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A startup is a fledgling business in the initial stages of development, typically founded by entrepreneurs seeking to develop a unique product or service and bring it to market. Startups generally have a limited operating history, small employee count, market uncertainty, as well as lack of profitability and sustainability during the early founding years. The goal of a startup is to disrupt industries or create completely new markets through innovation.
**NOTE: Please see Gazette Of India For Start-up Registration**
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Startup registration in India has been gaining momentum with various government initiatives to foster innovation and entrepreneurship. India has emerged as the third largest ecosystem for startups globally.
The process enables founders to gain official recognition from authorities like DPIIT based on criteria such as less than 10 years of incorporation, annual turnover below 100 crore rupees etc. Registration opens opportunities like self-certification compliance, IPR fast tracking and easier public procurement access. It also grants exemptions on income tax and labor law inspirits.
Further it facilitates applying for grants, subsidies and venture capital funding offered by GOI’s Startup India scheme and other programs. Overall, registration brings strategic benefits in addition to an official affirmation of being a startup entity in India.
Here are some of the important terminologies related to startups:
Understanding these key terms helps navigate the startup landscape more effectively for entrepreneurs as well as professional services advising them.
The documents required for startup registration in India can vary depending on the type of startup entity you choose (Private Limited Company, LLP, Registered Partnership) and whether you want to apply for the Startup India recognition program. Here’s a general breakdown:
Essential Documents for Company Registration:
PAN card of all directors/partners: This is a unique 10-digit alphanumeric number issued by the Indian Income Tax Department
Aadhaar card of all directors/partners: This is a 12-digit unique identification number issued by the Government of India.
Digital Signature Certificate (DSC) of one director: This allows for electronic signing of documents required for registration.
Memorandum of Association (MoA): This outlines the company’s objectives and powers.
Articles of Association (AoA): This defines the internal rules and regulations of the company
Proof of registered office address: This can be a rental agreement, electricity bill, or property tax receipt.
Registration Certificate of your startup: This proves your company’s legal existence.
Proof of funding (if any): This could be investment agreements, bank statements, or convertible notes.
Authorization letter of the authorized representative: This person will be authorized to submit the application on behalf of the startup.
Proof of concept:This could be a pitch deck, website link, or video showcasing your idea and progress.
Patent and trademark details (if any):This demonstrates intellectual property protection.
List of awards or certificates of recognition:This highlights achievements and validation.
NSIC Registration: Required for businesses in specific industries.
Factory License:Necessary for manufacturing units.
CDSCO Registration: Mandatory for companies dealing with drugs and cosmetics.
GST Registration:Applicable for businesses exceeding a certain turnover threshold.
The good news is that there are no direct government fees for registering a startup in India! The Startup India initiative aims to make the process as streamlined and affordable as possible for emerging businesses. You can register your startup entity (Private Limited Company, LLP, etc.) through the Ministry of Corporate Affairs (MCA) portal completely free of charge.
However, there may be indirect costs associated with the process, such as:
Professional fees:If you choose to use a consultant or chartered accountant to help you with the registration process, they will charge their professional fees.
Digital Signature Certificate (DSC):You will need a DSC for one director to electronically sign documents, which typically costs around Rs. 500 to Rs. 1000.
Stamp duty and registration charges: These vary depending on the state and company type, but are usually minimal.
Additional fees for specific registrations: If you require licenses or registration for specific industries (NSIC, FSSAI, etc.), there may be associated fees
Professional Charges:Similar to general registration, consultants may charge fees for assisting with the recognition application process.
Facilitation Fees: The government covers the fees for facilitators assisting with intellectual property filings like patents, trademarks, or designs. However, you might need to pay the remaining statutory fees for these applications.
The process of recognition of an eligible entity as startup shall be as under: —
Early Stage Companies:
Entities that have been incorporated in the last 10 years with an aim to develop novel products using technological or intellectual property can apply. The startup cannot be spin-offs of established companies.
Shareholding and Ownership:
Startups owned by private limited companies or registered partnership firms or limited liability partnerships can apply for eligibility. The shareholding must show at least 51% ownership held by Indian citizens.
Activity Area Focus:
The applicant startup must be working towards innovation, development or improvement of products, services or processes in industry sectors like manufacturing, agriculture, education, healthcare etc. Service sector startups qualify for eligibility.
Prior Funding Stages:
Pre-revenue or early revenue startups that have not progressed beyond Series A funding round can explore registration for recognition and support benefits outlined under the Startup India initiative.
Revenue Criteria Qualifiers:
Only companies with an annual turnover less than ₹100 crore are eligible to be registered as a startup to enable obtaining government scheme incentives.
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Not necessarily, sole proprietorships exist, but companies offer advantages like limited liability
Private Limited Company, LLP, Partnership – depends on factors like liability & taxation.
PAN cards, Aadhaar cards, MoA, AoA, address proof, etc.
Minimal government fees, but professional charges may apply.
Usually 1-2 weeks, can vary depending on complexity.
Must be incorporated for less than 10 years, annual turnover under Rs. 100 crore, and working on innovation.
Tax exemptions, funding assistance, regulatory relaxations, etc.
Online application on Startup India portal, submit supporting documents.)
Depends on the quality of your application and innovation.
You can still operate as a regular company, reapply later if criteria are met.
Not mandatory, but recommended for complex cases or assistance with Startup India recognition.
Depends on company type, income level, and specific benefits used.
Startup India website, MCA portal, legal and financial advisors, business incubators.
Delayed approvals, unclear documentation requirements, lack of funding, etc.
NKG keeps in Close communications with various Trade Commissions, Business Chambers, embassies of many countries on various existing & new Rules & Regulations of government of India
NKG has a Dedicated and Efficient team of experienced regulatory professionals who have Registered more than 2000 brands until now who can help you Plan your regulatory needs and smoothen the process for Regulatory approvals. Strategically located in New Delhi, the “regulatory “ capital of India, NKG makes a head start by following its unique time tested “Step-by- Step “ process that puts a lot of method in between the madness.
