Start-up is a newly established business that works on the innovation of products or processes or re-engineering the existing product/processes or services into something new, or scaling the existing business to generate wealth and employment.
However, any business established by splitting up or reconstructing an already established business shall not be considered a “startup.”
To promote such businesses, the government of India has started an initiative to promote startups through the Department of Industrial Policy & Promotions (DIPP), Government of India. It includes various schemes, benefits, tax exemptions, and other easily accessible facilities for the start up.
Let’s discuss everything about the startup registration and what you should keep in mind while planning to register your start up.
To obtain start up registration under the startup India program, an organization must fulfill the below conditions:
Mandatory registration :
A business entity must be registered under any of the following Acts:
Turnover limit :
The business annual turnover (as per Companies act, 2013) should not be less than INR 100 crores in any of the financial years since its incorporation.
Startup aim :
The business must be working towards the innovation, development, deployment, or improvement of products/processes driven by Intellectual property or technology.
If it has a scalable business model, then it must have the potential of wealth creation or employment generation.
Time period :
Any eligible business shall be considered as a start up for a period of 10 years from its incorporation date.
Step 1: Obtain a registration certificate
As the basic eligibility for start up, it is necessary that you must first incorporate your business as a Partnership firm, LLP, or a private limited company and obtain the certificate of incorporation or registration certificate, as the case may be.
Step 2: Register with the Startup India program
The next step is to take registration under the Startup India program at https://www.startupindia.gov.in/content/sih/en/registration.html. This is the government’s official website, where you need to fill in the required details and create your profile.
Step 3: Obtain DPIIT registration
DPIIT refers to the department for Promotion of Industry and Internal Trade Recognition. It helps the startups to avail various benefits such as easy access to the funds, tax exemptions, etc. You can easily apply for the DPIIT registration at the Start up India website by following these steps.
After login, click on “DPIIT recognition,” showing at the dashboard button.
Now, “Recognition Application Detail” will open. Here, click on the “view details” under the registration details section.
Here, you need to fill the details in the “Startup recognition form” and submit it.
Step 4: Submit documents and get your recognition number
Submit the necessary documents (as mentioned below) at the Startup India website. After successful submission, you will get the recognition number for your startup.
Start up India will review your application and documents to check if you are meeting the startup India guidelines and issue a certificate of recognition within 2 days of submitting the registration form along with documents.
Choosing the “right legal structure,” i.e., Partnership firm, LLP, or company: As the startup registration firstly requires obtaining the registration certification. You should keep in mind the advantages and disadvantages of various business structures and register the suitable business entity.
Another thing you should never avoid is “to secure your intellectual property or resources.” It is crucial to secure your ideas and protect them before launching them in the market. It may include domain name, business logo/tagline, unique product design, etc. To protect them from being stolen, it is always advisable to contact a legal specialist and secure them with patents, trademarks, or copyright.
Obtaining only startup registration is not sufficient; you must be aware of the other various “government registrations and legal consequences”. There are many other registrations and regulations that a startup has to follow, such as
Non-obtaining the applicable registrations causes monetary penalties and fines, which may highly impact your startup.
Therefore, you must take advice from a Chartered accountant or consultant about the applicable laws and regulations on your startup.
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