In India, there are around 50,000 startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT).
With Recent government notification on DPIIT Recognition no. and the benefits one can avail from it, this is the opportunity that startups shouldn’t be missing on to avail tax benefits and many more.
Follow this article to know What is DPIIT startup Registration? How to get the Recognition number? Every query and question related to the process is covered in this article.
What is DPIIT Startup Registration?
- 1 What is DPIIT Startup Registration?
- 2 Eligibility Criteria to get Startup India DPIIT Recognition?
- 3 Benefits of DPIIT Startup Registration?
- 4 Documents Required to get DPIIT Startup Registration?
- 5 How to apply for DPIIT’s Certificate of Recognition for Startups
Start-up India is a flagship government initiative that aims to propel startup culture and build a strong and inclusive ecosystem to foster innovation and entrepreneurship in India
Companies that qualify for Startup India can be recognized as Startups by DPIIT, in order to access a host of tax benefits, easier compliance, IPR fast-tracking & more.
Eligibility Criteria to get Startup India DPIIT Recognition?
The following criteria must be met by your company in order to be considered for DPIIT startup recognition.
1. Company Age:
From the date of incorporation, the existence of the company should not exceed 10 years.
2. Company Type:
It should be organized as a Limited Company, a Registered Partnership Firm, or a Limited Liability Partnership
3. Annual Turnover:
The annual turnover should not exceed 100 crores for any of the financial years since its Incorporation
4. Original Entity:
An entity shouldn’t have been created by splitting up or reconstructing an existing business
5. Innovative & Scalable:
The entity should work towards the improvement and development of products and services and have a scalable business model which has a high potential for wealth and employment.
Benefits of DPIIT Startup Registration?
Under the Startup India Initiative, startups recognized by DPIIT can benefit from the following benefits:
- Self Certification :As a result of self-certification, startups can focus on their core business while reducing compliance costs and alleviating regulatory burdens.With the DPIIT Certificate of Recognition for Startups, the entity will be able to self-certify compliance with 3 Environmental Laws and 6 Labor Laws.The above can be achieved by simple online procedures, click here to know more.
- Startup Patent Application & IPR Application :Patents are the most efficient ways to protect new innovative ideas and a process that can level up your product or process value and the value of the company. Now gone are the days when the patent process was considered a tedious task and costly process, now with DPIIT Recognition it has become a financially viable option to protect and encourage future innovators.You can reach out to appropriate Trademark Facilitators and Patent Facilitators, depending upon your sector.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.
- Easy winding up of the Company:The company can wind up within 90 days of applying for insolvency according to the Insolvency and Bankruptcy Code, 2016.The Startup shall be assigned an insolvency professional, who shall be responsible for the company (the promoters and management shall no longer be in charge of the company), including liquidating its assets and paying its creditors within six months following such appointment.As soon as the insolvency professional has been appointed, the liquidator is responsible for the swift closure of the business, the sale of assets, and the repayment of creditors in accordance with the distribution waterfall established in the IBC. Limited liability is respected throughout this process.
- Tax Exemption Under 80İAC:An eligible startup can be exempt from paying income tax for 3 consecutive years out of the first 10 years after incorporation.
- Section 56 Exemption:Section 56 (2) VIIB of the Income Tax Act exempts investments by listed companies with a net worth of more than INR 100 Crore or turnover of more than INR 250 Crore in eligible startups.Accredited Investors, Non-Residents, AIFs (Category I), & listed companies with a net worth of over INR 100 crores or turnover of more than INR 250 crore shall be exempt from income tax under Section 56(2)(VIIB).Stocks received by startups will be exempt from taxation up to a limit of INR 25 crore
- Easier Public Procurement Norms: You will get an opportunity to list your services and product on the government e-marketplace. One might get an exemption from prior experience turnover without any compromise on technical parameters. The startup that are DPIIT recognized are also exempted from submitting Earnest Money Deposits while filing the tender.
Documents Required to get DPIIT Startup Registration?
For the DPIIT Certificate of Recognition for Startups, the following documents are required:
- Entity registration or certificate of incorporation
- A Proof of Funding for the DPIIT Certificate of Recognition for Startups is required if the startup received funding
- Documentation of awards or recognition received by the entity
- The document of the patent published by the entity (The patent should appear in the patent journals)
- A brief description of the company’s nature. The following information should be filled up in this section:
- Details on how the startup is working toward innovation
- Product development, process development, or service development
- Scalability in terms of employment or wealth creation
Proof document for Funds
- An official letter of support from the central or state government or any incubator recognized by the government of India should be submitted.
- The document for funding should have a minimum of 20% equity by angels or incubators.
How to apply for DPIIT’s Certificate of Recognition for Startups
To receive a DPIIT certificate of recognition, the entity should follow these simple steps.
Step 1: Incorporation of the Business
The business must be incorporated as a Limited Company, a Partnership firm, or a Limited Liability Partnership (LLP).
To register your company, contact IndiaFilings.Com.
Step 2: Register your business with Startup India
For the DPIIT certificate of recognition, the business needs to be registered with the Startup India Scheme.
Step 3 : Apply for Start-up Recognition
To obtain the DPIIT Certificate of Recognition for Startups, an applicant unit must access the Start-up India Recognition portal and register with Start-up India.
Step 4: Fill out the Start-up Recognition application with the following information :
- Details about the entity: Name, Industry, Sector, Category, Incorporation Number, and Date of Registration
- Entity’s full address
- Information about the Authorized Representative
- Director or partner information
- Intellectual Property Rights Details
- Funding details
- Entity receives recognition
Step 5: Upload the relevant documents to the entity after providing the required information.
Step 6: Get the Startup Recognition Number
After the application and documents submitted have been reviewed, the DPIIT Certificate of Recognition for Startups will be issued.
A startup can be registered once the ministry approves the application and provides a unique startup recognition number.
Is there any Penalty for Forged Documents for DPIIT Startup Registration?
Yes, If the ministry finds that the uploaded documents are forged, then the applicant is liable to pay a penalty of 50% of the paid-up capital of the startup with an amount of Rs.25000.
Does the DPIIT charge a fee to obtain a Certificate of Recognition for Startups?
Startups do not need to pay a fee to obtain the DPIIT Certificate of Recognition for Startups from the Ministry of Commerce and Industry.