First of all, it is essential to understand the real meaning of a startup. Startup Company is a young firm that is beginning to develop and making its way in the market. These are usually small firms that are financed and operated by the founders of companies. Together, it is an entrepreneurial venture. The start-up firms tend to exceed their revenues because they work on developing, marketing, and testing their ideas. The Government of India has finalized the word start up and defined it as follows:-
• It is a startup firm if it has completed up to 5 years from the date of inception
• If the turnover of the company does not exceed 25 crores in the last 5 financial years
• The same works in the area of innovation, deployment, development, and commercialization as far as new products are concerned. The same can be in terms of new products, processes, and/or diversified services that are guided by technology or intellectual properties.
It is essential for a firm to register itself in order to get the recognition and applicable tax benefits. A simple process has to be followed for the registration of a firm. The government is soon going to launch an application through which online registration can be easily done. As of now, registration can be done from the portal of the Department of Industrial Policy and Promotion (DIPP). The same shall require an application form that has to be submitted with certain documents such as a recommendation in the specified format of the DIPP given from an incubator (established from a post graduate college of the country), a support letter from a central or state university to promote the incubation, and a letter of funding provided by the central or state government as a part and parcel of the specified scheme to promote incubation or innovation and other ideas. In addition, the letter of funding indicating that 20% or more equity by any incubation or angel network that is duly registered with Securities and Exchange Board of India (SEBI) that innovates the nature of the business is required.
Role of Startups in India:-
India is a hub for start-up firms and has been ranked 3rd globally. To encourage start-ups, the Indian Prime Minister Mr. Narendra Modi has come up with a declaration of “Startup India” on 69th Independence Day of the Republic of India. This is a quite futuristic, innovative, and productive approach to the Indian economy. This will not only be helpful to local entrepreneurs but also to the foreign migrators who would want to settle in this country. Startups are helpful to generate employment covering all sectors such as IT, e-commerce, manufacturing etc. According to experts, Micro, Small & Medium Enterprises (MSME) can contribute to raising the GDP to 24%, Which is almost 3 times higher than the current GDP of 3%. Hence, such start-ups can prove a masterstroke for the country as well as the Indian economy.