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Under the Start-up India Initiative, those companies that fulfil the eligibility can be recognized as start-ups by the Department for Promotion of Industry & Internal Trade (DPIIT). This article specifies the registration applicable to start-ups and its eligibility criteria. You will also find the details and documents required for Registration of start-ups under DPIIT.
Here is a piece of brief information on the DPIIT Start-up India Recognition:
The eligibility criteria is as follows:
Incorporated as Private Limited Company, Registered Partnership Firm or an LLP (Limited Liability Partnership).
It should not be older than 10 years from the incorporation/registration date.
Annual turnover not more than 100 crore rupees for any of the financial year since the incorporation/registration.
It must be working towards innovation, development or improvement of a product, process or service and or scalable business model with massive potential for employment generation or creation of wealth.
The entity shouldn’t be formed by splitting up or reconstructing an already extant business.
The following details are required for registration:
It may be noted that in case the ministry finds the document uploaded to be forged, then the applicant would be required to pay penalty.
To avail benefits, an entity should be set up by the DPIIT as a start-up.
Start-ups are permitted to self-certify their compliance with 6 labour laws and 3 environment laws. It is permitted for 5 years from the incorporation or registration date of the entity. Start-ups are also provided with tax exemptions.
The exemption available to a start-up is the levy of tax on excess consideration. The exemption is beneficial at the stage of an angel/VC round where the angel or VC invests in the excess of fair market value.
A registered start-up may avail exemption from income tax payment for 3 years out of the first 10 years from the incorporation date.
Section 54GB pertains to tax on LTCG received on the sale of residential property of an individual. The exemption is provided to individuals from payment of tax if the long term capital is invested in a registered start-up.
Public procurement means the process through which the government and state owned enterprises buy goods and services from the private sector. So in order to permit start-ups to participate in public procurement, the eligibility conditions of prior turnover and security cover for projects are exempted as per the goods or services.
The start-ups recognized by the DPIIT will be required to pay only 80% fee on patents, copyrights, designs, trademark. Moreover, fast tracking of the patent application is also available for start-ups recognised by DPIIT.
Start-ups recognised by DPIIT are eligible for getting ads 10000 crore funds of fund from AIF.
Start-ups recognised by DPIIT can also be wound up in less than 90 days of applying for insolvency.
Under Start-up India initiative, eligible companies can get recognized as start-ups by the DPIIT and get access to a host of benefits from tax exemption to IPR fast tracking and more. If your entity satisfies the eligibility criteria for registration of start-ups under DPIIT, then consider applying for registration.
Read our article: All about Start-up India Seed Fund Scheme
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