Despite being a minuscule community, Parsis have created a niche for themselves as successful and eminent business-minds and professionals. In virtually all fields, a prominent Parsi-owned business or venture is sure to feature top of the mind. This encourages the new generation’s entrepreneurial spirit, especially now, when favourable jobs are not easy to come by. Our newspapers invariably carry advertisements of budding entrepreneurs in various fields – be it catering or tiffin services or transportation or providing tuitions or stitching or making exquisite Garas or glass-bead torans, etc.
Every Baug or Colony has numerous young individuals running a lovely business, patronised by the members of the Baug, and which grows by word of mouth. But how many of these start-ups are aware of the legalities that they must follow? How many of are looking for means to grow and expand their footprint but don’t know where to get the required financial support? Which of the popular sources of fundings should one tap – Bootstrapping, Angel Investors, Government Loans, Crowdfunding, Incubators, Venture Capital Funds, Venture Debt Funds? Where can one avail business-related support from professionals? How can mentoring help?
Not many are aware that they could benefit substantially from the schemes/programmes launched by the Central Government, such as ‘Start-up India’. The season of Spring heralds new beginnings and growth across nature. If you are an entrepreneur or on the verge of setting up your start-up, read on to gain insights that you could benefit from the ‘Start-up India’ program launched by the Government of India.
GoI’s ‘Start-Up India’ Initiative aims to catalyse the start-up culture and build a strong and inclusive eco-system for innovation and entrepreneurship in India. Launched in 2016, it offers three pillars to entrepreneurs:
- Simplification and Hand-holding: It furnishes easier compliance, easier exit process for failed startups, legal support, fast tracking of patent applications and a website to reduce information asymmetry.
- Funding and Incentives: It offers exemptions on Income Tax and Capital Gains Tax for eligible startups; a ‘Fund of Funds’ to infuse more capital into the startup ecosystem and a ‘Credit Guarantee Scheme’.
- Incubation and Industry Academia Partnerships: It enables creation of numerous incubators and innovation labs, events, competitions and grants.
To benefit from this initiative, an eligible start-up needs to apply by itself on the portal: https://www.startupindia.gov.in/ or the mobile app, using its email / mobile number by providing firstly, a copy of its Certificate of Incorporation or Registration; and secondly, a write-up about the nature of business, highlighting how it is working towards innovation, development or improvement of products or processes or services, or its scalability in terms of employment generation or wealth creation.
There is no fee charged for applying for the ‘Certificate of Recognition’ by the Department of Industrial Policy & Promotion, Ministry of Commerce & Industry (DPIIT). The start-up recognition by DPIIT for companies and LLPs is available through the National Single Window System (nsws.gov.in). To apply, create an account on NSWS or the ‘National Single Window System’ – a digital platform to guide you in identifying and applying for approvals according to your business requirements. Then, add the form ‘Registration As A Startup’. On the NSWS portal, one can also apply for a host of business approvals from the Central and State Government, including labour laws.
That brings us to the next question: Is every start-up eligible for this scheme? If not, who is? A start-up that is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership within the previous 10 years, and whose turnover is lesser than INR 100 crores in its previous financial years, may register itself under the scheme. This means that a sole proprietorship will not be eligible. Further, the start-up should be working towards innovation / improvement of existing products, services and processes and should have the potential to generate employment / create wealth. An entity formed by splitting up or reconstruction of an existing business will not be considered as a ‘Start-up’.
What are the benefits that one can avail of? A recognised Start-up can avail of a raft of benefits (including tax holidays) under this initiative. Post getting recognition, a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act. After getting clearance for Tax exemption, the Start-up can avail a tax holiday for three consecutive financial years out of its first ten years of incorporation. An exemption u/s 56 of the Income Tax Act (Angel Tax) can also be applied for and availed of. Regulatory support, legal support, Patent and trade-mark registration with rebates through facilitators, incubation, MAARG mentorship, Atal Innovation Mission, Start-up India Seed Fund Scheme are just a few of the various benefits.
A list and details of additional government schemes specifically for start-ups may be found at https://www.startupindia.gov.in/content/sih/en/government-schemes.html Lastly, recognised Start-ups can self-certify compliance of labour and environmental laws directly on https://shramsuvidha.gov.in/startup.action
If you are an entrepreneur looking to set up your own business, I hope that this article has been of use to you. This Navroz, do register yourself as a Start-Up to benefit from the government schemes. Oncoming articles will cover ‘Legal Do’s and Don’ts’ that every start-up should bear in mind.
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