What is #StartupIndia?
It is an action plan to develop entrepreneurship in the country. The aim of this action plan is to create favourable environment for entrepreneurs by providing relaxation from taxes, bank financing, creation of knowledge hubs and hence generate self-employment in India. The foundation of StartupIndia Action Plan is the Innovation of product or service or process. In order to get listed in the Action plan the startup needs to fulfill certain criteria which are listed below.
Who all are eligible?
A startup needs to satisfy all the conditions below to be eligible for listing:
The Government needs a structure of the startup. So you need to
2. Register a Limited Liability Company; or
3. Register a Partnership firm
This would mean that a sole proprietorship is rejected from becoming part of the mission.
The entity needs to be Head-quartered in India. The name suggests it all, only applicable for entities with their head office in India 😉
Time and Turnover
It should have opened less than 5 years ago and has an annual turnover of less than 25 crores including the new startups if any. This entity should not be formed by splitting up or reconstruction of an existing business.
Product / Service provided
The entity should aim to develop and commercialise:
1. New Product; or
2. New Service; or
3. New Process; or
4. Significantly improved existing product; or
5. Significantly improved service; or
6. Significantly improved process
that should create value or add value to customers or workflow
As discussed supra, the essence of the Action plan is INNOVATION and hence apart from a new product even a significantly improved product may get eligible for availing benefits.
Benefits for a Startup under #StartupIndia
So you got a startup with an INNOVATIVE IDEA which you feel will satisfy the conditions above? These benefits are for you then, read on…
1. Self-Certification Based Compliance
Removal of compliance with labour laws (like gratuity, contract labour, employee provident fund) and no inspection will be conducted by Government officials for a period of 3 years.
2. StartupIndia Hub
A one point contact for entire startup ecosystem for knowledge exchange, advises, clearances.
3. Legal support for Facilitation of Patent Registration and Trademark Registration
It is proposed that for Patent and Trademark applications the legal support shall be provided by the Government free of cost.
4. 80% Rebate on fees for filing patent applications
In order to reduce costs of startups in the initial phases of its journey a 80% rebate on fees of filing for patent application is proposed.
5. Exemption from Taxation
a. Capital Gains Exemption if invested in the Funds of Funds recognized by Government of India.
b. Startups shall be exempted from Income tax for a period of 3 years to ensure growth of startup
c. For investors making investment above Fair Market Value of shares shall be exempted.
6. Faster Exit Scheme
Though one would never want it but the Government proposes a fast exit scheme for startups within 90 days.
7. Funding support for startups with 10,000 crores financing corpus.
8. Prior Experience / Turnover criteria removed in manufacturing sector for Government Tendering and public procurements.
The eligibility criteria above was the non-compliance criteria that the entity needs to fulfill before filing an application for being listed of course there are certain compliance which come later like Certification by DIPP, Recommendation by Incubator from Post graduate Indian College, Recommendation by Incubator funded by Government of India (Government of India), Recommendation by Incubator recognized by GOI, Patent from Indian Patent Authority etc.