Startup India Scheme | Know Everything About Start-up Scheme

A start-up is a young company founded by one or more entrepreneurs to develop a unique product or service. That is into existence for up to 10 years from the date of its incorporation or registration. Provided such an entity is incorporated in India as a:

Private Limited Company as per the Companies Act, 2013 or Partnership Firm as per section 59 of the Partnership Act, 1932 or Limited Liability Partnership as per Limited Liability Partnership Act, 2008 has a turnover that is not more than Rs 100 crores during any of the financial years since incorporation or registration is working towards innovation, development, or improvement of products or services or processes.

Or the entity has a scalable business model having a high potential for employment generation or wealth creation Furthermore, an entity that is created by splitting or reconstructing an existing business unit is not considered a start-up. Also, a business entity shall cease to exist as a start-up: once it completes 10 years from the date of incorporation or registration and if its turnover for any of the previous financial years exceeds Rs. 100 crores.

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Advantages of Startup India Scheme

Self Certification under Labor and Environmental Laws

Start-ups are allowed to self-certify their compliance under six labour laws and three environmental laws. This is allowed for a period of five years from the date of incorporation of the entity.

Tax Exemption for Three Years

The profits earned by the recognized start-ups having been granted inter-ministerial board certificates are exempted from income tax for three consecutive years.

Tax Exemption on Investment Above Fair Market Value

In case a start-up: has an inter-ministerial board certificate and
Receives consideration from the issue of shares exceeding the face value of such shares
Then the consideration up to Rs. 10 crores received from such shares exceeding the fair market value of such shares is exempted from tax.

Easy Winding Up of Company

Start-ups also known as fast-track firms can be wound up within 90 days as against 180 days for other companies.

Startup Patent Application and IPR Protection

Start-up India provides high quality intellectual property services and resources to help startups protect and commercialize their IPRs. This includes:

Fast-tracking of start-up patent applications,
Providing 80% rebate in filing of patents as compared to other companies
Providing 50% rebate in filing of trademarks as compared to other companies
A panel of facilitators to help in filing IP applications and
Government support to bear facilitation costs

Relaxation in Public Procurement Norms

In order to meet quality and technical specifications all government of India departments, ministries and PSUs have been given authority to ease the norms with regard to public procurements. Thus, a start-up can avail exemptions on:

Earnest money deposit
Prior turnover and
Experience requirements in case of government tenders

Further, start-ups can now get listed as sellers on the Indian Government’s largest e-procurement portal which is Government– Marketplace.

SIDBI Fund of Funds

The government of India has set aside a corpus fund of Rs. 10,000 crore. This fund is managed by SIDBI and is intended to provide equity funding support for the development and growth of innovation driven enterprises. The nature of such a corpus is a fund of funds. This means that the government contributes towards the capital of SEBI registered funds. These funds further invest in start-ups.

Documents for Registration

Certificate of Incorporation / Registration Certificate and PAN
Email ID and Mobile number
Company Details Industry, Sector, Category, Regd. Office Address etc)
Directors/Partners Details (Name, Photo, Gender, Mobile No. Email ID, Full Address)
Details of Authorised Representative (Name, Designation, Mobile No. Email ID)
A Brief about business and products/services and notes on innovations
Revenue model and Uniqueness of the Product
Website/Pitch Deck/Video/Patent (anyone)