India saw a slew of changes in its corporate regime with the amendment in Companies Act. The introduction of the Startup India initiative by the Government of India is a major milestone. The benefits of startup India program are many and has been crucial in the growth of entrepreneurship culture in India.
It is an opportunity for the generation of employment, wealth and promotion of indigenous industries. As per a report by NASSCOM and Zinnov, India is the third-largest startup destination in the world. Startup India is an attempt to develop an ecosystem that promotes entrepreneurial spirit. There are several benefits of Startup India program.
The goals of Startup India is the development and innovation of products and services. It also seeks to increase the employment rate in India. Among other benefits of Startup India, it also seeks to provide:
a) Simplified work
b) Financial aid
c) Networking opportunities, and
d) Government tenders.
Launched on 16th January 2016, Startup India has seen a boost of innovative ideas. It has also seen unprecedented growth in the entrepreneurial spirit in the youth of the country.
Most of the startups in India get registered under the following types of companies:
- Partnership Firm
- Limited Liability Partnership Firm (LLP)
- Private Limited Company
Eligibility for Registration under Startup India
The above-mentioned company(s) are required to meet the following eligibility criteria, to be able to avail the benefits under the scheme:
- The company must be a private limited company or a limited liability partnership.
- The firm must have obtained approval from the Department of Industrial Policy and Promotion (DIPP).
- It must have a recommendation letter by an incubation.
- The firm must provide innovative schemes or products.
- It should be a new firm and not older than five years.
- The total turnover of the company should not exceed 25 crores.
- It should not be a result of any business already in existence, i.e., a company incorporated as a result of the scheme of re-arrangement.
On meeting the above eligibility criteria, a start-up can avail numerous benefits.
9 Benefits of Startup India Scheme
Here are the top 9 benefits of Startup India scheme that a business owner can avail:
A company is required to comply with various labour law compliance. Non-compliance with such laws leads to strict liability. Startups being fairly new to the eco-systems end up neglecting them.
However, to reduce regulatory liabilities, startups are allowed to self-certify compliance with nine labour and environmental laws. In such a case, no inspection will be conducted for a period of three years.
2) Tax Exemption
In a wonderful movie, the startups registered under the Startup India scheme are exempted from tax. This exemption is provided for a period of the initial three years. Any investment which is made by incubators of higher value than the market price is exempted.
Further, investments made by angel investors are also exempted under the scheme. A tax holiday for the first three years or reaching a certain threshold limit means, that the startup can completely utilize the revenues for business development purposes only.
3) Single Window Clearance from Mobile App
One of the benefits of Startup India includes giving eligible companies an option to register themselves through a single form. This can be done via Startup India mobile application. The application has a single form to allow startups to register themselves.
This app further provides startups with single-window clearances for approvals, registrations, filing compliances, etc. This is the easiest way possible for any individual to start a startup.
4) Patent Protection
If you are someone who has ever registered a patent, you will know the cumbersome process it is. However, several steps are taken under the scheme to protect valuable intellectual property. This includes a fast-track examination of patent applications.
The efforts are not just restricted to fast-track patent application. A rebate of 80% of the total value of the patent fee is also granted once the patent is filed.
5) Relaxed Norms for Public Procurement
Earlier, to go for public procurement, a company was required to have ‘prior experience’ or a ‘requisite turnover’. However, such is not the case. Startup India has paved the way for equal opportunities for both startups and experienced entrepreneurs. Now, public procurement norms have been relaxed for startups. Thereby making it easy for them to go for public procurement.
6) An Incubator Setup
The Startup India scheme includes an incubator module. This module endorses the public-private partnership. The module gives the startup the requisite knowledge and support that are required by the start-ups.
At the moment, there are 118 incubators are powering the startup ecosystem across India, helping the startup ecosystem
7) Networking Options
Under the scheme, startups get opportunities to meet other startup stakeholders at a particular place and time. These meetings are conducted as fests. These fests are conducted twice, annually.
The fests are conducted on both national and international levels. This provides startups with a great opportunity to not only seek funding but also grow and develop by looking at other startups. It also provides them with a broader perspective with their day to day activities.
8) Government Tenders
Government projects are usually large and have higher monetary incentives. However, it is fairly difficult to obtain one. The primary reason being the competitiveness involved in them.
However, under this scheme, startups are given incentives to receive government tenders. They are also not required to have any prior experience to be eligible to receive such tenders.
9) Research and Innovation Benefits
Finally, the most crucial of them all. Startup India also encourages research and innovation among those, who have an aspiration to be an entrepreneur. Proposals are in place to set up seven new research parks. These parks will ensure that facilities are provided to students and startups to research and develop their products/services.
This is a great time in India to start your own business. The benefits of Startup India are numerous and can help you to start your business. With little compliance and a lot of opportunities. Avail them at the earliest. This is the time to see your business idea to grow, develop and implement.