To obtain Startup Certificate, one must understand the startup registration process.
Step 1- For startup registration the first step, you need to register your business as a Private Limited Company under the Companies Act, 2013.
Step no. 2- For the second step, you must get registered your firm or company as a startup company business under the Startup India Scheme of the Government just by filling necessary details in the form available on the startup India website and upload and attach all required documents in PDF(Portable Document Format) format only as well.
Step 3- For the third step, you must go through the process of registration where you are amended as under:-
i. Your startup should make an online application over the mobile app or portal set up by the DPIIT(Department for Promotion of Industry and Internal Trade).
ii. The application must be accompanied by:-
❖ A copy of the certificate of registration as per the case.
❖ A write-up about the nature of business highlighting how it is working toward innovation development or improvement of products or processes or services or its salability in terms of employment generation or wealth creation.
After calling for the above documents and making required enquires. It depends on the DPIIT whether they recognize the eligibility as a startup or reject the application by providing reasons.
Step 4- For the next step, you must inform whether your startup requires a tax exemption or not. The Indian Government has realized the hardships faced by the startup’s aims to reduce their managerial burden so they have allowed the startups to keep their core business their priority. They have exempted them from the superfluity of compliance under various laws such as the companies act, FEMA(Foreign Exchange Management Act), and labor and Environmental Laws.
⮚ An eligible startup can also avail of exemption under section 56(2) (vii b) of the Income Tax Act 1961 where if the company receives any consideration for issues related to shares such excess consideration is taxable in the hands of the recipient. To seek the above exemption, your startup must fulfill the following condition:-
⮚ It has to be recognized by DPI.
⮚ The gross amount of paid-up share capital and share the promotion of the startup after the issue or proposed issue of a share, must not exceed 25 crore rupees. Apart from this, there are some investment restrictions on certain assets detailed in the DPIIT notification of 19th February 2019.
⮚ Startup fulfilling the above conditions can submit a declaration in form 2 to DPIIT which will forward the same to CBDT(Central Board of Direct Taxes) for granting the exemption under the section.
For any queries regarding startup registration process, contact us.
Step 5- You need to certify yourself as per the following:-
⮚ Your company’s turnover is more than Rs. 100 crore and less than 25 crores per year.
⮚ The work and ideas of the company must be innovative and new or making a more exciting and better version of the old system.
⮚ The concept of the business must be a fresh and different idea and not a splitting up or reconstruction of a previous business.
Step 6- For the last step, you must obtain your recognition number, which you will get on the application of the registration. Them you will finally get the certificate of registration or incorporation only after the authority goes through all your uploaded documents.
How to apply for startup registration?
Let us walk you through the startup registration process:
Step 1: Incorporate your business
The incorporation of a company refers to the legal process that is used to form a corporate entity or a company. One needs to incorporate his/her business as a Private Limited Company
or a Limited Liability Partnership or a Partnership firm. The company’s name must end with ‘Limited’ if it’s a public company and ‘Private Limited’ if it’s a private company. Also make sure you have obtained all the certificates of partnership or incorporation registration, PAN, and other necessary compliances. Registration services in India with 3 simple steps:
- Register your directors with the MCA i.e. (Ministry of Corporate Affairs)
- Get direction to pick the right company name
- Enlist your company’s constitution (MoA(Memorandum of Association) and AoA(Articles of Association))
A Certificate of Incorporation with PAN(Permanent Account Number) and TAN(Tax Deduction and Collection Account Number) can be obtained post-approval of the company registration process. You can formally open a current bank account with the Certificate of
Incorporation and start your company operations.
Step 2: Register with startup India
Fill up the registration form available on the website (www.startupindia.gov.in) with supporting documents. Documents Requirement for Startup India registration:
1. Certificate of Incorporation / Registration Certificate and PAN
2. Email ID and Mobile number
3. Company Details ( Industry, Sector, Category, Regd. Office Address, etc)
4. Directors/Partners Details ( Name, Photo, Gender, Mobile No. Email ID, Full Address)
5. Details of Authorized Representative ( Name, Designation, Mobile No. Email ID)
6. A Brief about business and products/services and notes on innovations
7. Revenue model and Uniqueness of the Product
8. Website/Pitch Deck/Video/Patent ( anyone)
After that enter the OTP(One Time Password) which is sent to your e-mail and other details like, startup as a type of
user, name, and stage of the startup, etc. After entering these details, the Startup India profile is created.
Step 3: Avail of DPIIT Recognition benefits.
The next step after creating the profile on the Startup India Website is to avail of the Department for Promotion of Industry and Internal Trade (DPIIT) Recognition. It helps the startups to get the first 3 years of tax exemption.
- If you are a new user click on the button “Get Recognized” and if you are an existing user then first click on “Dashboard”
- Then “DPIIT recognition” to get recognized on DPI.
- The DPIIT after calling for documents like certification of incorporation and other details of the company may either recognize the eligible entity as Startup or reject the application by providing reasons.
Step 4: Fill up the “Startup Recognition form”
The ‘Recognition Application Detail’ page opens. Under the Registration Details section on this page click on ‘View Details’.
Fill up the ‘Startup Recognition Form’ and click on ‘Submit’. Here
the company has to get self-certified by providing the following details:
- You are a Private limited company, an LLP, or a partnership firm.
- Your business must be incorporated or registered in India, not before 5 years.
- Your company’s turnover must not be more than Rs. 100 crore and not less than 25 crores.
- The company has to keep innovating something new or making the existing system better in its
- own unique way
- Your business must be a fresh idea and not a splitting up or reconstruction of an existing
- business.
Step 5: Get your Recognition no. :
After registration, you will immediately get a recognition no. on the application. The certificate of recognition will be provided after a proper check of all your uploaded documents which is usually
done in 2 days after submitting the details online. The application must fulfill the Start-up India guidelines and conditions, then only it will grant recognition as a Startup and will issue the Certificate of Recognition.
To know more about Startup registration & process, click here.
Startup Registration Tax benefits
1) Exemption of Income Tax for Startups (80-IAC) :
After registration under startup India, those Private Limited companies or a Limited Liability Partnership incorporated on or after 1st day of April 2016 but before 1st day of April 2021 can apply for exemption of income tax for 3 consecutive years out of ten years tenure under Section 80-IAC of the Income Tax Act. For availing of such tax, benefits the Startup needs to file a separate application under Form-1.
2) Exemption from Angel Tax
After registration under a Private Limited Company who complies with certain specific conditions can apply for exemption of Angel Tax (Tax on Share Premium) Under Section 56(2)(vii b) of the Income Tax Act. This exemption is valid till the startup paid-up share capital + share premium does not exceed the INR(Indian Rupee) 25 crore. For availing of angel tax exemption, a startup needs to file a declaration under Form-2 to DPIIT.
Startup India benefits :
1) Easy winding up
-Within 90 days under insolvency & Bankruptcy code 2016.
2) Self-certification
-Eligible for self-certification and Compliance under 9 environmental & labor laws.
3) SIDBI(Small Industrial Development Bank of India) Fund of Funds
-Funds for investment into startups through Alternate Investment Funds. The government has allotted Rs 10,000 crores funds for investment into startups through Alternate Investment Funds. SIDBI is managing this fund. Startups can apply under this quota.
4) Connect Networks
-Search and find various startups and connect with them. Get Mentorship, connect with investors and industries.
5) IPR(Intellectual Property Rights) Govt. Fee Concession
-In IPR Registration 50%-80% Govt. fee concession available. Example in Trademark, Patent application. Fast track & up to 80% rebate in filing patents.
6) Participate in various Govt. Scheme
-Government issues day to day various schemes for the startup to participate. For example, sustainable finance scheme, bank credit facilitation, raw material assistance, etc.
7) Tender Participation
In many Tenders, Govt. and PSU gives relaxation for Startups to Participation in public procurement job through tenders. Relaxation in Prior experience, EMD(Earnest Money Deposit), or Turnover criteria.
The Startup Registration process may get tiring for you, so let us help you with that. To apply for Startup Certificate, click here.