In the past few years, India has seen a huge surge in the number of startup registrations. Many startups in India are not registered, however, Startup India Registration helps the startup owners to raise funds for their businesses and enjoy legal liberties.

The introduction of the Startup Initiative by the government of India has made it easier for startup entrepreneurs to register their startups. Also, by registering their startups, owners can easily avail of loans from banks.

If you are an aspiring startup owner who is looking at how to register a startup in India, this guide will help you.

Startup Eligibility Criteria for Businesses

To proceed with Company Incorporation in India for startups, your venture must meet certain eligibility criteria.

• Type of Business Entity: A startup must be registered as one of the following- Private Limited Company, Limited Liability Partnership or Partnership firm.
• Age limit of Business: The startup must not be older than 10 years from the date of its incorporation. If the business has existed for more than 10 years, it is no longer eligible for startup benefits.
• Turnover limit: The annual turnover of the startup must not exceed INR 100 crores in any financial year since incorporation. If the revenue crosses INR 100 crores, the company will no longer be considered a startup.
• Innovation: The business must work towards innovation, development or improvement of products, services or processes. The startups must be able to generate employment and create wealth in India. Only reselling products or services does not quality business as a startup under this initiative.
• DPIIT Registration: A startup must apply for recognition under the Startup India Initiative. The application can be submitted on the Startup India portal. After the application is approved, a Startup Recognition Certificate is issued.
• Original and Independent: A company formed by splitting or reconstructing an existing business is not a startup. The business must be original and registered independently.
• Tax benefits eligibility: The startup can apply for a 100% tax exemption for three consecutive years under Sector 80 IAC of the Income Tax Act. To avail of tax benefits, the startup must be a DPIIT-recognized entity. The venture should be incorporated between 1st April 2016 and 31st March 2025.
• Angel Tax Exemption: The DPIIT-recognized startup ventures are exempt from Angel Tax on investments received from Indian residents. The investment must be valued fairly according to DPIIT guidelines.
• Government Support and Seed Funding: DPIIT-recognized startups can apply for government grants and seed funding under the Startup India Seed Fund Scheme. These startups can access venture capital and angel investor networks.
• Approval from DIPP Commission: A registered startup must obtain approval from the DIPP Commission.

Upon meeting the above requirements, the startup business is entitled to call itself a startup and gain DPIIT recognition.

How to register a startup in India?

The Incorporation process for startups in India is complicated; it is thus advisable to work with a professional expert to help you navigate the registration process effectively.

Name Registration: The startup venture should have a unique name. Reserve the name before anyone chooses it. A name is important for creating your brand and registering your company legally. The startup owner can check whether their chosen name for their startups is available using the RUN platform – Reserve Unique Name managed by MCA. The name must follow the naming convention set. Once reserved the name is stored for twenty days before which the startup owners must finish the other registration formalities.

Here’s how the startup company name is approved and becomes eligible for startup company registration in India.

• The chosen name should be unique and no other registered government or private company should have kept it.
• The name should not be offensive or look like it is related to the government.
• The startup owner must enter the name of at least two of the company’s directors.
• They can have two names and one of them is backed up and finalised at the time of registration.

Apply for the digital signature certificate.

After name registration and its approval by MCA, one of the important legal requirements for startups in India is to obtain a digital certificate. A digital certificate is a form that acts as proof of the registered startup business. It contains information about the name, address, pin code, contact details, date of certificate issuance and its approved authority’s signature.

A digital certificate is important for e-filing as it allows one to fill out incorporation documents and sign them electronically. The certificate will be used for GST registration and tax filing. For digital authentication and fulfilling statutory norms made by MCA, obtaining the digital certificate is important. To obtain the digital certificate, the startup owners will have to submit an ID proof with a photo, proof of address and the digital certificate application form.

Digital Identification Number

DIN or the Digital identification Number is assigned to all the directors of the registered company. The startup owners can get access to the incorporation documents and file them only after they get their DIN number approved. DIN is the eight-digit number that the director is supposed to use along with their signature. DIN is valid for a lifetime.

Directors can work for multiple companies but they will get only one DIN. There are various forms for DIN application including –

• SPICE Form – New DIN request for assigning new directors for a business that is about to be registered.
• Dir 3 Form- The company is already registered and is requesting a DIN to be allotted for the director they appoint.
• Dir 6 Form – For making changes in the given information about directors.

Preparation of MOA

MOA or the Memorandum of Association defines the constitution, leadership structure and director’s role and responsibilities of the company. It also defines in detail the relationship between the company and its stakeholders and how internal management happens. The founder members of the startup firm must draft MOA with accuracy. It is advisable to seek professional help to ensure precision in MOA.

Preparation of AOA

AOA of the Articles of Association is an important component of a company. AOA defines internal rights, duties and share capital. It should also contain meeting minutes, director’s qualification, auditing and accounting details, dividend rules and more.

Application for Incorporation of your startup

The important Compliance checklist for Indian startups, a significant process is to initiate the process of application. The owner must submit important documents including PAN, TAN, Authorized ID and address proof of all directors and shareholders, passport size photograph of all directors and shareholders and other forms filled for name reservation, obtaining DIN along with incorporation application form. The startup owners must fill out the SPICE form online through the MCA website. After successful submission and approval, the startup owner will be granted a certificate of incorporation that proves the existence of the company.

Fee waiver policies for registering the startup firm as a private limited company.

The fees for Company incorporation in India for startup is zero to register the startup as a private company if the authorized capital is less than INR 15 lakhs. If the authorized capital is between INR 15 lakhs and INR 50 Lakhs, the registration fee charged is INR 2000. If the startup is not a small company, the fee waiver is not applicable and the registrant must pay INR 36,000.

Post Incorporation Process

After receiving the incorporation certificate, the startup venture must-

1. Open the bank account
2. Apply to register for social security from the Ministry of Labor and Employment, if applicable.

Startup India Program

The Startup India program is a flagship move by the government of India to create a more open and inclusive environment for entrepreneurs. The program is operated by MCA and DPIIT and focuses on simplifying the regulations for registered small and medium firms, providing funds and incubation support.

After registering under this Startup India program, the startups can enjoy patent protection and tax benefits for relaxation.

Steps to register a startup in India under the Startup India Program

1. Register the company as a startup.
2. Provide name, email address and strong password on the Startup India registration page and confirm the account by entering OTP and finish the registration process.
3. Access the incubation and learning programs.
4. Apply for government schemes applicable.

What are the documents required to register under the Startup India Program?

1. Certificate of Incorporation.
2. An authorization letter was issued by one of the representatives of the firm.
3. Proof stating business plans like presentation, link to website and more.
4. If the startup has obtained funding, proof testifying the same.
5. List of patents and trademarks.
6. PAN number.

How to get DPIIT recognition for startups?

By gaining the Department for Promotion of Industry and Internal Trade (DPIIT), the startups can enjoy –

• Tax exemption up to 3 years from the date of registration under Section 56 of the Income Tax Act.
• Exclusive access to intellectual property services.
• Funding help from investors.
• Enjoy relaxed and less strict public procurement norms.
• Tax exemption when the startups make investment above the market value.

The process of getting DPIIT recognition

• Go to the Startup India website.
• Click ‘DPIIT Recognition for Startups’
• Click ‘Get recognized’
• Fill company and director details in the startup recognition form
• Submit the required documents
• Accept Terms and Conditions
• Submit the Startup Registration India Form

The application will be reviewed in two days by the concerned authorities of the startup India.

After registering and reviewing your application in the Startup India Platform, the startup firm will get a unique recognition number.

Is my startup venture eligible for tax exemption under Section 80C of the Income Tax Act?

To be eligible for the tax exemption, the registered Indian startup should meet the following requirements-

1. Your startup must be a recognized startup venture.
2. It must be registered as a private company limited or limited liability partnership.
3. The incorporation must have happened after 1st, April 2016.

Once the tax exemption application of your startup venture is reviewed you will get an exemption. Your startup is free from paying taxes for three years from the date of its incorporation. If the startup venture has DPIIT recognition, it is also eligible for angel tax exemption under section 56 of the Income Tax Act.

Self-Certification

Business certifications are not easily obtained. With self-certification available in the Startup Registration India program, the startups can self-certify their compliance using the mobile apps and demonstrate their startups adhere to the nine labour and six environmental laws. After successful self-attestation, your startup will be free from inspection-related labor laws compliance for a time period of 3 to 5 years.

All about Startup Funds of Funds Scheme

The Startup Funds of Funds scheme is launched by the Startup India Initiative. It is managed by the Small Industries Development Bank of India (SIDBI). The scheme initiates a fund formation of INR 10,000 crore in funding to invest in investment firms and venture capital companies that will invest in DPIIT-recognized startups.

This fund is Funds of Funds. The funds will not directly go to the startups but will be invested in incubators and investment firms that are registered with SEBI. SIDBI is authorized by the Startup India Foundation to oversee how the funds are disbursed and what startups utilize at the end. Startups from any stage are qualified to get funds under this scheme.

The scheme aims to create jobs, boost innovation and strengthens the startup ecosystem by providing easy access to capital for high-potential startup ventures.

To register your startup venture, it is advisable to work with the best company registration in India for startups to help you navigate the incorporation process without any hassle.

FAQs

1. Why startup registration is important for startups?
Startup registration provides tax benefits, access to government schemes, funding opportunities, legal recognition and intellectual property support.

2. What documents are required to register a startup venture?
Certificate of Incorporation, PAN card, MOA, AOA, address proofs, identity proof of directors, TAN and passport photographs of all the directors.

3. What is the timeline for receiving a startup recognition certificate?
After submitting an application for obtaining the DPIIT recognition, the startups can expect the certificate to be delivered within two working days.