What is Start-up
An entity shall be considered as start-up:
- If it is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India.
- Up to 10 years from the date of its incorporation/registration
- If its turnover for any of the financial years since incorporation/registration has not exceeded INR 100 Crore.
- If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
How to get recognized as ‘Startup’
- Businesses to be considered as startup and to avail the benefits of startup, they have to apply to get recognized by Department for Promotion of Industry and Internal Trade (DPIIT).
- Businesses who want to get recognized as startup may apply online at www.startupindia.gov.in
- Businesses need to upload certain documents while applying online like incorporation/registration certificate, director/partner details, proof of concept or idea of business (website link, video etc.), PAN number.
- It is completely online and cost free process. Once online application is submitted, the department will take approx 6 to 7 to scrutinize your application and grant you recognition.
What are the benefits available to Startup
Tax exemption
- The recognized startup whose turnover is less than 25 cr is eligible to get 100 % tax exemption from income tax for a period of 3 consecutive years out of 7 years since incorporation.
- This tax benefit is not available to startups which are incorporated before 1st April 2016.
Intellectual Property Rights (IPR)
Rebate on application fees:
Startups are provided a rebate of up to 80% on filing of patent application which brings down cost from INR 8000 to INR 1600 and 50% on filing of trademark application which brings down the cost from INR 10000 to INR 5000.
Fast-tracking of patent application:
The patent application of Startups is fast-tracked for examination and disposal. The process is much faster for recognised Startups.
MSME Benefits
Startups being eligible to get registered under MSME, can avail various benefits which are granted to MSMEs like access to loan at reduced interest rate, relaxation from compliance burden under companies Act 2013 and various other laws.
Online market place
DPIIT recognised Startups can now get listed as Sellers on the Government of India’s largest e-procurement portal –Government e-Marketplace (GeM). Get recognised and visit www.gem.gov.in/startup_runway to avail the benefits!
Fund of funds for startups
To provide equity funding support for development and growth of innovation driven enterprises, the Government has set aside a corpus fund of INR 10,000 crores managed by SIDBI. The Fund is in the nature of Fund of Funds, which means that the Government participates in the capital of SEBI registered Venture Funds, who invest twice the amount in Startups. The flow of funds is Government > SIDBI > Venture Capitals > Startups
Access to Govt. Schemes
Many government departments are working to promote entrepreneurship in India and launches various schemes and policies for benefit of startups. Recognizes startups can get access to various schemes and policies issued by department and ministries.
Faster exit for startup
Ministry of Corporate Affairs has notified Startups as ‘fast track firms’ enabling them to wind up operations within 90 days as compared to180 days for other companies
Stages of funding for startup
CS Harshit Shah 