Startup India Scheme

Startup India is a flagship initiative launched by the Government of India in 2016 to accelerate the growth and development of startups across the country. The primary objective of this scheme is to foster a thriving startup ecosystem, encouraging innovation, entrepreneurship, and economic growth, ultimately positioning India as a global leader in innovation. By completing the Startup registration process in India, startups can unlock a wide range of incentives and support programs aimed at facilitating their growth.

DPIIT Registration for Startups

Under the Startup India scheme, eligible startups can apply for official recognition from the Department for Promotion of Industry and Internal Trade (DPIIT), which operates under the Ministry of Commerce and Industry, Government of India. Upon obtaining DPIIT recognition, startups gain access to a host of benefits, including tax exemptions, funding opportunities, and regulatory support, as outlined in the Startup India scheme.

To qualify for DPIIT registration and avail benefits under the Startup India scheme, a startup must meet the following eligibility criteria:

• Business Structure: The entity must be registered as a Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm under Indian law.
• Startup Age Limit: The entity should be no older than 10 years from its incorporation date. However, startups in the biotechnology sector can avail benefits for up to 15 years from incorporation.
• Annual Turnover: The startup’s annual turnover must not exceed INR 100 crore in any fiscal year since its inception.
• Innovation & Scalability: The startup should focus on innovation, development, deployment, or commercialization of new products, processes, or services driven by technology or intellectual property.
• DPIIT Recognition: The startup must obtain official recognition from the Department for Promotion of Industry and Internal Trade (DPIIT) under the Startup India initiative.
• Legal & Regulatory Compliance: The startup must comply with all applicable laws, including the Companies Act, Income Tax Act, and Goods and Services Tax (GST) Act. It should also maintain a dedicated business bank account, the details of which must be provided during DPIIT registration.
• Job Creation Potential: The startup should either actively generate employment or have the potential to contribute to job creation, aligning with the Startup India scheme’s mission to boost economic growth and workforce expansion.

The Startup India Company Registration provides a comprehensive set of benefits designed to support and foster the growth of startups. These benefits include:

1. Patents, Trademarks, and Design Registration

Startups seeking to secure patents for their innovations or trademarks for their brand can avail of government-approved facilitators. This enables them to receive up to an 80% reduction in fees, with the startup only covering the statutory charges. This significantly lowers the cost of intellectual property protection.

2. Financial Support and Funding

Startups often struggle to secure funding due to limited experience, lack of security, or inconsistent cash flow, making them high-risk investments. To address this, the government has established a Fund of Funds with an initial corpus of Rs. 2,500 crore, with a target of reaching Rs. 10,000 crore over four years. This fund invests in SEBI-registered venture funds, indirectly supporting startup financing.

3. Self-Certification under Labour and Environmental Laws

To ease regulatory compliance, startups can self-certify under six labour laws and three environmental laws for a period of three to five years from incorporation. This reduces the administrative burden and associated compliance costs.

4. Exemption from Environmental Regulations

Startups operating in any of the 36 industries classified as ‘white’ by the Central Pollution Control Board are exempt from environmental clearances under three specific environmental acts for up to three years, simplifying regulatory requirements.

5. Tax Exemptions

DPIIT-recognized startups can benefit from a 100% income tax exemption for three consecutive financial years within the first ten years of incorporation. Additionally, startups can seek exemption from angel tax under Section 56 of the Income Tax Act, which is highly beneficial for early-stage startups raising capital at valuations above their fair market value.

6. Fast-Track Business Exit (Streamlined Winding Up)

In case a startup needs to cease operations, it can wind up its business within 90 days from the date of application. This provides a hassle-free exit strategy, allowing founders to move forward with minimal complications.

7. Relaxed Public Procurement Norms

DPIIT-recognized startups are exempt from prior turnover and experience requirements when applying for government tenders. This allows them to compete for public procurement opportunities from government departments, ministries, and public sector undertakings, opening doors to lucrative business contracts.