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What Makes You A Startup Under The Startup India Program?
Startups In India-The company must be a limited liability company or a limited liability company
The company will remain a startup for the first ten years after incorporation. And the Indian government has changed this from 7 years to 10 years to create opportunities and tax breaks for extended-term companies.
The company remains a startup if the annual turnover does not exceed Rs 100 crore in any of the ten years. But once the company exceeds the bar, it can no longer be called a startup. So the Government of India has also upgraded the Rs 100 crore mark from Rs 25 crore in the recent past
- The company must have the approval of the Department of Industrial Policy and Promotion (DIPP).
- The company must fund by an incubator fund and an angel fund, or a private equity fund
- A guarantee from the Patron of the Indian Patent and Trademark Office is required
- But must have a letter of recommendation for an incubator
- The company must propose innovative ideas and plans.
- All financing details must register with SEBI (Securities and Exchange Board of India).
- [Suggested Reading: Because GST Rules for Startups in India]
- And procedure for registering a startup in India
Step 1: Create Your Company
For Start-Ups. First, you need to incorporate your business because of a limited liability company or limited liability company, or general partnership. And you have to follow the standard procedure of filling out a form to get the registration.
Step 2: Log In To Startup India
You need to register your company or business because a new company in the state Startup India program, so fill in the form available on the Startup India website. Fill in all the details and upload a set of documents.
Step 3: You Only Have To Upload The Documents In PDF Format
You will need a letter of recommendation with the registration form. So you may receive one of the following letters of recommendation.
- A letter of recommendation from a well-known incubator to a graduate university in India in a DIPP-approved format. And it refers to the innovative nature of the company; WHERE
- A letter of recommendation from an incubator funded by the Government of India under a specific program to encourage innovation; WHERE
- A letter from one of the governments of India approved incubators in DIPP format.
- A letter of funding of at least 20% of the principal from an incubator fund and private equity fund and angel fund and accelerator and a private equity fund that is registered with SEBI and approves the natural enterprise innovation; WHERE
- A subsequent recommendation by the central government or any state government of India; WHERE
- A patent was filed and published in the Journal of the Indian Patent Office in areas related to the type of business promoted.
- Certificate of Registration or Incorporation
- You must upload your company or LLP certificate of incorporation or your general partnership registration certificate.
- And a brief description of your company
Step 4: You Must Indicate Whether You Require A Tax Exemption
New companies do not have to pay income tax for the first three years in India, but they must be certified by the Inter-Ministerial Board (IMB) to enjoy these benefits. And it is where DIPP-registered companies relax a little because registration is enough to qualify for benefits.
Step 5: Self-Certification Of The Following Conditions
- You are a limited liability company, SENCRL, or general partnership.
- And Your company must be incorporated or registered in India no earlier than five years.
- Your business turnover must not exceed Rs 100 million.
- And the company always has to invent something new or improve the existing system in its way.
- So Your business must be a new idea and not a spin-off or conversion of an existing business.
Step 6: Get Your Identification Number
You will immediately receive a recognition number when you apply for this registration for StartUps. And you will only receive the registration or incorporation certificate after the authority has checked all your uploaded documents.
It would help if you were careful when uploading the data. Because any discrepancy can result in a hefty fine of up to 50% of your deposited capital or a minimum of Rs 25,000.
Now that you know the registration and approval criteria for startups, so register your company in the Startup India program and enjoy all the government’s benefits.