Issues faced while seeking Start-up India registration

03 May 2022

The Startup India initiative was announced by Hon’ble Prime Minister of India on 15th August, 2015. The Department for Promotion of Industry and Internal Trade (DPIIT), previously known as the Department of Industrial Policy and Promotion (DIPP), is the nodal agency for dealing with matters related to startups in India. To obtain the benefits of “startups'' under the Startup India initiative, as outlined above, recognition from DPIIT is necessary. DPIIT is the monitoring authority for registering all Startups under the scheme.

  1. One of the key issues that an entity, being a startup, faces is not having adequate knowledge about what qualifies as a “Startup” under the Department for Promotion of Industry and Internal Trade (“DPIIT”).  Due to lack of unawareness, many entities fail to avail the benefits applicable and attracted to them under the Startup India Action Plan prescribed vide notification No. G.S.R. 34 (E) dated January 16, 2019 issued by the Ministry of Commerce and Industry.

Under the DPIIT Scheme, an entity shall be considered as a startup:

●     Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.

●  Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded INR 100 crore

●     Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of “employment generation” or “wealth creation”.

Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup

  1. The other major concern is lack of information about the registration process, the documents required for making registrations, collating the information and documents and uploading the same on the portal. The company will need the Charter documents of the Company i.e. MOA and AOA, Certificate of Incorporation, Pitch deck of the Company, Link of the company website(optional), Intellectual Property Registration Certificates (if applicable), Proof of any funding received by the company (MCA records, capital structure of the company, bank statements etc), Aadhar card of the authorized signatory making application on behalf of the Company, Director details (DIN, PAN, Address, contact details), Company details (CIN, Address, authorized signatory details for the Company).

In order to help ease the process, here are a few things one needs to bear in mind while initiating the registration process.

  1. Preliminary process for registration:

● The Company needs to make a profile on the Startup India Portal. The registered email id will then receive an OTP and once that is confirmed the profile can be operated using the login credentials entered for registration.

● The User will have to complete the profile by adding the company specific details i.e. name of the company, CIN, the industry that the company operates, area of operation, stage of development the startup is currently at (ideation, validation early traction, scaling) etc

● The User will have to provide company specific responses to the questions basis which, at the discretion of the DPIIT, the application will be accepted/rejected or asked for clarification in case of any deficiency.

Questions on the portal:

a. Details of the innovation product/service or improvement in any existing product/service the Startup aims to create/provide

b. What is the problem that the startup aims to solve

c. How does your startup propose to solve this problem

d. What is the uniqueness of the solution provided by the startup.

e. How does startup generate revenue. Etc.

The authorized signatory signing and making application on behalf of the Company needs to be authorized by the other director/s of the Company and the same needs to be authenticated by signing a Letter of Authorisation (in the format provided on the startup India portal).

Once the application is submitted, the department will, at its discretion, approve the application of the Company.

The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife Consulting is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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