Startup means an entity, incorporated or registered in India:

• Upto a period of seven years from the date of incorporation/registration or upto ten years in case of Startups in Biotechnology sector
• As a private limited company or registered as a partnership firm or a limited liability partnership
• With an annual turnover not exceeding Rs. 25 crore for any of the financial years since incorporation/registration
• 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

Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’.

An entity shall cease to be a Startup:

• On completion of seven years from the date of its incorporation/registration, ten years in case of Startups in Biotechnology sector, or
• If its turnover for any previous year exceeds Rs. 25 crore

Maksim Consultant team will assist the client in verfiying the eligibility of entity to get registration as Startup.

Startup Registration For Foreign Entity

Start-up India benefits are for LLC ( Private Limited Company ).

A foreign national, NRI and PIO can register itself through registering LLC using the existing processes and subsequently register itself on the Startup India portal as a “Startup” to avail the benefits.

Maksim Consultant team assist the client in verfiying the eligibility of entity to get registration as Startup.

Process Of Startup Registartion

The process of recognition as a ‘Startup’ shall be through an online application made over the portal set up by the Indian Government. Entities will be required to submit the online application along with the Certificate of Incorporation/ Registration and other relevant details as may be sought.

Startups also have to submit a write-up about the nature of business highlighting how is it working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.

Maksim Consultant team will write-up and make high Quality Application for Startup registration.

Tax Exemption For Startup

A DIPP recognized Startup shall be eligible to apply to the Inter-Ministerial Board for full deduction on the profits and gains from business.

Provided the following conditions are fulfilled:

• A private limited company or a limited liability partnership,
• Incorporated on or after 1st April 2016 but before 1st April 2021, and
• Products or services or processes are undifferentiated, have potential for commercialization and have significant incremental value for customers or workflow

The deduction is for any three consecutive years out of seven years from the year of incorporation of startup.

Income Tax Exemption on investments above fair market value received under Section 56 of Income Tax Act

A DIPP recognized Startup being a private limited company shall be eligible to apply to the Inter-Ministerial Board for exemption from income tax on investments above fair market value made by angel investors.

Provided the following conditions are fulfilled:

• the aggregate amount of paid up share capital and share premium of the Startup after the proposed issue of shares does not exceed ten crore rupees,
• the investor/proposed investor, who proposed to subscribe to the issue of shares of the Startup has, —
  • the average returned income of twenty-five lakh rupees or more for the preceding three financial years; or
  • the net worth of two crore rupees or more as on the last date of the preceding financial year, and
• the Startup has obtained a report from a merchant banker specifying the fair market value of shares.

Benefits Of Registered Start Up

Reduction in Patent Registration cost

The government also provides lists of facilitators of patents and trademarks. They will provide high quality Intellectual Property Right Services including fast examination of patents at lower fees. The government will bear all facilitator fees and the startup will bear only the statutory fees. They will enjoy 80% reduction in cost of filing patents.

Easy access to Funding

A 10,000 crore rupees fund is set-up by government to provide funds to the startups as venture capital. The government is also giving guarantee to the lenders to encourage banks and other financial institutions for providing venture capital.

Tax holiday for 3 Years

Startups will be exempted from income tax for 3 years provided they get a certification from Inter-Ministerial Board (IMB).

Relaxation in Government tenders

Startups can apply for government tenders. They are exempted from the “prior experience/turnover” criteria applicable for normal companies answering to government tenders.

R&D facilities

Seven new Research Parks will be set up to provide facilities to startups in the R&D sector

No time-consuming compliances

Various compliances have been simplified for startups to save time and money. Startups shall be allowed to self-certify compliance with 9 labour and 3 environment laws.

Tax saving for investors

People investing their capital gains in the venture funds setup by government will get exemption from capital gains. This will help startups to attract more investors.

Choose your investor

After this plan, the startups will have an option to choose between the VCs, giving them the liberty to choose their investors.

Easy exit

In case of exit – A startup can close its business within 90 days from the date of application of winding up

Meet other entrepreneurs

Government has proposed to hold 2 startup fests annually both nationally and internationally to enable the various stakeholders of a startup to meet. This will provide huge networking opportunities.