A start-up is a young company founded by one or more entrepreneurs for the purpose of developing a product or service and bringing it into the market.
As per the income tax rules, a start-up can be a company or a limited liability partnership (LLP) engaged in such kind of business which involves innovation, development, deployment, or commercialization of new products and services.
If you come up with an idea for a business and decide to start one, you need to follow procedures to register a company in New Delhi.
Why would we Register a Startup in New Delhi?
New Delhi, the capital of India, is one of the largest business hubs in the country. With a strong economy and a vibrant startup ecosystem, New Delhi offers immense opportunities for entrepreneurs to establish and grow their businesses. The scope of setting up a business in New Delhi can be beneficial as well as profitable for start-ups.
What are the Eligibility Criteria for Start-up Registration?
- The firm must be a Private Limited Company or a Limited Liability Partnership (LLP).
- The company remains a start-up for the first 10 years from the date of registration. Recently, the Indian government changed that to 10 years from 7 years to provide more opportunities for companies.
- The company remains a start-up when the turnover per year does not exceed Rs 100 crore limit in any of the 10 years. Once the company exceeds the limit, then it is not eligible to be known as a start-up.
- The firm should have approval from the Department of Industrial Policy and Promotion.
- A patron guarantee from the Indian Patent and Trademark Office is mandatory as a necessity.
- All the details regarding the funding must be registered with the Securities and Exchange Board of India (SEBI).
What are the Documents Required for Startup Registration in New Delhi?
- Registration Certificate of your start-up
- Details of all the Directors
- Proof of concept like pitch deck/website link/video
- Patent and trademark details (not compulsory)
- PAN Number
What are the Steps for Startup Company Registration in New Delhi?
Firstly, incorporate your business as a Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm.
Register under the Start-up India scheme of the Government.
Fill in the required details and upload documents (documents must be uploaded in PDF format only).
In India (New Delhi), start-ups do not have to pay income tax for the first 3 years, but to avail such benefits, the company must be certified by the Inter-Ministerial Board. So, in order to avail tax exemption, you need to mention it.
Next step is to self-certify the following mentioned conditions:
- You are a Private Limited Company, an LLP, or a Partnership Firm.
- Your business must be incorporated or registered in India, and the time period must not be before five years at least.
- Your company’s turnover did not exceed Rs 100 crore.
- The company must innovate something different and unique or improve the existing system.
- Your business is not a splitting-up business or any kind of reconstruction of an existing business.
Finally, you will get your recognition number upon application for the registration. You will receive the certificate of registration or incorporation only after the assigned authority reviews your uploaded documents.
What are the Benefits of Start-up Registration in New Delhi?
- By registering a company, you can limit your personal liability. Companies are also entitled to a large number of tax deductions.
- Registering the company enhances your company’s brand image, reputation, and perception in the business market.
- You can raise significant capital for your start-up business. Registering a start-up company gives you the ability to borrow and incur debt in your name.
- The biggest advantage of a start-up is that it improves employment in the country, as more and more companies come together.
So, it is advisable to register the start-up company to avail a variety of benefits.