How Startup India Scheme Helps the Entrepreneurs? Eligibility and Application Procedure
- Published On: 18/06/2021 12:00 am
What is Startup India?
The Startup India Initiative was launched on January 16, 2016, with the aim of empowering startups, creating a strong startup ecosystem, and transforming India into a nation of job creators rather than job seekers. Startup India is the government of India’s organization’s strategy, with the aim of creating a strong ecosystem that encourages the development of new businesses, resulting in long-term economic growth and large-scale job creation. Through this scheme, the government hopes to encourage startups to expand through creativity and design. The Indian government is working hard to make the vision of the Startup India initiative a reality. The Startup India project, which has stimulated entrepreneurship across the world, has made significant progress.On January 16, 2016, Prime Minister Shri Narendra Modi launched Startup India. Let us learn more about the advantages and eligibility of Startup India.
What does a startup refer to?
“Startup” is described as a business that is in the early stages of development. Any enterprise that falls into one of the categories below will be referred to as a “startup” and will be entitled to be recognized by the Department for Promotion of Industry and Internal Trade in order to receive benefits from the Indian government.
- The company’s age should not exceed ten years from the date of incorporation.
- Kind of Business – A Private Limited Company, a Registered Partnership Firm, or a Limited Liability Partnership may have been formed.
- Annual Turnover – The annual turnover does not exceed Rs.100 crore in any of the financial years since it was incorporated.
- Initial Entity – The corporation or Entity should have been founded from the ground up by the founders, rather than being broken up or rebuilt by an established enterprise.
- Innovative & Flexible – Can provide a plan for designing or expanding a product, operation, or service, as well as a scalable business model with high potential for wealth and employment development.
Companies that are registered under Department for Promotion of Industry and Internal Trade (DPIIT)
Department for Promotion of Industry and Internal Trade are entitled to receive the following advantages under the Startup India Initiative:
- Simplicity and guidance – Faster enforcement, a smoother termination path for failing startups, legal assistance, patent application monitoring, and a website to eliminate knowledge asymmetry.
- Exemptions from income and capital gains taxes for qualifying startups, as well as a pool of funds to pump more capital into the business industry and a loan guarantee programme.
- Incubation and Industry-Academia Collaborations – Various incubators and innovation laboratories, as well as events, contests, and grants, have been created.
Required Documents for Startup India Registration:
- Memorandum of Association Deed (Pvt. Ltd./LLP)
- Resolution of the Board of Directors (If Any)
- The startup’s financial statements for the previous three financial years.
- Returns on Information Infrastructure for the three years following submission
- You will review the status of your application in your Startup India Portal dashboard. Since signing in, this has been visible in the top right corner of the screen.
Startup Registration Eligibility:
- It is necessary to create a private limited company or a limited liability partnership.
- It must be a startup or a company that has been in service for less than five years and has a total revenue of less than Rs. 25 crores.
- The Indian Patent and Trademark Office should have provided the company with a donor guarantee.
- A letter of recommendation from a laboratory is needed.
- Capital profits are exempt from income tax under the Startup India campaign.
- The business must come up with new products or innovations.
- Both angel funds, incubation funds, accelerators, private equity funds, and angel networks are required to be registered by SEBI ( Securities and Exchange Board of India).
Advantages of the Startup India Program
Startups will benefit from the Startup India Scheme in a variety of ways. However, an organisation must be approved as a startup by the Department for Promotion of Industry and Internal Trade in order to receive these benefits.
1. Labour and environmental laws require self-certification:
Six labour laws and three environmental laws allow startups to self-certify their compliance. This is permitted for a term of five years from the date of the entity’s incorporation.
2. Tax-free exemption of three years:
Profits earned by recognized startups who have received a certificate from the research committee are tax-free for three years.
This form of exemption is available to help companies grow and fulfil their working capital needs in their early stages.
3.Investing in assets that are worth more than their fair market value is tax-free:
When a company has multiple board certifications and makes money from the selling of shares that are worth more than their face value, it’s a good sign. The consideration gained from such shares that raises the fair market value of such shares is tax-free up to Rs. 10 crore.
4. Startups’ IPR Protection and Patent Application:
Startup India provides high-quality intellectual property resources and software to developers to help them protect and commercialize their ideas. The following is included:
Timely monitoring of a startup’s patent application.
- In comparison to other companies, we give an 80% discount on patent registration.
- When opposed to other companies, we give a 50% discount on patent filings.
Government Schemes for Entrepreneurs On Startup India Scheme:
Micro and Small Business Credit Guarantee Trust Fund:
One of the largest Startup Loan Schemes initiated by the Ministry of MSME in India is the Credit Guarantee Trust Fund for Micro and Small Enterprises. Qualified startups and MSMEs can get a loan up to Rs 1 crore under this scheme. The loan is distributed via the Ministry of MSME and Small Industries Development Bank of India’s Credit Guarantee Fund Trust for Micro and Small Enterprises.
This specific Government scheme was initiated by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to assist merchants, educational institutes, self-help organisations, fishermen, and SMEs.Essentially, the Credit Guarantee scheme was created to improve the credit distribution mechanism by providing SMEs with a guarantee cover of up to 85% for loans up to Rs 5 lakh.
Venture Capital Assistance Scheme
The Venture Capital Assistance (VCA) scheme was initiated by the Small Farmers Agri-Business Consortium (SFAC) for the benefit of farmer-entrepreneurs and the development of their agri-business. The system has been authorized by the RBI-regulated banks and financial institutions. It plans to offer term loans to farmers in order for them to fulfill the capital needs for the execution of their projects. VCA encourages agri-entrepreneurs to be trained and supported.
The debt amount would be 26 percent of the promoter’s equity (40 percent in hilly areas). The gross loan sum available under this scheme is INR 50 lakhs.
Women’s Entrepreneurship and Rural Development
The Rural and Women Entrepreneurship Development programmes are designed to promote a favorable business environment and to promote and help people, especially women, who want to start their own businesses. Creating a business climate that encourages rural and female entrepreneurs.Providing instruction manuals and training for women entrepreneurs.
Small Business Development Center for Rural Areas
The world association for small and medium businesses, which is sponsored by NABARD, established it as the first of its kind. It helps people and communities that are socially and economically vulnerable. Its aim is to provide managerial and technological assistance to existing and future micro and small business owners in rural areas. Food manufacturing, soft toy making, ready-made clothes, candle making, incense stick making, two-wheeler repairing and servicing, vermi-composting, and non-conventional building materials are among the trades covered by these services, which benefit a significant number of rural unemployed youth and women.
How can Taxxinn help you?
We Taxxinn can help you get through the startup registration process without any hassle. Taxxinn is a one step solution for your business needs. Starting from company registration, Start up registration to any legal requirements service. Get in touch with us right away to get things started.