The one benefit that many people enjoyed when Narendra Modi become PM in 2014 was the start-up initiative. He made registering and starting a new business more manageable. To help all new entrepreneurs grasp what it takes to register a start-up, this article explains the crucial conditions to it.
If you’ve read about Prime Minister Narendra Modi’s ambitious Startup India project, you’ve probably wondered how the term ‘startup’ is defined by it. So let’s figure out what it all means.
The government has clearly mentioned that any company or legal entity that wishes to reap the benefits of this policy must be either a company (private limited or one-person company), a limited liability partnership or a registered partnership. This means that proprietors and unregistered partnerships will not qualify.
Once you get your company registered in any of the above-mentioned structures, a couple of things need to be taken care of.
1) Your company must be less than five years old.
2) The turnover of the said company in any year should not have exceeded Rs. 25 crore.
3) The company should be working towards innovation, development, commercialization of new products or services driven by technology or intellectual property. However, any such entity formed by splitting up an earlier company or restructuring it will not be considered a ‘startup’.
The aforementioned set of requirements needs to be fulfilled by the entity while they’re filling up the Startup India form.
Let’s look at the next of necessary conditions.
1. A startup that fulfils the conditions mentioned above must also get a certificate of being an eligible business from the Inter-Ministerial Board of Certification. Now, the Inter-Ministerial Board may consist of joint secretary of the department of industrial policy and promotion, representative of the department of science and technology, a representative of he department of biotechnology.
2. A recommendation, with regards to the innovative nature of the business, in a format specified by the department of industrial policy and promotion, from any incubator established in post-graduate college in India; or a letter of support from an incubator which is funded by the central or state government as part of a specified scheme to promote innovation.
3. A letter of funding of not less than 20% in equity by an incubation fund/agent fund/private equity fund/accelerator/angel network that is duly registered with the securities and exchange board of India (SEBI) which endorses innovation.
4. Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit;
5. A letter of funding by the central or state government as part of any specific scheme to promote innovation.
6. A patent filed and also published in the India Patent Office’s journal in areas affiliated with the business that is being promoted.
Once you’re done with all the above, move to fill the application form here
We suggest you register yourself as a private limited company and apply for a patent in your company’s name. Other than the numerous advantages that one might have as a private limited company, patents also add value to your firm’s portfolio, and increases your market standing. Once your patent application is successfully through, get your application at the Startup India scheme going.
To refresh, any company less than 5 years old with an annual turnover of less than Rs. 25 Crore can be registered as a start-up. It only has to prove that they are funded and working towards innovation or technological development. The company also needs to file a patent to be called a start-up!