StartupIndia scheme is a golden scheme launched by Government of India under MINISTRY OF COMMERCE AND INDUSTRY to promote and grow the startups in India.

Government of India has introduced very efficient policy to support startups & new business ventures with creative & innovative ideas.

StartupIndia is a campaign to promote banks for financing new ventures to encourage entrepreneurship and star ups with jobs creation. Announced by hon’ble Prime Minister Narendra Modi in his lecture on 15th August, 2015 from the Red Fort, to encourage entrepreneurs for creating jobs instead of doing jobs and increase employment in India.

The purpose of this Scheme is to restrict role of States in policy domain and to eliminate of “License Raj” and break hurdles like in land permissions, foreign investment, environmental clearances, political interferences etc. It was regulated by DIPP (Department of industrial policy and promotion).

1. Incorporate your Startup/Business

You must first incorporate your business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership. You can refer our earlier post to get the help on Incorporating a company.

2. Register with Startup India

Go to StartupIndia website and follow the simple steps to get registered there as a startup. The entire process is simple and online. All you need to do is log on to the Startup India website and fill up the form with details of your business and upload certain documents. Give entity details, startup office address, authorized representative details, Directors and Partners details etc.

3. Documents in PDF format to be uploaded

A) A letter of recommendation/support

A letter of recommendation, from any of the below, needs to be submitted along with the registration form.(i) A recommendation (regarding innovative nature of business) from an Incubator established in a post-graduate college in India, in a format specified by the Department of Industrial Policy and Promotion (DIPP)

(ii) A letter of support by an incubator, which is funded (in relation to the project) by Government of India as part of any specified scheme to promote innovation

(iii) A letter of recommendation (regarding innovative nature of business), from an Incubator, recognized by the Government of India in DIPP specified format

(iv) A letter of funding of not less than 20% in equity, by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network, duly registered with SEBI that endorses innovative nature of the business

(v) A letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation

(vi) A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of the business being promoted.

B) Incorporation/Registration Certificate

You need to upload the certificate of incorporation of your company/LLP (Registration Certificate in case of partnership)

C) Description of your business in brief

A brief description of the innovative nature of your products/services.

1. 1. If you want to avail Tax benefits under this scheme: Startups are exempted from income tax for 3 years. But to avail these benefits entity must be certified by the Inter-Ministerial Board (IMB). Start-ups recognized by DIPP, Govt. of India can now directly avail IPR related benefits without requiring any additional certification from IMB. There are certain other conditions as well like the entity must be incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2019, and must be working towards innovation, development or improvement of products or processes or services, or should be a scalable business model with a high potential of employment generation or wealth creation.
   2. Finally self-certify for below steps-
      A) Entity must be a Private Limited Company, Partnership firm or a Limited Liability Partnership (LLP) B) Turnover must be less than 25 crores per year. C) Innovation is a must– the business must be working towards innovating something new or significantly improving the existing used technology. D) Your business must not be as a result of splitting up or reconstruction of an existing business.

Apart from the tax benefits startups get after registering in this program, startups also get funding support. Government has set up a fund with an initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR 2,500 crore per year) for the registered startups under StartupsIndia program.

Recently, SEBI has also taken steps to ease Angel Funding for Startups in India. You can follow the above steps to register your startup.

Other than this, there are certain Startup laws every Entrepreneur should follow.

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Startups India initiative was announced on 2015 Independence day speech by the Prime Minister Narendra Modi. The aim of this initiative was to create the environment of Job Creators rather than the community of Job Seekers. Developing a productive culture of innovation in the country is a long and important journey which India has taken up to make itself a hub of innovation, design and startups.

At the absolute beginning of the startup and nurturing it includes many things such as knowing the correct procedure and laws relating to startups in India.

When do you call a business entity a Startup?

As per new legal norms a business entity is identified as a startup for up to five years from the date of its incorporation which needs to meet following criteria set by DIPP to access government benefits:
1. Its turnover should not exceed INR 25 Cr in the last five financial years
2. Its headquarters should be located in India
3. It must work towards innovation , development, deployment and commercialization of new products, processes , or services driven by technology or intellectual property

Who comes under Startup India Scheme?

Sole proprietorship firms cannot come under the startup India scheme. For an entity or business to be termed as startup it must establish itself under either of the following legal framework-
• Company’s Act, 2013
• Partnership Act, 1932 (registered under section 59 of the Partnership Act, 1932)
• Limited Liability Partnership Act, 2008

Startup Laws in India

Apart from the above, knowing basics of startups laws could be the stepping stone to protect and nurture your startup. Choosing your brand will depend on your long-term goals and vision. Every type of vehicle has a separate set of laws which one needs to follow with.

Some basic legal knowledge is required before proceeding with the startups.

1. Choosing the type of venture i.e. Incorporation laws

You could brand it as a ‘private limited’ or ‘single proprietorship’ or ‘Limited Liability Partnership’ etc. While this may seem unnecessary, it goes a long way to decide your company’s viability, visibility, sustainability, suitability and profitability. All depends on the kind of your venture, and your long-term goals, vision, and objectives.

2. Tax Laws

Knowledge of Central, State and local/provincial government taxes, sector and area-specific knowledge of taxation would do good in maintaining the financial & legal health of your organization.

3. Basics of accounting

It is always beneficial to keep a record of accounts and go through them periodically to adopt best practices. Taxation information according to area and sector of work will help in retaining and improving the financial and legal strength of any organization.

4. Securities Laws (SEBI)

Knowledge of Securities Laws becomes essential only if you want to list your company. The Securities market is regulated by the Securities and Exchange Board of India (SEBI) and it issues various regulations periodically.

5. Business Finance

Business finance refers to the management of all the financial needs arising during the various stages of business life cycle, wherein you will have to look for options for fund raising. Hence, knowledge of avenues like crowd funding, venture capitals, angel investors, foreign direct investment (FDI on Startups), or even joint ventures (as a part of strategic decisions), would help increase the profitability of your organization.

6. Employment & Labor Laws

Laws about employee, contract employee and their relationship with the employer etc.

7. Intellectual Property Laws

Intellectual property (IP) like new kind of  code, design, program or research work need patent etc. comes under these laws. Timely IP audits of your organization, and also filing the right patent/trademark/copyright claims, would increase the profitability of your venture manifold.

8. Information Technology Laws

Digital signatures, e-contracts etc. comes under this law category. All type of computing services like cloud and your venture data are governed under this law type. This IT law protects your data from any infringes or hackers etc.

9. Corporate Governance

Though you are just a startup and not a huge organization, though you are small in size, lessons from corporate governance and management can take you a long way in managing your organization effectively.

10. Contract Law

Contracts are indispensable tools of entrepreneurs. It wouldn’t be an exaggeration if it is said that no organization would come to existence without the use of contracts, in some way or the other, at some stage or the other. Hence, basic knowledge of certain fundamental principles of contracts certainly helps.

11. Dispute Resolution

Disputes are inevitable in today’s business world. It is one thing to be reactive to disputes, and a completely different thing to be proactive and to see to it that all disputes are prevented, or at least minimized. Being the CEO of the startup, knowledge about the formal (how court cases work) and informal (arbitration, mediation, conciliation, etc.) ways of dispute resolution could be beneficial in all ways. The best friction is no friction.

12. Knowledge related to government contracts

This actually is not a very necessary factor but a successful venture depends upon a steady flow of funds. Bidding for government contracts can create wonderful opportunities for growth, revenues and reputation building.

Hence, knowing about all the above legalities and Startups Laws can help out in smooth sailing even on a rough sea.

Also, you can refer small business ideas to start the startup at low investment.

Image credit- Canva