Startup India: What are the benefits of Startup India Scheme

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Startup India What are the benefits of Startup India Scheme

Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design. In order to meet the objectives of the initiative, Government of India is announcing this Action Plan that addresses all aspects of the Startup ecosystem.

• From digital/ technology sector to a wide array of sectors including agriculture,
manufacturing, social sector, healthcare, education, etc.; and


• From existing tier 1 cities to tier 2 and tier 3 citites including semi-urban and rural areas.
The Action Plan is divided across the following areas:


• Simplification and Handholding


• Funding Support and Incentives


• Industry-Academia Partnership and Incubation


The definition of a Startup (only for the purpose of Government schemes) has been detailed in
Annexure I.

Types of Startup Funding

There are five ways in which a new startup can gather startup funding for the functioning of its company. You can provide startup funding via:

  • Series funding
  • Crowdfunding
  • Loans
  • Venture Capital
  • Angel Investors

Definition of a Startup

In legal terms, the term startup applies to those companies which have been incorporated within the past 7 years. For biotech companies, the startup label can be attached to a firm till within 10 years.

The Department of Industrial Policy and Promotion has also laid out some criteria which need to be met by a company to be termed as a startup.

  • If its turnover for any of the financial years since incorporation/registration has not exceeded INR 100 Crore.
  • If it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India
  • If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
  • The organization is headquartered in India
  • If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
  • The organization has been recognized to be working towards innovation, development, deployment, and commercialization of products/ delivery of services powered by technology or intellectual property.

However,

If a company crossesUp to ten years from the date of its incorporation/registration it will no longer be classified as a startup.

These norms and definitions are not set in stone, as they are prone to change by the directives from the concerned departments and the government. These definitions are up to date

for more information click on this PDF link:Startup India Kit

How Startup India Scheme has Helped Startups

Startup India Scheme has helped multiple startups with its financial and other support.

  • The government provides Income Tax Exemption to startups for the first three years of profits made by the company.
  • Capital Gains Tax exemption
  • Up to 80% rebate on patent costs
  • Simplified registration process

Benefits of Startup India

Incentivized Schemes and initiatives from the Government of India in conjunction with the Department of Industrial Policy and Promotion have yielded fantastic results for the business sector of India. With over 19,000 startups operational across the country with 8 of those valued at $ 1million and more (Unicorn Club). The Startup India initiative was put in place to ensure that the increasing number of startups in the country have the right resources to grow. New startups registering themselves right now or in their early stags can really benefit from these schemes. Here are some of the benefits of the Startup India initiative.

Financial Benefits

As mentioned before,  startups will tend to gain an 80% rebate on the government fees of patent costs. The government will also pay the fees of the facilitator and help in obtaining the patent in a faster more streamlined fashion. Basically, the processing of the Intellectual Property Rights (IPR) will be easier and simpler for startups.

Registration Benefits

On the 1st of April 2016, the government launched a mobile application which opened up a portal allowing the companies to register themselves within a day. Registration based queries have been streamlined via a single point of contact at the startup-hub India.    In addition to this, there is a single clearance window for all types of clearances, approvals, and registrations,  which makes the procedure easier for all.

Income Tax Benefits

Under the provisions of startup India, up and coming businesses are eligible for exemption from Income tax as a whole for the first three years. However, in order to obtain the income tax exemption,  a startup has to obtain a certificate from an Inter-Ministerial Board setup for the same purpose. If the money is invested in a fund of funds, the startups can also avail the tax benefit on capital gains.

Government Tenders

Acquiring government tender usually requires a lot of effort, making it a tedious task to gain access to them, especially being a fresher. Corporates and businesses often have their eyes laid on government tenders because of its attributes like high payments & large projects.

Start Up India Scheme allows startups to gain priority on acquiring government tenders, despite having little or zero experience. 

Huge Networking Opportunities

Two startup fests are organized by Startup India annually to help promote the entrepreneurial spirit amongst the registered startups, helping them gain a broader exposure to the market.

It also provides access to many Intellectual Property awareness workshops. Startups gain opportunities to network with potential startup stakeholders and other great businesses in the startup community.

Click here to get more details on the Start Up India Scheme.

Overall, the Start Up India scheme has not only been able to uplift the registered startups but has also provided a supportive foundation for several other individuals looking to take their first steps for starting their business

Special Benefits

  • Manufacturing sector startups are exempted from the criteria of ‘prior experience’ or turnover. There is, however, no relaxation in the quality standards or the technical parameters with regards to public procurement.
  • National Credit Guarantee Trust Company or SIDBI ensures guaranteed funds for over 4 years
  •  Labor Laws inspections will not be held in the first three years of incorporation
  • Environment law compliances are only mandatory after self-certification
  • Winding up of the company can be done in just under 90 days under Insolvency and Bankruptcy Code

Well, Startup India has proven to be a miracle worker for enforcing the flourishing of the startup culture as well as empowering these businesses with the proper tools and facilities to help them leapfrog from the startup phase into a successful business stage.  You can go ahead and visit the Startup India Website – https://www.startupindia.gov.in/  to help your venture on the path to success.

Who can register in Startup India?

A company fulfilling the criteria given below can register for Startup India:

  • A company with a period of existence & operations below 10 years from the Date of Incorporation
  • A Private Limited Company, a Registered Partnership Firm or a Limited Liability Partnership
  • Holds an annual turnover of less than Rs 100 crore
  • Must be an original entity
  • The business model must be innovative and scalable

It is suggested to make use of the bootstrapping method initially for commencing your startup, which can later be expanded and by gathering funding using any of the methods as mentioned above by an entrepreneur. We hope we were able to provide answers to your questions like how to get funding for a startup in India, how to raise funds for business in India, etc.

After reading this Article you have more question in your mind

oky!! just click on your link: Startup India F&Q

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