In this article we will shed light on some of the features and benefits of the Start-up India Scheme introduced by the government.
Let’s look at a brief history before proceeding to answer “what is startup India scheme” in detail.. Since time immemorial, India has been a country of businessmen and traders. Traders from ancient Greek and Roman empires have come to the shores of India to trade in the wares and goods produced by Indian tradesmen in collusion with craftsmen considered to be one of the finest in the world. And while as an economy we are making our way back to our erstwhile wealthy glory, the intrinsic entrepreneurial spirit of our culture is becoming more and more vibrant.
As of 2022, India is the world’s third-largest startup ecosystem in terms of the number of active startups. And while the startup culture itself cannot be said to be new, there has definitely been a sharp surge in the number of startups being incorporated in the country, especially in the last few years. This is due to the priority given by the government to strengthening indigenous businesses and proliferating self-reliance in terms of technology and other crucial sectors.
In order to boost this sector the government has introduced a slew of schemes and policies to create a nourishing environment for young entrepreneurs and innovators to create their businesses and nurture them so as to strengthen the foundations of the economy. These policies and schemes are all being launched under an umbrella initiative called the ‘Startup India’ Scheme. In this article, we will discuss in detail the various Startup India Scheme features and benefits of this scheme.
Startup India Scheme
Start-up India Scheme is an initiative of the Indian government, the essential target of which is the advancement of startups, employment, and general prosperity. It was flagged off on 16 January 2016 by our current Prime Minister in New Delhi.
Under this scheme, new companies in India can profit from administrative and tax cuts, capital funding, tax exemptions, and also access to government investment provided that they satisfy certain criteria.
A self-accreditation agreement system is likewise set up concerning the key labour and condition laws, whereby there will be no investigations for the initial three to five years of the commencement of the enterprise.
Other advantages include a decrease in patent registration amount by 80 percent and trademarks documenting expenses by 50 percent, free legal help, less complex incorporation, and exit rules; security of intellectual property rights (IPR); and amenities to advance entrepreneurship among women and communities belonging to SC/ST group.
Startup Redefined According to Indian Legal Norms
According to Indian legal norms, a business unit is recognized as a startup for up to seven years from its date of inception. This desirable period is increased to ten years for the biotechnology division.
A startup firm additionally needs to meet the accompanying criteria set by the DIPP to benefit from government remunerations:
The organisation’s revenue does not surpass US$3.84 million (Rs 25 crores) in any previous pecuniary year (US$1 = Rs 65.02).
Its head office is in India.
It is acknowledged as operational in the direction of revolution, growth, distribution, and commercialisation of new products, services, and procedures determined by technology or copyright. The system likewise views such endeavors as new companies in the event that they meet the above criterion and objective of a flexible business model with a lofty capability to produce employment or create wealth.
These arrangements and courses of events are liable to change, and new companies and shareholders ought to be vigilant to administrative and legal signs of progress reported by the legislature.
Highlights of the Startup India Scheme
The accompanying highlights make the Startup India Scheme a notable factor:
- New entrants are given a fixed duty time-off for three years.
- The government has given a subsidy of Rs.2500 crore for startup companies, just as a credit to ensure a reserve of Rs.500 crore rupees.
- The requirement to be eligible for Startup Registration
- The organisation to be created must be a private limited company or a constrained risk joint venture.
- It ought to be a new firm or not established before more than five years, and the complete turnover of the organisation ought to be not surpassing 25 crores.
- The organisations ought to have acquired the endorsement from the Department of Industrial Policy and Promotion (DIPP).
- To get an agreement from DIPP, the business ought to be financed by an Incubation subsidiary, Angel investor, or Private Equity Fund.
- The firm ought to have gotten a guarantor from the Indian patent and Trademark Office.
- The firm must have a recommendation letter by slowly and steadily under proper inspection.
- Capital profit is let off from income tax under the startup India campaign.
- The firm should provide incentive schemes.
- Angel investors, Incubation finance, Accelerators, Private Equity Funds, and the Angel network must be enlisted with SEBI (Securities and Exchange Board of India).
The start-up India scheme is an extremely comprehensive scheme taking a lot of current economic factors and future prospects in mind. There is a provision for every type of startup to benefit from the scheme in the right way. However, in order to reap the benefits of the scheme there is paperwork and a good amount of documentary formalities involved. And it is crucial for this initial paperwork to be accurate and error-free.
Hence, it is advisable to seek the help of a professional or an expert who understands the legal language and is familiar with the mechanisms of regulatory provisions. If you have any further queries on the Start-up India Scheme or wish to engage someone to assist you with your requirements, get in touch with us and our team of experts will get in touch with you to understand your requirements.
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