Startup India Recognition

Startup India is an Indian Government initiative that is intended to build a strong eco-
system for nurturing innovation and startups in the country to drive sustainable
economic growth and generate large scale employment opportunities. Through this
initiative, the government aims to empower Startups to grow through innovation and
design.

The objectives of the Startup India Movement are outlined below. The action plan
envisages supporting the startups and more:

• Enhanced infrastructure, including incubation centres

• IPR facilitation, including easier patent filing
• The better regulatory environment, including the tax benefits, easier compliance,
improved setting up of a company, fastest mechanism and more.
• A goal to increase the funding opportunities
• Provide a vast networking database for the entrepreneurs and other stakeholders
in the startup ecosystem.

Eligibility Criteria
The startup must meet the following eligibility criteria to avail the DPIIT Certificate of
Recognition:

• Period of Existence of Entity: The Period of existence and operations of the

company should not exceed 10 years from the date of formation
• Type of Entity: The DPIIT Certificate of Recognition is provided for the company
which is incorporated as a Private Limited Company, a Limited Liability
Partnership (LLP) or a Registered Partnership Firm.
• Annual Turnover: To get the DPIIT Certificate of Recognition, The firm should
have an annual turnover of Rs. 100 crore for any of the fiscal years since its
federation
• Original Entity: To avail the DPIIT Certificate of Recognition, the company
should not have been incorporated by splitting up or recreating an already
existing entity.
• Innovative & Scalable Entity: The entity should be working towards
development or improvement of a product, process or service.
• The entity should have a scalable business model with high potential for the
creation of wealth and employment. The firm should have the potential to
generate employment or create wealth.
Procedure to get DPIIT Certificate
The entity should follow the below-mentioned simple steps to get the DPIIT certificate of
recognition.

Incorporation of the Business

As stated above, the entity must first incorporate the business as a Private Limited
Company or a Partnership firm or a Limited Liability Partnership (LLP).

Registering Business with the Startup India Scheme

The business needs to be registered with the Startup India Scheme to get the DPIIT
certificate of recognition.

Apply for Start-up Recognition

The applicant unit need to access the Start-up India Recognition portal for Register with
Start-up India to get the DPIIT Certificate of Recognition for Startups.

Provide the following details in the Start-up Recognition application :

• Entity Details: Nature of Entity, Industry, Sector, Categories and Company

Incorporation Number and Registration Date
• Full Address of the Entity

• Details of the Authorized Representative

• Directors or Partner Details
• Details of Intellectual Property Right
• Details of funding
• Recognition received by the entity

Get the Startup Recognition Number

The DPIIT Certificate of Recognition for Startups will be issued after examination of the
application and documents submitted.

Once the ministry approves the application and provides the unique startup recognition
number, the startup can be registered with tax benefits.

Benefits for DPIIT Recognized Startups

The startups can avail the following benefits after obtaining the DPIIT Certificate of
Recognition for Startups:
 Self Certification
After obtaining the DPIIT Certificate of Recognition for Startups, the entity will be
allowed to self-certify compliance under 3 Environmental Laws and 6 Labour Laws.

Start-Up Patent Application

The DPIIT recognized startups are required to pay only 80% of the fees on Patents,
trademark, copyrights and design, and the fast-tracking of a patent application will be
available for startups.

Easier Public Procurement Norms

• The DPIIT recognized startups will get an opportunity to list the product on
Government e-Marketplace.
• DPIIT recognized startups are exempted from submitting Earnest Money Deposit
• Exemption from Prior Experience/Turnover is provided for Start-ups in all Central
Government ministries and departments.

Easy winding up of Company

According to the Insolvency and Bankruptcy Code, 2016, the company can be wound
up within 90 days of applying for insolvency

Funds of Funds
The startups will be eligible for Rs.10000 crore funds of funds from the Alternative
Investment Funds.

Credit Guarantee fund

The startups can avail Rs.2000 crore Credit Guarantee fund through the National Credit
Guarantee Trust Company or SIDBI over 4 years

Tax Exemptions
• After obtaining the Certificate of Recognition, the startup can apply for Tax exemption
under section 80 IAC of the Income Tax Act.
• The DPIIT recognized startups can apply for Angel Tax Exemption.
• After obtaining the clearance for Tax exemption, the DPIIT recognized startups are
exempted from income tax for 3 consecutive fiscal years out of its first ten years since
formation.
 Documents Required For Startup India

Proof of Funding

In the case of funding, receiving the Proof of Funding is required for getting the Startup
Recognition Certificate.

Documents of Awards

Or any awards received by the entity

Patent documents

The patent should be published in the patent journals.

Description of Business

Write up on the brief description of business. Details of how a startup is working for innovation,
the scope of products and services, scalability in terms of employment generation or wealth.

Incorporation Certificate

Certificate of Incorporation or the registration of an entity certificate

 Company Registration in India
In India, company registration can be completed online through IndiaFilings. Private limited company
is the most common type of legal entity that is preferred by millions of Indian Entrepreneurs and
popular startups like Flipkart, PhonePe and Swiggy. A private limited company can be registered
online in less than 10 days at a very affordable price of just Rs. 7899.

What is a Private Limited Company?

A Private Limited Company (PLC) is one of the most common types of legal entityin India. Private
Limited Companies are governed by the Companies Act, 2013 and require a minimum of 2 Directors
and 2 Shareholders with one of the Directors being an Indian Resident and Indian Citizen.

To register a company in India, the following are minimum requirements:

• 2 Directors – 1 Person should be an Indian National and Indian Resident

• 2 Shareholders – The Directors can be shareholders
• Registered Office in India

100% Foreign Direct Ownership (FDI) is permitted in most sectors in India and there is no restriction
on foreign shareholding of a private limited company. Hence, most foreign subsidiaries are
established in India as private limited company.

Documents Required for Company Registration

The proposed directors of a private limited company must present the following documents as proof
of identification in order to register a company:

Indian Nationals: PAN card mandatory

Foreign Nationals: Passport is mandatory

In addition to the above document, the Directors must submit one of the following documents that
contain the address of the Director.

Indian Nationals: Passport / Driver’s License / Election ID / Ration Card / Aadhar ID

Foreign Nationals: Drivers License / Bank Statement / Residence Card

Finally, as proof of residency, the prospective Directors must produce one of the following
documents. This document must have been generated within the last two months:

Indian Nationals: Bank Statement / Electricity Bill / Phone Bill

Foreign Nationals: Bank Statement / Electricity Bill / Phone Bill

If one of the company's shareholders is a company based in India or abroad, the following
documents must be submitted:

• Board resolution authorizing investment in the company

• Incorporation Certificate of the Company
• Address proof of the company

Capital Required to Start a Company

A company can be started in India with a very minimum amount of capital. There is no fixed amount
and the shareholders of the company being incorporated can determine the capital they wish to
contribute. While setting up the capital structure of the company, the following are some of the
concepts to be kept in mind:

Face Value of Share: The face value of a share is the price per share with which the company is
incorporated. Normally, the face value of share is Rs. 1 or Rs. 10 or Rs. 100 or Rs. 1000 or Rs.
10,000.

Authorised Capital: Authorised capital is the total value of shares a company can issue to
shareholders. Normally, all companies are incorporated with an authorized capital of Rs. 1 lakh or
Rs. 10 lakhs. If a higher authorized capital is required, the company would be required to pay
additional fees to the Ministry of Corporate Affairs. The authorised capital of a company can be
increased at any time after incorporation.

Paid-up Capital: Paid-up capital of a company is the number of shares issued to shareholders for
which they have paid or deposited money to the company. Paid-up capital of a company cannot be
more than the authorized share capital of the company.

Company Registration Process

The following are the steps involved in registering a company in India:

Step 1: RUN Name Approval

An application for company name approval is first submitted to the Ministry of Corporate Affairs to
reserve the company name. In the name approval application, 1 or 2 names with business objectives
can be submitted. If a name approval is rejected, 1 or 2 more names can be resubmitted. Normally,
the MCA approves all name approval applications in less than 5 working days.

Step 2: Digital Signature for Directors

In India, the Ministry of Corporate Affairs does not allow wet signatures. All signatures for filings with
the MCA must be completed with a digital signature that is issued by a Certification Authority in
India. Hence, digital signatures are mandatorily required for the Directors before incorporation.

Digital signature for the Directors will be obtained through an Authorized Certifying Authority by
IndiaFilings. To obtain Digital Signature, the Directors will have to submit a copy of their identity
proof and complete a video KYC process. If the Director is a foreign national, the passport and other
documents submitted must be apostilled by a local embassy.

Step 3: Incorporation Application Submission

Once the digital signatures are obtained, the incorporation application can be filed in SPICe Form to
the MCA with all relevant attachments. Along with the incorporation application, the Memorandum of
Association (MOA) and Articles of Association (AOA) of the company are filed. If the MCA finds the
incorporation application to be complete and acceptable, the Incorporation Certificate is granted
along with PAN of the company. The MCA normally accepts all incorporation applications in less
than 5 working days.

Private Limited Company Compliances

Once a company is registered in India, various compliances must be maintained from time to time to
avoid penalties and prosecution. The following are some of the compliances a company would be
required to complete after company registration:

Auditor Appointment: All companies registered in India must appoint a practicing and licensed
Chartered Accountant registered with the ICAI within 30 days of incorporation.

Director DIN KYC: All persons who hold a Director Identification Number (DIN) – which is allocated
during the incorporation process must complete DIN KYC each year to validate the phone and email
address on record with the Ministry of Corporate Affairs.

Commencement of Business: Within 180 days of incorporation, the company must open a Bank
Current Account and the shareholders must deposit the subscription amount mentioned in the MOA
of the company. Hence, if the company was to be incorporated with a paid-up capital of Rs. 1 lakh,
then the shareholders must deposit Rs. 1 lakh in the Company’s bank account and file the bank
statement with the MCA to obtain a commencement of business certificate.

MCA Annual Filings: All companies registered in India must file a copy of the financial statements
with the Ministry of Corporate Affairs each financial year. If a company is incorporated between
January – March, the company can choose to file the first MCA annual return as a part of the next
financial year’s annual filing. MCA annual return consists of Form MGT-7 and Form AOC-4. Both
these forms must be digitally signed by the Directors and a practising professional.

Income Tax Filing: All companies must file an income tax return using Form ITR-6 each financial
year. Income tax filing must be done for each financial year before the due date – irrespective of the
incorporation date. The income tax return of a company must be digitally signed using one of the
Director’s digital signature.

Registered Office of Company

All companies registered in India are required to maintain a registered office in India. The registered
office must have a board with the name of the company and should be a place where notice or
communication if any can be served. Hence, the registered office of a company cannot be vacant
land or under construction premises.
After incorporation, the registered office of a company can be changed if required. In case the
registered office is changed within the same city or same Registrar of Company, the process can be
completed easily. In case the registered office of a company is changed from one state to another,
the process would be longer and more cumbersome.

GST Registration after Company Registration

During the company registration process, the Directors can opt to obtain GST registration along with
the incorporation. However, it is not mandatory for a company to be registered under the GST unless
certain turnover limits are crossed. You can know more about the turnover limit and process for
obtaining GST registration in our detailed guide on GST registration in India.

GO TO GST REGISTRATION
Bank Account for Private Limited Company
After company registration, a bank current account must be opened in the name of the company
within 180 days and the subscription amount must be deposited. If the above steps are not
completed, the commencement of business certificate would not be issued and a penalty would be
applicable.

The following are documents required to open bank account for a private limited company:

• Incorporation Certificate of Company

• Directors KYC Documents
• Board Resolution Authorizing the Directors to open Bank Account
• Address Proof of the Company

At IndiaFilings, we work with various banks to help our clients open a current accounts for their
companies in a seamless fashion.

Advantages of Private Limited Company

The following are the major advantages of incorporating a private limited company in India versus
other entity types.

Separate Legal Entity

A company is both a legal entity and a juristic person. Therefore, a company has broad legal rights
to like acquiring property, incurring debts, hiring people, etc. As a company is a separate legal entity,
the company's members (shareholders or directors) are not personally liable for the company's
liability.

Limited Liability
A private limited company is a separate legal entity with limited liability provisions. Therefore, the
shareholders are not liable for the losses of the company – for an amount more than what was
invested by them into the company as share capital.

Uninterrupted Existence
A company has 'perpetual succession,' which means it will continue to exist until it is legally
dissolved. Because a company is a separate legal entity, it is unaffected by the death or other
departure of any of its members, and it continues to exist regardless of membership changes.

Fund Raising
A private limited company has multiple options for fundraising. A company can raise funds from
shareholders, investors, angels, venture capital funds, private equity funds, foreign funds, NBFCs,
banks and other financial institutions. Only a company can raise debt and equity funds from
investors.

Disadvantages of Private Limited Company

While a company has various advantages, registering a company may not be ideal for all
entrepreneurs due to the following reasons:

Compliances
A company has to mandatorily maintain various compliances irrespective of business turnover or
activity. Hence, operating a company involves a minimum recurring cost each year.
Directors: Indian Nationals
The following documents are mandatory for Indian Nationals for incorporation of company in
India:

PAN Card: PAN Card copy of the proposed Directors of the Company will be required for Company
Registration. PAN or Permanent Account Number is a unique identification number issued by the
Department of Income Tax in India. It is mandatory for Directors who are Indian Nationals to submit
PAN during the incorporation process.

Note: The name on the PAN Card will be used by the Ministry of Corporate Affairs for all matters
pertaining to the company. Hence, in case of mistake in the name mentioned in the PAN Card or
name change due to marriage or any other reason, the PAN Card must be first changed. Click
here to know about procedure for PAN Card name change.

Address Proof: In addition to the PAN Card copy, the proposed Director must submit an address
proof. The address proof submitted must have the name of the Director as mentioned in the PAN
Card and the most current address of the Director. Further, the document must also not be older
than 2 months. The following documents are acceptable address proof for Indian Nationals.

• Passport
• Election Card or Voter Identity Card
• Ration Card
• Driving License
• Electricity Bill
• Telephone Bill
• Aadhaar Card

Residential Proof: In addition to the address proof, a residential proof must be submitted during the
incorporation of the Company to validate the current address of the Director. As applicable for
address proof, the residential proof must also contain the name of the Director as mentioned in the
PAN Card and must not be older than two months. The following documents are acceptable
residential proof:

• Bank Statement
• Electricity Bill
• Telephone Bill
• Mobile Bill

Director: Foreign Nationals

The following documents are mandatory for Foreign Nationals for incorporation of company
in India:

Passport: In case of Foreign Nationals, Passport is a mandatorily required as a proof of identity.

The Passport must also be Notarized or Apostilled in the country it was issued. In case the
document is in foreign language, then it must be translated by an official translator to English and
notarized or apostilled. Further, if the Passport does not contain date of birth of the holder, then an
additional document indicating the date of birth of the Director must be provided, duly certified or
attested or notarized or apostilled.

Address Proof: In addition to the Notarized or Apostilled Passport copy, the proposed Director must
submit an address proof which is also notarized or apostilled. The address proof submitted must
have the name of the Director as mentioned in the Passport and the most current address of the
Director. Further, the document must also not be older than 1 year for foreign nationals. The
following documents are acceptable address proof for Foreign Nationals.

• Driving License
• Residence Card
• Bank Statement
• Government issued form of identity containing address.

In case the document is in a foreign language, then it must be translated by an official translator and
notarized or apostilled.

Residential Proof: In addition to the address proof, a residential proof must be submitted during the
incorporation of the Company to validate the current address of the Director. As applicable for
address proof, the residential proof must also contain the name of the Director as mentioned in the
Passport and must not be older than one year. The following documents are acceptable residential
proof:

• Bank Statement
• Electricity Bill
• Telephone Bill
• Mobile Bill

In case the document is in a foreign language, then it must be translated by an official translator and
notarized or apostilled.

Registered Office Proof

In addition to providing identity, address and residential address for the Directors, proof must be
provided to validate the registered office address of the Company . The following documents
must be submitted as proof of registered office during the company registration process or within 30
days of incorporation of the company.

• The registered document of the title of the premises of the registered office in the name of
the company; OR
• The notarized copy of lease / rent agreement in the name of the company along with a copy
of rent paid receipt not older than one month;

In addition to the above, the following must also be provided as proof of registered office:
 • The authorization from the Landlord (Name mentioned in the Electricity Bill or Gas Bill or
Water Bill or Property Tax Receipt or Sale Deed) to use the premises by the company as its
registered office. This is usually referred to as NOC from Landlord; AND
• Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the
address of the premises in the name of the owner or document, which is not older than two
months.

Shareholder: Indian National or Foreign

National
The identity and address proof as detailed in the article must be submitted for all the shareholders of
the Company (i.e., subscribers to the Memorandum of Association (MOA) and Articles of Association
(AOA).

Shareholder: Corporate Entity or Artificial

Judicial Person
In case one of the shareholder or subscriber to the MOA and AOA is a Corporate Entity (Company,
LLP, etc.,), then Certificate of Incorporation of the Body Corporate must be attached along with the
resolution passed by the Body Corporate to subscribe to the shares of the company under
incorporation.

In addition to the above proofs and documents, a number of documents like INC-9, MOA, AOA
would be drafted by a Professional. These legal documents made specifically for the incorporation
must be signed and notarized by the promoters of the Company.
Startup Registration India – 7
Steps to Register your Startup
Updated on: May 15th, 2023
|
18 min read

Startups are booming in India. The government is also supporting young

entrepreneurs to establish startups. Startups help to boost the country's
economy. A startup is a business that offers innovative products or services
that provide solutions to a problem existing in society. A startup may also
redevelop a current product or service into something better.
Startup India
The Government of India, under the leadership of PM Narendra Modi, has
started and promoted the Startup India initiative to develop the Indian
economy, recognize and promote startups and attract talented
entrepreneurs.

Steps to Register Your Startup With

Startup India
Step 1: Incorporate your Business
You must first incorporate your business as a Private Limited Company or
a Partnership firm or a Limited Liability Partnership. You have to follow all the
normal procedures for registration of any business like submitting the
registration application and obtaining the Certificate of
Incorporation/Partnership registration.

You can incorporate a Private Limited Company or a Limited Liability Partnership

(LLP) by filing the registration application to the Registrar of Companies (ROC)

of your region. You can establish a Partnership Firm by filing the application for
registration of your firm with the Registrar of Firms of your area. You need to
submit the required documents and fees to the Registrar of Companies or
Registrar of Firms along with the registration application.

Step 2: Register with Startup India

Then the business must be registered as a startup. The entire process is

simple and online. Visit the Startup India website and click on the ‘Register’
button as shown below.
Enter your name, email ID, mobile number, password and click on the
‘Register’ button.
Next, enter the OTP which is sent to your email and other details like, the type
of user, name and stage of the startup, etc and click on the ‘Submit’ button.
After entering these details, the Startup India profile is created.

Once, your profile is created on the website, startups can apply for various
acceleration, incubator/mentorship programmes and other challenges on the
website along with getting access to resources like Learning and
Development Program, Government Schemes, State Polices for Startups and
pro-bono services.

Step 3: Get DPIIT Recognition

The next step after creating the profile on the Startup India Website is to avail
the Department for Promotion of Industry and Internal Trade (DPIIT)
Recognition. This recognition helps the startups to avail benefits like access to
high-quality intellectual property services and resources, relaxation in public
procurement norms, self-certification under labour and environment laws,
easy winding of company, access to Fund of Funds, tax exemption for 3
consecutive years and tax exemption on investment above fair market value.

For getting DPIIT Recognition, log in with your registered profile (account)
credentials on the Startup India website and click on the ‘Apply for DPIIT
Recognition' option under the ‘Recognition’ tab.
On the next page, click on ‘Apply as Company or LLP’ or ‘Apply as
Partnership Firm’. When clicked on the ‘Apply for Company or LLP’ button, it
will redirect to the National Single Window System (NSWS) website. Companies
and LLPs should register on the NSWS website and add form ‘Registration as
a Startup’ to get DPIIT recognition.
The ‘Startup Recognition Form’ page is as shown below.
Step 4: Recognition Application

On the ‘Startup Recognition Form’, you need to fill the details such as the
entity details, full address (office), authorised representative details,
directors/partner details, information required, startup activities and self-
certification. Click on the plus sign on the right-hand side of the form and enter
each section of the form.
After entering all the sections of the ‘Startup Recognition Form’, accept the
terms and conditions and click on the ‘Submit’ button.
Step 5: Documents for Registration

• Incorporation/Registration Certificate of your startup

• Proof of funding, if any

• Authorisation letter of the authorised representative of the company, LLP

or partnership firm
• Proof of concept like pitch deck/website link/video (in case of a
validation/ early traction/scaling stage startup)

• Patent and trademark details, if any

• List of awards or certificates of recognition, if any

• PAN Number

Step 6: Recognition Number

That’s it! On applying you will get a recognition number for your startup. The
certificate of recognition will be issued after the examination of all your
documents which is usually done within 2 days after submitting the details
online.

However, be careful while uploading the documents. If on subsequent

verification, it is found to be obtained that the required document is not
uploaded/wrong document uploaded or a forged document has been
uploaded then you shall be liable to a fine of 50% of your paid-up capital of
the startup with a minimum fine of Rs. 25,000.

Step 7: Other Areas

Patents, trademarks and/or design registration: If you need a patent for

your innovation or a trademark for your business, you can easily approach
any from the list of facilitators issued by the government. You will need to bear
only the statutory fees thus getting an 80% reduction in fees.
Funding: One of the key challenges faced by many startups has been
accessing finance. Due to lack of experience, security or existing cash flows,
entrepreneurs fail to attract investors. Besides, the high-risk nature of
startups, as a significant percentage fail to take off, puts off many investors.

In order to provide funding support, the Government has set up a fund with an
initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a
period of 4 years (i.e. INR 2,500 crore per year). The Fund is in the nature of
Fund of Funds, which means that it will not invest directly into Startups, but
shall participate in the capital of SEBI registered Venture Funds.

Self Certification Under Employment and Labour Laws: Startups can self
certify under labour laws and environment laws so that their compliance costs
are reduced. Self-certification is provided to reduce regulatory burden thereby
allowing them to focus on their core business. Startups are allowed to self-
certify their compliances under six labour laws and three environment laws for
a period of 3 to 5 years from the date of incorporation.

Units operating under 36 white category industries as published on the

website of the Central Pollution Control Board do not require clearance under
3 environment-related Acts for 3 years.

Tax Exemption: Startups are exempted from income tax for 3 years. But to
avail these benefits, they must be certified by the Inter-Ministerial Board (IMB).
The Startups incorporated on or after 1st April 2016 can apply for the income
tax exemption.
Key Features of the Fund of Funds
• The Fund of Funds shall be managed by the Small Industries
Development Bank of India (SIDBI)

• Life Insurance Corporation (LIC) shall be a co-investor in the Fund of

Funds

• The Fund of Funds shall contribute to a maximum of 50% of the SEBI

registered Venture Funds (“daughter funds”). In order to be able to
receive the contribution, the daughter fund should have already raised
the balance 50%. The Fund of Funds shall have representatives on the
board of the venture fund based on the contribution made.

• The Fund shall ensure support to a broad mix of sectors such as

manufacturing, agriculture, health, education, etc.

It’s very easy to register as a startup thanks to the various government

initiatives.