Startup Registration | The Do's and the Don'ts How to Register Availing Tax Benifits | Cessation of Being a Startup Tax Benifits |

1. Registration | The Do’s and Don’ts
Lexplosion Solutions Pvt. Ltd.
Date: 30th September, 2016

2. Announcement of the “Start-up India” initiative as part of Independence Day
Speech by PM which aims for the following –
What Is A Startup?
Fostering entrepreneurship and promoting innovation by creating an ecosystem
that is conducive for growth of Start-ups.
Targeted for India to become a nation of job creators instead of being a nation of
job seekers.
Fostering a fruitful culture of innovation in the country is a long and important
journey.
Formal launch of “Start-up India” initiative on January 16, 2016
Organizing a global workshop on “Innovation and Start-ups” on January 16, 2016 to:
• provide a platform to bring together all stakeholders;
• stimulate dialogue on key challenges that the Indian innovation ecosystem currently faces;
and
• provide the potential solutions to address them.
2

3. Private Limited Company
OR
Registered Partnership Firm
OR
Limited Liability Partnership
Including existing entity/ies or
One Person Company which
is/are registered as Pvt. Co.
Entity Type
Entity’s Age limit: Within 5 years
from the date of incorporation
Turnover limit: Within 25 crore
at the end of financial year
Operation: Working towards innovation, development, deployment or
commercialization of new products, processes or services driven by
technology or intellectual property.
Other
Conditions
o An entity formed by the splitting or reconstruction of an existing
business shall not be considered to be a startup.
o A proprietorship or a public limited company is not eligible as
startup.
Restrictions
Precondition for Registering as Startup
3

4. How to Register (Online Only)
NEW ENTITIES
A. Register entity through MCA or Registrar of Firms using the existing processes
B. Register itself on the Startup India portal and mobile app as a “Startup”.
Option 1
Option 2
EXISTING ENTITIES
Register through the Startup India portal and mobile app using a seamless process.
Any One of the following documents is required to be uploaded along with the application for
registration as a Startup on Startup India portal and mobile app:
*recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion,
from any Incubator established in a post-graduate college in India; or
* 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
* 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
* 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; or
(Note: Department of Industrial Policy and Promotion may include any fund in a negative list for such reasons as it may deem fit.)
Documents Required for making Application:
4

5. NEW ENTITIES
A. Register entity through MCA or Registrar of Firms using the existing processes
B. Register itself on the Startup India portal and mobile app as a “Startup”.
EXISTING ENTITIES
Register itself through the Startup India portal and mobile app using a seamless process.
Option 1
Option 2
Documents Required for making Application:
Any One of the following documents is required to be uploaded along with the application
for registration as a Startup on Startup India portal and mobile app:
* Letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation;
OR
(Note: Prescribed formats for recommendation / support / endorsement letters are published on Startup India portal.)
* Patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of business being
promoted; AND
(Note: If an entity has filed for a patent that has been published, then valid copy of the published patent would suffice as a
supporting document.)
* Valid PAN of the entity.
How to Register (Online Only)
5

6. NEW ENTITIES
A. Register entity through MCA or Registrar of Firms using the existing processes
B. Register itself on the Startup India portal and mobile app as a “Startup”.
EXISTING ENTITIES
Register itself through the Startup India portal and mobile app using a seamless process.
Option 1
Option 2
Any One of the following documents is required to be uploaded along with the
application for registration as a Startup on Startup India portal and mobile app:
(Note:
 One can register as a Startup without a PAN, however, it is advised that a valid PAN of the entity is provided at the time of
registration, as each entity is separately taxable person.
 Mobile number of the authorized representative of the entity has to be provided at the time of registration. The portal and the
mobile app would be sending an OTP on the mobile number provided for the user to complete authentication and registration
process.)
List of SEBI registered funds is also available on the Startup India portal.
List of recognized incubators are published on the Startup India portal.
Document Required for making Application:
How to Register (Online Only)
6

7. Register as Startup by applying on Startup
India Mobile App / Portal.
Obtain certificate as an eligible business from
the Inter Ministerial Board of Certification.
1
2
(Note:
The inter-ministerial
board shall process
the application within a
period of 10-25 working
days.)
During the registration
process, the applicant
has to mark the
response to “Do you
want to avail Tax
benefits” as “Yes”*.
Once a user opts for
availing the benefits,
his/ her application
would be evaluated by
the Inter-Ministerial
Board.
Once certified by the
Board, the tax
benefits may be
availed**.
Process Evaluation Result
*Even if “No” is selected as response to “Do you want to avail Tax benefits”, option to opt for such benefits may be indicated at a later
stage as well.
**Startups incorporated between April 1, 2016 and April 1, 2019 shall be eligible to obtain tax benefits proposed under the Section 80
IAC of Finance Act 2016.
Preconditions for Availing Tax Benefits
7

8. Cessation of being a Startup
Upon expiry of 5 years from the date of its incorporation or
registration.
If entity’s turnover for any of the financial years has exceeded
INR 25 crore.
1
2
Intimate DIPP within 21 Days!TO DO
8

9. Laws Covered as part of the Scheme
Industrial Disputes Act, 1947
Trade Unions Act, 1926
Building and Other Constructions Workers’ (Regulation of Employment
and Conditions of Service) Act, 1996
Industrial Employment (Standing Orders) Act, 1946
Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, 1979
Payment of Gratuity Act, 1972
Contract Labour (Regulation and Abolition) Act, 1970
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
Employees’ State Insurance Act, 1948
Zero inspection for start ups in the first year of establishment.
Flexibility to submit online self-declaration certifying compliances.
Inspection based on credibility - From 2nd year up to 3 years from date of setup,
inspection only upon receipt of credible written complaint filed and subject to
approval of senior officer.
Other Benefits
Incentive on engaging Apprentices
Self-certification of start-ups and filing of single
return
Gujarat, Telangana, Karnataka, Rajasthan & Kerala
will show way to nation for setting up startup ecosystem
WHY Startup?
Benefits | Exemption under Labour Laws
9

10. Insolvency Professional Appointment of insolvency professional
(IP) and swift closure of business
Winding Up Start ups to be wound up in 90 days from making
application
Insolvency and Bankruptcy Code, 2016 procedure for voluntary
closure
WHY Startup?
Faster Exit options for Start-Ups
1
2
3
10

11. Income tax is exempted for a period of three years-subject to the approval of the inter-
ministerial board: subject to the non-distribution of dividends by the start-up.
Extending MSME benefits to Startups tax exemption to newly formed manufacturing
MSMEs (if capital gains used to purchase new asset) shall extend to all start-ups.
Consideration for shares exceeding fair market value (as taxable under IOS) not to be
levied on investment by venture capital funds and incubators in start-ups.
Exemption from paying Tax Start ups exempted from paying tax on capital gains if used
for purchase of new asset.
Capital Gains Exemption on Capital Gains if the capital gain is invested in the start up
fund of the Government.
Tax Benefits Start-ups to apply for tax benefits while filing for registration.
WHY Startup?
Tax Exemptions for Start ups: Direct Tax
1
2
3
4
5
6
11

12. Easier listing norms for start ups.
Minimum application size to be 10 lakh initially to pool in
sophisticated investors.
Relaxation in delisting, takeover and AIF regulations for entities in
IT, data analytics, IPR, bio-tech and nano-tech activities
Relaxations in disclosure requirements
WHY Startup?
SEBI Listing Relaxations
1
2
3
4
12

13. This aims to put start-ups on a level playing field with the MSMEs.
Ministries/Departments/PSUs may relax norms for condition of prior
turnover and experience.
No relaxation on the quality standards or technical parameters.
Ministry of Micro, Small and Medium Enterprises- Exemption for
Start-ups from criteria of prior experience/ turnover.
WHY Startup?
Relaxed norms of public procurement for
SMEs
1
2
3
4
13

14. 1
2
3
4
Simplifying the procedure for reporting of FDI transactions by specifying the
penalty.
In case of outward remittances, Form A2 to be allowed to be filled online.
In case of transfer of ownership of start ups the receipt of the consideration amount on a deferred
basis. Also, escrow arrangement or indemnity arrangement is permitted for upto 18 months.
Allow start-ups to receive foreign venture capital investment and enabling transfer of
shares from FVC to other residents/non-residents.
RBI notified certain regulatory changes for easing cross-border transactions,
particularly relating to operation of start-ups.
WHY Startup?
RBI relaxations for Start ups- Foreign Capital
14

15. 1
2
3
Facility: Start up may avail facility of realizing receivables from its overseas subsidiaries or making
repatriation through Online Payment Gateway Service Providers upto USD 10,000 or as prescribed by
RBI.
Relaxation: Balance amount from such account is to be repatriated to India within a period that is
applicable to realization of export proceeds (currently 9 months)
Opening Up: Start up may open foreign currency account abroad to pool foreign
exchange earnings from its foreign subsidiaries.
Accepting payment on behalf of overseas subsidiaries:
WHY Startup?
RBI relaxations for Start ups
15

16. To promote commercialisation of intellectual property with ease
Registration of IPR will be in accordance to any relevant laws and rules.
The appointment of facilitators in no way transfers any IP right to the
Government or the facilitator.
To empanel ‘facilitators’ to give advice on IPR including IPR regimes
in other countries.
To provide rebate in fees for the patent application- 80% of the fee
shall be provided as rebate.
To fast track patent application and examination processes. The Patent (Amendment)
Rules, 2016 has added Rule 24C for ‘expediting patent application’ for start ups.
1
2
3
4
5
The scheme eases out patent process with the following objectives:
SIPP (Scheme for Start up Intellectual Property
Protection)
16

17. One day incorporation of Companies through the app.
CSR: Contributing to incubators notified as eligible spending under CSR. (Amendment
to Schedule VII of Act made in 2014)
Dormant company: in case company does not have financial transactions.
(Sec 455)
Small company: Paid up share capital less than 50 lakh or turnover less
than 2 cr. (Sec 2(85))
One person company: Paid up capital of 1 lakh minimum-single promoter
may incorporate (Sec 2(62))
1
2
3
4
5
Though the concept of start up has been defined only recently, the Companies Act, 2013
makes indirect provisions beneficial for start ups.
Companies Act and Related Relaxations
17

18. Entity Manufacturing Services
Micro Investment in plant and machinery<25 L investment in equipment < 10 L
Small Investment in plant and machinery between
25 L – 5 Cr
investment in equipment between 10L –
2 Cr
Medium Investment in plant and machinery between
5 Cr – 10 Cr
investment in equipment between 2 Cr –
5 Cr
While calculating the investment for plant and machinery, the cost of pollution control, R&D, Industrial safety
device and other such items shall be excluded.
Definitions 
COMPLIANCES
For MSMEs For buyers from MSMEs
Filing of Memorandum: An MSME shall file the memorandum
to the State Government authority to set up their enterprise.
Registration under Udyog Adhaar: All MSME to be obtain
the Udyog Adhaar number. There is an online registration
facility.
Furnishing information: All MSMEs have furnish information
with regard to Udyog Adhaar number, Plant capacity,
investment, product manufactured etc.
Payment: Pay MSMEs within 45 days of acceptance of the
goods or service.
Penalty: Compound Interest at the rate of 3 times the rate
notified by RBI becomes payable in case of default.
Furnishing additional information in annual audited accounts
with regard to principal and interest amount due (payable to
MSMEs), amount paid as interest along with the amount paid
after the due date, amount of dues remaining due and payable in
the succeeding years, etc.
MSME Act | A Perspective
18

19. Fully-
automated
compliance
solution
Simple
Quick
Inexpensive
Comprehensive
Compliance
Checklist
Central
State
Municipal
For Small
& Medium
Businesse
s
Efficiency
Penalty
Avoid
Surprises
Critical
Compliances
across
modules
HR
Tax
Corporate
Environment
Industry-
specific
Hassle-free
Updates & Task
Management
Email
Reminders
Calendar View
Generate
Reports
1 2 3 4 5
About Komplify
19

20. • Know the applicable
critical compliances
online
• Move up or drill
down the applicable
compliances by
various variables
• Real-time compliance
status of your
organization
• Generate customized
compliance reports
• Slice and dice reports
basis your requirements
• Get online compliance
certificates
• No complicated
workflows
• Easy to allocate
compliances
through quick links,
bulk allocation, etc.
• Get email alerts well
before compliance
date
• Get compliance
alerts from your
calendar
• Stay updated about
regulatory
amendments
Identify
laws
online
Management
by Exception
Easily manage
compliances
Ahead-of-
time
alerts
How Komplify can help MSMEs ?
20

21. 1. Depth of Laws Covered
2. Type of Laws and Compliances Covered
Central Laws State Laws
Municipality
Laws
Corporate
Secretarial
Compliances
Environment,
Health
& Safety
Fiscal
Compliances
(Registrations
and Filings only)
Labour & Employment Industry Specific
Compliances
Building,
Infrastructure
& Establishmen
About Komrisk
21

22. Comprehensive and Customized compliance repository
Ahead of time alerts and reminders
Single source of truth for all Compliance Proofs
Manage Incidents and Internal Policies
Management by Exception through Real-time status dashboards
Near real-time Compliance updates
1
2
3
4
5
6
Why Komrisk?
Lexplosion’s Compliance Management tool – Komrisk, combines the benefits of a
Comprehensive Compliance Content and a web-based software
(This is the preferred option for organizations)
22

23. • Receive information on
client's operations
• Discuss with client
regarding applicability of
laws
• Client reviews and signs-
off the list of laws
Deployment of Komrisk
• Basis applicable laws, identify the
applicable compliances
• Create and configure client workspace
in Komrisk
• Publish applicable compliances onto
the workspace
• Configure client details on Komrisk
• Impart Komrisk training for client’s
users
Periodic Regulatory
Updates
• Track applicable laws on
an ongoing basis
• Update client-specific
workspace with any
regulatory amendments
Software Support
• SLA based software support
• Periodic software updates,
as and when applicable
55+Entities Using
Komrisk 1800+Komrisk
Users 22000+Compliance
Tasks~5 Years Since in
Existence
Identification of Regulations
Komrisk Deployment Process
23

24. Founded by 4 experienced lawyers
– Worked with GE; Genpact,
Amarchand & Mangaldas
Focused on Legal & Statutory
Compliance Management
Introduced India’s first cloud-based
compliance solution – Komrisk in
2012
Partnered with CII for providing Compliance
Training & Updates to its Members
Deloitte’s “Technology Fast 500 Asia Pacific
Companies ”NASSCOM’s
“Outstanding IT/ITES Company” at Emerge
January 2012.
NASSCOM’s Emerge 50 for 2012 and
2013
Deloitte’s “Technology Fast 50 India
2012”
Started in
2007
Highly decorated /
acknowledged
by Industry/ Consultants
Delivered 150+
Compliance
Management
Engagements
About Lexplosion
Leading Fortune 100 Companies
Top Fortune 500 Companies FTSE/ NYSE/
NASDAQ / BSE/ NSE Listed Entities
Reputed ecommerce companies
24

25. Contact Us
Lexplosion is also a Member Firm of Leading Indian Industry Associations
Headquarter
Lexplosion Solutions Private Limited
Infinity Benchmark, Floor 6, Office# 1, Plot# G1, Block
- EP & GP, Sector V, Salt Lake,
Kolkata- 700 091, India
T. +91.33.40 61 80 83/84/85, F. +91.33.40 61 80 86
Mumbai Office
Lexplosion Solutions Private Limited
Regus Trade Centre G/F & 1st Floor, Bandra East,
Mumbai, Maharashtra 400051
www.lexplosion.in / www.kompify.com
NCT (Delhi) & Registered Office
Lexplosion Solutions Private Limited
D-20 Hauz Khas, Ground Floor,
New Delhi – 110016, India
Bangalore Office
Lexplosion Solutions Private Limited
Regus, CBD Bangalore, Level 9 Raheja Towers,
26-27 Mahatma Gandhi Road,
Bangalore - 560 001, India
25

26. THANK YOU
26