The Indian government started the Start-Up India initiative to encourage innovation, job creation, and entrepreneurship. This innovative programme offers start-ups a variety of benefits, including tax breaks, financial assistance, simple registration, and networking opportunities.
To be eligible for the Start-Up India scheme, entities must fulfill the following criteria:
1. Type of Entity: The entity should be registered as a private limited company or a limited liability partnership (LLP) firm.
2. Turnover Limit: The total turnover of the company should not exceed 25 crores in any financial year since its incorporation.
3. Registration Duration: The entity must have been incorporated or registered in India for up to 7 years. However, for start-ups in the biotechnology sector, this period can be extended to up to 10 years.
4. Innovation and Development: The entity should be actively working towards innovation, development, or improvement of products, processes, or services. It should demonstrate a scalable business model with high potential for employment generation or wealth creation.
5. Exclusion: Entities formed by splitting up or reconstruction of an existing business are not considered eligible for registration.
1. Tax Exemption: Registered start-ups can apply for income tax exemption benefits under section 80 IAC and relief from Angel Tax under section 56. They enjoy income tax exemption for three years post-incorporation, subject to certification from the Inter-Ministerial Board.
2. Financial Support: Start-ups receive an 80% rebate on patent costs and faster processing of patent registrations. The government also covers facilitator fees for obtaining patents.
3. Tender Participation: Start-ups enjoy priority in government tenders and are not required to have prior experience. Relaxations are provided in criteria such as prior experience, Earnest Money Deposit (EMD), or turnover.
4. Government Funding Opportunity: Start-ups can apply for funding through the Rs 10,000 crore corpus managed by SIDBI (Small Industries Development Bank of India) under the Alternate Investment Funds.
5. Self-Certification: Registered start-ups are eligible for self-certification and compliance under nine environmental and labour laws.
6. Easy Winding Up: The Insolvency and Bankruptcy Code 2016 allows start-ups to wind up their operations within 90 days, providing a streamlined process compared to other laws.
7. Networking Opportunities: The government organised two start-up fests annually, facilitating networking opportunities with stakeholders from the start-up ecosystem at the domestic and international levels.
The government has implemented several measures to bolster the start-up ecosystem in India. Some key action points include:
1. Funding Support: A fund-of-funds with Rs 10,000 crore has been earmarked to support start-ups. However, disbursement of the allocated Rs 2,500 crore annually remains a challenge.
2. One-Day Company Registration: The government aims to streamline the company registration process, allowing entrepreneurs to register their companies in just one day, minimising the current timeframe of 15-20 days.
3. Tax Benefits: Start-ups enjoy tax exemption on profits for three years and capital gains tax exemption on investments made in other start-ups. Additionally, a credit
a guarantee scheme is in place.
4. Relaxed Procurement Norms: Start-ups benefit from relaxed norms for participating in public procurement jobs through tenders, including relaxation in prior experience, EMD, and turnover criteria.
5. Intellectual Property Rights Protection: The government offers an intellectual property rights protection scheme with an 80% reduction in patent fees and expedited patent examination.
6. Special Schemes: The government has introduced special schemes to support women entrepreneurs, encourage incubation centres, and provide assistance to biotechnology start-ups.
To register under the Start-Up India scheme, the following information and documents are necessary:
1. Certificate of Incorporation (for companies or LLPs) or Registration Certificate and PAN (for other entities).
2. Details of Directors/Partners: Name, Photo, Gender, Mobile No., Email ID, and Full Address.
3. Company Details: Industry, Sector, Category, Registered Office Address, etc.
4. Brief Business Description: Information about the business, products/services, and any notes on innovations.
5. Authorized Representative Details: Name, Designation, Mobile No., and Email ID.
6. Revenue Model and Uniqueness: Explanation of the revenue model and highlighting the uniqueness of the product or service.
7. Website: If applicable, provide the website URL.
The Start-Up India scheme opens up a world of opportunities for budding entrepreneurs in India. By fulfilling the eligibility criteria, leveraging the benefits, and submitting the required information and documents, start-ups can harness the support measures provided by the government. Whether it's tax exemptions, financial aid, or streamlined processes, the Start-Up India scheme acts as a catalyst for growth and innovation.
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