenses, and regulatory compliance
What are the Eligibility Criteria for Applying to Startup India?
1. Organizational Structure : The startup must be a sole proprietorship, limited liability partnership, or partnership.
2. Turnover : Previous-year turnover should be under Rs. 100 crore.
3. Time Limit : Startups can only be formed within 10 years of incorporation.
4. Action : Startup goals must be original. Startups must offer unique or improved products or services and create jobs and wealth.
Startup India Registration Documents
How do I Register a Startup in India?

The following Documents are Needed to register for Startup India online:

  • The Certificate of Incorporation (COI)
  • MOA and AOA (Pvt Ltd Companies) or Partnership Deed (LLP/Partnership Firm)
  • Director/Designated Partner List
  • Director/Partner contact information
  • Information on awards and certificates received by the entity.
  • Investor details and investments in the entity (if available).
  • Intellectual Property Rights, including trademark and patent registration (where applicable),
  • Website / Mobile App Link
  • Udyam Registration
  • Plan for growth and business
What is the Registration process for Startup India?

Steps to register under the Startup India Scheme:

Incorporate your business

Start by incorporating your entity as a private limited company, limited liability partnership, or partnership.

Sign up for Startup India

After incorporation, you can apply for Startup India Registration online. The process is straightforward and online. Login to Startup India and enter your business information. Your Email will receive your user ID and password after OTP verification.

After creating a profile, entrepreneurs can apply for acceleration, mentorship, incubator, and other opportunities on the platform. Various Government Schemes, State Startup Policies, Learning and Development programs, and pro-bono services are also available.

DPIIT Registration

Step 2 allows you to apply for DPIIT Recognition. This DPIIT recognition allows startups to access high-quality intellectual property and other resources, self-certification under labor and environment laws, Fund of Funds, relaxation in public procurement norms, easy company winding, tax exemption for 3 consecutive years, tax exemption on investments above fair market value, and other benefits. available.

Application for Recognition

Fill out the DPIIT Recognition Online Form with all the relevant details. The questions and information are: company winding, tax exemption for 3 consecutive years, tax exemption on investments above fair market value, and other benefits. available.

  • Briefly describe your startup.
  • Current workforce (including founders)
  • What problem does the startup solve? (500-5000 words)
  • How will your startup fix this? (500-5000 words)
  • What makes your solution unique? (500-5000 words)
  • How does your startup make money? (500-5000 words)
Recognition Application

Your startup will receive a recognition number shortly after submission. Your recognition certificate will be issued a week after all documents are reviewed.

To be Aware: Upload documents honestly and sincerely. If the documentation is fake or erroneous, a minimum penalty of Rs. 25000 and punishment of 50% of the startup’s paid-up capital would be levied during verification.

Other areas

Patent and Trademark Registration

The government’s list of trademark and patent registration facilitators makes it easy to find one for your firm. Startup India Registration reduces government fees by 80%.

Funding

Many firms struggle to acquire investors due to inexperience. Funds are essential for every startup. This inhibits investors from investing in startups due to high risk.

To overcome this problem, the Indian government has created an initial corpus fund of INR 2,500 crore in the first year out of a total corpus of INR 10,000 crore over four years (i.e., INR 2,500 crore each year) to fund startups. This is a Fund of Funds. FoF indicates the government will invest in SEBI-registered Venture Funds, not startups.

Labour and Employment Law Self-Certification

Startups can cut compliance expenses by self-certifying under environmental and labor rules. Self-certification reduces compliance load and lets them focus on other important business tasks. Startups can self-certify compliance under 6 Labour Laws and 3 Environment Laws for 3–5 years after establishment.

Tax-Exemption

Startups get three years of income tax relief. For tax benefits, Inter-Ministerial Board (IMB) certification is required. Startups founded after April 1, 2016, can claim income tax exemption.

Final Words

Startup India shows the Indian government’s dedication to entrepreneurship. The government’s tax breaks, easier compliance, access to capital, and lower costs for intellectual property empower startups. Innovation, economic growth, and job creation boost India’s startup environment with this comprehensive approach.  Starting businesses with government support can transform the nation and advance it. There are plenty of benefits of startup registration in India. Represent your ideas, achieve career success, and leverage the benefits of startup registration.

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