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An Action Plan for Start up/Stand up India/Jaipur as per companies act 2013-Khanna & Associates


An Action Plan for Start up/Stand up India/Jaipur as per companies act 2013-Khanna & Associates

 All you Need to Know

KHANNA & ASSOCIATES is a 70 year old  taxation lawyer and chartered accountant firm .It includes Company Secretary , MBA s, Taxation Lawyers and Chartered Accountant. We are an international law firm . We provide various services legal to finance.

 we provide the formation, Promotion ,Incorporation ,management and post-incorporation compliance services for  LLP/Private/Public/Wos/Ngos/Non-profit  offshore and onshore companies.

 

Prime Minister Narendra Modi has kicked off the ambitious Startup India Movement. The government programme aims to fill gaps in the economy for the growth and development of startups and will aim to boost digital entrepreneurship at the grassroots.

 

What is a Startup?

Most countries would define a startup with parameters such as age, growth, revenue, profitability or even stability.The essence of startups is generally related to the concepts of technology, innovation, scalability, and entrepreneurship.

Many of the world’s largest technology companies, including Google and Facebook, still consider themselves to be startups in one sense or another. Indeed, they see being a startup as more of a state of mentality of innovation and problem solving for masses. Startups – a proposed legal definition. As the Government of India proposes to provide tax incentives and other benefits for Startups, it is imperative that a clear definition of Startups is provided in the proposed notification. A Startup status depends on its age, revenues, profits, employees, business and technology.

 Therefore, a draft legal definition that covers the following elements can be included in the proposed notification: –

A Startup is an incorporated legal entity of not more than 7-years, which uniquely uses technology to deliver products, services or solutions across India, and in any Financial-Year it has,

 

ü  Annual profits of less than Rs. 5 crores

ü  Annual revenues of less than Rs. 100/- crores; and less than 100 direct-employees on it’s rolls; and

ü  Also market capitalization of less than Rs. 100 crores.

This proposed definition of Startups has several advantages for Government of India. These advantages are:

A startup status can be given to any kind of entity- it can be a company:-

Ø  LLP Partnership

Ø  Section-8 not-for-profit

Ø  Society

Ø  Trust or even proprietorships.

 

The annual profits, revenues, employment, market capitalization, patent filings are all measurable and can be supported with paper-evidence and proof — Indian bureaucracy likes this.

This Startup definition will require startups to solve a problem that caters to India. Many startups may have market exclusively outside India (for example a call center), and such Startups cannot be eligible to seek Incentives from Government of India – funded by Indian tax payer’s money.

 

The Sops

A very supportive Government came out with number of sops for Indian startups.

Important sops includes:-

Ø  Tax exemptions for three years

Ø  Concessions on capital gains tax

Ø  Compliance simplification

Ø  Self-certification

Ø  No regulatory inspection for three years,

Ø  A Rs. 10,000 crore fund to back startups, 90 days to close down a startup, 80 % reduction in patent filing fee,

Ø  And also a mobile app to be launched on April 1 making it possible to register startups in one day.

The Honorable Prime Minister was quick to point out that the startup package is commitment of ‘Minimum Government with Maximum Governance’. It is not interested in licensing a startup, but providing support and funding, where ever necessary. A visibly excited startup industry has welcomed the announcements with a big applaud.Many entrepreneurs were excited by the announcements made by Prime Minister Narendra Modi as part of the Startup India Action Plan.

 

In addition, for a startup to be recognized as one,

 

Ø  It must be an entity registered/incorporated as a:

Ø  Private Limited Company under the Companies Act, 2013; or

Ø  b. Registered Partnership firm under the Indian Partnership Act, 1932; or

Ø  c. Limited Liability Partnership under the Limited Liability Partnership Act, 2008.

Ø  Five years must not have elapsed from the date of incorporation/registration.

Ø  Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crore.

Ø  Startup must be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.

 

    The Startup must aim to develop and commercialise:

  1. new product or service or process; or
  2. significantly improved existing product or service or process that will create or add value for customers or workflow.
  3. The Startup must not merely be engaged in:
  4. developing products or services or processes which do not have potential for commercialisation; or
  5. undifferentiated products or services or processes; or
  6. products or services or processes with no or limited incremental value for customers or workflow
  7. The Startup must not be formed by splitting up, or reconstruction, of a business already in existence.
  8. The Startup has obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business, and

ü  be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an incubator established in a post-graduate college in India; or

 

ü  be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or

 

ü  be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an incubator recognized by GoI; or

 

ü  be funded by an Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or

 

ü  be funded by the Government of India as part of any specified scheme to promote innovation; or

 

ü  have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.

 

KHANNA & ASSOCIATES is a full service Law Firm handling all legal matters on Civil, Criminal, Business, Commercial, Corporate, Arbitration , Labor & Service subjects in law, in all courts  as well  as Tribunals. An individualized service by members with decades of experience  to ensures  total satisfaction to the clients.

We Provide services are:

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