Startup is a useful term in today’s era to lift up the environment of business. It is the term or scheme used under DPIIT which is an initiative by the Government of India, in consonance with the Make in India initiative that altogether aims to help and support the entrepreneurs and facilitates the startup ecosystem by offering several exemptions, subsidies, and other benefits.
This Startup India portal helps in many ways and aims to promote unique and innovative startups in India.
A few benefits that are made available to Startups post registration are as follows:
1. Reduction in cost of patents
The government of India has enlisted a few facilitators for patents and trademarks. Such consultants will provide high-quality Intellectual Property Right Services including fast – pace examination of patents at lower fees. The government will bear all facilitator fees and the startup will have to pay only statutory fees. They will enjoy an 80% subsidy on the cost of filing patents.
2. Easy access to Venture Capital
A 10,000 crore rupees corpus fund is set up by the government of India to provide funding to Indian startups as venture capital. The government will also be giving limited guarantees to the lenders in order to encourage banks and other financial institutions for providing venture capital.
3. Tax holiday for 3 Years
Startups will be exempted from income tax for 3 years provided they get a certification from Inter-Ministerial Board (IMB).
4. Ease in an application for Government tenders
Registered startups are exempted from “prior experience/turnover” criteria applicable for normal entities applying for government tenders.
5. Simplified and easy compliances
The Government has simplified a lot of compliances for startups so that they can save time and money. Startups shall also be allowed to self-certify compliance (through the Startup mobile app) for 9 labor and 3 environment laws.
6. Tax saving for investors
Investors investing their capital gains in the venture funds set up by the government of India will get an exemption for capital gains under the Income Tax Act, 1961.
7. Easy winding up
In case of closure of operations– A startup can wind down its registered company (business) within 90 days from the date of application of winding up.
What is the eligibility for getting your startup registered?
1. Company Age: The period of existence and operations should not be exceeding 10 years from the Date of Incorporation.
2. Company Type: Incorporated as a Private Limited Company, a Registered Partnership Firm, or a Limited Liability Partnership.
3. Annual Turnover: Should have an annual turnover not exceeding Rs. 100 crores for any of the financial years since its Incorporation.
4. Original Entity: An entity should not have been formed by splitting up or reconstructing an already existing business.
5. Innovative & Scalable: Should work towards the development or improvement of a product, process, or service and/or have a scalable business model with high potential for the creation of wealth & employment.