The Startup India Initiative was launched by our Indian government on January 16, 2016. The campaign was first announced by our Honourable Prime Minister, Narendra Modi during his 15th August 2015 address from the Red Fort in New Delhi.
The prime motive behind the campaign was based on the areas of handholding and simplification. It was setup to support entrepreneurs to create a remarkable startup ecosystem and through this shifting India towards creating jobs instead of seeking them. Furthermore, it encourages sustainable economic growth to provide large scale employment benefits.
There are certain benefits of Startup India Scheme:
No tax for 3 years
Recognized startups earn profits after having granted an inter-ministerial board certificate. They are likely to be exempted from the burden of income tax for 3 consecutive years. This exemption facilitates well business growth and safeguards the working capital during the initial years.
Easy roundabout of companies
Startups, commonly known as fast track firms can be wound up within 90 days. An insolvent professional must be appointed for paying creditors and liquidating the assets within 6 months of filing an application.
Exemption of invested tax beyond fair market value
In certain cases, a startup may receive consideration from the issue of shares beyond the face value of the same or might have an inter-ministerial board certificate. In that scenario, a consideration of upto 10 crore summing up from those share exceeding the fair market value of the same is considerably exempted from tax.
Self-certified environment and labour laws
Startups are allowed to self-certify their compliance under the guidelines of 3 environmental and 6 labour laws. It is for a period of 5 years starting from the date of NTT Incorporation. When such a benefit is offered, it reduces the regulatory burden and helps the startups to concentrate on their business, keeping any other external compliance costs low.
IPR protection along with startup patent application
The Startup India Initiative offers high-quality resources and intellectual property services to commercialize and protect startups with their IPRs. It contains the following:
Support from the government bearing facilitation costs
In filing of patents providing 80% rebate
Listing down facilitators to file IP applications
Offer 50% rebate in trademark filing
Fast-tracking of startup patent application
Comfortable public procurement norms
All government of India departments along with ministries and PSUs are authorized to help with the norms in regards to public procurements, so as to meet technical and quality specifications. Under this, any startup can avail exemptions on:
Earnest money deposit
Experience requirements in case of government tenders.
Now startups can easily get listed as sellers on Indian government’s largest e-Procurement portal i.e. Government Marketplace (GeM).
SIDBI fund of funds
A corpus fund of Rs. 10,000 crore has been formed by our Indian government and managed by SIDBI to provide equity funding support for the growth and development of innovation charged enterprises. The basic nature of such a fund is generally a fund of funds showing that the government contributes towards the capital of SEBI registered funds. These can in turn further help the startups to manage the initial investments.
In order to boost entrepreneurship and job productivity, this scheme was launched. Due to this scheme, the government intends to give a series of tax benefits, making the compliance easy, fast-tracking of IPR along with other sets of benefits. This, in turn, relieves the entrepreneurs to carry out their core business ideas without any regulatory burden.
The Startup India Initiative can be accessed from the website of www.startupindia.gov.in. It is registered under the Department for Promotion of Industry and Internal Trade. Under this, startups develop business immunity platforms for any kind of assistance and query resolution during this Covid-19 pandemic. Currently, there are 421,383 users on this website’s portal along with recognized 34,754 startups.
Around 40 new startups have been shortlisted into this website by July 2020. Companies are getting easily recognized as Startups by DPIIT. The period of existence and operation of a company must not exceed 10 years under this scheme. A company must be registered as a Private Limited Company, a Registered Partnership Firm. No company should have a split up the entity or reconstructed from an existing business under this scheme. They should be innovative, possess original entity, process service through a scalable business model and must have a high potential for building the foundations of wealth and employment.