The Department for Promotion of Industry and Internal Trade (DPIIT) registration is a crucial recognition for startups in India. This comprehensive guide will walk you through the benefits of DPIIT registration, the eligibility criteria, and the application process to help your startup unlock its full potential.
Benefits of DPIIT Registration
DPIIT registration opens up a world of benefits for startups:
- Self Certification: DPIIT-recognized startups can self-certify compliance under 3 Environmental Laws and 6 Labour Laws.
- Startup Patent Application: DPIIT-recognized startups enjoy an 80% fee reduction on patents, trademarks, copyrights, and design. They also have access to fast-tracking of patent applications.
- Easier Public Procurement Norms: DPIIT-recognized startups can list their products on the Government e-Marketplace and are exempted from submitting Earnest Money Deposits. They also enjoy exemption from Prior Experience/Turnover requirements in all Central Government ministries and departments.
- Easy Winding up of Company: As per the Insolvency and Bankruptcy Code, 2016, the company can be wound up within 90 days of applying for insolvency.
- Funds of Funds: DPIIT-recognized startups are eligible for Rs.10000 crore funds of funds from the Alternative Investment Funds.
- Credit Guarantee fund: DPIIT-recognized startups can avail Rs.2000 crore Credit Guarantee fund through the National Credit Guarantee Trust Company or SIDBI over 4 years.
- Tax Exemptions: DPIIT-recognized startups can apply for Tax exemption under section 80 IAC of the Income Tax Act and for Angel Tax Exemption. They are exempted from income tax for 3 consecutive fiscal years out of its first ten years since formation.
Eligibility Criteria for DPIIT Registration
To avail the DPIIT Certificate of Recognition, the startup must meet the following criteria:
- Period of Existence of Entity: The company should not exceed 10 years from the date of formation.
- Type of Entity: The company should be incorporated as a Private Limited Company, a Limited Liability Partnership (LLP), or a Registered Partnership Firm.
- Annual Turnover: The firm should have an annual turnover of Rs. 100 crore for any of the fiscal years since its federation.
- Original Entity: 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 and should have a scalable business model with high potential for the creation of wealth and employment.
Documents Required for DPIIT Registration
The following documents are required for DPIIT Certificate of Recognition for Startups:
- Certificate of Incorporation or Registration of entity
- Proof of Funding (if the startup received any funding)
- 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.
- 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.
Application Procedure for DPIIT Registration
The application process for DPIIT registration is straightforward:
- Incorporate the Business: The entity must first incorporate the business as a Private Limited Company, a Partnership firm, or a Limited Liability Partnership (LLP).
- Register 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: Access the Start-up India Recognition portal and fill out the application for DPIIT Certificate of Recognition for Startups.
- Upload Required Documents: After providing the necessary details about your entity, upload the required documents.
- Receive the Startup Recognition Number: After the examination of the application and documents submitted, the DPIIT Certificate of Recognition for Startups will be issued. Once the ministry approves the application and provides the unique startup recognition number, the startup can be registered with tax benefits.
DPIIT registration is a significant milestone for any startup in India. It not only validates your startup but also provides access to a plethora of benefits that can significantly aid in your startup’s growth. So, if you’re a startup looking to make your mark, consider applying for DPIIT registration today.
Q1: What is the validity of the DPIIT registration certificate?
The DPIIT registration certificate is valid for a period of 10 years from the date of its issue or until the startup crosses the turnover limit set by the department, whichever is earlier.
Q2: What are the penalties for forged documents?
If the ministry finds 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 a minimum amount of Rs.25000.
Q3: Is there any fee for obtaining the DPIIT Certificate of Recognition for Startups?
No, startups are not required to pay any fee to the Ministry of Commerce and Industry for obtaining the DPIIT Certificate of Recognition for Startups.
Remember, DPIIT registration is not just a recognition; it’s a stepping stone towards the success of your startup. So, don’t wait, get your startup DPIIT registered today!
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