Is Your Company a Startup?
Under the Startup India initiative, eligible companies can get recognised as Startups by DPIIT, to access a host of tax benefits, easier compliance, IPR fast-tracking & and more. Learn more about eligibility and benefits below. Your company must meet the following criteria to be considered eligible for DPIIT startup recognition.
Eligibility:
- Company Age: The period of existence and operations should not exceed 10 years from the Date of Incorporation of the Company or LLP
- Company Type: Incorporated as a Private Limited Company, a Registered Partnership Firm or a Limited Liability Partnership.
- Annual Turnover: Should have an annual turnover not exceeding Rs. 100 crore for any of the financial years since its Incorporation.
- Original Entity: Entity should not have been formed by splitting up or reconstructing an already existing business.
- Innovative & Scalable
Should work towards the development or improvement of a product, process, or service and/or have a scalable business model with high potential for the creation of wealth & and employment.
Benefits:
- Self-Certification: DPIIT-recognised startups that are within 10 years of incorporation. To apply for DPIIT recognition, click on www.lexproadvice.com
- Startup Patent Application and IPR application:
- Fast-tracking of Startup Patent Applications: Patent applications filed by startups shall be fast-tracked for an examination so that their value can be realized sooner.
- Panel of facilitators to assist in the filing of IP applications: For effective implementation of the scheme, a panel of “facilitators” shall be impaneled by the Controller General of Patents, Designs and Trademarks (CGPDTM), who shall also regulate their conduct and functions. Facilitators will be responsible for providing general advisory on different intellectual property as well as information on protecting and promoting intellectual property in other countries.
- Government to bear facilitation cost: Under this scheme, the Central Government shall bear the entire fees of the facilitators for any number of patents, trademarks, or designs that a Startup may file, and the Startups shall bear the cost of only the statutory fees payable.
- Rebate on filing of application: Startups shall be provided an 80% rebate in filing of patents vis-a-vis other companies. This will help them pare costs in the crucial formative years
- Tax Exemption 80IAC: Eligible startups can be exempted from paying income tax for 3 consecutive financial years out of their first ten years since incorporation.
- Section 56 Examination:
- Exemption under Section 56(2)(VIIB) of Income Tax Act
- Investments into eligible startups by listed companies with a net worth of more than INR 100 Crore or turnover more than INR 250 Crore shall be exempt under Section 56 (2) VIIB of the Income Tax Act
- Investments into eligible Startups by Accredited Investors, Non-Residents, AIFs (Category I), & listed companies with a net worth more than 100 crores or turnover of more than INR 250 Crore, shall be exempt under Section 56(2)(VIIB) of Income Tax Act
- Consideration of shares received by eligible startups shall be exempt upto an aggregate limit of INR 25 Crore
- Easy Winding up Company:
- To make it easier for Startups to shut down or wind up operations, to allow entrepreneurs to reallocate capital and resources to more productive avenues faster.
- To encourage entrepreneurs to experiment with new and innovative ideas, without having to face complex and long-drawn exit processes where their capital becomes interminably stuck in the event of business failure.
- Easier Public Procurement Norms:
- Opportunity to list your product on Government e-Marketplace: Government e Marketplace (GeM) is an online procurement platform and the largest marketplace for Government Departments to procure products and services. DPIIT Recognized Startups can register on GeM as sellers and sell their products and services directly to Government entities. This is a great opportunity for startups to work on trial orders with the Government.
- Exemption from Prior Experience/Turnover: In order to promote startups, the Government shall exempt Startups in the manufacturing sector from the criteria of “prior experience/ turnover” without any compromise on the stated quality standards or technical parameters. The Startups will also have to demonstrate requisite capability to execute the project as per the requirements and should have their own manufacturing facility in India.
- EMD Exemption: DPIIT recognised startups have been exempted from submitting Earnest Money Deposit (EMD) or bid security while filling government tenders.
