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Registration of Startup in India

Registration of Startup in India: Step-by-Step Guide

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Last Updated on May 27, 2023 by Kanakkupillai

Registration of Startup in India

In recent years, India has witnessed a surge in entrepreneurial ventures and the government’s support for startups. One crucial aspect of establishing a startup is the registration process. Registering your startup provides legal recognition and unlocks numerous benefits and opportunities. This article aims to guide aspiring entrepreneurs through registering a startup in India, highlighting the eligibility criteria, step-by-step procedure, and post-registration obligations.

What is the Startup India scheme?

The Startup India scheme is a government initiative to promote and support startups in India through various benefits, incentives, and access to funding.

Understanding Startup Registration

Startup company registration refers to establishing a new business entity and obtaining legal documentation. It provides a distinct legal identity to the startup and enables it to operate within the framework of laws and regulations. Registering a startup offers several advantages, such as access to funding, tax benefits, protection of intellectual property, and eligibility for government schemes.

Key Takeaways

  1. Registering a startup in India provides legal recognition and unlocks numerous benefits and opportunities.
  2. Benefits of startup registration include access to funding, tax incentives, intellectual property protection, and government support.
  3. Eligibility criteria for startup registration include being less than ten years old, having an annual turnover below INR 100 crore, focusing on innovation, and registering as a private limited company, LLP, or partnership firm.
  4. The step-by-step guide to registering a startup involves choosing the right business structure, obtaining a DSC and DIN, name approval and reservation, drafting MOA and AOA, filing incorporation documents, obtaining PAN and TAN, and registering for GST.
  5. Post-registration obligations include complying with statutory requirements, maintaining accurate financial records, and fulfilling tax compliance obligations.
  6. Registering a startup in India contributes to the growth of the startup ecosystem and provides a strong foundation for success.

Benefits of Registering a Startup

Registering your startup in India opens up a plethora of benefits:

  1. Access to Funding: Registered startups gain access to various funding options, including government schemes, venture capital, angel investors, and bank loans.
  2. Tax Benefits: Startups can avail themselves of tax incentives and exemptions introduced by the government to promote entrepreneurship and innovation.
  3. Intellectual Property Protection: Registration enables startups to safeguard their intellectual property rights, such as patents, trademarks, and copyrights.
  4. Government Support and Recognition: Registered startups are eligible for government schemes, grants, and incubation programs, providing essential support and recognition.

Eligibility Criteria for Startup Registration

To be eligible for startup company registration in India, your business must fulfil certain criteria:

  1. Age: The startup should be less than ten years old from the incorporation date.
  2. Annual Turnover: The annual turnover of the startup should not exceed INR 100 crore in any of the previous financial years.
  3. Innovation: The startup should work towards innovation, development, deployment, or commercialization of new products, processes, or services driven by technology or intellectual property.
  4. Entity Type: The startup must be registered as a private limited company, limited liability partnership (LLP), or partnership firm.

Step-by-Step Guide to Register a Startup

To register a startup in India, follow these step-by-step procedures:

  • Choosing the Right Business Structure: The first step is to determine the appropriate business structure for your startup. Options include private limited company, LLP, or partnership firms. Consider factors such as ownership, liability, compliance requirements, and future growth prospects before making a decision.
  • Obtaining Digital Signature Certificate (DSC): A Digital Signature Certificate (DSC) is required for online filing of documents. Obtain a DSC from a licensed Certifying Authority (CA) to ensure secure and authentic electronic transactions.
  • Acquiring Director Identification Number (DIN): Every company director needs a unique Director Identification Number (DIN). Obtain DIN by filing the DIN-1 form with the Ministry of Corporate Affairs (MCA).
  • Name Approval and Reservation: Choose a unique and suitable name for your startup and check its availability on the MCA website. Once finalized, file the RUN-LLP or INC-1 form, depending on the business structure, for name approval and reservation.
  • Drafting the Memorandum of Association (MOA) and Articles of Association (AOA): Prepare the MOA and AOA, which outline the company’s objectives, rules, and regulations. Ensure compliance with the Companies Act 2013, and consult a professional for accurate drafting.
  • Filing the Incorporation Documents: File the incorporation documents, including the SPICe form for a private limited company or LLP Agreement for an LLP, along with the required attachments and fees.
  • Obtaining Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN): Apply for a PAN and TAN with the respective authorities after incorporation. These are essential for income tax compliance and business transactions.
  • Registering for Goods and Services Tax (GST): Depending on the nature of your startup, register for GST to comply with indirect tax regulations. Determine the appropriate GST registration category and complete the online registration process.

Post-Registration Obligations

Once your startup is registered, fulfill the following post-registration obligations:

  • Compliance: Adhere to various statutory and regulatory compliance requirements, including timely filing of annual returns, financial statements, and other relevant documents.
  • Accounting and Bookkeeping: Maintain accurate financial records, conduct regular audits, and comply with accounting standards to ensure transparency and good governance.
  • Tax Compliance: File regular tax returns, comply with a tax deduction and collection provisions, and meet the obligations under GST, income tax, and other applicable tax laws.

Conclusion

Registering your startup in India is crucial to establishing a strong foundation and gaining legal recognition. It provides access to benefits, opportunities, and government support. Following the step-by-step registration process and fulfilling post-registration obligations, you can set your startup on the path to success and contribute to the thriving Indian startup ecosystem.

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FAQs

1) Can a sole proprietorship be registered as a startup in India?

No, sole proprietorships are not eligible for startup registration. Only private limited companies, LLPs, and partnership firms can be registered as startups.

2) Is it mandatory to register a startup in India?

It is not mandatory, but registering a startup offers various advantages, including legal recognition, access to funding, tax benefits, and intellectual property protection.

3) How long does it take to register a startup in India?

The registration process typically takes around 7-15 working days, depending on the accuracy and completeness of the documents submitted.

4) Can a foreign national register a startup in India?

Yes, foreign nationals can register a startup in India. However, they must comply with the Foreign Direct Investment (FDI) guidelines and fulfil the required criteria.

5) What is the cost involved in registering a startup in India?

The cost varies depending on the business structure, professional fees, government charges, and any additional services opted for during registration.

6) Do startups receive any support from the Indian government?

Yes, the Indian government provides various support schemes, grants, and incubation programs specifically designed to foster the growth and success of startups.

7) Can a startup change its business structure after registration?

Yes, it is possible to change the business structure after registration. However, the process and requirements may vary, and it is advisable to consult legal professionals for guidance.

8) Is there any specific tax benefit available for registered startups?

Yes, registered startups can avail themselves of tax benefits such as tax exemptions for a specified period, carry-forward of losses, and reduced tax rates under certain government schemes.

9) Is it necessary to have a physical office space for startup registration?

No, startups can provide their registered office address, which can be a residential or commercial address, for the purpose of registration. There is no requirement for a physical office space.

10) What is Startup India, and what is it for?

Startup India is an initiative launched by the Indian government to promote and support startups in the country. Its aim is to build a strong ecosystem that nurtures innovation, entrepreneurship, and job creation, and to make India a leading startup hub in the world. Startup India offers various benefits, including tax exemptions, funding opportunities, simplification of regulations, and networking and incubation programs to help startups realize their potential.

11) What documents do I need to register my company as an Indian Start-up?

The documents required for registering a company as an Indian startup include the Certificate of Incorporation, Memorandum of Association, Articles of Association, Director Identification Number, and Permanent Account Number. Additionally, the startup must also provide proof of registration with the Startup India initiative to avail of its benefits. It is advisable to consult legal professionals for complete guidance on the registration process and documentation requirements.

12) Which registration is best for startups in India?

The most popular and recommended registration type for startups in India is the Private Limited Company registration. This provides benefits such as limited liability, separate legal entity, access to funds, and ease of doing business. It also enables startups to avail themselves of the benefits provided by the Startup India initiative. However, it is advisable to consult legal professionals to understand the various registration options and choose the one that best suits your startup’s needs.

13) Is Startup India incorporation mandatory?

Startup India registration is not mandatory for startups in India but is highly recommended. Registering with Startup India provides various benefits, such as tax exemptions, funding opportunities, and simplification of regulations. It also helps startups to connect with other entrepreneurs, investors, and potential customers through networking and incubation programs. However, the decision to register with Startup India depends on each startup’s individual requirements and goals.

14) What is IPR in the context of startups?

IPR stands for Intellectual Property Rights. It refers to legal rights granted to individuals or businesses for their inventions, creations, or innovations, such as patents, trademarks, copyrights, and trade secrets.

15) What is the Startup India portal?

The Startup India portal is an online platform where startups can register themselves, access resources, and avail of various benefits and services offered by the government under the Startup India initiative.

16) How can I register a trademark for my startup?

To register a trademark for your startup, you can apply through the online portal of the Trademark Registry. It involves submitting the application, paying the required fees, and complying with the trademark registration process.

17) What is an incorporation certificate?

An incorporation certificate is a legal document issued by the Registrar of Companies (RoC) upon the successful registration of a company. It confirms the existence of the company as a separate legal entity.

18) How can I register a partnership for my startup?

To register a partnership for your startup, you need to draft a partnership deed outlining the terms and conditions of the partnership. This deed is then registered with the Registrar of Firms in the respective state.

19) What is GST, and how does it apply to startups?

GST (Goods and Services Tax) is a unified indirect tax levied on the supply of goods and services in India. Startups need to register for GST if their annual turnover exceeds the specified threshold. It involves filing regular GST returns and complying with GST regulations.

 

Kanakkupillai

Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.