In order to improve the Indian economy, the Government of India is launching various schemes to promote company formation in India. One such scheme is ‘Start-up Initiative Scheme’, which was launched in January 2016 by the honourable Prime Minister Narendra Modi.
Start-ups play a significant role in pushing the economy forward. The Government of India has launched the ‘Start-up Initiative Scheme’ with the action plan framed by the Department of Industrial Policy and Promotion (DIPP) to make the start-up registration process easier and increase the entrepreneurial drive in India.
Benefits of Start-up Action Plan
- The action plan simplifies the start-up registration process. It expedites the legal compliance process, encourages the set-up of start-ups and access through the use to mobile app or web portal further simplifies the work.
- The government has allocated Rs. 10,000 crores to help the start-ups to establish themselves. The action plan also provides many other monetary benefits like tax exemption on capital gains, credit guarantee, etc.
- The action plan provides the start-ups with resources and knowledge bases that are essential for efficiently running the business. Furthermore, it also promotes industry partnerships and focuses on promoting business in the biotechnology sector.
Let us now have a look at the start-up registration criteria.
Criteria for Start-up Registration
- The start-ups can be either of the following; limited liability partnerships (LLPs), private limited companies, or partnerships.
- The start-up has been incorporated not more than 5 years ago.
- Turnover since its operation for each year is less than Rs. 25 crores.
- It must be developing products that add value to the customers.
- It must have obtained DIPP approval.
- The start-up must focus on developing innovative products.
- The start-up must have a recommendation letter.
- The start-up must have a patent from the trademark office and Indian patent.
- The start-up must be funded by angel fund, private equity fund, incubation fund or angel network.
Moreover,
- There is an exemption from capital gain if the start-up is under the start-up India campaign.
- New entrants get the benefit of tax holiday for 3 years.
Your business is eligible for start-up registration if you fulfill the above criteria. There are many benefits of registering the start-up with DIPP. Let us see some of the benefits of registering the start-up with DIPP.
Benefits of Registering the Start-Up with DIPP
- The start-ups get the benefit of self-certification if they fulfil the compliances in relation to 9 labour laws and environmental laws.
- Faster tracking of patent application and rebate of up to 80% on patent fees.
- The start-ups get the opportunities and same level playing field which are available to the experienced entrepreneurs.
- As per the Insolvency and Bankruptcy Code of 2016, a registered start-up gets the time period of 90 days to execute the exit strategy.
- An amount of Rs. 25 crores has been set aside by the government to help the start-ups.
- Tax exemptions in the form of exemption on capital gains and investments made by incubators or angel investors are Furthermore, tax exemption for 3 years is available to the start-ups.
- National Credit Guarantee Trust or Small Industries Development Bank of India (SIDBI) provides help for over 4 years to DIPP registered start-ups.
- DIPP provides a common platform for new entrepreneurs to grow their business by engaging with the leaders of the industry.
There are many other benefits of registering the start-up with DIPP. IMC Group provides assistance to the start-ups in India. Our experts can help your start-ups grow and function at a rapid pace. We also provide assistance for foreign company registration in India. To know our quotes, you can send us an e-mail or get in touch with us on our number.
