Registration of Startups Under Startup India Action Plan
The annual turnover of the entity should not have exceeded INR 25 Crores in any preceding financial year.
Registration under the Startup India Scheme is a simple process and any entity that wishes to register under the scheme can apply for the same at the Startup India Portal or Mobile App.
Requirements for Registration:
· The entity should be
i. a Private Limited Company (under The Companies Act, 2013) or
ii. a Registered Partnership Firm (under The Indian Partnership Act, 1932) or
iii. a Limited Liability Partnership (under The Limited Liability Partnership Act, 2008).
· The entity should not have been formed by splitting up or reconstruction of a business already in existence.
· A proprietorship or a public limited company is not eligible as startup. A one person company, being a private limited company is entitled to be recognized as a 'startup'.
· Five years should not have elapsed since registration/incorporation of the entity.
· The annual turnover of the entity should not have exceeded INR 25 Crores in any preceding financial year.
· A business is covered under the definition if it aims to
i. develop and Commercialize a new product or service or process or
ii. a significantly improved existing product or service or process, that will create or add value for customers or workflow.
Restrictions on Registration:
· The mere act of developing
i. products or services or processes which do not have potential for commercialization; or
ii. undifferentiated products or services or processes; or
iii. Products or services or processes with no or limited incremental value for customers or workflow would not be covered under the definition of a Startup.
· One of the following documents is required to be uploaded along with the application for registration as a Startup on Startup India portal and mobile app:
a. Recommendation with regard to innovative nature of business from any Incubator established in a post-graduate college in India. The Recommendation shall be in a format specified by Department of Industrial Policy and Promotion; or
b. Letter of Support by any Incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or
c. Recommendation with regard to innovative nature of business from any Incubator recognized by Government of India. The Recommendation shall be in a format specified by Department of Industrial Policy and Promotion; or
d. Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network.
Such Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network should be registered with Securities and Exchange Board of India and should endorse innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
e. Letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or
f. Patent filed and published in the Journal by the India Patent Office. The Patent should be in areas affiliated with the nature of business being promoted.
The list of incubators recognized for the purpose of (a), (b) and (c) are published on the Startup India portal for reference.
The list SEBI registered funds for the purpose of (d) is also available on the Startup India portal.
Review by Inter-Ministerial Board:
· An Inter-Ministerial Board of Certification would be setup by Department of Industrial Policy and Promotion which will consist of:
a. Joint Secretary, Department of Industrial Policy and Promotion;
b. Representative of Department of Science and Technology; and
c. Representative of Department of Bio-technology.
· The Inter-Ministerial Board shall review the supporting document(s) provided to ascertain if the entity qualifies as an eligible business for availing tax/ IPR benefits.
· An application for a certificate from the inter-ministerial board shall be processed within a period of 10-25 working days.
Certificate of Recognition:
On successful registration, the entity concerned would be able to download a system generated verifiable certificate of recognition.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
Around The World