Startup Recognition And Its Benefits

The startup India is a campaign that came back in 2016. Honorable Prime Minister Narendra Modi Ji initiated this campaign to boost the Entrepreneurship in India. This campaign has several motives. It includes facilitating bank finance for the startups, simplifying the process of registration, and offers tax support to the newly nurtured startups. But all the advantages are granted to the startups only if they satisfy the below criteria.

1. Any enterprise in India will only be considered as a startup in its initial ten years. That is the first ten years from its date of registration.

2. If any entity wants to be recognized as a startup, it must be a newly formed entity. In cases of splitting up from an existing one, it would no more consider as a startup.

3. The turnover of the entity must be below INR one hundred crores from its date of registration.

4. The entity must work on the purpose of innovating, modernizing, or renovating an existing product. It also must have a high-manageable of employee generation.

5. It will be considered ten years if it integrates as a private limited company, LLP, or a partnership firm.

Below is the procedure to be recognized as a startup.

1. If you want to be recognized as a startup, you must apply for it online. For an online certificate, you have to visit the portal for startup recognition.

2. The application must be provided with copies of the incorporation certificate of business. Further, it should also include the nature of the business that makes it unique. The description must focus on the innovation of the product that will boost the country’s economy.

3. Once the entity receives all its details and documents, the authority will recognize it as a startup. And it can enjoy all the benefits.

If any startup wants to apply for the tax exemption after being recognized, they must follow the below procedure:

1. Visit the Startup India portal to sign up and create your credentials.

2. Once you visit the portal, you have to apply for startup recognition. This is a pre-requisite for the next tax holiday request. After the validation, the entity will obtain a certificate of recognition.

3. Now the entities are eligible to get the tax benefits once they are approved by the IMB.

4. Further, the applicant will also be examined for uniqueness, innovation, and scalability. It would be done via a specialized agency that shall put up the cases in the next meeting. But before this, if you have some clarifications to be done, you can communicate it via email. Every startup gets three chances of resubmission.

5. Once the IMB approves an entity, it will offer a certificate of eligibility.

6. After getting the eligibility, the entities can provide all the certificates along with DPIIT number to claim the tax exemption.

If you want to get recognizes as a startup, you must provide the following documents.

1. A photocopy of the Memorandum of association/ LLP agreement of the entity

2. Copy of incorporation certificate/ LLP registration certificate of the entity

3. A copy of pan card

4. Brief details describing the uniqueness of the products and services

5. IT returns of the last three financial years

6. Brief description of directors and representatives of the entity, it includes their email ID, contact details, etc

7. Annual audited account of the startup of the last three years

8. Mobile app Link/any video that relates to the product of the entity

9. URL of the website of the entity

10. Trademark, patent, or any other IPR filing number and the logo of the entity