Indian Startup Ecosystem
“In today’s scenario startup is receiving much attention all over the world. Numerous startups are still on rise and are now widely renowned as employment generating startup which contributes in growth engines for the world. Through improvement, modernization and ascendable technology, startups are spreading across the world and are responsible for the transformation and development of india. Not only entrepreneurs but startup ecosystem consists of shareholders incubators, accelerators, other investors, entities, research institutions etc. As per the report, following are the factors that make Indian startup attractive:Overview of the Indian Startup Ecosystem
The Prime Minister’s startup india campaign is a great creativity to lift up private enterprise in India. This inventiveness will play a very significant role in further enabling startups and providing a new aspect to private enterprise in the country.
Glitches faced by new startup ecosystem
All the entrepreneurs and startup owners face various problems relates to pitching the idea to investors, lack of knowledge and other factors due to which they can’t give the shape of business to the idea. A startup ecosystem will help each other in solving the problems by supersede the factors mention below. This provides opportunities to new entrepreneurs to showcase their ideas, generate funding and finding the right partner for their collaborations.
Indian startup ecosystem are controlled by various factors, it could belongs to external or internal. Innumerable exterior dynamics like immense market distractions, financial environment controls the largely arrangement of an ecosystem. Startup ecosystems are dynamic entities which progress from formation stages to periodic disturbances and then to recovering processes.
Challenges for an Indian startup ecosystem
When founders and enterprise leaders recognize that a critical growth barrier lies within the organization, they find the right talent, retaining them, firming the middle level administration, creating a positive culture, building the subsequent generation leaders and improve working environment. These are steps that they follow to overcome the challenge of growth. Interestingly, India’s corporate sector struggles with a similar set of challenges.
Overview of the Indian Startup Ecosystem
Revolution in technical and digitization oblige to startups and other corporate business person to familiarize and create teams that can work with updation. In a world where more and more routine jobs can be achieved with the help of technology, similarly learning, self-development, and keeping up with the changes in today’s business environment are key characteristics of upcoming personnel. To respond to the talent needs in india’s startup ecosystem, five areas have been identified are,
- Discovery: To find the right talent.
- Holding: To create an attractive workplace.
- Governance: To firm the middle level management.
- Values: To create a positive environment.
- Proficiency- To help team to work along with technology.
- Effective cost of doing the business
- Size of marketplace
- Relationships with the customers
- Large consumer base
The rapid growth in the Indian startup ecosystem has increased to approx. 15% in 2018, while the rise of the number of incubators, accelerators has increased to 11%. Remarkably, in previous years the women entrepreneurs has also increased to a great extent. In 2019, Bangalore has been ranked as the world’s rapidly growing startup city. We are in the era of 2020 and following a new decade, the Indian startup ecosystem has much to look forward to, and there’s a perceptible sense of keenness and enthusiasm for the coming years. More significant aspect is the hi-tech enhancement they bring to the country. Startups implicate dealing with new know-how which generally lies at the uppermost end of value addition chain. Enterprises are recognizing the potential under upcoming startups and thus investing and being in partner in them.
Startup companies are the most energetic organizations in the market by adopting new modest changes in the market. Indian economy stays vigorous, important and industrious by providing supplementary refinements and affordability to the economic system. This implies that single entrepreneur find it tougher to fall asleep on their achievements. Startup entrepreneurship is vital because it brings inventions, new jobs and economical dynamic forces into the business.”
Recognition & Benefits
A startup is a newly business setup that is small in nature and initiated by single or a group of individuals. What makes the startup different from other businesses is that a startup presents a new product or service that is not in present at some other place in the same manner. The base of startup is modernisation and innovation. The enterprise which indulge in developing the new product or service or redevelop the current into something better is signifies as startup.
Startup India is a campaign that is established in year 2016 by the Prime Minister Narendra Modi Ji with the intent to boost entrepreneurship. This action plan has various objectives like promotion of bank financing for the startup, to simplify the process for the startup registration and incorporation and along with that aimed to grant many tax aids to newly established startup. But all the advantages and exemptions are on hand to the startups solely if they satisfy below mentioned criteria of an ‘Eligible Startup’.
Eligibility Criteria for startup recognition
Upto a period of 10 years from the date of incorporation, if it is integrated as a private company (as defined in the companies act, 2013) or a limited liability partnership (under the LLP act, 2008) or can say registered as a partnership firm under the provision of section 59 of the Indian partnership act, 1932.
An enterprise shall be consider as a startup only up to ten years from the date of its registration
Turnover of the entity since incorporation shall be less than one hundred crore rupees for any of the previous financial years.
Entity is working in the direction of innovation, development or enhancement of products or processes or services, or if it is a scalable enterprise model with a high manageable of employment generation or can say creation of wealth.
An entity must be newly formed or if in case it’s being registered by way of splitting up or renewal of an existing one then it shall not be considered in ‘Startup’.
Tax exemptions in startup India plan
Startup India tax exemption under section 80 IAC says that a startup may apply for tax exemption after being registered by DPIIT. DPIIT registration certificate and approval of inter-ministerial board allows the startup to avail tax excursion for three consecutive financial years out of its first ten years since incorporation. One entity must be eligible for this exemption if they are incorporated in form of private limited or LLP after 01 Apr, 2016 and they got the certificate of recognised startup.
Tax Exemption under section 56 of the income tax act (Angel Tax)- Unlisted companies raise the capital by way of issuing the shares and the share prices is more than FMV of share sold. Entity after getting registration as startup is eligible to apply for angel tax exemption. An entity must be recognised by a department for promotion of industry and internal trade and the cumulative amount of paid-up share capital and share premium of the startup must not exceed Rs 25 crore after the anticipated share issue.Application for tax exemption procedure after recognised by DIPP
Make signup and create login credentials on the startup India portal.
One has to make an application for startup recognition which is pre-requisite for the next tax holiday request. On positive validation and approval of application, the startup shall obtain a “certificate of recognition” with DIPP number.
From now the registered establishment are eligible to get tax benefit or tax holiday after the approval from IMB (Inter-ministerial Board) and the following landmark is to make an application u/s 80-IAC online.
The application shall be examined for uniqueness, innovation, scalability and significance of sector and other parameters by using the “Technical Agency” who shall put up the case within the next meeting. Before this stage, if some clarification is required to be sought, the utility is moved for resubmission and therefore the query is communicated through email. Each startup gets three probabilities of resubmissions which include the primary utility made.
On approval from IMB in its assembly comprising of various officials, a “certificate of eligibility” is issued to the startup or the application is rejected.
DPIIT number with details of startup application and other tax benefit certificate details is to be feed into ITR at the time of claiming exemption.Rewards to eligible startup under startup India program
3 year tax excursion in a block of seven years The startup registered after April 1, 2016, is eligible for getting a hundred percent tax rebate on profit for the time period of 3 years in a total of 7 years but annual turnover must not exceed 25 crore in any of monetary year.
Exempted long term capital gain tax Section 54 EE of income tax is introduced to exempt taxes on a long term capital gain if such a long-term capital obtains or a phase thereof is invested in a fund notified by using Central Government inside a length of six months from the date of transfer of the asset. The most amounts that can be invested in the long-term specific asset are Rs 50 lakh. Such quantity shall be continued to be invested in the targeted fund for duration of three years. If withdrawn before three years, then exemption will be revoked in the year in which money is withdrawn.
If investment above the fair market value The authority has exempted the tax being levied on investments above the fair market value in eligible start-ups. This must be made by domestic angel investors or family but must not be registered as venture capital funds. If investment done by incubators then also it’s exempt but it must be above the fair market price.
Development of Pitch Deck & Business Model
Quick SIDBI Loan
Small Industrial Development Bank of India (SIDBI) purpose is to arrange finance facilities for MSME sector and to provide short term lending to businesses. It was recognized on April 2, 1990, through an act of parliament. To arise as a single window for gathering the monetary and developing requirements of the MSME sector SIDBI loan was introduced as preferred brand and consumer pleasant institution for improvement of shareholder’s wealth through new technology stage.
DETAILED DESCRIPTION OF TOPIC SIDBI
SIDBI stands for Small Industries and Development Bank of India, that mostly emphases on the promotion, funding, and expansion of the micro, small and medium enterprises. It was established in 1990 with the chief objective of supporting the MSME sector by enabling them with cash flow. MSME gets help from bank in getting funds for business development, commercialization and marketing of products with innovative technologies. SIDBI proposes custom-made monetary products under several loan schemes and serve services to meet the demands of various business projects.
To be the main financial institution for small medium sector, SIDBI has devoted its means towards progression of an energetic MSME ecosystem. SIDBI’s initiatives have remained aligned to the national goals of poverty alleviation, employment generation, lighting entrepreneurship and fostering competitiveness in MSME sector.SIDBI’s Objectives
SIDBI follow the major objectives which are development, promotion, coordination and financing. Main points are here, To cover monetary support to supplemental security income and other sectors. Supplemental security income program generate welfares to incapacitated adults and children who have restricted revenue and resources.
SIDBI delivers indirect funding through banks, NBFCs, SFCs and other financial institutions.
SIDBI purposes to generate stability in the economic sector by firming credit flows and encouraging skill development.Modes of Finance
There are three mode of financing
- Direct finance: In the form of assistance to MSME sector in term loan and working capital.
- Indirect finance: The indirect assistance to core lending institutions comprising banks, state level financial institutions, etc. having an extensive network of divisions all over the country. The main purpose of this scheme is to upgrade the credit flow in MSME sector.
- Micro finance: This scheme provides micro finance to small business persons for business establishment.Main purpose of SIDBI
The foremost functions of SIDBI are:
- To assist financial institutions in lending to small-scale industries to confirm their monetary health.
- To offer direct loans to companies categorized in the small and medium enterprises sector.
- To carry out marketing initiatives for small-scale industries on a global scale.
- To offer venture funding possibilities for industries in the small and medium enterprises sector.
- To help in promotion of employment and upgradation of technology in the sector.
Benefits of availing a loan from SIDBI
- To offer loans as per the requirement of the business and at attractive interest rates.
- Benefit of a relationship manager to advice businessmen on the type of loan they should apply for.
- No collateral or security for loans up to 1 crore.
- To provide sufficient capital for the business.Stand-Up India for Financing SC/ST and Women Entrepreneurs
Small Industries Development Bank of India (SIDBI) – Stand up India scheme facilitate bank loans between 10 lakh and 1 crore for set up a greenfield initiative to the minimum one women entrepreneur or reserved caste or tribe (SC/ST). These people must be indulge in manufacturing, trading or service sector. Shareholding and controlling stake (not less than 51%) must be required to be held by either a SC/ST or women entrepreneur if enterprise is non-individual
Suitability for loan
Qualified applicant who is a women business person or schedule tribe, schedule caste must be age of more than 18 years.
Merely Greenfield project are qualified for finances under this scheme. The primary or new first time project of the person in manufacturing or services or trading sector will be indicated as Greenfield.
In circumstance of non-individual enterprises, 51% of the ownership and controlling stakes would be detained by either SC/ST and/or women entrepreneur.
Borrower must not be in defaulting to any financial institution or bank.
Raising funds from Angel Investors
Angel investor makes capital available for startup business in exchange of transformable debt or equity ownership. They provide support to startup at very initial phase where risks of failing the startup are comparatively high and at that time most investors are not willing to backbone them. Sometimes angel financers are recognized as angel funder, business angel or seed investor. The main reason for calling them “angels” is that they’re eager to put their money into prevaluation startups, which may have a tough time to them to find fund source.
Generally, angel investor provides capital support to new or small business venture for startup or expansion. Basically they are either a single individual investor or group of person who create a fund or have some vacant unused cash and observing for a higher rate of return than the customary investments. The investment by angel investors during initial stage is just to carry the operations through its early stages.
Angel investors are very significant for minor and average sized enterprises because they provide management support from their experience along with money. They contribute their services in business just to make the startup successful by infusing knowledge and expertise. They are literally very rich and well off persons with great business knowledge. Another advantage of having an angel investor is they lend unbelievable reliability to the company. The name of an influential and experienced man works as a catalyst for the progression of a business.Importance of angel capital investment
Angel investor plays an important role for the economic development by providing the risky capital to startup that will leads to implementation of projects with some new ideas and upgraded technology.
The main aim of venture capitalist is to put more focus on passion and commitment of the founders who identify the large market opportunities.
Due to initial phase of funding, startup becomes more reliant on angel investors as they offer loans on comparatively easier rate of interest as compared to venture capital investors.
Angel investments are impeccable for businesspersons who are financially stressed during the early phase of their business. The actual internal rate of return that must be expected is 20% to 30% from a successful portfolio.Advantages of angel investors
Angel investors works as a fuel to the startup or new business. Along with this there are some of the advantages which are as follows:
- Funding available – Angel Investors bear high risks and provide funding to new avenues. They invest their funds in a very initial phase of business when no person ready to invest or support. Even banks and other financial institutions also not ready to offer a loan.
- Flexibility – Banks and financial institutions are very strict about the criteria or norms that they put on borrower for obtaining the loan. But in case of angel investors, there is no set of heavy regulations from which new business has to cross over for getting funding.
- Expertise – Apart from funds, angel investors also provide expertise assistance to startup firm.
- Success – The firms who got funding from angel investors have higher survival rates, faster growth rates as compared with others.Disadvantages of angel investors
Some of the disadvantages of angel investors are:
- Investor expectations – Angel investor anticipate heavy returns on their investments as they bear more risk While investing. Profit expectation is around 10 times of their primary investment. Investors always strive to make it big successful business venture so that they can get expected returns from them.
- Loss of control – Angel investor often becomes the part of business after making the investment. They get control over the affairs of business decisions. After getting the control, they run the company by their own terms to make it successful and from this founder feel insecure due to loss of control over the business.
- Restricted funding – First angel investor make investment in the startup and analyze the working of company, if he assures that company has strong profit making agenda, after onwards investor infuse additional.
PMMY- Pradhan Manti Mudra Yojna
Under Pradhan Mantri Mudra Yojana (PMMY), an arrangement launched by the Hon’ble Prime Minister on April 8, 2015 for specified the advances upto 10 lakh to the small business having non-corporate structure and transact in non-farming activity. Mudra stands for Micro Units Development and Refinance Agency Limited, which is an NBFC, which is associated for the improvement of micro initiative division in the country, It also aims at refinancing support to banks for advancing to small units to ensure loan necessity.
The Mudra loan is distributed under the Pradhan Mantri Mudra Yojana to micro and small initiatives having non corporate background and deals in non-farming Sector. From this initiative one can get loan upto Rs.10 Lakh. The major block to the progress of entrepreneurship in the non–corporate small business sector is deficiency of economic funding. Further in excess of 90% enterprise of this sector does not have formal bases of finance. Indian government has fixed up mudra bank through a legislative enactment for catering to the needs of the segment for bringing them in the mainstream. All non-corporate small business segments consist of firms like proprietorship or partnership which is running as small industrial units, service sector units, are eligible for help under mudra.Approach of Pradhan Mantri Mudra Yojana
In this segment, minimum 60% of funding would flow to initiatives. Partner mediators of mudra panel have to challenge to follow the following outline:
- Primary businesspersons, youth entrepreneurs aged up to 30 years and women industrialists shall be cheered and special schemes shall be planned for such entrepreneurs.
- Highlighting shall be on cash flow based advancing and not security based lending. Collateral securities, etc. shall be evaded.
- Recompense responsibilities shall be stretchy and framed according to the business cash flows of the entrepreneur.Classes of mudra loan
There are three structures, namely Tarun, Kishor, and Shishu.
- Shishu: It’s a plan which offers loans upto Rs 50 thousand. This is for initial stage of business.
- Kishor: This scheme offers loans more than fifty thousand and upto Rs 5 lakh for businesses that is already recognized and looking for extra finance.
- Tarun: This is suitable for sound firmed business and this Scheme offers loan amount upto Rs. Ten lakh
These arrangements are scheduled to support in meeting the requirements of different business activities and areas. Loans upto 10 lakh can be issued by banks without collaterals. No subsidy is allowed to be given in this yojana.Objectives of mudra loan
Mudra loans can be taken for a variability of motives that help in generating employment and producing revenue. The loans are extended mainly for,
Community, personal service and social activities: The activities for community, personal service and social activities include medical shop and motorcycle repair shop.
Transportation automobile: Mudra grant financing for procurement of transport vehicles for goods as well as personal.
Food Products Sector: Further down the food products sector, mudra loans can be availed for actions like achar-papad making, small service food stalls, etc.
Business Loans for Shopkeepers and Traders
Mudra loans can be availed by individuals who require financing for successively their shops, business and trading activities that helps in producing income.
Financing of machinery for micro units
Mudra loans are comprehensive for the setup of micro enterprises by buying the necessary machinery.Eligibility for mudra loan
Person who have their own business and deals in non-farm activities like trading or manufacturing and need an amount to ten lakh can smear up for mudra loans. This loan can be availed from
- Public sector banks
- Private sector banks
- Regional rural banks
- Small banks
Micro finance institutionsBenefits of taking mudra loan
The key benefits of taking mudra loan:Economic services can be obtained at affordable interest rates by micro-small businesses
Business loans can be taken for small amount and credit guarantee of the borrower is reserved to the government, so if borrower is incapable to refund the amount, the government will be liable to all sums.
Financial assistance is accessible through this system in regions where people have no access to basic funding facilities.
The time period for repayment can be extended up to 7 years.
businesswomen have the advantage of loan at reduced interest rates.
The mudra loan arrangement is in association with the “Make in India” operation which the government has originated to nurture invention, smooth investment in the country.Mudra card
A debit card issued against the mudra loan account for working capital portion of the loan known as Mudra card. Mudra card can be usage by the borrower in manifold withdrawal and credit facilities to manage the limit of working capital efficiently and keep the interest burden minimum. Mudra card helps in creating the credit history for the borrower and digitalization of mudra transactions. This card can be worked throughout the country for cash withdrawal from any ATM and also make payment through any sales.
Raising funds from Venture Capitalists
Who is venture capitalist?
The private equity investor that deliver the monetary assistance to the start-up ventures or the small companies to qualifying their projects and helps to encounter the shortage in the capital requirement for implementation of the project are known as Venture Capitalist. Venture capital is a type of financing that is provided to minor, early-stage, developing businesses that are estimated to have high growth prospective, or which have demonstrated high growth.Venture capitalist (Group of investors)
Venture capitalists are the investors that assist in providing the capital to the companies or the small start up to initiate the project. The start-ups are generally established on an advanced technology and business ideal. Venture capital firms advance in very early-stage of company in interchange for equity and a possession stake. Venture capitalists proceeds on the possibility of supporting risky start-ups in the optimisms that some of the firms they care will become fruitful. Venture capital also known as seed funding for the start-ups.The purpose of providing the capital assistance is to help the small companies in setting up the projects through financial participation.Venture capital ( Investment amount)
Venture capital is a form of private equity and a type of funding that financiers provide to new companies and minor industries that have the potential of improvement. Venture capital usually arises from rich depositors, investment banks and any other monetary organisations.
Why small start ups looks for private equity investor (venture capitalists)
An investment from a venture capitalist is a form of equity financing. The investor delivers money to the company in exchange of taking equity position. Equity financing is normally used by unestablished businesses or can say small start-ups that are unable to secure business loans from financial institutions because of insufficient cash flow, lack of security, or a very extraordinary outline.Process of the venture capital.
Any business seeking for venture capital is to submit a business plan to a venture capital firm. If interested in the proposal then the venture capitalist firm must perform due diligence, which includes a thorough investigation of the company’s business model, products, and management. It is necessary to research the background as these investor invest in very large amount. After completion of due diligence, the financier will initiate an investment of wealth in exchange for equity in the company. The investor actively participates the in the funded company and also advices and monitors its progress before discharging further funds.Essentials of venture capital
The venture capital financing is different from traditional financing. In traditional, financiers invest in proven technologies and low risk ventures, whereas venture capitalists invest in new technologies and high risk ventures. Nearly the key distinctive types of venture capital may be concise as follows:High Risk: Investor delivers investment to high risk high reward ventures. These risks involve technology risk, market risk, liquidity risk or any other type of risk.
Longstanding Investment: Venture funding is a continuing investment of funds. Funds are provided for 5 to 10 years. Venture capital is not repayable on demand. The investor has to wait for a long time to earn profit.
Management Participation: Venture capitalists participate in the management affairs and give his advice from time to time along with the investment in the equity shareholding of the entrepreneurs company.Professional Entrepreneurs:Usually, the venture capital is provided to those entrepreneurs who qualified technically and skilfully but lack adequate funds to start a new venture.
Latest Technology: Entrepreneur who attempts innovative technology which may produce uncertain results is the main seekers of venture capitalists.Who can apply for venture capital?
Following are the person who can apply for funding
- Producer assemblies
- Firms partnership or proprietary
- Self-help groups
- Company/ Agripreneurs
- Units in agriexport regions
DPIIT Registration & Benefits
Startup India scheme is an initiative by government of India which aims to support entrepreneurs and create jobs via G2B Portal. This government to business (G2B) Portal is a platform where online applications are filed for access to number of government to business services. The importance of the scheme was to form a strong system for encouraging innovation in the country.
There is a prescribed criteria for the entity to get register itself under the startup scheme. Before proceeding for the DPIIT registration we need to first understand what a startup is? A start up is a small business started with the objective to solve a problem. These are the small business entities like (companies, LLP, firms etc.) which are generally functioned by the promoters or an individual. Startups provide jobs opportunities to the people which help in the economic development of the society. Startup India defines those business that has been newly formed or has been in existence of 10 years or lesser. This has been specified for biotechnology firms that the limit is 10 years of operation from the date of registration in India and for the other industries the limit is 7 years to get recognised under startup.
This initiative of identifying and encouraging the startups are taken by our government of India. This has been done in consonance with the Make in India Campaign. By getting registration under DPIIT, the startup will get benefit of self-certification and compliance under 9 environmental & labour laws. If the entity wishes to wind up the company they can do so under 90 days under Insolvency & Bankruptcy Code 2016. Further there are multiple exemptions and/or rebates available such as:
- Tax exemption on capital gains & on investments above fair market value.
- Exemption from requirement of earnest money deposit in government tenders.
- Income tax exemption for a period of 3 consecutive years
- In case of patent and trademark filing there is rebate of fee upto predefined limit.
- Further while applying for government tenders, the requirement of minimum capital or turnover or experience has to be fulfilled by the entity as specified. But if the business entity is recognised as Start-up by DPIIT then, such entities can apply for tenders as specified even if they don’t fulfil such requirements of minimum capital, turnover etc.
Conditions required to be fulfilled for getting registration under DPIIT
- It should not be older than ten years from the date of incorporation.
- It should be incorporated either as a private limited company or a registered partnership firm or a limited liability partnership.
- Since incorporation, yearly turnover should not surpass Rs. 100 crore for any of the financial years.
- It should not have been formed by splitting up or reconstruction of already established business. New entity must be formed.
- It should have innovative business, development or improvement of products or processes or services, or it should be generating employment and creating the wealth for the economy.Benefits and rewards of the registration
Following are the benefits of getting recognised which will straightaway uplifts the startups:
- First and foremost is the tax exemption which any recognised startup can claim.
- There will be lot of income tax benefits for the period of three years.
- Save the money as well as time
- Investment exemptions can be availed.
- Concessions on all the capital gains can be availed.
- Fund by the government to help the startups.
- Self-certification and no inspection for three years.
Listing of Start-ups at BSE
BSE (Bombay stock exchange) has set up the platform for startups as per the norms placed by SEBI. This platform offers an entrepreneur and investor friendly atmosphere which permits the listing to all startup dispersed throughout the india from unorganized sector into a structured sector. The startup listing platform has been launched by the BSE in 2018 December with the aim to allow deserving startup to raise capital from the market.
BSE already listed startups will support small medium enterprise to raise equity capital for their growth and development and accordingly help them to bloom into full fledged companies. They have also the option to migrate to main board of listing according to the set of norms. BSE Startups will deliver immense opportunities to entrepreneurs, to raise capital in cost effective manner and simultaneously provide opportunity to investors to choose the best company and invest at early stage so that maximum return can be yield.
The startup establishments who want to list on BSE startup platform should be deal in prescribed sectors. They must belong to IT and Nano technologies sector, bio-technology and space technology, and others are 3d printing, life sciences, e-commerce, artificial intelligence etc. For listing on the BSE start-up platform, the start-up must be registered with MSME/DIPP with minimum paid-up capital of ₹1 crore. The company must be in functioning for a minimum of 2 years before the date of filing of listing application. They must have positive net worth among other monetary standards. Maximum paid up capital of company would be ₹ 25 crore after issue has made. The post issue paid-up capital (face value) of the company shall not be more than ₹25 crore.BSE Exchange Platform for SME?
The utmost difficult phase of commencing a new business is not having an idea or plan for its execution but the fund raising is most tough job for it. Getting reliable investors with enough capital for business is quite difficult. Maximum job creation in india came from SME (around total 30 million) sector as they share nearly employment to minimum 70 million people. Nowadays SME became the backbone of indian economy and thus the Bombay stock exchange has provide an option to small and medium sized enterprises to list at BSE SME Exchange platform for raising equity capital for expansion of trade. Prime minister’s task force suggested to set up a platform at dedicated stock exchange for SMEs and SEBI will help them in raising funds for the growth and enlargement of their businesses. One more advantage of this startup platform is that, startup can list on them and launch the initial public offerings even they have no profitable business.Benefits of listing:
Listing provides an exclusive opportunity to securities of company in the stock exchange. Recorded shares have only right to be traded on the stock exchange. Stock exchange enables transparency in all the transactions made in listed securities. The important advantages of listing are listed below,
Raising funds: First company must list their securities to stock exchange and after that they can raise capital from public for the specified purpose like having new project, want an expansion and diversification in company and others.
Corporate practice must be good: If there is no compliance of listing agreement that made between corporate and stock exchange, exchange have right to delist or suspend the securities from the rings of the exchange. So it’s better for the listed companies to follow the fair practice just to get benefits of exchange.
Liquidity in security: Listed securities easily bring liquidity or marketability between the share prices as there is continuous trading between them and it’s beneficial for the corporates and investors.
Beneficial for the public : The data maintained by stock exchange server in the form of price quotations and others, helps to provide valuable information to the public which can be used for research study. Before making investment, financial institutions, or other individual investor whether NRI or domestic can take wise decisions before making investments. It also helps to make proper due diligence of company.
Valuation of fair price : Stock exchange reflects the real value of securities. When the securities arrives the public, their prices can be changed as per the basis of demand and supply but when it comes to stock exchange, other factors are also consider to get the real price of a single security. Thus listing helps to make the independent valuation of the business by the market.
Disclosure of business information timely :At the time of signing the listing agreement with the exchange, it creates the responsibility on company is to disclose all important information relates with them like issue of bonus shares, dividend, about right shares and other material information. By providing the information to exchange, share price start fluctuating and bringing the transparency and help to build confidence among investors.
IT Exemption of Start-ups
A Recognized startup from the inter-ministerial board is treated as an eligible business for tax exemption. Their business must involve in innovation, creation, development and deployment of new products, services or processes. With the intent to make available a competitive platform and help them in development, an eligible startup shall be allowed a deduction of taxes and other various benefits so that they can convert the business idea into fruitful business.
India is developing and has just become the third leading startup supportive economy. It is creating step by step and will soon become the most exposed tech startup center on the planet. To support and sustain new businesses in india, the administration has declared a few projects through which they can profit benefits, one of them being the startup india program. The fundamental point of this activity is to make a situation that helps new businesses in the nation and pushes for the advancement of business people. Here’s a glance at the tax benefits these new companies can make and how they can utilize these projects to fuel their development.
Exemption under section 80IAC for startups
Section 80-IAC provides tax incentives of amount of profit that is 100 percent. It helps to start the development and provide a viable podium to startups in India.PIIT stands for Department for Promotion of Industry and Internal
DPIIT setup the inter-ministerial board whose work is to validate the startup for allowing tax related benefits. The board shall validate them for tax exemption on profits as per the section 80-IAC of income tax act. A DPIIT authority provides recognition to startup that makes them eligible to apply to the inter-ministerial board for complete tax deduction on the profits and gains rises from business. Start-up must be engaged in innovation, creation or improvement of products or services or accessible business model with a great potential of employment generation or wealth formation.
The entity must be newly incorporated after 01 April 2016, in the form of private limited company or a limited liability partnership. Any entity which is shaped from the practice of reconstruction then it’s not allowed here to get benefit. Turnover of the entity must not exceed 25 crore annually in the preceding year related to the assessment year for which deduction is claimed under section 80-IAC. Entity must be recognised with DPIIT.Deduction amount
Allowed deduction as per section 80 IAC of the income tax act would be 100% for 3 years income out of 7 years from the year of is registration. The intention to provide exemption is just to support small startup. A startup has to accomplish all the conditions for claiming the deduction as specified in section 80-IAC. These turnover limits for claiming deduction is not determined by DPIIT notification but section 80-IAC of income tax act mandates the provision of turnover limit.Exemption under section 56 for startups (Angel Tax)
With the intent to give more relief to new startups, indian government has decided to relax the eligibility criteria for startup and respite the norms of angel tax by increasing the turnover limit from 25 crore. This helps them to grow and make stable in economy. An entity will be considered as startup if its turnover has not more than 100 crore instead of 25 crore in any of the financial year since incorporation. Ministry of government is taking all these steps just to promote and strengthen the startup ecosystem in economy as startup plays a very significant role in GDP as well.
When a startup receives any consideration upto Rs 25 crore by all the investors for the issue of shares then if these startups are recognised by DPIIT then their consideration will be exempt under section 56(2)(viib) of the income tax act. For getting exemption, eligible startups are required to file a declaration form by with DPIIT and further it will be transmit to CBDT.
Entity must be private limited company and recognised by DPIIT. For getting DPIIT registration one can visit the startup india portal. If the turnover of the entity for any financial year is upto the amount of 100cr then it would be treated as startup. Cumulative amount of paid up share capital and share premium after the proposed issue must not exceed 25 crore rupee in case of startup. For being eligible for exemption under Section 56(2)(viib), a startup is not required to make investment in any immovable property, capital contribution to other entities or investment amounted to more than 10 lakh rupee in any transport vehicles, make loans and advances, and in some other assets except in the regular sequence. This investment can be done in normal course of business.
GEM Registration & Benefits
GeM portal (Government e-Marketplace) is an online portal launched by the government through which Government–it issues tenders for various day to day needs of different government organizations, public sector undertaking and departments. The main aim of introducing GeM portal is to enhance transparency, efficiency speed in public procurement as well as employment. By registering through this portal, the seller as well as buyer can buy or sell their products to the government.
What is GeM portal?
The Government e-Marketplace (GeM) is a government e-commerce portal. It acts as a one stop shop to facilitate and enable easy online procurement of the consumer goods & services that are needed by various government sectors. The main objective of the GeM is to ensure transparency, effectiveness and promptness in the procurement of supplies. GeM is a portal where the buyers and sellers can register their products either through direct purchase or auction. The department contacts the registered person and gives them the bulk order. Through this process government has extended their hand towards the vendors who wants to do business with government to meet up the different needs of government at the lowest price.Through this portal the buyer can search, compare and then select the one. He can use filters by adding the specifications, quantities and other details of the required product. The sellers can list their products according to the requirement of the government. The prices can be changed according to the changing needs and conditions of the market. Seller can keep a check on the supplies, payments as well as availability of the products. The sellers can also do bidding regarding the products through this portal.
GeM removes human interference in seller registration process, payment process and posting of order. Being an open platform, GeM offers no entry barriers to bonafide suppliers who wish to do business with them. At each phase, sms and e-mail notifications are directed to both buyers, his association’s head, paying authorities along with sellers.
GeM is a completely secure platform and all the documents on GeM are e-signed at various stages by the buyers and sellers. The details of the suppliers are verified online that helps to strengthen due diligence about the reliability of suppliers who wanting to do business on GeM.Why opt for GeM registration?
GEM registration helps to authorize the manufacturer, small dealers and service providers to enter the wide and interactive online platform, where they can directly sell their products & services to various buyers from the government departments, organizations and PSUs. It enables the authorised governments to buy the goods and services directly from the private traders and manufacturers instantly and hassle-free.How GeM is different from GeM startup runway?
Government e-Marketplace (GeM) is an online procurement platform for government ministries and departments, and the most widely used channel for public procurement. Small medium enterprise, startups accepted with DPIIT and other private companies is eligible to register on GeM portal as sellers and sell the listed products and services directly to government department.
On the other hand, GeM startup runway is a new initiative launched by GeM to allow startups to reach out to the universe of government buyers by offering innovative products that are unique in process. Recognized startups can outlook the GeM startup runway on their GeM dashboard, where they may blowout awareness about the goods in which they deal by completing a form that describes their product as well as intended buyers (ministers of government department). The “GeM startup runway” is a unique concept initiated by government e-Marketplace in partnership with startup india, to promote entrepreneurship through innovation.
Benefits for DPIIT recognized startups on GeM
- Requirement exemptions: Startups are exempted from tough principles of selection such as requirement of previous experience, prior turnover etc.
- Pilot projects: The chance to work on trial orders with the government, making them more likely to take chances on a new product.
- Feedback device: Buyers can rate the listed product or service on portal.
- Flexibility: It provides flexibility on choice of products that must be innovative for the publishing on the platform.
GeM ADVANTAGES For Buyers
- Good catalogue of products.
- It helps buyer to explore, compare and then select the product.
- To buy products online anytime.
- Makes transparent and comfort of purchasing.
- Customer friendly dashboard for purchasing and observing supplies and payments.
- Helps to direct reach out to all government divisions.
- It provides a shop for advertising with minimal efforts and auction on products or services.
- It helps to change the process as per the market conditions.
- Seller friendly dashboard for selling and monitoring of supplies and payments.
- Provide identical procedures of buying.
Credit Guarantee Fund Trust
As there are problems faced by the MSME’s with respect to the funding, keeping this problem in mind, our government of India has brought up an initiative to launch the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) to provide security free loans to the micro and small enterprises. Both the prevailing and the new msme’s are qualified to be covered in the scheme. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust established by the government of India, Ministry of Msme’s and SIDBI (Small Industries Development Bank of India) for the purpose of implementation of Credit Guarantee Fund Scheme for SME’s and MSME’s.
There is a prescribed eligibility criteria, eligible institution for obtaining the funds, eligible credit facilities etc. MSME’s were facing a lot of issues related to the funding and non-availability of the funds in a timely manner and also high rate of interest was charged by the financial institutions. To resolve this problem our government of India in consonance with the Ministry and other regulators and institutions has launched this scheme of the Credit Guarantee Fund Scheme. This is protection specifically for the MSME’s as they are the backbone of the Indian economy. Whatever loan facility is provided the trust charges the fees for the same amounting to 1% per annum of the credit sanctioned.Benefits under the scheme
The eligible credit facilities are: providing the loan facilities of up to 200 lacs even to the entrepreneurs of Jammu and Kashmir, North-eastern states of India etc. either without collateral security or third party guarantee.
Providing of funds and composite credit schemes.
If the credit facility is up to 50 lakhs then credit guarantee is provided amounting to Rs. 75% or 80% of the credit to a maximum of 62.5 lakhs or 65 lakhs.
In case of default has been done by the borrower of the credit facilities extended by MLIs, then trust provides the guarantee of up to 50/ 75 / 80/ 85 % of the amount plus interest on such amount. Other penalty charges, service charges or any other dues are not covered under the guarantee.
Rehabilitation help is also provided by the lender (institution) but within the credit limit of 200 lacs for the units covered Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and becoming sick due to issues which are not in the control of management.
Special benefits provided to the women entrepreneurs who are running the MSME’s.Eligible MSMe’s for the scheme
All the existing as well as new MSME’s providing the business as specified under this scheme like MSME’s engaged in the activity of manufacturing, retail trade, educational or training institution, service sector etc. Now prescribed NBFC’s can avail credit facility scheme. Only 75 percent of the fund is allowed to a maximum of Rs. 50 lakhs for the period of five years. And the eligible lenders are: All the Banks and Financial institutions, scheduled commercial banks and some regional rural banks which are Sustainable Viable as classified by NABARD, Private or public sector banks, Small Industries Development Bank of India (SIDBI) etc.
The trust has the right to reject the application for the credit facility and guarantee cover on the grounds as mentioned in the scheme. MSME’s not engaged in manufacturing activity, services and retail trade, educational or training institution are not eligible to avail this facility and if any application is received from such msme’s then the application liable to be rejected by the trust as this is the first criteria which is to be fulfilled by the msme sector.
Finance through Central & State Government Schemes
BUSINESS MENTOR FOR STARTUPS
Some survey statistics show that those startups that had a mentor performed almost 3 x better, compared to those startups that did not have one! Startup mentors are invaluable resource for a startup, and can most often be the reason for your startup’s existence.
Why do Small Businesses and Startups need Business Mentor?
Over 2/3rd of mentored businesses survive for 5 years or more. Every business owner, entrepreneur needs to have a business mentor should they seek that additional insight and business acumen for their business to not just survive but grow to next level. Mentor for startups are most sought after in today’s dynamic, competitive VUCA world.
We at Startup Xperts understand the importance of Business Mentor for Startups and Small Busines and has passionately taken up the cause of mentoring a number of startups and SMEs to build our startup ecosystem. Startups are mentored at various stages – some right at the idea stage itself; or in an incubation or prototyping stage; or products/services that have already been launched in the market but unable to take things forward from that point; lacking clarity; or those startups that have not been able to grow their business despite having a brilliant idea, solution.
How to choose the right business mentor?
Be it whatever stage you are in, you need that guiding force which comes in the form of a business mentor! At the same time, you will need to ensure that your mentor fits your purpose, passion and other aspects as below
- business ethics
- openness and
- responsive to feedback, etc.
What are your benefits in having a startup mentor?
There are so many benefits that startups can derive in having a startup business mentor on board, but some of the key aspects are as below;
- We show you the way that you can tread along
- Help you shortlist, validate ideas
- Bring in strategic thinking
- Provide you feedback without any bias
- May create opportunities to network
- Help you to focus, and work on critical aspects of your business
- Facilitate you to connect with potential investors where possible
- Fine tune your pitch, value proposition
- Guide you in digital marketing (execute it for you if you need it – optional)
- Can discuss, negotiate, for you with your potential investors (as per agreed terms)
- Support you in accelerating your growth
- Suggest ways to structure your company for better performance
Generally in India, there is no any separate law made for sole proprietorship business registration, however, you can start your business without any registration, but in the opening of bank accounts, a banker can demand following registration documents as per nature of business:
1. Shops & Establishment Act
2. GST Registration
3. MSME Udyog Aadhar
Easy Formation-The only requirement for starting a partnership firm in most cases is a partnership deed. Hence, it is relatively ease to form. Legal formalities associated with formation are minimal. Though, the registration of a partnership is desirable, but not obligatory.Unlimited Liability-That means, if the assets of the firm are insufficient to meet the liabilities, the personal properties of the partners, if any, can also be utilized to meet the business liabilities.
Flexibility-The partnership business is flexible. The partners can easily appreciate and quickly react to the changing conditions. No giant business organisation can run so quick and quickly respond to new opportunities.
Limited Liability Company
1. Minimum 2 Designated Partners
2. If a body corporate is a Partner, it has to nominate a natural person as its Nominee
3.The Partners and Designated Partners can be same person
4.There is no concept of share capital, but there has to be some sort of contribution from each Partner
5.DPIN ( Identification Number) for all the designated partners 6. Digital Signature Certificate
One Person Company
1. Minimum 1 Shareholder
2.Minimum 1 Director
3. The director and shareholder can be the same person
4.Minimum 1 Nominee
5. Only India residents can be shareholder & nominee
6. Minimum 1 director must be Indian Resident
7. Minimum Authorised Share Capital to be Rs. 1 Lac
8. DIN ( Director Identification Number) for all Directors
9. DSC ( Digital Signature Certificate) for Directors 10. Witness for MOA/AOA/Subscriber
Public Limited Companies
1. Minimum 7 Shareholders
2.Minimum 3 Directors
3. At least 1 of the Directors shall be an Indian Resident
4. The Directors and shareholders can be the same person
5. Minimum Authorised Share Capital to be Rs.5 Lacs
6. DIN ( Director Identification Number) for all Directors
7. DSC ( Digital Signature Certificates) for Directros, Shareholders & Witness
8. 1 Witness for MOA/AOA subscriber.
Indian subsidiary company of Foreign company
2.Address Proof (Indian Consulate must certify electricity Bill, Telephone Bill, Bank statement or passbook or rent agreement and latest electricity bill in case of rented accommodation. Document)
3.Photo ID Proof (Any government license or document containing the name in full, photo and date of birth. Document must be certified by Indian Consulate)
4.MOA & AOA of Parent Company ( Company is Subscriber/shareholder)
5.Declaration- Specific Form
6. Affidavit- Specific Form
7. MOA & AOA of Indian proposed Company
1. Mininum Shareholders should be 7
2.Minimu directors should be 3
3. Minimum Authorised Capital Rs.5.0 Lacs
4. It must have minimum 200 members
5. It must also ensure that net owned funds are Rs.10.0 Lacs or more- “Net Owned Fund” means the aggregate of paid-up equity share capital and free reserve as reduced by the accumulated and intangible assestes appearing in the last audited balance sheet
6. It must also ensure that the ratio of net owned funds to be deposit is not more than 1:20.
1.Trusts are governed by Relevant state trust act or Bombay Public Trusts Act
2.2 persons are required to form a trust with no upper limit
3.Trust is set up by a trust deed on non-judicial stamp paper worth some percentage of the value of the trust property (Stamp duty varies from state to state)
4.Trust deed contains the aims and objectives of forming a trust and the mode of management of the trust
5.The composition of the board changes mainly by appointment and not election 6.Alteration of the objects laid down in the trust deed is difficult and only the settler can modify them.
Socities Registration & Incorporation
1.Societies are governed by Societies Registration Act
2.7 persons are required to form a society with no upper limit
3.Complete renewal of members is possible and objects can be modified easily
4.The legal requirements are much simpler than in the case of a trust or Section 25 companies
5.Members have to file an MOA on non-judicial stamp paper, setting out the objectives of the society before the registrar of societies in the state in which the society is set up 6.Society has a more democratic set up with membership and an elected body to manage the society. Due to democratic procedures, the society can be taken over by elements opposed to the founding members.
The GST journey in India began in the year 2017, and since then, it has come a long way in shaping our economy. All matters like registration, form filing, application for refund, etc. are taken care of by our skilled and efficient Chartered Accountants. It is our sole purpose and duty to take part in and to give way to a robust and open discussion surrounding accountable GST, increased transparency and the ensuring of taxation in an increasingly digitized and globalized world.
- GST Registration for new Assessee
- Regular Routine Work
- Filing of monthly and quarterly GST returns and annual compliance return
- Assistance in deposit of GST to electronic cash ledger
- Consultancy on GST on regular basis
- Refund of GST from GST Department
- Bond and Letter of Undertaking (LUT) related work for Exporters
1.Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax, etc.
2.Businesses with turnover above the threshold limit of Rs. 40 Lakhs (Rs. 20 Lakhs for North-Eastern States, J&K, Himachal Pradesh, and Uttarakhand)
3.Casual taxable person / Non-Resident taxable person
4. Agents of a supplier & Input service distributor
5. Those paying tax under the reverse charge mechanism
6. A person who supplies via e-commerce aggregator
7. Every e-commerce aggregator
8. Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person
Trade mark registration gives the proprietor the right to exclusive use of the mark in respect of the goods or services covered by it. Possibly the most important reason for registration of a trade mark is the powerful remedies against unauthorised use
2.Hypothecation / Security
A very important reason for registration is to create the trademark as an identifiable intangible property in the legal sense. Trade mark registration is a value store or receptacle of the value attaching to the reputation or goodwill that the product enjoys
A trademark standardizes the product and services provided by the business entity in the market. This builds up the value of the brand such that it is easy for a customer or a potential customer to spot the company or brand in the market
4.The Value in The Market
A trademark standardizes the product and services provided by the business entity in the market. This builds up the value of the brand such that it is easy for a customer or a potential customer to spot the company or brand in the market
A registered trademark can be transferred. The same is not possible for a common law trade mark, which can only be transferred with the business 6.The Right to use the Symbol ® or “R” or word Registered
Once the trademark is registered the symbol ® or “R” or word “Registered” may be used for the goods and services listed in the registration.
1.Any FBO with an annual turnover of not more than Rs. 12 Lakhs.
2.Petty retailer dealing in food products
3.Any person who manufactures or sells any food article by himself
4. Food sale is done by the temporary stall holder
5.Any individual who distributes food in any religious or social gathering except a caterer
6.Small-scale or cottage industries dealing in the food business
Import-Export Code Registration
1.Unlock Internation Markers
IEC is popularly known as Import Export code, which is a ten digit number issued by DGFT in India. It is the primary requirement for the import into and export from India for the goods and specified services which enables the businesses to unlock the opportunities across the globe in international business market
2.Leads To Business Expansion
IEC assists you in taking your services or product to the global market and grow your businesses to the worldwide market and develop your organizations as per your expectation
3.Availing Several Benefits
The Companies could avail several benefits of their imports/ exports from the DGFT, Export Promotion Council, Customs, etc., on the basis of their IEC registration online, Obtaining IEC is complete online process through its common portal
4.No Filling Of Returns
IEC does not require the filing of any returns. Once you get your registration done, there isn’t any requirement to follow any sort of processes for sustaining its validity. Even for export transactions, there isn’t any requirement for filing any returns with DGFT
5.Easy Processing And Documentation
It is fairly easy to obtain IEC code from the DGFT within a period of 10 to 15 days after submitting the application. There isn’t any need to provide proof of any export or import for getting IEC code. Documents required are. IPAN Card of the Applicant, Passport Size photograph of the applicant, Cancelled Cheque, Address proof of the Business
6.No Need For Renewal
IEC registration is permanent registration which is valid for life time. Hence there will be no hassles for updating, filing and renewal the IEC registration. It is valid till the business exists or the registration is not revoked or surrendered, it could be used by an entity against all export and import transactions.
1.Suitable For Both Small And Large Organisations
Standards make market access easier, in particular for SMEs. They can enhance brand recognition and give customers the guarantee that the technology is tested and reliable. ISO registration is as effective for small organizations as it is for large organisations reaping major benefits. Your business generally becomes more efficient and productive, giving you an edge over your competitors. You can also enjoy marketing benefits from ISO certification because you can reassure customers that your business follows the highest quality standards
2.Increase In Efficiency, Productivity And Profit
ISO International Standards help businesses of any size and sector reduce costs, increase productivity and access new markets. For small to medium sized enterprises (SMEs), standards can help to: Build customer confidence that your products are safe and reliable, Meet regulation requirements, at a lower cost, Reduce costs across all aspects of your business, Gain market access across the world
3.Improved Customer Retention And Acquisition
ISO Certification is the proof to your stakeholders, customers and staff that you keep your promises, that you provide consistent, reliable and fit for purpose solutions, Issues are identified and resolved quicker, in many cases without the customer even knowing, Improve the customer / supplier relationship by responding proactively to customer feedback and also the time and cost is saved for both the organization and customers. Customers are far more likely to contact a company if it uses an ISO 9001 logo in the marketing of its products
4.Better Internal Management
Through ISO certification there is benefits increased for the staff and employees which increases job security through enhanced business performance, Improves job satisfaction as employees are clear about what to do and how it is to be done, Boosts morale and motivation through improved training capabilities. Better utilisation of your time though improved resource management
5.Consistent Outcomes, Measured And Monitored
ISO certification helps to improve the credibility of business with a current & new client which leads to creating niche market for business. ISO certification implementation enhances functional efficiency of an organisation. ISO certification agency helps you develop SOP’s & work Instructions for all your processes. ISO implementations help to manage the resources effectively, as you become able to utilize all your resources to its maximum extent
6.Globally Recognised Standard
ISO was founded with the idea of answering a fundamental question: “what’s the best way of doing this?” It isConsistent, transparent, targeted. ISO standards have a lot in common with the principles of better regulation. Developed through the consensus of globally established experts, regulators and governments count on ISO standards to help develop better regulation. Not only do they help save time, they are essential tools for reducing barriers to international trade.
The Employees’ Provident Fund (EPF) is a savings scheme introduced under Employees’ Provident Fund and Miscellaneous Act, 1952. It is administered and managed by the Central Board of Trustees that consists of representatives from three parties, namely, the government, the employers and the employees. The Employees’ Provident Fund Organization (EPFO) assists this board in its activities. EPFO works under the direct jurisdiction of the government and is managed through the Ministry of Labour and Employment. The EPF scheme basically aims at promoting savings to be used post-retirement by various employees all over the country. Employees’ Provident Fund or EPF is a collection of funds contributed by the employer and his employee regularly on a monthly basis. The accrued amount may also be withdrawn by the nominee or the legal heirs of the employee post his death or can be withdrawn by the employee himself post-resignation.
ESI registration is mandatory once a company or any other entity employs 10 or more low-earning employees i.e. less than Rs.21000.00.The ESI scheme provides tremendous benefits to the employees and has a large network of dispensaries, and hospitals throughout the country for facilitating fast and efficient medical care. All entities are required to mandatorily apply for the ESI registration within 15 days of the ESI Act, 1948 becoming applicable to them. After the registration ESI Returns have to be filed twice a year.
The following documents are required for the filing of the returns:
1. Register of Attendance of the employee
2. Form 6- Register
3. Register for wages
4. Register of any accidents which have happened on the premises of the businesses and
5. Monthly returns and challans
Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:Manufacturing Enterprises-he enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development Regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise is defined in terms of investment in Plant & Machinery.
Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment… As per revised definition of MSME, for Manufacturing Sector and Service Sector:
Enterprises Invtestment + Turnover
Micro Enterprises <Rs.1 Crore <Rs.5Crores
Small Enterprises <Rs.10 Crores <Rs. 50 Crores
Medium Enterprises <Rs. 20 Crores <Rs. 100 Crores
Provisional Patent Registration
Indian Patent Law follows first to file system. A provisional application is an application which can be filed if the invention is still under experimentation stage. Filing a provisional specification provides the advantage to the inventor since it helps in establishing a ―priority‖ date of the invention. Further, the inventor gets 12 months‘ time to fully develop the invention and ascertain its market potential and to file the complete specification.
- Application in the prescribed Form
- If the applicant is any Firm, LLP or a Company, their PAN Card, along with the incorporation certificate
- In the case of an individual applicant, his/her Aadhaar Card is mandatory.
- Latest Municipality Property Tax Payment Receipt.
- Lease documents or consent letter from the owner of the property.
- NOC from your immediate neighbor.
- A certified layout plan of your trade building showing the business, working or washing or resting areas: Katha extract, Katha certificate, Sanction plan, Occupancy certificate (OC).
Professional Tax Registration
NSIC Registration is also known as single point registration. As we know that governments are major buyers of various products. Government procurement is being carried out with tender process so NSIC is the playing role of mediator between governments and sellers.
This certificate is enabling to the seller to sold the goods to the different government agencies.
Benefits of the NSIC Registration:
- Issue of the Tender Sets free of cost;
- Exemption from payment of Earnest Money Deposit (EMD);
In tender participating MSEs quoting price within price band of L1+15 per cent shall also be allowed to supply a portion upto 25% of requirement by bringing down their price to L1 Price where L1 is non MSEs.
Every Central Ministries/Departments/PSUs shall set an annual goal of minimum 25 per cent of the total annual purchases of the products or services produced or rendered by MSEs. Out of annual requirement of 25% procurement from MSEs, 4% is earmarked for units owned by Schedule Caste /Schedule Tribes and 3% is earmarked for the units owned by Women entrepreneurs.
In addition to the above, 358 items are also reserved for exclusive purchase from SSI Sector (List is given below in download section).
Validity Period of G. P. Registration
The Registration Certificate granted to the Micro & Small Enterprise under Single Point Registration Scheme (Revised), 2003 is valid for Two Years and will be reviewed and renewed after every two years by verifying continuous Commercial and Technical Competence of the registered Micro & Small Enterprise in manufacturing / producing the stores for which it has been registered by NSIC.
Note: The registration Fee is based on the Net Sales Turnover as per latest audited Balance Sheet of the Micro & Small Enterprise for the Registration, Renewal and any other amendment etc
Registration as Venture Capital Fund
Step 1: Check the eligibility criteria
The initial step in forming a venture capital fund is to incorporate the entity with the main objective is to carry the activity of funding. Company, trust, partnership/LLP or others are eligible to register a venture capital fund and make application to SEBI board for the registration. SEBI Board may not grant the certificate to the applicant until he checks the registration document. Document must permit to carry the activity of ‘Venture Capital Fund’.
To become eligible for venture capital fund, one has to comply all the below mentioned provisions.
Compliance for type of entity
Trust: Trust deed has been duly registered under the provisions of the registration act.
LLP: LLP Agreement duly filed with the registrar under the provisions of limited liability partnership act 2008.
Body Corporate: Memorandum of company is permitted to carry on the activities of Venture Capital Fund (VCF)’.
Step 2: Apply to SEBI
Apply to SEBI in Form A as provided in the SEBI (Venture Capital Funds) Regulations, 1996 along with all the necessary documents. Form A should be appropriately filled, numbered, duly signed and stamped. Submit application fees of Rs.1 lakh by way of bank draft in favour. Online application will be file to SEBI as per the guidelines as prescribed.
Step 3: Check application status
Applicant must fulfil the requirements as specified in the regulations. If the Board is pleased with the requirements then applicant is eligible for the grant of certificate, it shall send intimation to the applicant.
Step 4: Pay registration fee
On receipt of intimation from SEBI, applicant shall pay registration fee of 10 lakh specified in Part A of the Second Schedule in the manner specified in Part B thereof in favour of The Securities and Exchange Board of India.
Step 5: Issue registration certificate by SEBI
After acceptance of registration fees, SEBI will grant the applicant the certificate of registration as a ‘Venture Capital Fund’ in Form B.
Step 6: Complete the compliance after registration
Check SEBI website regularly for updation issued with respect to VCF activity. Inform to SEBI about the material change in the particulars already provided to SEBI within a reasonable period of time.