Startup India Scheme has created a lot of buzz around the country. If you are contemplating to become an entrepreneur and start up a new business then this is a perfect time. However, as a novice, there are certain points that you should be aware of startup registration including eligibility criterion and the prerequisites to startup a new business. In order to leverage the benefits announced under Startup India Scheme you need to fulfill certain criterion as a startup that is mentioned below: Eligibility Criteria and Requirements
Eligibility Criteria and RequirementsEntity Eligible for Startup India Registration
- The entity should be
- The basis of formation of the entity should not be the reconstruction or split up of an already existing business.
- A proprietorship or a public limited company is not eligible as a startup. However, An OPC or one person company patent filed being a private limited company is eligible to be recognized as a ‘startup’.
- Five years should not have elapsed since registration/incorporation of the entity.
- The annual turnover of the entity should not have exceeded INR 25 Crores in any preceding financial year.
- A business is covered under the definition of Startup if it aims to
- develop and Commercialize a new product or service or processor
- a significantly improve existing product or service or process, that will create or add value for customers or workflow.
Restrictions on Registration
- The mere act of developing
- products or services or processes which do not have a potential for commercialization; or
- undifferentiated products or services or processes; or
- Products or services or processes with no or limited incremental value for customers or workflow would not be covered under the definition of a Startup. Eligibility Criteria and Requirements
- Recommendation from an Incubator with regard to innovative nature of business established in a post-graduate college in India. The format of the recommendation shall be the one specified by Department of Industrial Policy and Promotion DIPP; or
- Letter of Support by any Incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or
- Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network.Such Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network should be registered with Securities and Exchange Board of India (SEBI) and should endorse innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
- Letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation. or
- A patent filed and published in the Journal by the India Patent Office. The Patent should be in areas affiliated with the nature of the business being promoted.
- The list of incubators recognized for the purpose of (a), (b) and (c) and the list SEBI registered funds for the purpose of (d) are published on the Startup India portal for reference.
Review by Inter-Ministerial Board
- Department of Industrial Policy and Promotion would set up an Inter-Ministerial Board of Certification which will consist of:
- Joint Secretary, Department of Industrial Policy and Promotion;
- Representative of Department of Science and Technology; and
- A representative of Department of Biotechnology.
- The supporting document(s) would be reviewed by the inter-ministerial board to ascertain if the entity qualifies as an eligible business for availing tax/ IPR benefits.
- The inter-ministerial board shall process the application for a certificate within a period of 10-25 working days.
Certificate of Recognition:
A system generated a verifiable certificate of recognition could be downloaded by the concerned entity on successful registration.
Startup Registration under the Startup India Scheme is a simple process which involves incorporating the entity under professional guidance. Setindiabiz.com has a dedicated team of Startup specialists that can assist you at every stage of incorporation and growth of your company.