Many people have ideas, but only a few know how to start a business or transform their concept into a viable venture. However, it is effortless to register a startup in India, and even you can do startup registration after reading this article. Furthermore, some people are unsure whether or not their business qualifies as a startup. As a result, this blog post will assist you in this respect, outlining the criteria for being classified as a startup and the startup registration process for listing your business as one.
Benefits of Startup Registration in India
In India, startups are getting increasingly popular. The Startup India project aims to create a robust ecosystem that promotes startup growth. Startup India is a program launched by the Indian government to help people with a viable concept start their companies. The authorities define a startup as a company based in India which was founded less than ten years ago with annual revenue of not more than ₹100 crores (US$14 million).
1. Tax Exemption
For the first three years, a startup operating under the startup India scheme is exempted from paying taxes. In addition, cash received from incubators and angel investors is also excluded from taxation. The three-year tax exemption implies that a startup can invest the money however they choose and utilize it to expand their firm. In addition, the government offers some tax relief on up-front investments that exceed fair market value. It is most likely one of the most apparent advantages of registering under the startup India scheme.
2. Obtaining a Loan and Bank Account
Another critical feature of startup registration is that it facilitates opening a business bank account and helps entrepreneurs obtain loans from formal resources. One of the most significant assets of a corporation is a business bank account, which may be shown by presenting legal proof of registration. One of the additional advantages of business or startup registration is that you can obtain a quick loan from lenders and investors as a registered company.
3. Self Certification
In the early stages of a startup, companies are more vulnerable to failure. Except for nine labor and circumjacent rules, startups are allowed to self-certify. As a result, concerned officials and authorities will not conduct any probe for the first three years of a company’s inception.
4. Tenders From the Government
Government programs are based on the likelihood of evolution as well as monetary incentives. Due to the high level of competition, every company cannot secure tenders from the government. However, as a self-certified startup, companies will be ranked higher on the priority list when authorities give out tenders, helping a startup to establish itself better in the market.
Startup Registration Process – Registering as a Startup Company
Step 1: Incorporate your Company
For startup registration in India, you must first register your company as a Private Limited Company, Partnership Firm, or Limited Liability Partnership. Business owners can accomplish it by following all the standard steps for registering a startup business, such as acquiring a certificate of incorporation or a partnership deed, obtaining a Permanent Account Number, and meeting other prerequisites. Depending on the nature and scale of your firm, you may require legal assistance when you first start.
Step 2: Getting Involved in the Startup India Program
The next step in the startup registration process is to register your company as a new venture. The Startup India Scheme has made registering a business simple, and you can do it all online from the comfort of your own home. Logging into the Startup India website and completing the startup registration form is all that is necessary. You must submit the firm’s details and upload all the required documents to register your startup.
Step 3: Keep these Documents Handy
- Check the status of any online or offline journal you’ve submitted.
- Letters from the state or federal government, if they assisted you, or any government-approved incubator.
- A letter of funding with a minimum equity contribution of 20%
- Add your business’s details to the certificate of incorporation
Step 4: Avail Tax Advantages
Startups are free from paying income tax for the first three years. Startups must, however, be certified by the Inter-Ministerial Board to receive such incentives (IMB). DIPP and the Indian government-recognized startups are eligible for IPR advantages without requiring an additional certificate from the IMB.
Step 5: Self-Certification
The firm must self-certify the following conditions:
- The business is set up as a Limited Liability Partnership (LLP) or a Private Limited Company (PLC).
- The company was established in India at least five years ago, and its annual revenue has never exceeded ₹100 crores in any of the years it has been in operation.
- The company was founded on an original concept rather than a pre-existing company.
Step 6: Set the Recognition Number
A certificate of recognition will be granted once the applicant has self-certified and the relevant authority has validated the necessary documents. All the uploaded documents must be valid. If an incorrect document is uploaded, the applicant will be fined 50% of the Startup’s paid-up capital or a minimum of ₹25,000. Once the applicant has received the recognition number, they can file for trademarks, patents, and design registration through any government of India’s facilitators.
Any startup registration in India has gotten quite simple if we compute it from the beginning to finish. The government has done a lot to strengthen the economy, from startup registration to incubation support, government funding, and tax breaks. The government assists in developing a bright future for Make in India and preventing brain drain to foreign countries by making the Indian landscape more attractive for teeming startups.