DPIIT Certificate of Recognition for Startups
DPIIT Certificate of Recognition for Startups
To access tax benefits and easier compliance, companies have to be recognized as Startups by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Startup India initiative. Startups recognized by DIPP can avail Intellectual property Rights (IPR) related benefits such as IPR fast-tracking and more without requiring any other license from the Inter-Ministerial Board. The current article provides a brief understanding of DPIIT Certificate of Recognition for Startups.
Benefits for DPIIT Recognized Startups
The startups can avail the following benefits after obtaining the DPIIT Certificate of Recognition for Startups:
Self Certification:
- After obtaining the DPIIT Certificate of Recognition for Startups, the entity will be allowed to self-certify compliance under 3 Environmental Laws and 6 Labour Laws.
Start-Up Patent Application:
- The DPIIT recognized startups are required to pay only 80% of the fees on Patents, trademark, copyrights and design, and the fast-tracking of a patent application will be available for startups.
Easier Public Procurement Norms:
- The DPIIT recognized startups will get an opportunity to list the product on Government e-Marketplace.
- DPIIT recognized startups are exempted from submitting Earnest Money Deposit
- Exemption from Prior Experience/Turnover is provided for Start-ups in all Central Government ministries and departments.
Easy winding up of Company:
- According to the Insolvency and Bankruptcy Code, 2016, the company can be wound up within 90 days of applying for insolvency
Funds of Funds
- The startups will be eligible for Rs.10000 crore funds of funds from the Alternative Investment Funds.
Credit Guarantee fund
- The startups can avail Rs.2000 crore Credit Guarantee fund through the National Credit Guarantee Trust Company or SIDBI over 4 years
Tax Exemptions
- After obtaining the Certificate of Recognition, the startup can apply for Tax exemption under section 80 IAC of the Income Tax Act.
- The DPIIT recognized startups can apply for Angel Tax Exemption.
- After obtaining the clearance for Tax exemption, the DPIIT recognized startups are exempted from income tax for 3 consecutive fiscal years out of its first ten years since formation.
Know more about the Startup Tax Exemption under Startup India Initiative
Eligibility Criteria
The startup must meet the following eligibility criteria to avail the DPIIT Certificate of Recognition:
- Period of Existence of Entity: The Period of existence and operations of the company should not exceed 10 years from the date of formation
- Type of Entity: The DPIIT Certificate of Recognition is provided for the company which is incorporated as a Private Limited Company, a Limited Liability Partnership (LLP) or a Registered Partnership Firm.
- Annual Turnover: To get the DPIIT Certificate of Recognition, The firm should have an annual turnover of Rs. 100 crore for any of the fiscal years since its federation
- Original Entity: To avail the DPIIT Certificate of Recognition, the company should not have been incorporated by splitting up or recreating an already existing entity.
- Innovative & Scalable Entity: The entity should be working towards development or improvement of a product, process or service.
- The entity should have a scalable business model with high potential for the creation of wealth and employment. The firm should have the potential to generate employment or create wealth.
Documents Required
The documents required for the DPIIT Certificate of Recognition for Startups is listed as follows:
- Certificate of Incorporation or Registration of entity
- If the startup received any funding, the Proof of Funding need to furnish for DPIIT Certificate of Recognition for Startups
- Document of awards or recognition received by the entity
- Document of the patent published by the entity (The patent should be published in the patent journals)
- A brief description of the nature of the business. The write-up should contain the following details:
- Details of how the startup is working towards innovation
- Development of products or processes or services
- The scalability in terms of employment generation or wealth creation
Proof document for Funds
- Support letter from the central or state Government authorities or any incubator which is duly recognized by the government of India can be submitted.
- The document for funding should not be less than 20% in equity by angel funds or incubation funds
Penalty for Forged Documents
- If the ministry founds that the uploaded documents are forged, then the applicant is liable to pay a penalty of 50% of the paid-up capital of the startup with an amount of Rs.25000.
Applicable Fee
The startups are not required to pay any fee to the Ministry of Commerce and Industry for obtaining the DPIIT Certificate of Recognition for Startups.
Application Procedure to get DPIIT Certificate of Recognition for Startups
The entity should follow the below-mentioned simple steps to get the DPIIT certificate of recognition.
Incorporation of the Business
As stated above, the entity must first incorporate the business as a Private Limited Company or a Partnership firm or a Limited Liability Partnership (LLP).
Get in touch with IndiaFilings.Com to register your company.
Registering Business with the Startup India Scheme
The business needs to be registered with the Startup India Scheme to get the DPIIT certificate of recognition.
Apply for Start-up Recognition
The applicant unit need access the Start-up India Recognition portal for Register with Start-up India to get the DPIIT Certificate of Recognition for Startups.
Provide the following details in the Start-up Recognition application :
- Entity Details: Nature of Entity, Industry, Sector, Categories and Company Incorporation Number and Registration Date
- Full Address of the Entity
- Details of the Authorized Representative
- Directors or Partner Details
- Details of Intellectual Property Right
- Details of funding
- Recognition received by the entity
After providing the information related to the entity, upload the required documents.
Get the Startup Recognition Number
The DPIIT Certificate of Recognition for Startups will be issued after examination of the application and documents submitted.
Once the ministry approves the application and provides the unique startup recognition number, the startup can be registered with tax benefits.