Private Limited Company Registration In India | Startup Registration

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12 May 17
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12 May 17
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12 May 17
legalsalah

Legal Salahaims for excluding the mediators from between the disadvantaged and the professional and saving the time of former whilst the procedure. The Company came up with the idea of Legal Salah- an online legal advisory portal, after looking at the faulty and often pleonectic opinions of the lawyer and accountants. Thereby the motive of the firm is to provide hassle free online legal , tax , compliance support to startups and SME who have limited budget during the initial days of Business . 

TEN LEGAL REQURIMENT FOR STARTUP Before one starts a business venture and also during its operations, it is imperative to know the External Business Environment where it operates. External Business Environment consists of Political, Economic, Technological, Legal and Ecological Environment which encompass aspects of government policy to tax holidays. All these are out of control of the Business but have a major impact on the everyday operations as well as the overall functioning and growth of the Business. In the Startup Business Environment in India, a startup needs to keep track of the Regulatory Environment, Tax Regimes, Legal Issues, and necessary Compliances to be met which would ensure the smooth running and allow startups to avail all the benefits that the Government is offering to make startups in India a success.

According to the Startup Action Plan launched by the PM on January 16th, 2016:

A startup is an entity registered in India; it may be a Private Limited Company, Limited Liability Partnership or a Partnership and is deemed to be a startup when:

Less than 5 years of existence

Turnover not exceeding more than 25 Crores

Involved in innovation, development, deployment, or commercialization of new product

and services are driven by technology or Intellectual Property

Working on a new product or service

Significantly improves an existing product, service or process that will create and all value

for customers of the workflow.

PROCESS OF RECOGNITION OF A STARTUP:

To be accorded the status of a startup, and to enjoy the legal rights and avail the benefits of the same, the Business needs to acquire a certification from the Inter-Ministerial Board of Certification which comprises of the Joint Secretary, Department of Industrial Policy and Promotion(DIPP) and Representatives of the Department of Science and Technology and Department of Biotechnology. For the same, an application needs to be made with the following documents:

In the prescribed format by DIPP, a RECOMMENDATION needs to be obtained by the startup from any incubator established in a post-grad college in India, Or, From an incubator which is funded by the Government as a means to give impetus to innovation, a LETTER OF SUPPORT needs to be obtained, Or, In the prescribed format by DIPP, a RECOMMENDATION needs to be obtained by the startup from any incubator recognized by the Government of India, Or, A LETTER OF FUNDING from an SEBI-recognized Incubation Fund/ Angel Network/ Private Equity Fund/ Accelerator/ Angel Fund of not less than 20% in Equity appreciating the innovative streak in the business.

TAX EXEMPTIONS:

In order to encourage startups, and to support startups to grow, the Government of India has provided tax exemptions to startups. 100% profits are to be deducted while calculating the income of the Startups. The Startup can claim this exemption for three consecutive years out of the initial five years, however, the Minimum Alternate Tax is still applicable and this qualifies the Startups to pay a tax.

Capital raised from the sale of long-term assets is exempted from tax if such capital is invested in other funds o used to purchase computers or computer software. Furthermore, tax exemptions have also been provided by investments made by resident investors. A patent developed and registered in India is charged at a discounted rate of 10% at the income it generates worldwide.

SELF CERTIFICATION:

In order to save the startups from being caught up in the net of various compliances required with a business venture, the Government has proposed that for the initial three years of the existence of a startup, there would be no inspections unless there is a complaint and the startups can self-certify themselves on the mobile app and web portal created for the purpose. These compliances encompass the following laws:

The Building and Other Construction Workers (Regulation of Employment & Conditions of Ser­vice) Act, 1996

Inter – State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979

Payment of Gratuity Act, 1972

Contract Labour (Regulation and Abolition) Act, 1970

Employees’ Provident Fund and Miscellaneous Provisions act, 1952

Employees’ State Insurance Act, 1948

Water (Prevention & Control of Pollution) Act, 1974

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