The credit for invigorating the startup ecosystem in India could be attributed to Startup India, a Government of India initiative led by PM Narendra Modi. This programme not only recognizes and promotes Indian startups but has also made the entire process of starting up a business easier than before.
For aspiring entrepreneurs with a stellar business idea, Coffeemug.ai could help in terms of gaining insight about an ideal plan of action for your startup. Through this blog, we intend to help you explore the startup registration process that entails some mandatory formalities.
How to register startup in India?
For startup registration in India, the Startup India programme has outlined some mandatory steps that aspiring entrepreneurs need to follow, as part of their company’s registration process. The following steps are enlisted below:
1. Incorporate your business: The primary formality of the startup India registration entails incorporating the business either as a Private Limited Company or a Partnership firm or a Limited Liability Partnership (LLP). For the registration of the business certain procedures need to be followed that include getting the Certificate of Incorporation/Partnership registration, Permanent Account No. (PAN) and other documents required to meet necessary compliances.
2. Register with Startup India: The second process involves registering your business as a startup. This can be done by logging into the Startup India website, wherein, you can fill in a form asking key details about your business. After that an OTP reaches your email id, which needs to be fed into the website asking for details regarding the name and stage of your startup, type of user etc. After sharing all the key details about your business, the profile of your startup is created.
Once your startup’s profile is done, startups can avail various benefits entitled under the Startup India program. Under this scheme, startup owners can get access to mentorship programmes, learning and development programmes, acceleration, state-wise startup policies, government schemes and various pro bono services.
3. Get DPIIT recognition: Once the Startup’s profile is created on the Startup India website, you can get recognized by the Department for Promotion of Industry and Internal Trade abbreviated to DPIIT by clicking on the ‘Get recognized’ button (if you are a first-time user). Existing users can explore the ‘Dashboard button’ and successively click on ‘DPIIT recognition’. Numerous benefits that the startup can avail after getting DPIIT recognition include access to intellectual property services, self-certification under labor and environmental laws, relaxation in rules pertaining to public procurement, access to Funds of Funds, easy dissolution of company, tax exemption on investment above optimum market value and tax exemption for 3 consecutive years.
4. Recognition application: After completing the first three steps mentioned above, the ‘Recognition Application Detail’ page opens, wherein, you can click on ‘View Details’ under the Registration Details tab. Then, fill the required details in ‘Startup Recognition Form’ and click on ‘Submit’ tab.
5. Documents for registration: This scheme has waived off many unnecessary documents that were earlier required for the registration of a firm. However, there are still some important documents mandatory for the registration process. The list of documents are enlisted below:
- Registration certificate of your startup
- Details of Company’s Director(s)
- Proof of Concept
- Trademark, Patent details (If it exists)
- PAN Number
6. Recognition number: After following all of the above processes, your startup gets a recognition number. Once the details of your startup are submitted online, all the documents will be examined. Post that, the recognition certificate will be issued. However, while uploading the required documents, you need to be very vigilant. If there’s any discrepancy in the uploaded documents, you will be liable to a fine of 50 percent of the paid-up capital of your startup with a minimum fine of Rs. 25,000.
Why Should you sign up with Startup India?
The Startup India has made the registration procedure easier and hassle-free, thereby, encouraging most of the citizens to join the entrepreneurship bandwagon. Earlier, a lot of unnecessary documents were required for the registration process but now a lot of documents have been waived off. Currently, documents like Letter of Recommendations, Letter of Funding, Sanction letters, Udyog Aadhar, MSME certificate, and GST certificate; are not needed.
Under this scheme, obtaining a patent or trademark for your business works out cheaper. Startup owners can approach any of the government-recognized facilitators for their patent and trademark registration, for which they need to pay only the statutory fees.
Funding the new startups is also a provision as the government has established a reserve of Rs. 2,500 crore (initial amount). The Fund will be in the form of Fund of Funds, wherein, the Government will not directly put money into startups but shall contribute in the capital of SEBI registered Venture Funds.
Besides that, the provision for Self-certification under Employment and Labour Laws ensures that the startup’s compliance costs are also minimized. Apart from this, startups that are certified by the Inter-Ministerial Board (IMB) are exempted from income tax for three years. Startups registered on or after April 1, 2016 are eligible for the income tax exemption.
How can Coffeemug.ai help you in your startup journey?
If you are a first-time entrepreneur who is perplexed about the legalities involved in the startup registration process, Coffemug.ai can help you connect with seasoned entrepreneurs who can guide you in your startup journey. Our curated network of the platform ensures that you come across the right set of people who could help in your startup journey ahead.
FAQs
Q. How much does it cost to register a startup in India?
A. The startup registering rule under the Companies Act 2013, fee for registration in India that run differently according to the stakeholders of the company provides a minimal proportion of capital:
- Share capital limited up to Rs.10,00,000 – Registration fees is Rs 2,000
- Capital of Rs 10,00,000 to RS. 50,00,000 the registration fees will Rs2000 +Rs 200 added for every increase of Rs 10,000 of nominal capital
- The nominal share capital of Rs 50,00,000 to Rs 1 crore – Registration fees is Rs 1,56,000 +Rs 100 for every increase of Rs 10,000 of share capital
- Capital more than Rs 1 crore – Fees is Rs 2,06,000 +Rs 75 to be added for every increase of Rs 10,000 of nominal share capital to a maximum of Rs 250 crore.
Q. Who is eligible for startup India?
A. The startup India action plan has the following eligibility criteria:
- The company has not completed ten years from the date of incorporation/registration.
- It should be a private limited company or a limited liability partnership, registered as a partnership firm
- Company with annual turnover not exceeding Rs. 100 crore
- Business involves working with innovation development or improvement of products processes or services.
Q. Does startup require GST?
A. GST registration is necessary for every business with a revenue of more than Rs 40 lakh in a financial year.
Q. What happens if I don’t register my company?
A. A company, if not registered ceases to exist in the eyes of law, which may eventually result in closing down the business.
Q. Which registration is best for startups?
A. The business registrations for startups are:
- Startup India Registration
- MSME Registration
- GST Registration
- Udyog Aadhar Registration
