Startup Registration

Eligibility Criteria
  1. Company Age: 

A Company can be recognized as Startup if 10 years have not elapsed from the date of incorporation. 

  1. Company Type: 

Following three types of entities can be recognized as Startup-  

  1. a) Private Limited Company, 
  2. b) Limited Liability Partnership Firm (LLP) and 
  3. c) Registered Partnership Firm.
  1. Annual Turnover: 

Should have an annual turnover not exceeding Rs. 100 Crore for any of the financial years since incorporation. 

  1. Original Entity: 

The entity should not have been formed by splitting up or reconstructing an already existing business. 

  1. Innovative and scalable: 

Should work towards development or improvement of a product, process or service and/or have a scalable business model with high potential for creation of wealth & employment.


Benefits of Startup Recognition

Following are the benefits of Startup Registration / Department of Promotion of Industry and Internal Trade recognition: 

1. Self-certification under 3 environmental & 6 labour laws

Startups shall be allowed to self-certify (through the Startup mobile app) with 6 labour and environment laws mentioned below. In case of the labour laws, no inspections will be conducted for a period of 3 years. Startups may be inspected on receipt of credible and verifiable complaint of violation, filed in writing and approved by at least one level senior to the inspecting officer:

The Startups may self-certify compliance in respect of following Labour Laws:

  • Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour (Regulation and Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

In order to self-certify compliance, you may log on to ‘Shram Suvidha Portal’.

2. Income tax exemption

A DPIIT recognized Startup shall be eligible to apply to the Inter-Ministerial Board for full deduction on the profits and gains from business. Provided the following conditions are fulfilled:

  • A private limited company or a limited liability partnership,
  • Incorporated on or after 1st April 2016 but before 1st April 2022, and
  • Start-up is engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation.

To apply for Income Tax Exemption on investments above fair market value received under Section 56 of Income Tax Act:

A Startup shall be eligible for notification under clause (ii) of the proviso to clause (viib) of sub-section (2) of section 56 of the Act and consequent exemption from the provisions of that clause, if it fulfils the following conditions:

it has been recognised by DPIIT under para 2(iii)(a) or as per any earlier notification on the subject aggregate amount of paid-up share capital and share premium of the startup after issue or proposed issue of share, if any, does not exceed, twenty-five crore rupees

For more details, refer to the Notification.

3. Easier public procurement norms

Governments, just like private companies, have to buy goods and services for their operational needs.

Public procurement refers to the process by which governments and state-owned enterprises purchase goods and services from the private sector. As public procurement utilises a substantial portion of taxpayers’ money, governments are expected to follow strict procedures to ensure that the process is fair, efficient, transparent and minimises wastage of public resources.

In India, public procurement (government tenders) can also present useful pilot opportunities for startups that have not yet been able to gain traction in the private sector.

Conversely, opening government tenders up to startups improves the choices available to government bodies since startups are often more agile than corporate vendors and can provide cheaper, more innovative products and services.

Government e Marketplace (GeM) is an online procurement platform for government ministries and departments, and the most widely used channel for public procurement in India.  MSMEs, DPIIT recognised startups and other private companies can register on GeM as sellers and sell their products and services directly to government entities.

GeM Startup Runway is a new initiative launched by GeM to allow startups to reach out to the universe of government buyers by offering innovative products that are unique in design, process and functionality.

4. Easy Winding-up

Winding up provisions have been eased for recognised Startup entities under Insolvency and Bankruptcy Code, 2016 to provide a mechanism to wind up the entity within 90 days.

5. Up to 80% rebate in filing patents

Rebate upto 80% of the patent application fee is provided for entities recognised as Startup. 

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