START-UP INDIA MISSION, EMPOWERING ENTREPRENEUR
START-UP INDIA MISSION, EMPOWERING ENTREPRENEUR
Launched on January 16, 2016, Start-up India Initiative is a central government scheme to support entrepreneurs, create vigorous Start-up ecosystem as well as shift India towards creating jobs rather than seeking them. The start-up India mission objectives have been laid quite clear, to build a strong ecosystem for promoting innovation and start-ups in the country.
This mission also was aimed to encourage sustainable economic growth and create large scale employment opportunities and empower start-ups to grow through innovation and design. So let us get started with the very basic and work our way to what does this scheme offers:
WHAT IS A START-UP?
According to the notification by Department for Promotion of Industry and Internal Trade on February 19, 2019, the definition of a Start-up is an entity that is into existence once for up to 10 years from the date of its incorporation or registration.
Provided such an entity is incorporated in India as a: Private Limited Company as per the Companies Act, 2013 or Partnership Firm as per section 59 of the Partnership Act, 1932 or Limited Liability Partnership as per Limited Liability Partnership Act, 2008
It has a turnover that is not more than Rs 100 crores during any of the financial years since incorporation or registration
It is working towards innovation, development or improvement of products or services or processes. Or the entity has a scalable business model having a high potential of employment generation or wealth creation
Furthermore, an entity that is created by splitting or reconstructing an existing business unit is not considered a Start-up. Also, a business entity shall cease to exist as a Start-up once it completes 10 years from the date of incorporation or registration and if its turnover for any of the previous financial years exceeds Rs. 100 crores.
START-UP INDIA SCHEME BENEFITS
An entity recognized by the DPIIT as a start-up can avail a host of benefits provided under the Start-up India Scheme including:
SELF CERTIFICATION UNDER LABOR AND ENVIRONMENTAL LAWS
Under the start-up India mission, start-ups are allowed to self-certify their compliance under six labour laws and three environment laws for five years from the date of incorporation of the entity. This benefit is given to reduce the regulatory burden for start-ups so that they can focus on their core business and keep compliance costs low.
TAX EXEMPTION FOR THREE YEARS:
The profits earned by the recognized start-ups which are eligible having granted inter-ministerial board certificate are exempted from income tax for three consecutive years. This tax benefits for start-ups in India is given to facilitate business growth as well as cate to the working capital requirements during the initial years.
TAX EXEMPTION ON INVESTMENT ABOVE FAIR MARKET VALUE:
Well, this is a significant tax benefit for start-ups in India of the Start-up India Mission scheme as in case a start-up has inter-ministerial board certificate and receives consideration from the issue of shares exceeding the face value of such shares, the consideration up to Rs. 10 crores received from such shares exceeding the fair market value of such shares is exempted from tax.
EASY WINDING UP OF COMPANY:
A significant name of start-ups is fast track firms which can be wound up within 90 days as against 180 days for other companies. This mission eases the process and a step ahead an insolvency professional shall be appointed for liquidating the assets and paying creditors. This would be done within six months of applying to make such an exit.
START-UP PATENT APPLICATION AND IPR PROTECTION:
Most start-ups have their foundation based on innovation and their intellectual property thus become very important. The advantage of Start-up India Mission is that it provides high-quality intellectual property services and resources to help start-ups protect and commercialize their IPRs.
IMPACT: This includes fast-tracking of Start-up patent application, providing 80% rebate in filing of patents as compared to other companies, providing 50% rebate in filing of trademarks as compared to other companies, the panel of facilitators to help in filing of IP applications, and government support to bear facilitation costs.
RELAXATION IN PUBLIC PROCUREMENT NORMS:
Public procurement, a process by governments and state-owned enterprises purchase goods and services from the private sector. Now, according to the start-up India mission, to offer a chance to start-ups and meet quality and technical specifications all government of India departments, ministries and PSUs have been given authority to ease the norms with regards to public procurements.
IMPACT: This allows a start-up to avail exemptions on earnest money deposit, prior turnover, and experience requirements in case of government tenders. This mission also offers start-ups can get listed as sellers on Indian Government’s largest e-procurement portal that is Government– Marketplace (GeM)
SIDBI FUND OF FUNDS: SIDBI or the Small Industries Development Bank of India, a development financial institution managed the government of India has set aside a corpus fund of Rs. 10,000 crore. This fund is managed by SIDBI and is intended to provide equity funding support for the development and growth of innovation-driven enterprises. The nature of such a corpus is a fund of funds which means that the government contributes towards the capital of SEBI registered funds which further invest in start-ups.
DOWNLOAD START-UP INDIA APP AND GET STARTED!
Well, the Start-up India Scheme launched by the central government has been solely dedicated to boosting job creation and entrepreneurship as the government intends to give a host of tax benefits, make compliance easy, fast track IPR tracking and offer another set of benefits to support entrepreneurs can focus on their core business and do not have any regulatory burden. To know about the start-up app download or how to open a Start-up in India, visit https://www.startupindia.gov.in/