With benefits, tax exemptions and government assistance, many business owners have started registering their company under The Companies Act 2013. Many start-up owners, as well as small enterprises, have emerged more recently who seek to expand their wings in the Indian marketplace and beyond. Although many companies were not provided with enough support earlier, they are now being provided with many benefits which have made many people involved in company registration in India with an open heart. So, if you have an innovative idea or seek to enter into the corporate realm, all you need to do is register your company and give robust backing to the company you have formed.
What is a Start-up?
An initiative aimed at promoting startups was taken by the Honourable Prime Minister of India in 2017. The scheme laid by the government promoted many start-ups that bloomed in diversified sectors in India. The start-up initiative filled young and aspiring entrepreneurs with positivity towards growth as the government of India backed them with all kinds of legal and financial aid. Unfortunately, even today many entrepreneurs are unaware of the significance behind company registration and how there can reap benefits from it. In fact, the government have made start-up schemes very simple to understand along with its registration process.
With a digital signature and INC-29 incorporation (single-window clearance for the company incorporation procedure), you can now register your company within the comfort of your own home in less than ten days. Although it seems like buying a product, the company registration process needs business founders to meet some legalities and submit documents for incorporation of the company.
Procedure for registering a startup in India
Incorporation of business
Before you register your company under the Companies Act 2013 with the Registrar of Companies (ROC), you need to incorporate your venture as a Limited Liability Partnership, Partnership Firm or Private Limited Company. A simple process has been formulated for every business owner to incorporate their business including filling up registration a form.
Strat-ups can register under Startup India
If you want to register a startup, you must register your company under the Startup India Scheme introduced recently by the government of India. You will have to fill the form available online on the Startup India website. Just fill out the form and upload the required documents.
Documents that you need to upload alongside the registration form
- A letter of recommendation and a registration form needs to be uploaded such as a recommendation letter from an Incubator known in the post-graduate Indian college or from the Incubator recognized by the Government of India in DIPP format.
- A letter of funding which is not less than twenty per cent of the company’s equity by an incubation fund, accelerator, or private equity fund, registered with SEBI which endorses the innovative idea of the company. Or, you can provide a recommendation letter from any state or central Government of India.
- You can also provide a patent filed and published in the Journal of Indian Patent office as per the nature of the business to be registered.
- Incorporation or Registration certificate.
- Brief summary about what your venture seeks to do or offer.
Tax exemption requirements and DPIIT Recognition
All the startups in India do not have to pay their taxes for the first three years. However, to get such benefits, the company must have certifications from the Inter-Ministerial Board or IMB. You have to create a profile on the Startup India site which will help your company avail benefits like relaxation in public procurement, access to the high-quality intellectual; property resources, easy winding of the company, self-certification under the environment and labour laws and tax exemption of three consecutive years.
Getting Recognition Number
Once you have applied for your startup successfully, you will get a recognition number for your company. The certificate of recognition will be provided after all your documents have been examined thoroughly. This usually takes within the first two days after you have submitted all your documents online. However, you must be careful while uploading all the documents as if any wrong or forged document is found, you may become liable to pay 50% of your paid-up capital of the start-up as a fine.
Can an existing company register itself as a Startup?
Yes, according to the new law, even an existing company can register itself as a startup provided, they meet the required criteria for a startup. The company can also avail of IPR and tax benefits available for the startups. But, if your company has completed more than ten years at the time of registration and had exceeded the turnover of 100 crores in the previous year of registration, it cannot be termed as a start-up anymore.