India is one of the largest countries in the world and businesspersons here have many ideas they can put in practice by starting companies. In the past few years, the number of startup companies has started picking up in India thanks to these ideas which usually come from young entrepreneurs.
In this article, our company formation agents in India explain how you can open a startup in this country. You can rely on our support for creating a startup in India.
Pre-registration steps for startup formation in India
Startups are usually small businesses that begin with an idea that meets the specific demands of the market or that target groups of clients or customers. An Indian startup can also be created as a niche company, which is why before setting it up, one must make sure the following details are in place:
- a business plan that will provide the main idea behind the startup and the studies that indicate the need for such a business;
- a business model that will provide information about how to company will generate income through the service or product it will develop.
These documents are important because they will help the startup in India to obtain the necessary funds to operate after creation.
If you want to register a company in India as a startup, you can seek counseling from our local specialists. You can also rely on our Indian accountant if you have a small company. You can maintain track of your finances without creating a department by hiring our specialists to keep track of the most important aspects of running or managing and small enterprise, in accordance with the fiscal legislation.
Steps for creating a startup in India
Compared to the usual steps of starting a company in India, the creation of a startup requires an additional one, and that is to register it as such. Therefore, the following steps need to be completed when opening a startup in India:
- choose the legal form of the company (there are several legal entities suited to this business type);
- obtain the Digital Signature Certificate (DSC) and Director Identification Number (DIN);
- register the company with Startup India, the agency supporting such companies;
- register the business with the Companies Registrar in India, just like in the case of any other company;
- register for taxation purposes and obtain the necessary approvals and business permits.
Compared to the incorporation of a medium or large-sized company, the startup needs to be registered with Startup India.
With respect to the legal entities that can be employed to open a startup in India, the partnership and the private limited liability company are preferred.
If you have any questions on how to form a company in India, our representatives can answer them. Additionally, you may rely on us for outsourcing, employee tax administration, leave/absence management, and other payroll-related services. One of the departments our professionals can manage is accounting, allowing us to provide clients with all the services they would otherwise need to have specialized skilled staff for. So, do not hesitate to contact us for assistance with payroll in India.
Documents to prepare for startup creation in India
Upon the opening of a startup in India, the documents to prepare are usually the same as for any other company and include:
- the trading name reservation form;
- the DIN of the directors;
- the Digital Signature Certificate;
- the application form for company registration (Form-1);
- Form -18 which provides for the registered address of the company
- Form-32 which provides for the details of company officers (directors, managers, and secretary).
Apart from these, because the company is a startup, additional documents must be provided. Among these, a recommendation that will be filed with Startup India. This recommendation can take one of the following forms:
- a letter of support from a recognized business incubator;
- a letter of funding from a business incubator or angel investor (the funding cannot be less than 20% of the company’s capital and must be made in equity);
- a letter of funding from the Indian government;
- a patent registration form which has been published by the Patent Office in the Official Gazette.
The letter of recommendation will serve as proof of the viability of the idea presented by the startup in India.
If the company seeks tax exemption (startups in India are exempt for 3 years from the corporate tax), it must obtain a certificate from the Inter-Ministerial Board.
Our company formation consultants in India can help with the preparation of all the documents that need to be filed in order to create a startup in this country.
The startup environment in India
India is a very appealing destination for setting up a startup thanks to various benefits under the form of tax exemptions it can obtain. This is why the number of such businesses flourished in the last few years. According to statistics:
- by the end of 2019, there were 4,750 startup companies registered in India;
- the average age of entrepreneurs setting up such companies is 28;
- there are around 140 incubators to support startup companies;
- these businesses accounted for the creation of 80,000 jobs in the last few years.
Small business owners and operators needed accounts receivable and claims management solutions that were dependable, accurate, secure, and reasonably priced. Our accountant in India will set to work straight once and provide work quickly and to a high standard. Do not hesitate to get in touch with us for detailed information on all our services.
For assistance in creating a startup in India, please contact our local company registration advisors.