Company incorporation in India under Startup Scheme- 9 major benefits

Private limited company registration

In India, startups are becoming very popular nowadays. Under the leadership of Honorable Prime Minister Narendra Modi, the government of India has started and promoted the startup India Scheme in year 2017. It is an initiative of Indian government to build a robust eco system which is conducive to the growth of startup business. The idea is to generate employment and drive economic growth. It also aims to empower startups to grow through new design and innovation.

 In order to be eligible for this scheme, the entity should opt for either private limited company registration or LLP registration or partnership registration.


Any existing company can also opt for above scheme however, it should be in operation for not more than 10 years from the date of its incorporation.

 


Some of the benefits of company incorporation in India under startup scheme as mentioned below:

1.       Simple Process

In India, the government has launched a special website and a mobile app for easy registration for startups. If any person wants to a business he or she has to fill up the simple forms and upload minimal documents for it. All the process is completely online and hassle-free.

2.       Reduction in Cost

The Government of India provides lots of benefit for trademarks and patents. It also provides high-quality Intellectual Property Right Services including fast examination of patents at lower fees. So startups will enjoy an 80% reduction in the cost of filing.

3.       Tax Holiday

                Startups will be exempted from income tax for 3 years if they provided a certificate from Inter-Ministerial Board (IMB).

4.       Special Benefits

 

Ø  Startups in the manufacturing sector is exempted from the criteria of ‘prior experience’ or ‘turnover’. This has to be done without any relaxation in quality standards or technical parameters with regards to the government.

Ø  Guaranteed funds through National Credit Guarantee Trust Company or SIDBI over 4 years

Ø  No inspection will be for the first three years regarding labour laws.

Ø  Self-compliance and Self-certify under 3 Environment Laws

Ø  Closure/Winding up will be a quicker process – Just in 90 days.

 

5.       Registration Benefits

 

The government launched a mobile app on 1 April 2016 along with a portal to allow companies to register in a single day. There is a single-window clearance for all clearances, approvals, and registrations, which will make the process easier for all.

 

6.       Financial Benefits

 

            Startups will get an 80% rebate on the patent as well as trademark costs. This means, that if and when a startup applies for a patent, the government will come to its aid by funding the defense of the patent. The company will get a rebate of 80% on the fees. Moreover, the government will also pay the fees of  the facilitator and help to obtain the patent. Patent registration and protection of Intellectual Property Rights (IPRs) will be faster and the process is very simple.

 

7.      Easy Exit

 

If any startup wants to exit, then a startup can close it business within 90 days from the date of application of winding up.

 

8.      Easy access to Funds

 

                A 10,000 crore rupees fund is set up by the government to provide funds to the startups as venture capital.  The government is also giving guarantees to the lenders to encourage banks and other financial institutions for providing venture capital.

 

9.      Apply For Tenders

 

Startups can easily apply for government tenders. They are exempted from the “prior experience/turnover” cases criteria applicable for normal companies as it has to answer the government tenders.

 

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