BACKGROUND
India was once
known to be “Sone ki Chidiya” or what we call as “Golden sparrow”. India was
wealthy, prosperous nation having wide-spread business practices which can be
traced back centuries. A couple of reasons why India was known to be so are :-
Ø
Evidence of business practices
and corporate structure
Ø
Replacement of barter system
and usage of coins
India was such a
wealthy nation that the Middle-eastern rulers not once, but multiple times
visited India with the intention to loot India, which they did, on every visit.
Yet on every visit, they had the sources which could be looted. That is the
magnitude to which India was financially, economically and socially stable. But
this existed only till the time we were invaded by the British. It is during
the Colonial Raj, that the Golden sparrow lost its wings and fell to ground.
Though the British did bring in new techniques, no one can deny the loss Indian
economy faced because of it, which it is still trying to recover from.
You can take
away physical wealth of a nation like money, jewels and various other resources
of a nation and break the very back-bone of a country by damaging its economy,
which India did suffer and is still going through. However, the major requisite
for a nation to build itself back-up are its people and their talent and this
is one thing, no ruler, no British could take away from us.
After India
regained its independence, the economy was broken and so were our resources –
man resources, financial resources, geographical resources, everything. We have
been trying to build that up since then.
Over the years,
Government in India have come up with ideas and schemes which could promote
entrepreneurs to start their own business. But the framework under which a
business could be started is highly complicated, time consuming and may require
huge capital at the beginning. There are very small business which do not have
huge capital rising capacity, but have immense talent, innovation, unique ideas
and scope to excel in the business they intend to do. All they need is some
external support where the formalities to enter into the business they want to
carry is not too much to handle.
India has been
wealthy land, not only in terms of physical or material resources, but also its
human resources. Too much population having too much talent, striving to do too
much and all of this they are capable of. The major hurdle usually the upcoming
talent faces is that of lack of knowledge as to how to start their own
business, acquire resources, etc.
A prospective entrepreneur,
who may have an idea in mind , may not necessarily also know how to execute his
idea and make it good enough to enter the market.
In order to
facilitate these type of business, the Prime Minister of our Nation, Mr.
Narendra Modi has started pan-india scheme known as the “Start-up India
Scheme”.
MEANING OF STARTUP
Now, what do you
mean by a Start-up?
If you would
search “start-up Company” on Wikipedia, it gives a nice explanation. To put it
in simple words here, a start-up means when an individual or a group of people
(known as entrepreneur) gets into the activity of starting their own business
(venture) targeting a marketplace or a specific need of the public by either
creating an innovative product or service and using an innovative technique to
provide more satisfaction to needs of a customer.
In the words of Paul Graham
"a startup is a company designed to grow
fast. Being newly founded does not in itself make a company a startup. Nor is
it necessary for a startup to work on technology, or take venture funding, or
have some sort of "exit". The only essential thing
is growth. Everything else we associate with startups follows from growth.”
A start-up is
not defined just by starting a new business, it is defined by the growth it
manages to achieve over a period of time. Obviously, a nation will only benefit
when there are ventures which are successful rather than unsuccessful ones.
START-UP INDIA SCHEME
The Start-up
India scheme by our Prime Minister, is very much in tandem with the “Make in
India” concept promoted extensively by our PM. The Government had also
introduced “Ease of doing business” scheme wherein EBiz Portal was introduced which deals with ESIC and various other
payment related aspects of an organisation at one platform only.
All these steps
and schemes started by our Government, are to encourage people to come out of
their closet and explore their ideas, come up with something new and deliver to
the public at large.
OBJECTIVE OF THE SCHEME
There are
various regulatory requirements which are to be followed in order to start a
business such as labour laws, environment laws, etc. The person starting the
business has to deal with various authorities making it difficult to be able to
comply with all requirements causing a state of confusion and despair for the
person(s) trying to start a venture of its own.
The startup
india scheme provides for a single platform where the entrepreneur can fulfil
requirement with the help of one Mobile application only.
HOW WILL THE MOBILE APPLICATION WORK?
The Mobile
Application shall provide accessibility for the following:
Ø
Registering the startups with
relevant agencies of the Government such as agencies dealing in Labour and
Environmental laws.
Ø
A simple form is available for
the same. The Mobile App to have backend integration with Ministry of Corporate
Affairs and Registrar of Firms for seamless information exchange and processing
of the registration application.
Ø
Tracking the status of the
registration application and anytime downloading of the registration
certificate. A digital version of the final registration certificate shall be
made available for downloading through
the Mobile App.
Ø
Filing for compliances and
obtaining information on various clearances/ approvals/ registrations required.
Ø
Collaborating with various
Startup ecosystem partners such as venture funds, incubators, academia, mentors
etc.
HOW TO TAKE BENEFIT OF THE SCHEME AND REGISTRATION
UNDER THE SCHEME
The portal to
facilitate this scheme is hosted on startupindia.gov.in
To register
yourself as a Start-up, select on “Startup recognition” option.
This will open a
page divided into 4 horizontal sections.
a.
First section deals with entities
already registered on the portal as Startups under this scheme. As on 18th
November, 2016 midnight, there were 428 entities displayed under this scheme
under this section.
b.
Second Section is the one meant
for the entrepreneurs who want to get registered under the scheme. This section
requires you to fill in all the relevant details such as authorised signatory,
registered place of business, etc.
c.
Third Section provides formats
for Recommendation letter to be obtained from the Incubators depending upon the
type of Recommendation to be taken from the incubators which would be dependent
upon various factors such as Nature of Business, requirement of fund from
incubator or any other assistance, etc.
d.
Fourth section deals with
Validation of Startup recognition where certificate number or entity name can
be can be validated (for those registered under this scheme)
The MAIN facilitation of the scheme is highlighted in
this section in the sub-section which asks for letter of endorsement/
recommendation. This endorsement can be done by an entity registered as
Incubator under this scheme of the Government on this same portal.
Thus, this scheme provides a platform for a fresh
entity to obtain a sponsor/ endorsement letter from a more established company.
The said endorsement/ recommendation letter can be of following types:
a.
Recommendation (with regard to innovation nature of business), in a
format specified by Department of Industrial Policy and Promotion, from any
incubator established in post-graduate college in India; or
b.
Letter of support by any Incubator which is funded (in relation to
the project) from Government of India or any State Government as part of any
specified scheme to promote innovation; or
c.
Letter of recommendation from Industry association recognised by
DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION; or
d.
Recommendation (with regard to innovative nature of business ), in a
format specified by Department of Industrial Policy and Promotion, from any
Incubator recognized by Government of India; or
e.
Letter of funding of not less than 20 percent in equity by any
Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network
duly registered with Securities and Exchange Board of India that endorses
innovative nature of the business. Department of Industrial Policy and
Promotion may include any such fund in a negative list for such reasons as it
may deem fit; or
f.
Letter of funding by Government of India or any State Government as
part of any specified scheme to promote innovation; or
g.
Patent filed and published in the Journal by the India Patent Office
in areas affiliated with the nature of business being promoted.
The list of registered Incubators is uploaded in
“Other Services” Section on the website.
CONCEPT OF INCUBATORS IN STARTUP INDIA SCHEME
An incubator
must be a registered entity falling under one of the following categories:
a)
Society (under The Societies
Registration Act, 1860)
b)
Section 8 Company (under The
Companies Act, 2013)
c)
Private Limited Company (under
The Companies Act, 2013)
d)
Public Company (under The
Companies Act, 2013)
e)
Limited Liability Partnership
(under The Limited Liability Partnership Act, 2008)
There are
various parameters under which an entity can be registered as Incubator under
this scheme which can be found here < http://startupindia.gov.in/incubator_registration.php>
ADVERTISING ON STARTUP INDIA PORTAL
There are 3
options on the icon of STARTUP INDIA SERVICES which has further three options.
Accessing this option will make you come across option of Advertising.
You may not only
register yourself as a startup, but also advertise your enterprise on the
formal website by providing details
specified in the format.
HIGHLIGHTS OF THE SCHEME
Ø
An entity shall cease to be a
startup
o
on completion of five years
from the date of its incorporation/registration or
o
if its turnover for any
previous year exceeds Rupees 25 crore.
Ø
Entity means
o
a private limited company (as
defined in the Companies Act, 2013), or
o
a registered partnership firm
(registered under section 59 of the Partnership Act, 1932) or
o
a limited liability partnership
(under the Limited Liability Partnership Act, 2002).
Ø
Turnover is as defined under
the Companies Act, 2013.
Ø
An entity is considered to be
working towards innovation, development, deployment or commercialization of new
products, processes or services driven by technology or intellectual property
if it aims to develop and commercialize: A new product or service or process,
or A significantly improved existing product or service or process, that will
create or add value for customers or workflow.
Ø
For the first year of setting
up of the Start-ups such establishments may not be inspected under any of the 4 Labour laws mentioned
above (viz. BoCWAct, ISMW Act, Payment of Gratuity Act and Contract Labour
Act).
o
These start-ups may be asked to
submit an online self-declaration instead.
Ø
Start-Ups may be allowed to
submit self-certified returns (as is being done under Shram Suvidha Portal
under these Acts for the Central sphere) under aforesaid Acts.
Ø
From the second year onwards,
upto three year from the setting up of the unit, such Start-ups may be taken up
for inspection only when very credible and verifiable complaint of violation is filed
in writing and the approval has been obtained from at least one level
senior to the inspecting officer.
Ø
Tax exemption shall be given to
persons/ entities who have capital gains during the year, if they have invested
into start-ups by mobilising such capital gains arising out of sale of their
capital assets.
OTHER SALIENT BENEFITS UNDER THE SCHEME
1.
Legal Support and Fast Tracking of Patent Examination at Lower
costs:
To promote awareness and adoption of IPRs by Startups and facilitate
them in protecting the IPRs, the start-ups will be provided access to high
quality Intellectual Property services and resources which includes fast-track
examination of patent applications and rebate in fees.
2.
Relaxed Norms for Public Procurement of Startups:
Usually, when a Government entity or a PSU floats a tender, there
are always requirement of specifies prior experience or turnover which acts as
an impedement for start-ups from participate in such tenders which are good
opportunity for any startup. Under this scheme, in order to promote start-ups,
the start-ups in manufacturing sector are exempt from such prior conditions.
However, there would be no relaxation in quality standards or
technical parameters.
3.
Fast Track-exit:
All start-ups may not succeed in their venture and may like an
easier exit route. The Indian Bankruptcy and Insolvency Code provides for
easier exit to such ventures.
4.
Tax – Exemption:
The
Profits of the Startup ventures are exempt from Income tax for a period of
three years.
CONCLUSION
The Government
has in the recent times come up with many strong initiatives for the promotion
and encouragement of not only young entrepreneurs but overall ease in business
operations is targeted by the Government. The smoother it is for business
ventures to operate legally, the more it will be beneficial to the economy of
our nation. Introduction of “Make in
India”, “Ease of Doing Business”
along with “START-UP INDIA SCHEME” are surely right steps taken towards this
goal.
Company Secretary GAURAV SHARMA+919990694230 Connect on Watts App with Gaurav Email us [email protected] Submit your guest articles for our website click here we will publish it Subscribe our Email updates like other 21,000 Members, Free/Easy/Comfortableway
