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The Legal Time
START UP INDIA REGISTRATION
Welcome to Start-up India, your gateway to the vibrant world of entrepreneurship in India. India is witnessing an unprecedented surge in entrepreneurial activity, fueled by the government's ambitious Start-up India initiative. This groundbreaking program aims to foster innovation, create employment opportunities, and drive economic growth by nurturing a thriving start-up ecosystem in the country.
About Start-up India: Start-up India is a flagship initiative of the Government of India, launched in 2016 by Prime Minister Narendra Modi. It is designed to provide a conducive environment for budding entrepreneurs to flourish, offering a range of support mechanisms and incentives to facilitate their journey from ideation to execution.
Step to Register in Start-up India
Company
Filing
Verification
Certificate
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Start-ups can self-certify compliance for 6 Labour Laws and 3 Environmental Laws through an online procedure
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For labour laws, no inspections for 5 years unless there's a credible complaint.
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For environmental laws, self-certification allowed for start-ups falling under the 'white category,' with random checks.
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The specified Labour Laws include acts such as the Employees' Provident Funds Act and the Employees' State Insurance Act.
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The specified Environment Laws include acts such as the Water (Prevention & Control of Pollution) Act and the Air (Prevention & Control of Pollution) Act.
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Fast-tracking of Startup Patent Applications: Startup patent applications will be expedited for examination to realize their value sooner.
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Panel of Facilitators for IP Applications: A panel of facilitators regulated by the Controller General of Patents, Designs, and Trademarks will assist startups in filing IP applications and provide advisory services.
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Government-funded Facilitation: The Central Government will cover the entire facilitation fees for patents, trademarks, or designs filed by startups.
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Rebate on Filing Fees: Startups will receive an 80% rebate on patent filing fees compared to other companies, reducing costs during their formative years
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Exemption under Section 56(2)(VIIB) of Income Tax Act: Investments into eligible startups by listed companies with a net worth of over INR 100 Crore or turnover exceeding INR 250 Crore are exempt.
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Exemption for Various Investors: Investments by Accredited Investors, Non-Residents, AIFs (Category I), and listed companies meeting the specified criteria are also exempt under Section 56(2)(VIIB).
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Consideration Exemption: Shares received by eligible startups are exempt from consideration up to an aggregate limit of INR 25 Crore under Section 56(2)(VIIB) of the Income Tax Act.
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Fast-track Insolvency Process for Startups: Startups with simple debt structures or meeting specified income criteria can be wound up within 90 days of filing an application for insolvency under the Insolvency and Bankruptcy Code, 2016 (IBC)
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.Appointment of Insolvency Professional: An insolvency professional will be appointed for the startup, taking charge of the company's affairs, including liquidation of assets and payment to creditors within six months of appointment.
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Responsibilities of the Liquidator: Upon appointment, the liquidator will ensure swift closure of the business, sale of assets, and repayment of creditors according to the distribution waterfall outlined in the IBC, while respecting the concept of limited liability.
Income Tax Exemption for Eligible Startups: Eligible startups can be exempted from paying income tax for three consecutive financial years out of their first ten years since incorporation
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Listing on Government e-Marketplace (GeM): DPIIT Recognized Startups can register on GeM as sellers to directly sell products and services to Government entities, providing a valuable opportunity for startups to engage with the Government through trial orders.Exemption from Prior
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Experience/Turnover: Startups in the manufacturing sector are exempted from the criteria of "prior experience/turnover" by the Government, provided they demonstrate the capability to meet quality standards, technical parameters, and execute projects as required, with their own manufacturing facility in India.
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EMD Exemption: DPIIT recognized startups are exempted from submitting Earnest Money Deposit (EMD) or bid security when participating in government tenders, simplifying the bidding process for startups.