Starting up a company in India

How to enroll as a company in India?

The companies Act 2013, which has recently been passed in the parliament, gets assent from India’s President. On 29th August 2013, the companies Act received permission from the Indian President. The Act passed includes the law revisions that relate to the companies enrolling in India.

The Companies Act of 2013 also gets notified in the official gazette on 30th August 2013. Some provisions got implementation with a notification exhibited on 12th September, 2013.

After launching the startup India program by Prime Minister Narendra Modi, you can witness a rapid surge in the numbers of startups coming up. With the perks like tax exemptions, tax benefits, and many other benefits, more people establish a company of their own. The most enjoyable part about this is you can find many young entrepreneurs creating startups and companies. The benefits are pushing the young entrepreneurs to take more interest in the business. Thus, this is what speaks about the youth of incredible India.

What do you mean by a startup in India?

A startup is a business that gets managed/ operated by a group of peoples. Startups come intending to solve the hassle with the innovations of existing services/ products. These companies start operations when the young minds or founders witness a problem in the existing system. They make sure that they are solving the issue with the operations of their company.

Eligibility to operate like a startup in India

The company that wants to enroll as a startup in India must be a private limited company/ limited liability partnership.

Every company in India remains a startup for ten years. The time gets evaluated from the date of registration. However, lately, the Indian government changes the period from ten years to seven years. This is to offer chances and tax exemptions for the companies in the longer run.

Every company in India remains a startup until the turnover per year remains at the 100 crore mark. Once you cross the 100 crore mark, you will no longer remain a startup. Earlier the mark was 25 crore. But the Indian government changes it in the recent past.

Further, the company that wants to enroll as a startup in India must ensure that they get approval from the DIPP/ department of industrial policy and promotion.

All the companies that want to register as a startup must also ensure that they are funded by incubation fund, angel fund, or any private equity fund.

Further, a patron assurance from the Indian patent and trademark office is mandatory.

All the companies that want to register as a startup must have a letter of recommendation from the incubation.

The company must work to bring innovation to the existing product.

All the details about the funds must get registered with SEBI.

The list of documents that are necessary before submission of a company

Original copy of the formal letter issued by the registrar of the company about the name availability

The DIN of all the proposed directors of the company

Digital signature certificate

Form-1 includes details about the company incorporation

Form-18 showing the address of the proposed company

Form-32 is for the proposed directors, secretary, and managers

Significant steps to enroll as a company startup in India

1st step- obtain the digital signature

As per the IT Act requirements, 2000, there are provisions for submitting digital signature for all the electronic documents submitted. It is to assure about the security and authenticity of the documents that filed electronically

2nd step- obtaining the Director identification Number

This concept of obtaining the Director Identification number got introduced with section 266A t0 266G in the companies Act, 2006.

3rd step- Account creation on the MCA portal

4th step- apply for the company registration

Detailed steps for registering as a startup in India

Step-1 business incorporation

This is the primary ad core step to register as a startup. As the eligibility states that you need to be a private limited company or LLP to get your startup registration, you need to follow all the standard procedures to achieve your business incorporation.

Step-2 registration under startup India

This is the next thing that you need to do. After obtaining your company registration, you need to acquire the startup enrolment under the startup India scheme. On visiting the startup India portal, you can find a form to furnish all the details to get your startup registration. You also need to upload certain necessary documents.

Step-3 all the documents that you need to furnish in the PDF format

List of all the letter of recommendation that you must get during startup registration
A letter of recommendation from the incubator known in a post-graduate college India; the format must get approved by the DIPP

A letter of recommendation from the incubator that Indian Government funds under any certain scheme

Letter of recommendation from the incubator recognized by the Indian government as per the format approved by DIPP

Letter of funding that doesn’t value less than 20% of the equity; the letter of funding can be from the Private Equity Fund, incubation Fund, Accelerator, Angel Fund, Private Equity Fund, registered with SEBI

Letter of recommendation from the central or state government

You must file a patent and then publish it in the Indian Patent Office in the area relating to the nature of business

Registration certificate

Uploading of certificate of incorporation

Brief definition about business operations

Step-4 mention if you need tax exemption

The startup benefits allow the startups not to pay the taxes for the initial three years. In such cases, if you want to avail of such perks, you need to mention it. However, to get such benefits, the company must be certified by the IMB.

Step-5 self-certification to the following condition

You need to certify that you are a private limited company/ LLP

Your business must be incorporated in India, but not before five years

The annual turnover of the firm is not exceeding the 100 crore mark

The company must innovate product

The business must be a fresh concept

Step-6 Getting recognition number

On the application for the startup registration, you will immediately get a recognition number. This recognition number must be adequate immediately after you apply. However, the certificate recognition number comes after the verification of all your documents.

Further, it would be best if you are watchful while furnishing any data in the application form. It is because; any error can cost you 50% of the paid-up capital.

Now that you know all the necessary steps for startup registration, you should enroll now to get all benefits from the government.

Important: Please note that the information on this page / site is provided as general information for better understanding for the user and does not constitute tax, legal, or other professional advice and must not be used as such. Please consult your professional adviser(s) if you have any questions / doubts regarding the above.

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