1. What is a ‘Startup’, under the Startup INDIA Scheme?
A ‘Startup’ is an entity, incorporated or registered in India, not before the time interval of 5 years, with annual turnover not more than INR 25 Crore in any preceding financial year, working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
An entity shall cease to be a Startup, if –
A Startup shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.
Meaning of Startup Explained:
The definition given for Startups under Startup India Stand up India (SISI) Scheme is limited to get benefits under this scheme and is not a general or legal definition given to Startup.
It means FlipKart or OLA may be called startups in general, however they will not be eligible to get benefits under Startup Scheme (As their turnover is much higher than Rs. 25 crore).
2. ELIGIBILITY TO TAKE BENEFITS UNDER START UP INDIA INITIATIVE?
The Exemptions and benefits under the Startup Initiative can be enjoyed by the Startups who fulfill the below 6 Eligibility Criteria.
Business must be Private Limited Company, One Person Company (OPC), LLP or registered Partnership Firm
Turnover of Company to be less than Rs. 25 crore in last financial year
Company must not be older than 5 years.
|Entity||Eligibility Date||Important Point|
|Pvt. Ltd. Company||Company incorporated after 1st April 2014||On the date of application under Scheme, the entity must not be registered for more than 5 years|
|One Person Company (OPC)||OPC incorporated after 1st April 2014|
|LLP||LLP incorporated after 1st January 2012(tentative period)|
|Partnership Firm||Firm registered after 1st January 2012 (tentative period)|
Only Startups involved in developing and commercializing
Certification from the Inter-Ministerial Board is a must for getting 3 years tax exemptions.
Recommendation or Funding requirement
The startup application for the scheme must be supported by a recommendation certificate for innovative nature of business from any one of the following establishment:
3. BENEFITS & EXEMPTIONS UNDER START-UP INDIA STAND-UP INDIA
The eligible Startups will be enjoying various Incentives and Exemptions
4. MYTHS AROUND STARTUP INDIA PROGRAMME
MYTH #1: Applicability only for companies registered after announcement of Scheme or 1st April, 2016:
Truth: The Startup India Plan is ALSO APPLICABLE to companies REGISTERED BEFORE THE ANNOUNCEMENT or implementation of the Scheme.
MYTH #2: Applicable for all registered companies:
Truth: The scheme is applicable ONLY TO MOST INNOVATIVE COMPANIES fulfilling above 5 criteria
MYTH #3: Exemption in Incorporation and compliance cost:
Truth: There is NO EXEMPTION for company INCORPORATION OR ROC FILING FEES. The exemption is only related with 80% of Patent Fee and that too, registration fee will be paid by the startup and later rebate or refund will be made by the Government.
5. IMPORTANCE OF TRADEMARK & PATENT UNDER STARTUP INDIA MISSION.
Trademark Registration is given huge importance under Startup India Plan. This has created awareness among entrepreneurs to apply for trademark before and after starting up.
Patented innovations to be given high priority under the Scheme and will enjoy rebate/refund of 80% Patent application fees.
6. HOW TO PLAN FOR STARTUP INDIA SCHEME
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