10 Documents Required for Startup Registration in India in 2022
The Startup India was launched on 16 January 2016. Under the leadership of our prime minister, Mr Narendra Modi, the Indian government has initiated and promoted it. The overall motive of Startup India is to provide a pathway for products and services to make them resourceful and innovative. With this scheme, a considerable amount of growth is anticipated in the employment rate of India, and the list of Documents Required for Startup Registration has been updated accordingly.
Startups now can match forward to a better future of their business equipped with growth, innovation, and high-end technology. Across the board, the development of such startups of India is now in safe hands empowering them, if they avail of the Startup India Scheme.
According to one of the reports by NASSCOM and Zinnov, ‘India stands at the third position globally as a hub for startups.’ With this revealing, the entrepreneurship spirit lies in the blood of Indians.https://www.youtube.com/embed/9cukO6wpyWs
Registration of multiple startups in India is usually under three categories-
If your startup lies under any of the above categories, you are required to check your eligibility for applying to the Startup India Scheme. All you should know about the Startup India Initiative by the government of India, and the Documents required for startup registration are covered in this article.
What is Startup?
A Startup is a newly established business run by one or a group of individuals to solve a problem. When the founders find some negatives in the existing society and intend to solve the issue by creating a product or service, then such startups are formed. Most Startups focus on innovation and unique ideas, which set them apart from the rest.
A startup can also come into existence when the founders develop a unique and innovative concept. The most positive thing about a startup is that it increases the employment rate in the country as it directly results in the upcoming of more and more companies. With the growing job opportunities, the Indian government has also played their part by helping the young companies grow and sustain themselves in the Indian market by starting an initiative named “The Startup India“, which allows innovation and improve sustainable economic areas.
The Startup Eligibility Criteria
The company needs to meet the following eligibility criteria to avail all the benefits stated under the Startup India initiative.
- The company’s overall age can be five years or less or completely new.
- Approval by the DIPP – Department of Industrial Policy and Promotion is mandatory for the company.
- All the services, products, and other related schemes of the company are creative and customer-centric.
- The incorporated companies from the existing businesses aren’t eligible.
- Being a private limited company is one of the prerequisites to meet the Startup India Eligibility.
- You won’t be eligible to avail the startup India scheme benefits if your company’s total turnover exceeds INR 25 crores.
- Having a recommendation letter from an incubator is a necessity.
Procedure for Startup Registration in India
Startups must follow the beneath steps for a smooth registration process.
1. Incorporate your Business
The first step involves incorporating your startup as a Partnership firm, a Private Limited Company, or a Limited Liability Partnership. Then, strictly follow the registration regulations, including Incorporation certificate/PAN Number Verification/Partnership registration, etc.
2. Startup Registration India
The second step involves visiting Startup India’s official website and registering for Startup India. Fill the simple form, upload documents to complete the registration process. You will be asked to share an OTP and verify your email to complete the process.
You now get eligible to apply for the following-
- Learning and Development Program
- Incubator/mentorship programmes
- Government Schemes
- Website Challenges
- Pro-bono Services
- State Policies for Startups
3. GST Registration
GST Registration is required on all goods and services except Petroleum products. Goods & Service Tax (GST) is a combined tax, meaning that State and Central Indirect taxes have been merged. As a result, the entire country now operates under a uniform tax system. It replaced service tax, excise, VAT, entertainment tax, luxury tax, octroi, CST etc.
4. DPIIT Recognition
Startups need recognition from the DPIIT – Department for Promotion of Industry and Internal Trade. This step is done once you have completed the entire identity creation process on the website of Startup India. To get the recognition from DPIIT, you need to hit the ‘Dashboard’ button and further hit the ‘DPIIT Recognition’ option if you have an existing profile.
Benefits provided by DPIIT are-
- Three years Tax Exemption
- Premium level Intellectual Property Services
- Effortless Company Winding
- Self-certification in Environment & Labor Laws
- Funds Access
- Investing higher than the Market Value can lead to Tax Exemption.
- Public Procurement Norms Relief
5. Application of Recognition
You can see the ‘Recognition Application Detail’ now. On this particular page, you need the ‘View Details’ section. You can find this part just beneath the ‘Registration Details’ category. Now, look for the ‘Startup Recognition Form’ and fill it in carefully. Once you fill the form, verify it once and hit the ‘Submit’ button to proceed further.
6. Documents Required for Startup Registration
Documents required for Startup India Registration
- Director’s Complete Profile Verification Details.
- PAN Card Number
- Written Proof related to your official website, link, or pitch deck. Needed for validation, speaking, early traction, or a staged startup.
- Startup’s incorporation or Registration Certificate.
- Details about patent and trademark.
- Trademark
- Articles of Association/Incorporation
- A Non-Disclosure Agreement (NDA)
- Employee Contracts and Offer Letters
- Shareholder’s Agreement
- Bylaws
- Intellectual Property Assignment Agreements
- Founder/ Co-Founder Agreement
- Business Plan/Pitch Deck
Benefits of Startup India Registration
Startup India Initiative comes up with various benefits to motivate budding entrepreneurs. It will also promote the entrepreneurial culture more common in India.
1. Cost Reduction
The overall cost meant for the patents has been reduced by 80%. Entire facilitators will be bare by the government of India as per one of the statements provided by them. Only the remaining statutory fees are expected to be handled by the startups. The government itself provides a fearful list detailing the patent’s facilitator & trademarks. Cut down on cost is estimated for providing the services under the ‘Intellectual Property Right.’ It includes a quick patent examination at a minimum price.
2. Applying to Tender Facility
Startups of India are given the Oroville to apply for the government tenders with ease. The most satisfying part is that these startups are withdrawn from the extensive monotonous criteria where turnover or prior experience is asked.
3. Tax Exemption Facility
Startups availing of the Startup India scheme are expected to get exempted from the tax slab for three years fixed. To get exempted from tax, these startups must provide the IMB – Inter-Ministerial Board certification.
4. Increased Networking Options
The networking opportunity is seen ahead for the startups under the Startup India Scheme. The government has decided to conduct two events at least on an annual basis. These two events will be held in India as well as internationally. The budding entrepreneurs of various startups can come in front, meet up, and discuss several things that might get some good help via this medium. It will lead to massive networking in a single-day event.
5. Choosing of Investor
You, as a startup, will be given the exclusive right to choose your investor based on multiple parameters. Thus, you can easily choose between several VCs. This liberty shall make you happier about staying in your new business.
6. Investor’s Tax Saving Facility
Investors investing in the venture funds established by the government are provided with a tax-saving facility. Therefore, it is time to fit the core reasons to attract more and more investors to your existing businesses. Ideally, attracting more investors means good funding to start with all the resources required for your startup business.
7. Simple Exit Process
One of the central troubles startups face today is following the complicated pathways to exit from the business. However, with the help of a Startup India Scheme, you no longer have to worry about it. You can apply for a winding process if you plan to wind up due to several untold reasons. From the starting date of this application, you will have 90 days to wind up everything.
8. Straight Registration Process
To make the scheme reach lakhs of people, the procedure of registration is simple. Emerging Startups can register for the Startup India Initiative with the help of a mobile application or on their official website. You will be asked to fill the form and upload your documents online for verification.
9. Enhanced Research and Development Centres
The total number of R & D centres is going to increase by a massive number. Estimation of settling up the new research parks is at least seven in number. Such R & D centres are expected to prove highly beneficial. It will provide many facilities to the budding entrepreneurs for their startups in the R & D segment.
10. Direct Fund Access
The Government of India has declared an overall venture capital budget of INR 10,000 crore/- to help the startups of India. Lenders are assured that banks and other financial institutions will come in front to support venture capital.
11. Time-Saving Compliances
Compliances meant for the startups have been facilitated and eased by a significant perspective. The overall intention of doing it is to save your time, registration process, and money. With the help of three environment labour nine labour laws, Startups are given the authority to self certify compliance. It will require the mobile startup application for the same.
12. Govt. Funding Opportunity
The government sets up a 10,000 crore rupees fund to provide funds to the startups as venture capital. The government is also giving assurance to the lenders to encourage banks and other financial institutions for providing venture capital.
13. Various Govt. Scheme
The Startup India Scheme is an initiative started by the Government of India in 2016. The primary objective of Startup India is the promotion of startups, generation of employment, and wealth creation. Startup India has initiated several programs to build a strong startup ecosystem and transform India into a job creator country instead of job seekers. The Department manages these programs for Industrial Policy and Promotion (DPIIT).
Some of the schemes started by Startup India-
- Venture Capital Scheme
- Stand Up India
- Single Point Registration Scheme (SPRS)
- Small Business Innovation Research Initiative (SBIRI)
- Dairy Entrepreneurship Development Scheme
- Pradhan Mantri Mudra Yojana
- NewGen Innovation and Entrepreneurship Development Centre
- Agro Processing Cluster Scheme
- Procurement and Marketing Support Scheme
- Raw Material Assistance Scheme
Essential Legal Documents for Startups
With the drive to manifest business success, Startups often indulge themselves in legal troubles. Therefore, be ready with the list of Documents Required For Startup Registration mentioned below to avoid such legal matters.
1. Trademark
Trademarks hold the solid power to strengthen your business. Registering for a trademark and choosing a specific brand name allows you to reach your targeted audiences. However, the only struggle you could face here is from the business having a similar-sounding brand name. It could trigger them and get you into legal obligations, although it drives the attention of many people.
2. Articles of Association/Incorporation
You, as a startup, are putting yourself under considerable risk of getting pressed by the burden of legal liabilities and never-ending income tax bills by establishing only a sole proprietorship. Startup businesses often fail to understand the vitality of putting proper business structure in place. If these startups neglect the formation of a separate legal entity for their existing startups, the company’s founders put themselves under a significant threat. In the extreme case, they might end up losing their home, property, and all of their savings to date. The best solution to overcome this is to file up the Internal Revenue Service. It will save you from extensive tax obligations & other fees.
3. A Non-Disclosure Agreement (NDA)
NDA and other documents meant for startups ensure that all the confidential information between you and other parties like investors, stakeholders, third parties, etc., is secure by all ends. The role played by the NDA is quintessential if you’re dealing with potential clients, investors, and even your employees. NDA works well by providing a shield to the founder of the startup and its employees. It does so by protecting the intellectual rights of the company and its ideas.
An NDA letter determines the following things-
- Specifying time range meant for disclosing the confidential information
- Ways to handle the personal information
- Employee Contracts
- Employee Offer Letters
- Maintaining Confidentiality to the decided time
- Items included in the Confidential Information
- Owner’s Confidential Information
4. Employee Contracts and Offer Letters
The success of any business is determined by the A-level team and how well their multilevel minds are implemented. The offer letters and formal employment contracts put you and your employees on a safer side. So, if any grievance arises at a later period, this piece of document will be helpful to express your points better. It also sounds professional and makes employees know their worth and value in the company.
Things below are mentioned in the letter-
- Preset Commitments and targets
- Structure determining the reporting to the office.
- Determine in-depth Terms and conditions of employment with an employee. It includes roles, responsibilities, compensation own, predefined working hours, notice, and termination criteria.
- IP ownership of work
- A clear picture of internal policies, including timings, leaves, vacations, dressing sense, expected behaviour, etc.
- Expectations out of an employee
- Share Granting
5. Shareholder’s Agreement
The role of the Shareholder’s Agreement comes into the picture when your startup business is all set to proceed forward with the direction involving the investments made by the other firms or individual investors. It plays an essential role in defining partnerships between the multiple shareholders of the company. The value of the shareholder agreement becomes zero if the startup’s founder plans to leave the company. Now the question arises about the liabilities and overall rights of these shareholders. At this level, the shareholder agreement determines everything as a clear picture to the investors and the startup company itself.
6. Bylaws
The workplace requires a particular set of rules and regulations to maintain the decorum of the corporate place. Bylaws define such regulations and standards. In addition, bylaws make sure that each startup is working correctly. The bylaws here help you to run everything smoothly. It also allows each member of the company to voice themselves, opinions, and creative ideas whenever required. The best part of having a bylaws document is that it empowers individuals by providing voting rights. Such rights are helpful to choose the board members, leaders, and other supreme-level individuals.
7. Intellectual Property Assignment Agreements
Unlike other startups, you should look after securing your Intellectual Property Rights. Getting complete and detailed ownership of your Intellectual Property becomes of primary importance. The portfolio assessment of the startup firm plays a significant role in attracting the right set of investors. Having full ownership of electoral Property Rights is going to create a huge impact here.
The startups consider Two significant types of Intellectual Property agreements-
- Intellectual Property assignment agreement
It tells whether or not your startup is capable enough of attracting beneficial investments from potential investors.
- Technological Assignment Agreement
It is formed between startup and shareholder. Here, shareholders assign their IP to the company. It’s applicable in the case of employees creating innovative products.
8. Founders Agreement
The founder’s agreement helps to cope with the unseen future fights between the founding parties involved in the startup businesses! Signing such an agreement will define the relationship between all the company founders and specific terms and conditions. Moreover, the clash resolving clauses are also present in such documents. Forming certain boundaries and stating the functional coordination between different founding members is defined under this piece of paper. It will be highly effective to look back on this document to validate the clashes suspected to happen in the future.
9. Terms and Condition
Maintaining the website of your products or services is the core part of any business. It increases your reach to potential buyers and saves you from unseen clashes. Websites have the terms and conditions of use & clearly state the bond between a buyer and the company. It says all the limitations of liabilities, privacy policies, disclosures, jurisdiction for putting forward the clashes, copyright claims protection, and use of products from the website.
10. Business Plan/Pitch Deck
Putting the right set of the business forward by making a wholly analyzed business plan is rarely seen in startups! Due to this, they are on the verge of facing failure at some point soon in time. Apart from not stating the thoroughly examined and predefined business plan, the startups ignore ‘private limited incorporation’ and setting ‘sole ownership’ of startup businesses. Therefore, it can lead to losses and high-income tax returns in the long term.
Also Read: How to draft a legal notice: 17 Essential Pointers
Conclusion:
Startups are immensely supported by the government of India today! It is the most significant reason that more and more Indians are getting into business with each passing day; what’s better than getting the assurance that if we fall, we have somebody to catch us! It is the core reason for India being the third largest entrepreneurial spirit country.
Startups never assure the success of their business; getting the legal formalities done at the earliest is what could lend you to long-term safety. Think about having a “Draft My Documents” firm as extra help to your startup project! Sounds good. Our core experienced and highly qualified lawyers are one of a kind. We will help you with all the legal documents required and process them.
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