A startup is a newly established business, usually
small, started by 1 or a group of individuals. What differentiates it from other new businesses is that a
startup offers a new product or service that is not being given elsewhere in the same way. The keyword is
innovation. The business either develops a new product/ service or
redevelops a current product/service into something better.
What is Startup India?
Startups are becoming very popular in India. In order to
develop Indian economy and attract talented entrepreneurs, the Government of India, under the leadership of PM
Narendra Modi, has started and promoted Startup India initiative to recognize and promote startups.
Trusted By 20,000+ Entrepreneurs
Get Help To Launch And Manage All Business
You have to follow all the normal procedures for
registration of any business like obtaining the certificate of Incorporation/Partnership registration, PAN, and
other required compliances.
Step 2: Register with Startup India
Then the business must be registered as a startup. The entire process is
simple and online. All you need to do is log on to the Startup India website and fill up the form
with details of your business and upload certain documents.
Step 3: Documents to be uploaded (in PDF format only)
a) A letter of recommendation/supportA letter of recommendation must be submitted along with the registration form.
Any of the following will be valid-
(i) A recommendation (regarding innovative nature of
business) from an Incubator established in a post-graduate college in India , in a format specified by the
Department of Industrial Policy and Promotion (DIPP); OR
(ii) A letter of support by an incubator, which is funded (in relation to the project) by Government of India as part of any
specified scheme to promote innovation; OR
(iii) A letter of recommendation (regarding innovative
nature of business), from an Incubator, recognized by the Government of India in DIPP specified format;
(iv) A letter of funding of not less than 20% in equity,
by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network, duly registered with SEBI that
endorses innovative nature of the business; OR
(v) A letter of funding by Government of India or any
State Government as part of any specified scheme to promote innovation; OR
(vi) A patent filed and published in the Journal by the
Indian Patent Office in areas affiliated with the nature of the business being promoted.
b) Incorporation/Registration Certificate
You need to upload the certificate of incorporation of
your company/LLP (Registration Certificate in case of partnership)
c) Description of your business in brief
A brief description of the innovative nature of your
Step 4: Answer whether you would like to avail tax benefits
Startups are exempted from income tax for 3 years. But
to avail these benefits,
they must be certified by the Inter-Ministerial Board (IMB). Start-ups
recognized by DIPP, Govt. of India can now directly avail IPR related benefits without requiring any additional
certification from IMB.
Step 5: Finally, you must self-certify that you satisfy the following conditions
a) You must register your new company as a Private
Limited Company, Partnership firm or a Limited Liability Partnership
b) Your business must be incorporated/registered in
India, not before 5 years.
c) Turnover must be less than 25 crores per year.
d) Innovation is a must– the business must be working
towards innovating something new or significantly improving the existing used technology.
e) Your business must not be as a result of splitting up
or reconstruction of an existing business.
Step 6: Immediately get recognition number
That’s it! On applying you will immediately get a
recognition number for your startup. The certificate of recognition will be issued after the examination of all
However, be careful while uploading the documents. If on
subsequent verification, it is found to be obtained that the required document is not uploaded/wrong document
uploaded or a forged document has been uploaded then you shall be liable to a fine of 50% of your paid-up
capital of the startup with a minimum fine of Rs. 25,000.
Step 7: Other areas
a) Patents, trademarks and/or design registration
If you need a patent for your innovation or a
trademark for your business, you can
easily approach any from the list of facilitators issued by the government. You will need to bear only the
statutory fees thus getting an 80% reduction in fees.
One of the key challenges faced by many startups has
been accessing to finance. Due to lack of experience, security or existing cash flows, entrepreneurs fail to
attract investors. Besides, the high-risk nature of startups, as a significant percentage fail to take-off, puts
off many investors.
In order to provide funding support, Government has set up a fund with an initial corpus
of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR 2,500 crore per year). The
Fund is in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall
participate in the capital of SEBI registered Venture Funds.
Need Government recognition for your Startup?
Startup India helps you to enjoy benefits from the government
Key features of the Fund of Funds
The Fund of Funds shall be
managed by a Board with professionals from industry bodies, academia, and successful Startups.
Life Insurance Corporation (LIC)
shall be a co-investor in the Fund of Funds
The Fund of Funds shall
contribute to a maximum of 50% of the SEBI registered Venture Funds (“daughter funds”). In order to be able
to receive the contribution, the daughter fund should have already raised the balance 50%. The Fund of Funds
shall have representatives on the board of the venture fund based on the contribution made.
The Fund shall ensure support to
a broad mix of sectors such as manufacturing, agriculture, health, education, etc.
It’s very easy to register as a startup thanks to the
various government initiatives. However, you can focus on your key area while we at ClearTax help you from the
start to finish right from incorporating your company to getting your startup recognition. Do visit our website to know more about startup
FAQ on Startup Registration India
Who can register with startup India?
An entity incorporated as a Private Limited Company, Partnership Firm or a Limited Liability
Partnership can register themselves under the startup India scheme. The annual turnover of these
business entities should not exceed 100 crores, and they should have been in existence for up to
ten years from the date of its incorporation/ registration. Such an entity should be working
towards innovation, development or improvement of products or services or processes.
What are the benefits of signing up with startup India?
There are a number of benefits startups receive by the Startup India Scheme. Nevertheless, in
order to avail these benefits, an entity is needed to be set up by the DPIIT as a
Startups are allowed to self certify their compliance for six labour laws and three environment
laws. This is allowed for a total period of five years from the date of
incorporation/registration of the entity. Startups are allowed a three-year tax exemption and
the best intellectual property services and resources solely built to help startups protect and
commercialise their IPRs.
What kind of business structure should I choose for my startup?
The most preferred business structures for a startup are Private Limited companies and LLPs. A
Private Limited company is legally recognized and generally favoured by investors. However, it
has stricter compliance and may have a higher cost of incorporation.
Whereas incorporation cost is lower for LLPs and they tend to have relaxed compliance in
comparison to Pvt. Ltd. Co. In addition to that, LLPs have limited liabilities and are equally
recognised by investors and all over the world.
What can I do to attract investors for a start-up?
To attract investors, not only do you need a stellar product with a scalable model, but you also
need visibility. Make sure that your product receives healthy engagement and traction. You’ll
need to register your startup on startup India and proactively seek out investors. Make sure you
are able to effectively communicate your business idea to the investor and the sustainability of
your business model.
Can a foreign company register under the Startup India hub?
Any entity that has at least one registered office in India can register itself on the hub,
since the location preferences, for the time being, are only created for Indian states. However,
soon the government hopes to start registrations for stakeholders from the global ecosystem too.
What is the difference between an accelerator and an incubator?
Startup incubators are typically institutions that help entrepreneurs by developing their
business, especially in the initial stages. Incubation function is usually carried out by
institutions who have experience in the business and the tech world.
Startup accelerators support early-stage, growth-driven companies. These programmes usually have
a timeframe in which individual companies spend anywhere between a few weeks and a few months
working with a group of mentors who are educated and may also provide financial help.
For how long is a company recognised as a startup?
Any business entity that has completed 10 years from the date of its incorporation/registration,
and has exceeded the previous years turnover of 100 crores shall stop to be a startup on
completion of 10 years from the date of its registration/incorporation.
Can an existing entity register itself as a “Startup” on the Startup India Portal?
Yes, as per the law an existing entity can register itself as a startup, provided that it meets
the prescribed criteria for a startup. They will also be able to avail various tax and IPR
benefits that are available to startups. The criteria are the same as those mentioned in the
How do I know my registration is complete?
Once the application is complete, and the startup gets recognised, you will receive a
system-generated certificate of recognition. You will be able to download this certificate from
the Startup India portal.