Company registration, Documents to get ready, Startup India Recognition.

1. The Startup India Trilogy
DPIIT Recognition, Angel
Taxand 80-IAC

2. TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
AnEcosystem Overview
NUMBEROFSTARTUPSIN INDIA
61,300
INVESTMENT2014to 2019
$ 58Bn
3rd
Mapfor Illustrative purpose only
 3rdlargest startup eco-system in the world
 3rdmost active incubation/acceleration
program
UNICORNSTARTUPSININDIA
36
DPIITand
www.startupindia.gov.in
DepartmentforPromotionof
IndustryandInternalTrade(DPIIT)
MEDIANAGEOFSTARTUP
FOUNDERS
31
ACTIVETECHINCUBATORSAND
ACCELERATORS
520+
EMPLOYMENTFOR
1BnMillennials

3. TheStartup India Trilogy:DPIITStartup IndiaRecognition
DPIITRecognition
asEligible Startup
RecognizedasEligibleStartupby
DPIIT.
OnlyDPIITrecognizedStartups
canavail TaxandRegulatory
benefits
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
80-IAC, IMB Exemption
100%IncomeTaxdeduction for any
three consecutive years out of a
period of TenYears
AngelTax Exemption
Consideration received by
eligible start-ups for shares
issuedor proposed to be
issuedexempt up to an
aggregatelimit of INR25 crore
Startup
India

4. TheStartup India Trilogy:DPIITStartup IndiaRecognition
 TheGovernmentof India under its flagship programme
"Startup India" introduced the conceptof an"Eligible
Startup".
 Govtalso laid down the criteria for recognition asan
"Eligible Startup" (see image)
 "Eligible Startups" entitled to benefits announced by
government under various programmes, schemesand
regulations.
 Typesof entities canapply for "Eligible Startup" ?
1. Private Limited Companyor
2. Limited Liability Partnership (LLP) or
3. ARegisteredPartnershipFirm
 Startup canget recognition through anonline
application on www.startupindia.gov.in
Notolder that 10years
from the
dateof incorporation /
registration
Turnover1of the startup for
anyof the financial years
since incorporation /
registration not exceeded
INR100crore
Startupworking towards
 Innovation or
 development or
improvement of
products/processes/
services or
 ascalable business
modelin terms of
employment
generation andwealth
creation
Astartup ceases to be an Eligible Startup if does not fulfill the above the criteria
or the startup is an entity formed by splitting up or reconstruction of a business
already in existence.
DPIITStartupIndia Recognition
Recognitionasan"EligibleStartup"
01.
1"Turnover" shall have the meaning as assigned to it in clause (91) Section 2of the
Companies Act, 2013
Incorporation Criteria Turnover Criteria
Innovation, Employment
& Wealth Generation
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC

5. TheStartup India Trilogy:Processfor DPIITRegistration
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
02
01
03
04
05
Registeron
www.startupindia.gov.in
Apply for recognition as an
"Eligible Startup"
Submit a write up about the
nature of businessof your startup
by wayof answering predefined
questionnaire* (ReferAnnexure I)
Submit the online application
along with attachments such as
COI& Pitchdeck
TheDepartment will review the
application and send DIPP
theRecognition Certificate over
registered email ID.

6. TheStartup India Trilogy:AngelTaxExemption
AngelTaxExemption
02. Exemption from Section56(2)(viib)of
IncomeTaxAct
 AngelTaxis aterm coined for tax proposedto belevied
on consideration received by privately held companies
(including startups) towards issue of sharesfor avalue
that exceedsthe facevalue of suchshares(called
"Securities Premium" or "Premium")
 Wheresuchvalue i.e. essentially the premium on the
sharescannot be justified
 ValuationReportfrom MerchantBankerfor valuation
carried out under Discounted CashFlow Method
 Startup can get angel tax exemption through an online
application on www.startupindia.gov.in by furnishing a
self-declaration in Form2
Investmentfrom
Non-Resident
venture capital
companyor aventure
capital fund
(i.e SEBIRegisteredCat
1,CatII, CatIII,AIF)
Specified
company
Exemption available upto aninvestment of INR25 Crore.
(i.e Aggregateamount of paid up sharecapital and sharepremium of
the Eligible Startup after issueor proposedissueof share,if any, does
not exceedINR25 Crores)
Following arenot be
considered in computing
INR25 Crores
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
"Specified Company"meansacompanywhosesharesarefrequently traded
and
i.whosenet worth on the last dateof financial year preceding the year in
which sharesareissuedexceedsINR100Crores
or
ii.turnover for the financial year preceding the year in which sharesare
issuedexceedsINR250Crores
or or

7. TheStartup India Trilogy:Processfor AngelTaxExemption
Step 1
ObtainDPIITRecognition
asan"Eligible Startup"
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
Step 2
Provide self-declaration
in Form-2(Refer
Annexure II)
Step 3
Affix Director DSC on the
form and submit online on
www.startupindia.gov.in
Success
Receiptof Emailfrom
the Department for
Confirmation
Note:
1. TheExemption is valid till aggregateamount of paid up sharecapital and sharepremium of Startup after issue or
proposedissueof share,if any, doesnot exceed,twenty-five crore rupees (INR25Crores)
2. Exemption will berevoked if the investments aremadein ûSpecifiedAssetsüasmentioned in next slide

8. TheStartup India Trilogy:Inter-Ministerial Board Recognition
Section80-IAC: Inter-
Ministerial BoardRecognition
Deduction fromProfits
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
03.
 100%Taxdeduction for anythree consecutive years out of a
period of TenYears
 Deduction Period is available at the option of Startup
 TheEligibleStart-up should beincorporated on or after 01.04.2016
but before 01.04.2021
 Startupnot formed by splitting up, or the reconstruction, of a
business alreadyin existence ; Startupnot formed by the transfer
to anewbusiness of machineryor plant previously usedfor any
purpose(subject to 20%limit for transferred machinery)
 Startupcanget 80IACExemption through anonline application in
Form1on www.startupindia.gov.in by furnishing required
documents (ReferAnnexure I)
 Approval received from Inter Ministerial Board(IMB)
 "Eligible business"meansabusiness carried out by aneligible start-up
engagedin innovation, development or improvement of products or
processesor servicesor ascalable business model with ahigh potential of
employment generation or wealth creation;
 Only80IACrecognizedStartupcanavail other tax benefits - Carryforward of
Loss,Capital GainExemptions,ESOPTaxdeferments
 TechnicalAgencyappointed by the IMBwhich reviewsapplications
 3MemberIMBBoardandMinutesof the meeting arehosted on
www.startupindia.gov.in
o JointSecretary,Department of Promotionof Industry andInternal
Trade, Convener
o Representativeof Department of Biotechnology,Member
o Representativeof Department of Science& Technology,Member

9. Startup Structures
Particulars
RegPartnership
Firm
LimitedLiability
Partnership (LLP)
Private Limited
Company$
Regulatory Benefits- CompanyLaw#,
FEMA,SEBI,RBI,LabourLaw,IPR
Angel Tax
80- IACDeduction**
NotApplicable NotApplicable
Sec.54BITAof : Capital GainBenefit
Sec.54EEof ITA: Capital GainBenefit
Sec.79of ITA: Losses
Sect.68of ITA: Identity and
Genuiness@
IncomeTaxRate
Investment Solicitation
30%*
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
30%* 22%*
$ Private Limited can include OPC
subject to further analysis
(As per Startup India FAQ,OPCis also
entitles to Startup India Registration
and Recognition)
# Equity structure related benefits
available only to PrivateLimited
Companylike ESOP,sSweatShares,
Convertible Notes etc.
** Subjectto AMTandMAT
@FMannounced about e-verification
of identity andgenuiness of investors
* Subjectto Business Purpose
(Manufacturing.), Education Cess,
Surcharge,TurnoverLimits asper
FinanceAct,2020
ITA=IncomeTaxAct

10. Incorporation Private Equity
(Series B/C/D)
Friends& Family
(Pre SeedEquity)
Journey, Equity Structures ;Taxand Regulatory
 Equity Shares
 Ideation by Founders,
Co-Founders,
 FounderAgreements
 Equity Shares,Founder
Loans/ConvertibleNote
 Idea/ Protoype/ Proof
of Concept (POC)
 NoValuation Discovery
Incubators,
Accelerators, Mentors
andAngelInvestors
(Seed Round/ Pre-
Series A)
 Equity/CCPS/CCD
 Product/Service launched
 Challenges: Advisory equity
/SweatEquity / Mentor
Equity/ Considerationother
than Cash
 ShareHolderAgreements
with Investors, Investment
Round Compliance
 FEMAin caseof Non-
Resident Investors
 Valuationof Securities
Venture Capital
(SeriesA/ B)
 Instrument : CCPS/
Collateralized Borrowings
 Product/Servicegaining
Market
 Issues: Dilution in Shares,
Restriction on Saleof
Founder Shares
 ShareHolderAgreements
with Investors, Investment
Round Compliance
 FEMAin caseof Non-
Resident Investors
 Valuationof Securities
 CCPS,VentureDebt,
Collateralized Borrowings
 IncreasingRevenue,
CustomerBase,Overseas
Expansion
 Partial Promoter Sale
 ESOPExits for Employees
 ShareHolderAgreements
with Investors,
Investment Round
Compliance
 FEMAin caseof Non-
Resident Investors
 Valuationof Securities
Exit
 Acquisition by
Corporates,Competitors,
IPO’s, PEBuyouts, Acqui-
Hire, M&A
 CashSaleor ShareSwap
 Stable Revenue
 Private FamilyTrustsby
Selling Promoters
 ESOPExits for Employees

11. TheStartup India Trilogy:State SponsoredBenefits
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
Sr No. State Nodal Agency ContactDetails / Website
1
Andaman and Nicobar
Islands
Industries Department, Middle Point, Port Blair http://ls1.and.nic.in/startupindia/
2 Andhra Pradesh
Department of Information Technology,Electronics &
Communication
secy_itc@ap.gov.in
3 Assam Department of Industries & Commerce http://startup.assam.gov.in/
4 Bihar Department ofIndustries http://www.startup.bihar.gov.in/
5 Chhattisgarh Chhattisgarh InfoTechPromotion Society(CHIPS)
https://industries.cg.gov.in/startupcg/Hom
e/Index
6 Goa Department of Information Technology dir-dit.goa@nic.in
7 Gujarat Industries Commissionerate, GovernmentofGujarat http://www.startupgujarat.in/
8 Haryana
Haryana StateElectronics DevelopmentCorporation
Limited
mdhartron-hry@gov.in
9 Himachal Pradesh Department ofIndustries https://startuphimachal.hp.gov.in/
10 Jammu& Kashmir
TheJammuand Kashmir Entrepreneurship
Development Institute(JKEDI)
https://www.startupjk.com/
11 Jharkhand
Department of Information Technology and E-
Governance
https://abvil.jharkhand.gov.in/index.php
12 Karnataka
Department of Information Technology,Biotechnology
and Science& Technology,GovernmentofKarnataka
https://startup.karnataka.gov.in/

12. TheStartup India Trilogy:State SponsoredBenefits(Contd.)
TheStartupIndia Trilogy: DPIITRecognition,AngelTaxand 80-IAC
Sr No. State Nodal Agency ContactDetails / Website
13 Kerala KeralaStartup Mission https://startupmission.kerala.gov.in/
14 Madhya Pradesh Department ofMSME sicell.msme@mp.gov.in
15 Maharashtra
Department of Industries & Commerce, Maharashtra State
Innovation Society(MSInS);Department of Skill Development
and Entrepreneurship
https://www.msins.in/
16 Manipur Planning Department, Govt.of Manipur https://www.startupmanipur.in/
17 Nagaland
Department of Industries & Commerce, Government of
Nagaland
https://startup.nagaland.gov.in/
18 Odisha Department of Micro, Small& Medium Enterprises https://startupodisha.gov.in/
19 Punjab
Department of Industries & Commerce, Governmentof
Punjab
https://pbindustries.gov.in/static/policy_frame
work;Key=Startup_and_Entrepreneurship
20 Rajasthan
Department of Information Technology & Communication
(DoIT& C)
https://istart.rajasthan.gov.in/
21 Tamil Nadu Entrepreneurship Development and InnovationInstitute https://www.editn.in/
22 Telangana
Information Technology,Electronics andCommunications
Department
https://it.telangana.gov.in/
23 Uttar Pradesh - http://itpolicyup.gov.in/
24 Uttarakhand -
https://startuputtarakhand.com/start
up- uttarakhand/home
25 West Bengal
Department of Micro, Small& Medium Enterprises &
Textiles, Government of WestBengal
https://www.startupbengal.in/