Startup India : Fostering

Entrepreneurship and
Innovation

A Government of India
Initiative"
 Introduction
• A startup is a newly formed business that is typically in its
early stages of development, growth, and funding. It is
usually characterized by:- Innovation:
• Introduces a new product, service, or business model.-
• Scalability: Has potential for high growth and expansion.-
• Uncertainty: Faces risks and challenges in the market.
• Startup India is a flagship initiative
launched by the Government of India on
January 16, 2016, to promote
entrepreneurship and job creation. The
program aims to foster a supportive
ecosystem for startups in India,
enabling them to grow, innovate, and
 Central Policies
• 1. Startup India Initiative (2016): A flagship program to
promote entrepreneurship and job creation.
• 2. Make in India (2014): Aims to promote manufacturing
and entrepreneurship in India.
• 3. Atmanirbhar Bharat Abhiyan (2020): A self-reliant India
initiative to promote entrepreneurship and innovation.
 State Policies
1. Kerala Startup Policy (2016): Focuses on promoting
entrepreneurship and innovation in Kerala.
2. Telangana Startup Policy (2016): Aims to create a
vibrant startup ecosystem in Telangana.
3. Bengaluru IT and BT Policy (2017): Aims to promote
Bengaluru as a hub for IT, BT, and startups.
 Tax Incentives
• 1. Income Tax Exemption: Startups are exempt from income tax for
three years.
• 2. Capital Gains Tax Exemption: Exemption from capital gains tax
on investments made in startups.
• 3. GST Exemption: Startups are exempt from GST on certain
services.
• 4. Angel Tax Exemption: Exemption from angel tax for startups.
• 5. Tax Holiday for Startups: Eligible startups can avail a tax holiday
for three consecutive years.
 Other Incentives
• 1. Funding Support: Various funding schemes, such as the Fund of Funds for
Startups (FFS).
• 2. Mentorship and Incubation: Support from incubators, accelerators, and
mentors.
• 3. Regulatory Simplification: Simplified regulatory processes and compliance
requirements.
• 4. Infrastructure Support: Access to shared infrastructure, such as coworking
spaces and labs.

These policies and incentives aim to foster a supportive ecosystem for startups in
India, promoting innovation, entrepreneurship, and job creation.
 Registering of a company
• Step 1: Choose a Business Structure1. Private Limited
Company: Most popular choice for startups and small
businesses.
• 2. Public Limited Company: Suitable for large businesses
that want to raise capital from the public.
• 3. One Person Company (OPC): Ideal for solo
entrepreneurs.
• 4. Limited Liability Partnership (LLP): Suitable for
partnerships that want to limit their liability.
• Step 2: Obtain a Director Identification Number (DIN)1. Apply
for DIN: File Form DIR-3 with the Ministry of Corporate Affairs
(MCA).
• 2. Attach required documents: Proof of identity, address, and
photograph.

• Step 3: Register the Company Name

• 1. Check name availability: Use the MCA's name search tool.
• 2. Apply for name reservation: File Form INC-1 with the MCA.
• 3. Attach required documents: Memorandum of Association
(MOA) and Articles of Association (AOA).
• Step 4: Prepare the Memorandum of Association (MOA) and
Articles of Association (AOA)
• 1. MOA: Defines the company's objectives, scope, and powers.2.
AOA: Defines the company's rules and regulations.
• Step 5: Obtain a Certificate of Incorporation
• 1. File Form INC-7: With the MCA, along with the MOA, AOA, and
other required documents.
• 2. Pay the registration fee: As prescribed by the MCA.
Step 6: Obtain a Permanent Account Number (PAN) and Tax
Deduction and Collection Account Number (TAN)
1. Apply for PAN: With the Income Tax Department.
2. Apply for TAN: With the Income Tax Department.
• Step 7: Register for Goods and Services Tax (GST)
• 1. Apply for GST registration: With the GST portal.
• 2. Obtain a GSTIN: Goods and Services Tax Identification Number.

• Step 8: Open a Current Account1. Open a current account: With a

bank, to manage the company's finances.

• Step 9: Obtain Other Licenses and Registrations

• 1. Shop and Establishment Act registration: As required by the state
government.
• 2. Professional tax registration: As required by the state government.
• 3. Other licenses and registrations: As required by the industry or
state government.
The entire registration process can be
completed online through the MCA's
portal, and it typically takes around 10-
15 days to complete. However, the time
frame may vary depending on the
complexity of the application and the
speed of the approval process.
Services And Benefit Of Startup
India
• "Startup India" is a flagship initiative by
the Government of India aimed at
promoting entrepreneurship,
innovation, and creating jobs. Here are
the key services and benefits provided
under the program:
 1. SIMPLIFIED COMPLIANCE:
Self-certification: Startups can self-certify compliance with
labor and environmental laws.

• No inspection for 3 years: No government inspection will be

carried out for the first three years for compliance with labor
laws, except in cases of safety or environmental concerns.
• Startup India Hub: A one-stop platform for all regulatory
approvals and handholding.
2. TAX BENEFITS:
• Tax exemption on profits: Startups are eligible for a 3-year tax
holiday in the first 7 years of operations.
 • Tax exemptions on investments: Exemption on tax on
investments above market value of shares under Section
56(2)(viib) of the Income Tax Act.

• Capital Gains Tax Exemption: Exemption for capital gains

tax for investments in startups.
3. FUNDING AND SUPPORT:
• Startup India Seed Fund Scheme: Provides financial
assistance for proof of concept, product trials, market
entry, etc.
• Fund of Funds for Startups (FFS): A government fund of
INR 10,000 crore to provide funding support to startups.
 4. INTELLECTUAL PROPERTY (IP) BENEFITS:
IPR Fast-Tracking: The process of filing for patents, designs, and
trademarks is expedited, reducing costs and time for startups.

• IPR Facilitation: Assistance in filing patents and

trademarks.
5. MENTORSHIP AND NETWORKING:
• Accelerators and Incubators: Support for startups through
collaboration with incubators and accelerators.
• Networking Opportunities: Access to potential investors,
mentors, and industry leaders through various events and
programs.
 6. EASE OF DOING BUSINESS:
Single Window Clearance: Startups get easier access to
regulatory clearances and approvals through an online system.

• Faster Incorporation: Fast-tracking company registration

with fewer documentation requirements.
7. GOVERNMENT PROCUREMENT
BENEFITS:
• Relaxation in Public Procurement: Startups are provided
with relaxations in the norms related to government
tenders, making it easier for them to participate in public
procurement.
 8. SOCIAL SECURITY BENEFITS:

• Employee Provident Fund (EPF) and Employees’

State Insurance (ESI): Reduced contribution rates for
employees of startups, helping reduce their operating
costs.
These measures aim to foster a startup-
friendly ecosystem, making it easier for
new businesses to flourish, access funding, and
grow sustainably.
 Initiatives By Banking And
Financial Institution
Banking and financial institutions have been
taking various initiatives to improve their
services, ensure financial stability, and promote
inclusion. Some of these initiatives include:
1. Digital Transformation : Many banks and financial
institutions have been adopting digital technologies such as
mobile banking apps, AI, and blockchain to improve customer
service, increase efficiency, and offer innovative products.
 2. Financial Inclusion : Banks are focusing on reaching
unbanked populations, particularly in developing regions,
through mobile banking and microfinance products. This
includes offering basic savings accounts, small loans, and
digital payment services.
3. Sustainability and Green Financing : There is a growing
emphasis on sustainable finance, where financial
institutions are providing green loans, funding for
renewable energy projects, and adopting environmentally
responsible investment policies.
4. Cybersecurity Measures : As cyber threats increase,
banks are investing in advanced cybersecurity
technologies to protect customer data, prevent fraud, and
maintain trust in digital financial services.
5. Financial Literacy Programs : Institutions are promoting financial
education to help individuals and businesses make informed
decisions about budgeting, saving, investing, and managing debt.

6. AI and Machine Learning : Banks are utilizing AI for

fraud detection, risk management, customer service
through chatbots, and enhancing decision-making
processes.
7. Open Banking : This involves the sharing of customer
data (with permission) between banks and third-party
providers to create more tailored financial products and
services, fostering competition and innovation in the
financial sector.
 8. Regulatory Compliance : Banks are increasingly focusing on
adhering to stricter regulations, such as anti-money laundering (AML)
and know-your-customer (KYC) rules, to ensure a secure and
transparent financial ecosystem.

These initiatives aim to not only enhance

customer satisfaction and business
efficiency but also ensure broader access to
financial services while supporting
sustainable economic growth.