Start-up registration in India
Launch your entrepreneurial journey in a vibrant market

Startup India is a flagship initiative launched by the Government of India, 2016, focusing on creating a strong eco-system to nurture innovation and startups in the country that will have a sustainable economic growth environment and develop employment opportunities on a larger scale.

An entity shall be considered as a Startup on fulfilling the conditions defined by Government of India. Vide notification No. G.S.R. 364(E) dated April 11, 2018 as modified vide Gazette Notification No. G.S.R. 34(E) dated January 16, 2019. The Startup means an entity incorporated or registered in India not prior to 10 years. With annual turnover not exceeding INR 100 crore in any preceding financial year. Working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property. The company should be registered as a private limited company, a partnership firm, or a limited liability partnership company.

The Start-up registration in India program is managed by the Department for Promotion and Internal Trade (DPIIT) to propel the Indian Startup Ecosystem. Lexlevel Services can help you obtain MSME certification and DPIIT Certification.

Why Register a Start-up in India?

Register under 'The 'Startup India' program. Several benefits for a company like financial, registration, income tax benefit, etc. The benefit that this scheme offers is 80% rebate on patent cost, faster registrations, income tax exemption for the initial three years, and certain rules relieved for manufacturing startups.

a) Self-certification under environment and labor laws

Start-ups are allowed to self-certify their compliance for 6 labor laws and 3 environment laws for a period of 3 to 5 years from the date of incorporation.

b) Startup Patent application & IPR application-

To reduce the cost and time taken for patents as the central govt shall bear the almost 80 percent of entire fees of any number of patents, trademarks or designs that startup may file.

c) Tax exemption under 80 IAC

Starts are exempted from income tax for 3 out of the remaining 10 years since incorporation. However, that is only if it is certified by the Inter-Ministerial Board (IMB).

d) Tax exemption under Section 56 (2) VIIB of Income Tax Act

Investment in startup listed public entities having net value exceeding 100 crores or a total turnover of more than INR 250 Crore can claim it. It should be a private limited company.

d) Easy winding up of company

As per insolvency and Bankruptcy Code, 2016, startups with simple debt structures, it can be wound up in 90 days of filing the application of insolvency as an insolvency professional is appointed for throughout process.

d) Easier public procurement norms

The government has introduced simplified public procurement norms specifically tailored for startups. These measures include reduced compliance requirements, expedited evaluation processes, and dedicated support to help startups navigate the procurement landscape. By making it easier for startups to access government contracts, these initiatives aim to foster innovation and enable smaller companies to compete more effectively in the public sector.

Types of Business Entities for Start-ups

Type of business determines the legal and tax consequences for company. Lexlevel Services can help you register your start-up in the form of:

a) PRIVATE LIMITED COMPANY

Start-ups and growing companies prefer this most popular business structure because it enables the easy raising of outside funding, limits the liabilities of its shareholders and enables them to offer employee stock options in order to attract top talent. As these entities must hold board meetings and file annual returns with the ministry of corporate affairs, incorporating a start-up into this type of business is a must for serious entrepreneurs.

b) LIMITED LIABILITY PARTNERSHIP

A relatively cheaper approach to incorporate as compared to a Private Ltd. Co. and requires fewer compliances; its main improvement over general partnership is that it limits the liabilities of its partners to their contributions to the business and offers each partner protection from negligence, misdeeds or incompetence of the other partners.

c) GENRAL PARTNERSHIP

It is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the partnership deed. However low cost, ease of setting up and minimal compliance requirement make it a viable option.

d) ONE PERSON COMPANY

Its constitution was recently introduced as a strong improvement. It gives a single promoter full control over the company while limiting his/he liability to contributions to the business. This person will be the only director and shareholder.

Eligibility Criteria for Start-up Registration

Under the startup India Initiative, eligible companies can get recognized as startups by DPIIT.

a) COMPANY AGE

Period of existence and operations should not be exceeding 10 years from the Date of Incorporation. The startup should have been incorporated after 1^st April 2016

b) COMPANY TYPE

Incorporated as a private limited company, a registered partnership firm or a limited liability partnership.

c) ANNUAL TURNOVER

It should have an annual turnover not exceeding Rs. 100 Crore for any of the financial years since its Incorporation

d) ORIGINAL ENTITY

Entity should not have been formed by splitting up or reconstructing an already existing business

e) INNOVATIVE & SCALABLE

It should work towards development or improvement of a product, process or service and/or have scalable business model with high potential for creation of wealth & employment.

Step-by-Step Process of Start-up Registration in India

Step 1: Incorporate Your Business

Your company must initially be established as a sole proprietorship, limited liability Partnership, Private Limited Company, or Partnership firm. In order to register any firm, one must adhere to all prescribed processes, which involve completing the registration application and obtaining the Certificate of Incorporation as per the relevant laws.

Step 2: Register with Startup India

Obtain Start-up India Certification and get your organization registered. Lexlevel Services can also help you obtain Star-up India Registration and Certification.

Step 3: DPIIT Recognition

The endorsement helps startups to avail benefits like access to high quality intellectual property resources and services, easy extending of company, access to funds etc. Companies have to register on NSWS website, add registration as startup forma and fill out startup recognition form. Lexlevel can also help you obtain Star-up India Registration and Certification.

Step 4: Application of Recognition

You need to finish up the Startup Recognition Form to complete the process.

Step 5: Documents

Documents needed for start-up registration in India. Provide all the necessary Company documents, business licenses and certifications.

Step 6: Recognition number

On applying start-up get recognition number. The certificate will be issued within 2 days after examination of all your documents.

Documents Required for Start-up Registration

The following documents are needed to be submitted by the entities for recognition of Start-up India by DPIIT.

• Memorandum of Association for Pvt. Ltd. / LLP Deed / Certificate of Incorporation
• Company P.A.N Card
• Director’s Aadhar & P.A.N card
• Income Tax returns and Annual Returns
• Brief write up on how the business is working towards: Innovation, Scalability, Employment Generation

Start-up India Program and Benefits

The startup India scheme was launched on 5^th April 2016 to facilitate bank loan from scheduled commercial banks or scheduled tribe between 10 lakhs to 1 crore to at least one scheduled caste or scheduled tribe and done women per bank branch for setting up a greenfield enterprise in trading, services or manufacturing sector.

Start-up India program has various benefits-

• Self-certify compliance with 3 environmental always and 6 labor laws online.
• No inspection will be conducted for a lifetime of 5 years in labor law cases.
• Tax exemptions upto 3 years out of 10 years from date of incorporation.
• Offers financing support through fund of funds an amount upto INR10,000 crores.
• Startups can enjoy credit funds.
• Startup can windup business transaction in 90 days of filing of insolvency application.
• Tax Exemptions and easy winding up process of the company

Compliances After Start-up Registration

The Compliances apply similar to any other Pvt. Ltd company or LLP, depending on the structure of the organization and it’s legal obligation. Registering under Start-up India scheme provides certain benefits and exemptions as mentioned before. Some of the important compliances to be taken care of are:

• Mandatory annual general meeting of stakeholders as per Companies Act.
• Filing of Tax Returns, TDS, Tax Audit reports under Income Tax Act,1961.
• Protection of intellectual property rights.
• Contracts to ensure adherence to agreements between stakeholders.
• GST Registration and related compliances
• Labour Law Compliances
• Other Sector-Specific Registrations/Compliance such as FSSAI, Data Privacy, Import Export, Manufacturing unit compliances etc.

Common Mistakes to Avoid During Start-up Registration

Common mistakes to avoid during registration process are-

• To manage cash flow as entrepreneurs may usually stretch far to capture more customers, in process business may go for toss.
• Basic requirement to put a legal basic system in place.
• Intellectual Property rights aren’t protected.
• Taxes being mismanaged.
• Contracts and Agreements are not in place.

Why Choose Lexlevel Services for Start-up Registration in India

Are you looking for start-up registration in India? Let Lexlevel Services be your trusted partner in turning your creative ideas into certified startup registration. Our expert consultancy specialize in company registration across India. We provide comprehensive support from navigating paperwork to secure necessary licenses to basic legal requirements to compliances required before, during and after registration process required. We ensure effective and efficient process throughout.

Conclusion

Several programs were rolled out under the Startup India Initiative with the aim of supporting the budding entrepreneurs in building a robust startup ecosystem and transforming India into a country of job creators rather than job seekers.

The Startup India Initiative - championed by the Indian government - Aims to nurture aspiring entrepreneurs. The accompanying Startup India Scheme provides crucial financial and mentoring support for the growth and expansion of startup companies.

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