All posts by Nitish Banka

Startup India registration process

Recently PM Modi had announced the scheme related to Startups and extended his support towards innovation, it’s a very good step considering in mind a lot of startups are emerging and they need some sort of support to survive. The StartUp India initiative includes benefits like tax exemption, funding, relaxation and support in registration of intellectual property.

THE SCHEME-WHAT YOU HAVE TO DO

The number one thing you must do is to apply for recognition as a startup, for this first thing first is that you must be registered as a partnership, company or a LLP. In order to get recognized as a startup you must get

  1. Recommendation (with regard to innovation nature of business), in a format specified by Department of Industrial Policy and Promotion, from any incubator established in post-graduate college in India; or
  2. Letter of support by any Incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or
  3. Recommendation (with regard to innovative nature of business ), in a format specified by Department of Industrial Policy and Promotion, from any Incubator recognized by Government of India; or
  4. Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business, Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
  5. Letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or
  6. Patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of business being promoted

KEEP IN MIND

You must qualify for the definition Startup as per the government of India Notification to get the benefits under the scheme. That means you must be qualified as under The Startup must possess

a) Up to five years from the date of its incorporation/registration,
b) If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
c) It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property;

If you are qualified as a startup and got any of the 6 documents mentioned above then you have to apply with complete documentation. Once this done the Department of Industrial Policy and Promotion will issue recognition number and the startup will be recognized Startup

Then the funding process will be initiated which will be discussed in next part.

Advocate Nitish Banka
For details, visit Lexspeak Legal

(Please post your press releases directly to appropriate exchange forum and submit startup events using the form.)
(If you are an amazing startup founder or enabler of startup eco-system in India or elsewhere and would like to be interviewed or featured on Startups.in then please read this and this before you reach out)

Licensing – A way to grow your Business

Consider licensing as a way to grow your business, licensing means to permit or simply means to use. If you are a small business with innovative products you may use licensing as a mode to grow your business.

Licensing involves two partners one is an innovative partner and other is a heavy weight organization. Many small businesses die because they are not able to attain those levels of sale or generate revenue, even if they have great products, they do not have those mass production capacity to produce those great products to become profitable. Because R&D costs involved in generating or creating great products are huge yet many products fail to create an impact in the market. The solution is licensing. Licensing is very popular in software sector and very popular example is Microsoft licensing software’s to IBM. Now if a small company really wants to become big the Microsoft IBM licensing is a perfect example.

Here are some of the ways to assess whether your business is fit for licensing or not.

Innovative and Unique products but no capacity to produce at Large scale.

You have an innovative product and is an improvement of earlier product that could lead an impact to the existing industry if it is produced at a mass scale, the solution is simple it is to license it to the big corporation and take a royalty out of the sales, when it is produced and sold at large scale. But remember the legalities involved in such cases, make sure your product complies with all the Intellectual property laws this means you must have a proper copyright or patent for the product before you may license it for mass product otherwise you will lose your proprietorship.

Ancillary products to main product

If your product is an ancillary product to the main product and you can’t match the demand in case it’s a B2B business consider the proposition of licensing it to the main product manufacturer, because they have such facility to mass produce and fulfill demand. Like in cases of automobile industry some technology like computer software are licensed. Or some equipment like safety equipment’s like air bags sensors are often licensed by electronic companies and they earn royalty on it.

Products that can only earn profit if mass produced

It is for those manufacturing factories which have huge distribution channels and the price margin of the product is small that unless they are mass produced and distributed hardly the profit the product could make for those products huge amount of capital is needed to get some product, licensing with already established business is easier to mass produce and gain profits. It is for those products which are to be sold in millions to make millions and that can’t run of pennies as you would be getting pennies.

Licensing is a way to scale up the business really fast without raising any capital, but only precondition is that the product has a huge demand potential and should sell like hot cakes and the product if sold in masses could create a huge impact in the industry. These types of products are best suited for licensing.

For details, visit Startup legal

(Please post your press releases directly to appropriate exchange forum and submit startup events using the form.)
(If you are an amazing startup founder or enabler of startup eco-system in India or elsewhere and would like to be interviewed or featured on Startups.in then please read this and this before you reach out)

Startup Lawyer: 5 simple things startups could do to avoid expensive litigation

In recent times, we have been seeing several high and low profile startups ending up in courts disputing and tarnishing reputation. The recent case being that of TVF pitchers, fighting for equity stake in the company. Here are 5 quick tips startups can use to avoid costly litigations.

1. Have a Legal Agreement

A startup running without a legally enforceable agreement is a recipe for disaster. Clear and unambiguous agreement between the partners, employees, vendors reduce the chances of litigation.

2. Abidance with the Compliance Laws

Do you know government is the biggest litigator in Indian courts? Have a competent team of CS, CA lawyers to avoid litigation by government in CLB, Income tax tribunals, ED, EOW etc.

3. Robust Customer Redressal System

Don’t treat your customer badly, they can approach consumer forum for redressal if you fail to redress their legitimate claims.

4. Vendor Payments

Make sure you pay your vendors on time or else they may sue you for recovery with a civil suit or your startup can end up in arbitration.

5. IP Policy

Make sure all your intellectual property like copyright, TM, designs, patents is registered and are in the name of company, not in the name of employee(s).

Follow these tips to reduce expensive litigations, save time and money.

For more details or to request a consultation, visit Lexspeak Legal or call me at 9891549997 – Adv. Nitish Banka, Founder, Lexspeak.

[Edited for clarity]

(Please post your press releases directly to appropriate exchange forum and submit startup events using the form.)
(If you are an amazing startup founder or enabler of startup eco-system in India or elsewhere and would like to be interviewed or featured on Startups.in then please read this and this before you reach out)