The Indian government introduced the first of its kind median between the startup community of the nation and the government that addresses all the aspects of the business ecosystem.Anand Rajendran
People who are planning to start their own business this year have to follow new rules and regulations because the government of India has taken few steps to uplift the budding entrepreneurs to start their venture in the country and thereby increase the sustainable economic growth and improve the standard of doing business in the country. It will also provide large scale job opportunities. The Indian government introduced the first of its kind median between the startup community of the nation and the government that addresses all the aspects of the business ecosystem.
The Startup India campaign is an action plan that aims at providing bank finance for the startups in India to encourage entrepreneurship and to promote job creation in the country. On August 15th, 2015 Prime Minister Narendra Modi announced the Startup campaign in his speech at the Red Fort, the main focus of the campaign is to restrict the states from the getting involved in the policy domain and to eliminate the license raj and the obstructions like foreign investment proposal, environmental clearance and land permission. It was organized by the DIPP (Department of Industrial Policy and Promotion). The Stand up India was launched on April 5th, 2016 by the Prime Minister of India to support entrepreneurship among the women and the SC and ST communities and was named as the Deen Dayal Upadhyay Swaniyojan Yojana.
Every entrepreneur faces an emotional situation while setting up a new business because it involves many criteria like the visibility, feasibility, sustainability and profitability. Every business in the market is governed by a unique set of regulations and policies; hence it is important that the business is built in such a way that it includes all the legal frameworks. A business that fails to abide by the law can face many legal disputes, penalties and creates a bad impression for the startup. The new business marketers must see to that they choose the right business that can fulfill all the legal aspects and help in improving the quality of the business standards in the country.
The startups have a good source of intellectual property, but many the blunders that they do is that they are unaware of the limitations of the law, hence they fail to protect the law in its legal aspects. The intellectual property refers to the creativity of the mind that includes the artistry, invention, literary work and the names, images, symbols and designs used in the commerce. And they are protected by the law by trademarks, patents and copyrights, which also enable them to get financial benefits and recognition for their creation and invention. By focusing on the right balance between the public interest and the amusement of the innovators, the intellectual property system can build an environment that helps to flourish the innovations and creations.
One of the biggest mistakes that most of the entrepreneurs do is that they think that by protecting their IP rights, they are saving their ideas from being used by the others, but in reality it simply protects the way in which the ideas are put across. Thus, if any business owner meets a website developer to create a site to promote their business model without any non-disclosure agreement means that the developer is not legally bound to perform the business. Thus filing the right means of protection also increases the chances of the funding. Apart from the protection laws and agreements, the Startup Law in the country is said to loosen the regulations in conditions where the startups are procuring funds.
The new entrepreneurs must checkout with the proposed tax holidays that are given to the startups to build the scalability of the business and relax the taxes that are levied on them. Normally when friends join hands to start a new venture, the responsibilities and roles get blurred. The reputation of the startup is providing the service all day long, so they have to ensure that they maintain a good rapport between the co-founders and maintain the standard of the business.
The startups must plan and organize their business strategies and taxes because it helps them to save their money and time and to discard any financial disputes in the future. The main aspects are the financing the startups and the implications because if the family and friends lend money to the startup, the startup is liable to pay the tax, since the interest payments on the loans are deductible from the tax. The startups must consider the tax consequence of the investors when they are planning the business needs to check if they are approved for the tax relief on their savings or when they sell their business share. In some cases the startups mis-classify their employees, where they classify them as independent partners to save the taxes on their payroll, but if they pay the miscellaneous income they are considered by the government as full time employees and thus the startup gets penalized.
A new startup will receive all the benefits and advantages of the government scheme under the startup India campaign if they satisfy certain conditions like the business or entity must be registered or incorporated in India and must not be more than five years since the operation. The annual turnover of the startup must not be more than twenty five lakh in any of the financial year in the past. The entity must work towards the development, innovation, commercialization and deployment of a product or service or process driven by intellectual or technological property.
Another important aspect is that the startup must not be a part of an existing business. The startups can receive the benefits of the tax only when they obtain the certificate from the Inter-Ministerial Board, which states that the startup follows all the regulations and rules of the government. The Inter-Ministerial board is setup by the Department of Industrial Policy and Promotion to validate the innovation that takes place in the business and to approve them to relish the tax benefits. There are many objectives proposed by the campaign for the Startup India scheme, they are
Compliance regime based on self-certification
Startup India Hub
Legal Support and fast- tracking Patent examination at low cost
Rollout of portal and mobile app
Faster exit for startups
Relaxed norms of public procurement for startups
Credit guarantee fund for startups
Providing funding support through a ‘fund of funds’ with ten crore rupees
Tax exemption on investments above fair market value
Tax exemptions for the startups for three years
Tax exemptions on capital gains
Organizing startup fests for showcasing innovation and providing a collaborative platform
Harnessing the private sector expertise for the incubator setup
Launch of AIM (Atal Innovation Mission) with self-employment and talent utilization (SETU) program
Setting up of seven new research parks
Building innovation centers at National institutes
Launching innovation focused programs for students
Promoting startups in Bio-tech sectors
Annual incubator grand challenge
The new scheme benefits the businesses and entities in many levels, out of which the more beneficial aspect is that the business owners or entrepreneurs can apply for the Stand-up India and Startup India scheme and also obtain government loan.
The entrepreneurs can login to the official website of the Startup India and register their entity in the site to avail all the benefits from the government. They can register through the social media websites. like Facebook and Twitter. For more information related to startup registration, you may use Uptra also.