A start-up is a new business that is usually small and is started by one person or a group of people. A start-up differs from other new firms in a way that it provides a unique product or service that is not available anywhere else. The business either develops a new product/ service or redevelops a current product/service into something better.
In India, start-ups are getting increasingly popular. The Government of India, led by Prime Minister Narendra Modi, has launched and pushed the Start-up India programme to recognise and promote businesses in order to improve the Indian economy and encourage creative entrepreneurs.
You must first incorporate your business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership. You must follow all of the standard steps for registering a business, including acquiring a Certificate of Incorporation/Partnership Registration, a PAN, and other legal requirements.
The company must then be registered as a start-up. The entire procedure is straightforward and can be completed online. All you have to do is go to the Start-up India website and fill out a form with information about your company. Next, input the OTP that was delivered to your e-mail address, as well as additional information such as the start-up as the type of user, the name and stage of the start-up, and so on. The Start-up India profile is established after these facts are entered.
The next step after creating the profile on the Start-up India Website is to avail Department for Promotion of Industry and Internal Trade (DPIIT) Recognition. This recognition helps the start-ups to avail benefits like access to high-quality intellectual property services and resources, relaxation in public procurement norms, self-certification under labour and environment laws, easy winding of company, access to Fund of Funds, tax exemption for 3 consecutive years and tax exemption on investment above fair market value.
For getting DPIIT Recognition, click on the "Get Recognised" button if you are a new user. If you are an existing user click on the "Dashboard button" and then "DPIIT Recognition".
The page titled "Recognition Application Detail" appears. On this screen, under the Registration Details section, click 'View Details.' Complete the 'Start-up Recognition Form' and submit it.
You will receive a recognition number for your start-up as soon as you apply. The certificate of recognition will be granted after all of your documents have been examined, which normally takes two days after you submit your information online.
However, exercise caution when submitting documents. If it is discovered after further verification that the required document was not uploaded, the incorrect document was uploaded, or a fake document was uploaded, you will be fined 50% of the start-up's paid-up capital or with a minimum fine of Rs. 25,000.
Patents, trademarks and/or design registration: If you need a patent for your innovation or a trademark for your business, you can easily approach any of the list of facilitators issued by the government
Funding: One of the key challenges faced by many start-ups has been accessing finance. Due to lack of experience, security or existing cash flows, entrepreneurs fail to attract investors. Besides, the high-risk nature of start-ups, as a significant percentage fail to take off, puts off many investors.
In order to provide funding support, the Government has set up a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period of 4 years (i.e. INR 2,500 crore per year). The Fund is in the nature of Fund of Funds, which means that it will not invest directly into Start-ups, but shall participate in the capital of SEBI registered Venture Funds.
Self-Certification Under Employment and Labour Laws: Start-ups can self-certify under labour laws and environment laws so that their compliance costs are reduced. Self-certification is provided to reduce regulatory burden thereby allowing them to focus on their core business. Start-ups are allowed to self-certify their compliances under six labour laws and three environment laws for a period of 3 to 5 years from the date of incorporation.
Units operating under 36 white category industries as published on the website of the Central Pollution Control Board do not require clearance under 3 environment-related Acts for 3 years.
Tax Exemption: Start-ups are exempted from income tax for 3 years. But to avail these benefits, they must be certified by the Inter-Ministerial Board (IMB). The Start-ups incorporated on or after 1st April 2016 can apply for the income tax exemption.
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