For any aspiring entrepreneur, beginning a business in India gets considered as a thrilling process; however, the process of registering a startup business entity may be complex.

Here, we have given information about what is startup, How to register it in India announcements of Startup India Scheme and other important aspect related to the company under the Companies Act, 2013.

What is a Startup?

A startup is a young company founded to develop a unique product or service, bring it to the market, and make it irresistible to customers. Typically, startups operate with limited resources but aim for rapid growth, using innovation and technology to differentiate themselves.

In India, startups are recognized under the Startup India Initiative, if they meet a specific criteria such as a turnover of INR 100 crore in any preceding financial year and being incorporated within the past 10 years.

Benefits of Registering as a Startup in India

The Startup India Initiative offers several benefits for startups, including:

• Tax Exemptions: Startups are eligible for a 100% tax exemption for 3 years under Section 80IAC of the Income Tax Act, 1961.
• Simplified Registration Process: The process of registering as a Startup is simplified and streamlined to reduce paperwork and time.
• Access to Government Grants: The Government provides financial support to startups working on specific sectors such as biotechnology, green energy, technology development.
• Intellectual Property Rights (IPR) Benefits: Startups receive up to 80% rebate on patent costs and other benefits.

How to Register a Startup in India

Registering your startup in India is a straightforward process - thanks to the Government’s digital approach.Below are the steps involved:

• Incorporate your Business: Start by incorporating your business as a Private Limited Company under the Companies Act, 2013, Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008 or a Partnership Firm under the Partnership Act, 1932. The Private Limited Company or the LLP can be incorporated on the Ministry Of Corporate Affairs (MCA) Website.
• Register with Startup India: Visit the Startup India Website homepage and on the drop down menu of ‘Register’. List your details on basic profile page for a startup organisation. As soon we register we shall be able to access all these resources, government schemes and partners.
• Get DPIIT Recognition: DPIIT recognition under the Startup India Scheme is mandatory. They make you qualify for tax exemption and other privileges as a way of consolidating your business. After registering, apply for the DPIIT recognition by submitting the required documents, including:

1. Memorandum and articles of incorporation;
2. Description of business;
3. Short description of how the startup, is providing differentiation through innovation or improvement of a product, service, or process.

•  Apply for the Tax Benefits: When acquiring the DPIIT Recognition, secure the tax incentives having the Section 80IAC. This includes tax incentives such as tax exemption for a period of 3 years consecutively in the initial 10years from the year of incorporation of start up business.
• Self-Certificate for Compliance: It is legal for Indian startups to self-certify for 9 labor and environmental laws that have been easy for new businesses to meet a performance standard. This self-certification is good for 5 years and is a real selling point, as it takes the headache of regulations out of running the business.

Compliances and Registration under the Companies Act, 2013 and Limited Liability Partnership act, 2008

The Companies Act, 2013 governs business structures like Private Limited Companies and Limited Liability Partnership Act, 2008 governs the LLPs. To register as a startup, a business must meet specific compliance standards, such as:

• Digital Signature Certificate (DSC): Obtain a DSC for all the Directors to complete the online registration process.
• Director Identification Number (DIN): Every Director must obtain a unique identification number issued by the MCA.
• Company Name Approval: Reserve a unique name for your startup through RUN (Reserve Unique Name) service.
• Charter Documents: Draft and submit the Memorandum and Articles of Association.
• Certificate of Incorporation: Once approved, the MCA issues a Certificate of Incorporation, marking the official beginning of your journey.

Important Things to Know

• Startup India: A Government support program to enable, fund and facilitate opportunities for new business setups through implementing more support friendly initiatives, funds and ease of business policies.
• Startup Ideas: Creative and realistic business propositions which enable the creation of value where value was previously lacking or which enhance the existing value proposals.
• Startup Companies: Ventures that are yet to create and grow successful new products and ideas, or provide successful new services.

This begs the question: How does Registering a Startup in India benefit you? The answer is simple – it offers many possibilities.A Startup India Initiative and more so the Companies Act of 2013 provide the much-needed ground for startup entrepreneurs to establish their businesses with lots of enumerated privileges to support the endeavor.

Therefore, if all the procedures are followed appropriately, your start-up company will be ready for growth and changes across the Indian business environment.

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same. 

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.