STARTUP INDIA

A NEW WAVE TO BUSINESS:

Startup India is a flagship initiative of the Government of India, envisioned to build a strong ecosystem for nurturing innovation and Startups in the Country.

Ministry of Commerce & Industry (Department of Industry Policy and Promotion) vide Notification no. G.S.R. 180(E) dated 17^th February, 2016 have issued detailed outline for Startup India initiative.

ELIGIBILITY

An entity (Company/Partnership firm/LLP) shall be considered as ‘Startup’

1.  Upto 5 years from the date of its incorporation/registration,
2.  If its Turnover for any of the Financial years has not exceeded INR 25 crore, &
3.  Working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property;

Exclusion from eligibility: Entity formed by splitting up or reconstruction of a business already in existence shall not be considered as a startup.

PROCEDURE FOR INTER-MINISTERIAL BOARD APPROVAL, FOR TAX EXEMPTIONS AND RECOGNITION AS ‘STARTUP’-

For obtaining tax benefits & to apply for the recognition, entities fulfilling the eligibility criteria, shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification consisting of

1. Joint Secretary, Department of Industrial Policy and Promotion,
2. Representative of Department of Science and Technology, and
3. Representative of Department of Biotechnology

STARTUP RECOGNITION: PROCESS FLOW

Recognition process shall be through mobile/app portal of the DIPP- www.startupindia.gov.in

1.Submit online application with any of the following documents:

1.  Recommendation (with regard to innovative nature of business), in a format specified by DIPP, from any Incubator established in a post-graduate college in India; or
2.  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
3.  Recommendation (with regard to innovative nature of business), in a format specified by DIPP, from any Incubator recognised by Government of India; or
4. Funding letter of not less than 20% in equity by any incubation fund/angel fund/Private equity fund/Accelerator/Angel Network duly registered with SEBI that endorses innovative nature of the Business. DIPP may include any such fund in negative list for such reasons as it may deem fit; or
5.  Funding letter by GOI or any State Government as part of any specified scheme to promote innovation; or
6.  Patent filed & published in the Journal by the Indian Patent office in areas affiliated with nature of business being promoted.

2.On submission of this application, a real time recognition number would be issued to the Startup for availing benefits (other than tax and IPR).

INNOVATION OF ENTITY : AIMS TO DEVELOP AND COMMERCIALIZE

Entity is considered to be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize:

1. A new product or service or process, or
2. A significantly improved existing product or service or process that will create or add value for customers or workflow.

However, the mere act of developing:

1. products or services or processes which do not have potential for commercialization, or
2. undifferentiated products or services or processes, or
3. products or services or processes with no or limited incremental value for customers or workflow

would not be covered under this definition.

BENEFITS OF RECOGNITION AS START-UP:

1. Ease in registration/recognition.
2. Self-certification of compliances with Labour and Environment Laws
3. No inspection for during first 3 years in case of labour laws
4. Special facilities for Female participants
5. 80% Rebate in filing fee of Startup patents
6. Funding support from GOI through Venture Capital Funds registered with SEBI
7. Credit to innovators through Credit Guarantee Fund

ACS Shelly Sharma

An Associate Member of Institute of Company Secretary of India (ICSI) having a rich experience of more than 3 years of Corporate Law Compliances, Due Diligence, FDI , ECB compliances and representing before RBI. Currently engaged as Manager-Regulatory with RSJ Professionals Private Limited for managing regulatory compliances of its clients through Lexcomply.