Ever since the Indian government came up with the â€˜Start-up India’ program, more and more young entrepreneurs have come up with their creative ideas and are trying to turn them into a business model.
To promote this concept and allow youngsters to engage in this process even more, the government has come up with quite a few significant benefits for young entrepreneurs. While some benefits help in easy filings and registration, others help in the tax exemptions.
Let us dive into the benefits one by one and see how it helps the young start-ups.
The biggest issue with legal, filing and registration systems in India is the slowness of it. One cannot deny the fact that it takes you ages to get some paperwork done across all platforms. To prevent the young generation from getting fed up with the system and giving up, the government decided to make the whole process simple and easily accessible. You can now register your start-up using just an application on your phone. You just need to submit the required documents and you are good to go. With the whole process online, you can do the registration from anywhere you want if you have a smartphone with an internet connection.
Reduction in costs
Filing for patency costs a certain amount of money, which many small-scale entrepreneurs cannot afford. To make it feasible for everyone, the government has reduced the fee by 80%. The government now provides the list of facilitators of patents and trademarks and have increased the pace of operations of Intellectual Property Right Services. By reducing the fee structure, a start-up now just has to pay the statutory fees and the facilitator’s fee will be managed by government.
Better chances of getting funds
With the government now allocating funds upwards of Rs 10,000 crores, start-ups now have a much better chance of getting funding, which has always been a huge problem for them. Furthermore, the government has also asked all the major banks to provide financial capital to budding start-ups.
No tax for the first 10 years
Initially, a company fell under the definition of a start-up for its first 7 years of existence and the company did not have to pay taxes for the first 5 years. However, now the company can remain classified as a start-up for the first 10 years and the tax exemption rules too have increased to 10 years. The government is listening to the response from people and angel investors in general, and has made these changes.
Start-ups can apply for tenders
The general rules require a company to have a certain amount of experience or a certain turnover to make bids on government tenders. However, the government has exempted start-ups from this rule, allowing them to make tenders if they have the required financial backup. This provides wonderful opportunities for everyone new involved in the game to both earn and learn in the process.
Setting up R&D Facilities
The government has promised to develop several R&D parks across the country to help tackle the problem of not having infrastructure to build new things. A few such parks have already come up in the nation with a few more coming down the line pretty soon.
No unnecessary or time-consuming compliances
As mentioned above, the simple process of registering a start-up is due to the direct result of a cutting down in processes and steps. It not only saves a lot of time but money as well. Start-ups can self-certify their company through the mobile app by following the 9 labour and 3 environmental laws.
Investors too can save money
Investors do not have to worry as they too are exempted of taxes if they make investments in such start-ups. It is not just the parent company that will enjoy the tax benefits but the investors too. This rule has given way to many investors investing heavily in projects where they see a certain spark or opportunity. Therefore, if you believe that your idea is incredibly superb then you just need to find the right investor who will be ready to invest in your company generously.
Freedom to choose your investor
Now with this plan rolled out, there are far more options in terms of venture capitalists. Earlier, the options available were quite limited but now more and more firms are coming up as VCs to aid start-ups. With this development, start-ups now have the freedom to choose a VC that resonates with their thought process. This results in the smooth functioning of the company as you get the required money at the right time.
An easy exit plan
It is not just about inviting entrepreneurs to this scheme and forcing them to stay in it. The government has made an equally easy exit plan allowing any company to leave the scheme if they feel like it is not working out for them. You just need to fill the form for exiting the service and you will be able to leave it within 90 days of this submission.
Opportunity to meet fellow entrepreneurs
The government has planned to keep start-up meets every now and then to ensure that you can meet with fellow entrepreneurs and work on different ideas. It also gives you an opportunity to form new alliances, resulting in better quality of products coming out.
With all these benefits offered by the Indian government, it is surely the best possible time to start your company and aim high.
Also read: All You Need to Know about the Make In India Scheme