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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)

Startup India Financing – Funding for startups

Startup India campaign is based on an action plan aimed at promoting bank financing for start-up ventures to boost entrepreneurship and encourage start ups with jobs creation. The campaign was first announced by Prime Minister Narendra Modi on 15 August, 2015. As part of Start Up India action plan Canara Bank has introduced a specialized scheme for financing of startups and early stage units promoted by graduates of reputed educational institutions like IIT and IIM. Canara Bank is among the largest banks in India with 5841 branches spread across all geographical segments. In addition to over 5841 branches, the bank also has other channels that include 9251 ATMs, covering 4081 centres.

Loan Eligibility

Canara Bank is one of the first bank to launch a specialized scheme for financing of start ups and early stage units promoted or proposed to be promoted by Graduates of reputed Educational Institutions. To be eligible for loan under this scheme, the promoter must be aged between 20 – 50 years and operate a startup or early stage unit that is less than 3 years from date of commercial operation or first balance sheet, whichever is earlier. In addition to the above, the promoter must be a Graduate of one of the Educational Institution listed below:

  1. IIMs (Indian Institute of Management)
  2. IITs (Indian Institute of Technology)
  3. IIITs (Indian Institute of Information Technology)
  4. IISc (Indian Institute of Science)
  5. ISBs (Indian School of Business)
  6. IISERs(Indian Institute Of Science Education And Research)
  7. XLRI ( Xavier School of Management)
  8. Symbiosis Institute of Management Pune/Bangalore
  9. Management Development Institute, Gurgaon
  10. NITs (National Institute of Technology)

Amount of Loan

Under the scheme for financing startups, loan can be provided for manufacturing or services activity. The loan can be working capital, term loan and non-fund based limits. The minimum loan that can be availed under this scheme is Rs.10 lakhs, while a maximum loan of upto Rs.2 crores can be provided for startup and Rs.5 crores for early stage units.

Promoters would have to maintain a margin of 25% in case of working capital limit and 20% in case of term loan.

Collateral Security

Minimal collateral security is required for loan sanctioned under this scheme. In case of loan under Rs.100 lakhs, loan can be provided without collateral under CGTMSE coverage. In case of loan over Rs.100 lakhs, loan can be provided against pledge of collateral property worth 50% of the loan amount in the form of land or building or approved securities or bank deposits.

Interest and Repayment

Loan sanctioned for startups and early stage units under this scheme are sanctioned at attractive rate of interest. A 0.25% reduction from card rate is provided for applicable MSME businesses. In addition to the interest, an upfront fee of 0.25% of the sanctioned amount (Minimum of Rs.5000) must be paid to be bank on sanction of the loan.

Repayment tenure of up to 7 years excluding moratorium is provided for projects involving project cost of less than Rs.1 crore. Projects with a cost of over 1 crore can enjoy 7 to 10 years repayment tenure, excluding moratorium period. Repayments can be structured as EMI payments or ballooning repayment, based on the projected cash flows.

For details, visit MyeCA

(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)