STARTUP REGISTRATION - INDIA ENTRY SERVICES

DEFINITION OF STARTUP

A startup is a fledgling business in the initial stages of development, typically founded by entrepreneurs seeking to develop a unique product or service and bring it to market. Startups generally have a limited operating history, small employee count, market uncertainty, as well as lack of profitability and sustainability during the early founding years. The goal of a startup is to disrupt industries or create completely new markets through innovation.

INTRODUCTION TO STARTUP REGISTRATION IN INDIA

Startup registration in India has been gaining momentum with various government initiatives to foster innovation and entrepreneurship. India has emerged as the third largest ecosystem for startups globally. The process enables founders to gain official recognition from authorities like DPIIT based on criteria such as less than 10 years of incorporation, annual turnover below 100 crore rupees etc. Registration opens opportunities like self-certification compliance, IPR fast tracking and easier public procurement access. It also grants exemptions on income tax and labor law inspirits. Further it facilitates applying for grants, subsidies and venture capital funding offered by GOI's Startup India scheme and other programs. Overall, registration brings strategic benefits in addition to an official affirmation of being a startup entity in India.

TERMINOLOGIES

Here are some of the important terminologies related to startups:

"Board" means the Inter-Ministerial Board of Certification comprising of the following members.

1. Joint Secretary, Department of Promotion of Industry and Internal Trade, Convener

2. Representative of Department of Biotechnology, Member

3. Representative of Department of Science & Technology, Member

• "CBDT" means Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)
• "Limited liability partnership" shall have the meaning as assigned to it in clause (n) of subsection (1) of Section 2 of the Limited Liability Partnership Act, 2008;
• "Partnership firm" means a firm registered under section 59 of the Partnership Act, 1932;
• "Private limited company" shall have the meaning as assigned to it in clause (68) Section 2 of the Companies Act, 2013;
• "Turnover" shall have the meaning as assigned to it in clause (91) Section 2 of the Companies Act, 2013;
• "DPIIT" means Department for Promotion of Industry and Internal Trade.

Understanding these key terms helps navigate the startup landscape more effectively for entrepreneurs as well as professional services advising them.

DOCUMENTS REQUIRED FOR STARTUP REGISTRATION

The documents required for startup registration in India can vary depending on the type of startup entity you choose (Private Limited Company, LLP, Registered Partnership) and whether you want to apply for the Startup India recognition program. Here's a general breakdown:

Essential Documents for Company Registration:

• PAN card of all directors/partners: This is a unique 10-digit alphanumeric number issued by the Indian Income Tax Department
• Aadhaar card of all directors/partners: This is a 12-digit unique identification number issued by the Government of India.
• Digital Signature Certificate (DSC) of one director:. This allows for electronic signing of documents required for registration.
• Memorandum of Association (MOA): This outlines the company's objectives and powers.
• Articles of Association (AoA): This defines the internal rules and regulations of the company.
• Proof of registered office address: This can be a rental agreement, electricity bill, or property tax receipt.

ADDITIONAL DOCUMENTS FOR STARTUP INDIA RECOGNITION (OPTIONAL):

• Registration Certificate of your startup: This proves your company's legal existence.
• Proof of funding (if any): This could be investment agreements, bank statements, or convertible notes.
• Authorization letter of the authorized representative: This person will be authorized to submit the application on behalf of the startup.
• Proof of concept: This could be a pitch deck, website link, or video showcasing your idea and progress.
• Patent and trademark details (if any): This demonstrates intellectual property protection.
• List of awards or certificates of recognition: This highlights achievements and validation.

OTHER DOCUMENTS (BASED ON SPECIFIC REQUIREMENTS):

• NSIC Registration: Required for businesses in specific industries.
• Factory License: Necessary for manufacturing units.
• CDSCO Registration: Mandatory for companies dealing with drugs and cosmetics.
• GST Registration: Applicable for businesses exceeding a certain turnover threshold.

GOVERNMENT FEE

The good news is that there are no direct government fees for registering a startup in India! The Startup India initiative aims to make the process as streamlined and affordable as possible for emerging businesses. You can register your startup entity (Private Limited Company, LLP, etc.) through the Ministry of Corporate Affairs (MCA) portal completely free of charge.

However, there may be indirect costs associated with the process, such as:

• Professional fees: If you choose to use a consultant or chartered accountant to help you with the registration process, they will charge their professional fees.
• Digital Signature Certificate (DSC): You will need a DSC for one director to electronically sign documents, which typically costs around Rs. 500 to Rs. 1000.
• Stamp duty and registration charges: These vary depending on the state and company type, but are usually minimal.
• Additional fees for specific registrations: If you require licenses or registration for specific industries (NSIC, FSSAI, etc.), there may be associated fees.
• Professional Charges: Similar to general registration, consultants may charge fees for assisting with the recognition application process.
• Facilitation Fees: The government covers the fees for facilitators assisting with intellectual property filings like patents, trademarks, or designs. However, you might need to pay the remaining statutory fees for these applications.

PROCESS FOR STARTUP REGISTRATION

The process of recognition of an eligible entity as startup shall be as under:

1. A Startup shall make an online application over the mobile app or portal set up by the DPIIT.

2. The application shall be accompanied by-

3. A copy of Certificate of Incorporation or Registration, as the case may be, and

4. A write-up about the nature of business highlighting how it is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.

5. The DPIIT may, after calling for such documents or information and making such enquires.

WHO CAN APPLY

• Early Stage Companies: Entities that have been incorporated in the last 10 years with an aim to develop novel products using technological or intellectual property can apply. The startup cannot be spin-offs of established companies.
• Shareholding and Ownership: Startups owned by private limited companies or registered partnership firms or limited liability partnerships can apply for eligibility. The shareholding must show at least 51% ownership held by Indian citizens.
• Activity Area Focus: The applicant startup must be working towards innovation, development or improvement of products, services or processes in industry sectors like manufacturing, agriculture, education, healthcare etc. Service sector startups qualify for eligibility.
• Prior Funding Stages: Pre-revenue or early revenue startups that have not progressed beyond Series A funding round can explore registration for recognition and support benefits outlined under the Startup India initiative.
• Revenue Criteria Qualifiers: Only companies with an annual turnover less than 100 crore are eligible to be registered as a startup to enable obtaining government scheme incentives.

ADVANTAGES OF STARTUP INDIA REGISTRATION

• Tax Exemptions and Rebates: Startups can enjoy tax benefits like exemption from income tax for 3 years (under Section 801AC) and reduced capital gains tax.
• Funding and Investment Assistance: Recognition opens doors to various government funding schemes, incubators, and angel investor networks, making it easier to secure capital.
• Regulatory Relaxations: Startups benefit from simplified compliance requirements in areas like labor laws, environmental regulations, and public procurement.
• Faster Approvals and Permits: Government approvals and permits related to business operations can be obtained faster through dedicated channels for recognized startups.
• Intellectual Property Protection: The program provides assistance in obtaining patents and trademarks, safeguarding your innovative ideas.

HOW NKG CAN HELP?

For the past two decades, NKG has been helping more than five thousand clients worldwide, across the healthcare spectrum, to get their products registered. The dedicated regulatory team of NKG has more than ten years of experience in helping clients cross the hurdles they face while marketing their products to sell or distribute in India.

Have a query, drop it at [email protected]

1.A representative from NKG will contact you within 24 hours

2.A team will be assigned to help you.

3. Team will help you understand your product's regulatory requirements.

4. Team will help you to prepare the documents to comply with regulations.

5. The product marketed successfully.