Start-up Registration
A start-up refers to a young company established by one or more entrepreneurs to create a product or service and introduce it to the market.
According to income tax regulations, a start-up can be a company or a limited liability partnership (LLP) engaged in businesses involving innovation, development, deployment, or commercialization of new products and services.
If you have an innovative business idea and decide to start a company, you need to follow specific procedures to register your business.
Eligibility Criteria for Startup Registration:
- The firm must be a private limited company or a limited liability partnership (LLP).
- The company is considered a start-up for the first 10 years from the date of registration. The Indian government recently extended this duration from 7 to 10 years to provide more opportunities.
- The company remains a start-up as long as its turnover does not exceed Rs 100 crore in any of the 10 years. Once the limit is surpassed, the company no longer qualifies as a start-up.
- The firm must obtain approval from the Department of Industrial Policy and Promotion (DIPP).
- A guarantee from the Indian Patent and Trademark Office is mandatory.
- All funding details must be registered with the Securities and Exchange Board of India (SEBI).
Documents Required for Startup Registration in India:
- Registration certificate of the start-up.
- Details of all directors.
- Proof of concept, such as a pitch deck, website link, or video.
- Patent and trademark details (optional).
- PAN number.
Steps for Startup Company Registration:
- First, incorporate your business as a Private Limited Company, Limited Liability Partnership (LLP), or Partnership firm.
- Register under the Start-up India scheme of the Government.
- Fill in the required details and upload the documents (documents must be in PDF format).
- In India , start-ups are exempt from income tax for the first 3 years, but to avail of this benefit, the company must be certified by the Inter-Ministerial Board. Mention this when applying.
- Self-certify the following conditions:
- Your business is a Private Limited Company, LLP, or Partnership firm.
- Your business is registered in India, with a minimum 5-year period.
- The company’s turnover does not exceed Rs 100 crore.
- The company must have an innovative or improved product/system.
- The business is not a split or reconstruction of an existing business.
- After submission, you will receive your recognition number and a certificate of registration once the authority verifies your uploaded documents.
Benefits of Startup Registration:
- It limits personal liability, and companies are eligible for a range of tax deductions.
- It enhances your company’s brand image, reputation, and public perception.
- It allows you to raise significant capital and borrow funds in your company’s name.
- It contributes to employment growth as more companies emerge.
Registering your start-up offers various benefits, so it is advisable to complete the registration process.