2022-03-26 09:05:37

BASIC LEGAL ASPECTS OF A STARTUP IN INDIA

INTRODUCTION

Startups are small enterprise development on the basis of one or more economic operators; they are in the initial stages of their business in a company, with limited capital and limited experience. The government of India has taken several initiatives to encourage the growth of start-ups in order to promote entrepreneurship and employment by providing easier IPR facilitation, a favorable For start-ups located in India, we deal with a variety of obstacles such as funding, lack of skills, lack of marketing, etc.). Failure to comply with the law or a violation of the ethical standards of those startups can lead to "severe problems" such as fines, penalties, fines, license revocation, legal cost, etc.).This can have a negative impact on the reduced share capital of the startups.

WHAT IS STARTUP

Startup India program was launched on November 16, 2016. It is designed to build a strong ecosystem for the development of innovation and new ventures in the country that will drive sustainable economic growth and generate huge employment opportunities. The Indian government through this initiative aims to empower startups to grow in design and design.

The business will be considered a startup if it meets all of the following conditions:

• If it is incorporated/registered as any of the following:

Private Limited Company (as defined in Companies Act, 2013).
Partnership Firm (registered under Partnership Act, 1932).
Limited Liability Partnership (registered under Limited Liability Partnership Act, 2008).
A one-person (as that term is defined under the Companies Act, 2013).

Provided, however, that such entity is not formed by the demolition or renovation of an existing business.

At least ten years from the date of enrolment/registration, as described above.
Revenues for each fiscal year are not more than INR 100 crore.

If all of the following terms and conditions:

It does work in the direction of:

innovate with new products or processes or services, or
the development of new products or processes or services, or
improve on the existing products/processes/services

This is a scalable business model with high potential:

create jobs
create wealth

STARTUP REGISTRATION OR RECOGNITION BY THE GOVERNMENT

Startup satisfying all the above conditions can apply to be recognized by Department for Promotion of Industry and Internal Trade (DPIIT) using startup India portal https://www.startupindia.gov.in/.

Requirements for Recognition:

Certificate of incorporation/registration and PAN
Total number of directors/partners and details of each director/partner with respect to Name, Mobile Number, Email ID, and complete address
Business details in relation to the Industry, sector, and category in which it operates.
Details of the authorized representative (Name, appointment, mobile number, and email)
Number of employees including founders
Any prizes/recognition received by the business, in which case you need to upload the documents regarding the award/recognition received. What is the problem the startup is solving? It needs to be defined in 250 words.
How does your startup propose to solve the above-mentioned problem? It needs to be defined in 250 words.
What is the uniqueness of your solution? It needs to be defined in 250 words.
How does your startup generate revenue? It needs to be defined in 250 words.
Link or upload additional documents or support your application. (website link, videos, pitch deck, patents, etc). It is mandatory to provide anyone.

BENEFITS OF STARTUP RECOGNITION BY DPIIT

• PATENTS, TRADEMARKS, AND DESIGNS 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.

• FUNDING:

One of the key challenges faced by many startups has been accessing finance. Due to a lack of information, security, or cash flow, entrepreneurs are unable to attract investors. Other than that, the high risk of startups as significant percentages fail to come out, puts many investors at risk.

To provide funding, the Government has established a fund with initial funding of INR 2,500 Crore and a total amount of INR 10,000 crore over a period of 4 years. The fund is in the form of a fund, which means that it will not invest directly in the basics but will participate in SEBI's registered capital.

SELF CERTIFICATION UNDEREMPLOYMENT AND LABOR LAWS:

Startups can self-certify under labor laws and environmental laws so that their compliance costs are reduced.
Self-Certified is offered to reduce the burden of control and therefore allows them to focus on their core business. Startups are allowed to verify compliance under six labor laws and three environmental laws for a period of 3 to 5 years from the date of installation.

Units operating under 36 white sector industries as published on the Central Pollution Control Board website do not require a permit under three environmental activities for three years.

Tax Exemptions:

Initially exempt from 3 years tax. However, in order to receive these benefits they must be certified by the Inter-Ministerial Board (IMB).

Exemption under section 56 (2) (vii b) of the Income Tax Act, 1961:

Implementation will be liable for tax exemption on any investment earned in excess of the fair market value under section 56 (2) (viib) of the Income Tax Act if it meets the following conditions: Recognized by DPIIT under section 2 (iii) (a) of notice no. GSR 127 (E) dated February 19, 2019; The aggregate amount of the paid share and the start-up premium after the proposed issuance or disbursement, if any, does not exceed, twenty-five rupees.

The entity has not invested in any of the assets as described in the above-mentioned notice.

CONCLUSION

The rise of the Indians was rising mainly due to the increase in the aspirations of the educated youth. Government initiatives such as 'Make in India' and 'Startup India' aim to create an environment conducive to business growth and work to promote business facilitation in the country.