Namaste from Moneyम्जी! Let’s understand about the process of registering under Startup India Plan.
See, you are a startup, and fostering an environment of innovation, something which the government is promoting. You do deserve some benefits for that. Startup India Plan of the government provides you those benefits.
Those benefits include:
- Funding Support: A corpus of Rs 10,000 crore has been set aside by the government through a fund of funds, for startups.The fund shall ensure support to diverse sectors, including manufacturing, agriculture, health, education, and so on.
- Tax Exemption: Startups registered under this scheme will get a capital gain exemption if such capital gain is invested in the Fund of Funds recognized by the government. Profits of the startups will be exempt from income tax for any three years out of ten years. Investment in startups recognized under this scheme, above their fair market value will be exempt under Income Tax. It is normally taxable for other companies.
- Intellectual Property Protection: The scheme allows fast-tracking of startup patent applications, panel of facilitators will assist in filing of IP and 80% rebate is provided on filing of patents.
- Quicker exits: The startups will be able to wind up the companies on fast track basis, just within 90 days with arrival of the Insolvency and Bankruptcy Code, 2016.
- Self Certify Compliance: Start-ups are allowed to self-certify compliance (through the start-ups mobile app) with 9 labour and environment laws. In case of the labour laws, no inspections will be conducted for a period of 3 years.
Benefits are amazing for ‘startups’. Are you a startup? What?!?! Yes, the government has defined what would a ‘Startup’ mean.
Any Legal entity will be identified as a startup:
- If it is not older than five years from the date of incorporation.
- If its turnover does not exceed 25 crores in the last five financial years.
- It is working towards innovation, development, deployment, and commercialisation of new products, processes, or services driven by technology or intellectual property.
Point to be noted, my lord: You are a startup only if you aim to develop and commercialise – a new product or a service or a process or significantly improve a product or service or process which will add significant value for customers or workflow.
So if your Startup is like another Ecommerce Startup Website or IT Sector then there is not a positive news for you. It is not a startup. L
A corporation, entity or a business is termed as a start-up if
- The entity is registered under Companies Act, 2013
- It is registered under section 59 of Partnership Act, 1932, as a partnership firm
- Or registered under Limited Liability Partnership Act, 2002, as a limited liability partnership
Point to be noted, my lord: Sole Proprietorship Firm is not under the Startup India Scheme.
In order to obtain tax benefits, one has to obtain a certificate from the Inter-Ministerial Board of certification.
Great, we qualify all the above criteria. Let’s go ahead!
- Log on to startupindia.gov.in/registration.
- Fill details about your startup
- Upload any of the following documents:
- A recommendation in a format specified by DIPP from an incubator established in a post-graduate college in the country.
- A letter of support from any central or state government funded incubator to promote innovation.
- A recommendation in a format specified by DIPP (with regard to innovative nature of business) from any incubator recognised by the Central Government.
- A letter of funding of not less than 20 per cent in equity by any incubation or angel fund/PE fund/accelerator or angel network duly registered with Securities and Exchange Board of India that endorses its innovative nature of business.
- A letter of funding by the Central or State government as part of any scheme to promote innovation.
- A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.
- Upload Incorporation/Registration Certificate
- Brief note on innovativeness of products /services offered by the entity
The department will review your application and register you under the scheme if you meet the requirements. For more details, contact Moneyम्जी at firstname.lastname@example.org.