Startup Registration: Advantages and Requirements

Introduction

A startup is a business by an entrepreneur for validating the viability and developing the same into a scalable business model. India is seeing an enormously mushrooming number of startups and is the third-largest startup harboring nation in the world. Though the numbers seem to be inspiring and tend to have an impact on the socio-economics of the startup ecosystem, there are only a sizeable number of startups that are registered. Also, India is the second-largest nation with unregistered businesses in the world.

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The governments have taken extraordinary measures for supporting the registration of businesses and have made tremendous steps in creating awareness to the public about the benefits of registration. Governments have taken special care in the registration and growth of the startups by offering various programs and subsidies including Startup India schemes, subsidies for MSME, IP registrations, easy access to funds, easy approval for the bank loans, etc.

Advantages of Registering Startups

Registering a startup will reap lots of benefits that will ensure the smooth and effective operation of the businesses.

Some of the advantages of registering the startups include:

1. Simplified registration steps for registering startups i.e. Single form and through Startup India mobile application.
2. Inspection-free self-certified compliance to some of the labor laws, which would be a leaping step forward i.e. inherent avoidance of the license raj. No inspection will be done by the labor department for three years.
3. Registered startups with a track records have the added advantage of attracting angel investors than the unregistered ones.
4. Easy access to the startup India fund offered by the government to support and promote the growth of startups in India. Also, they can access the business loans offered by the banks in easy steps.
5. Tax exemption for a period of three years. The exemption includes the investments made by the incubators as well as the angel investors albeit with a threshold limit.
6. Relaxations in government norms for competing in the tenders floated by the government or government agencies i.e. waiver of previous experience related to the works of the tenders. Also, the government offers incentives to the startups to procure the tenders.
7. Option to start the business in an incubator set up which will not only save the costs associated with the operations of the business but also provide networking options among the businesses which will ensure knowledge transfer and efficient research and development with a shared expertise.
8. Startup India Scheme offers a nearly a 75% reduction in the government fee associated with the registration of IPRs such as patents and trademarks. Further, they offer incentives to the startup-friendly IP firms for preparing and prosecuting the IP applications i.e. startups don’t have to pay the application preparation and prosecution charges, while the firms can take their fee from the startup India scheme though at a subsidized rate.

Document Requirements for Startup Registration:

Following critical documents are required for the registration of startups:

1. Business structure such as proprietorship, Partnership, LLP, One Person Company, etc.
2. Agreements in place if the business is Partnership, LLP
3. Requirements that meet the definition of startup under DIPP notification
4. MSME and GST registrations
5. UdyogAadhaar registration
6. Name and address details of the business owner(s)
7. Place of business

IPLF and LLP Registration

The paradigm on the reputation of registered companies is always higher compared to that of the unregistered companies and the suppliers would mostly prefer the registered companies. Further, to reap the benefits of the government schemes and to build a business with a reputed name, one must register a startup.

Our team comprises highly skilled and trained legal / accounting professionals to assist in the registration of your businesses as per the needs including Startup registration and protecting your business interests.

Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana & Khurana, Advocates, and IP Attorneys.  In case of any queries please contact/write back to us at support@ipandlegalfilings.com