Startup wave: A new ray of hope for job creation

Startup are companies or ventures that are focused on a single product or service that the founders want to bring to market. These companies typically don't have a fully developed business model and, more crucially, lack adequate capital to move onto the next phase of business

What is the difference between a startup and a company? A startup is a temporary organization designed to look for a business model that is repeatable and scalable. While a company is "a permanent organization designed to execute a business model that is repeatable and scalable." Therefore, the difference is that startup look for an attractive business model, while companies already have such a business model and are focused on successfully executing it.

Startups are becoming very popular in India. Startup India initiative aims to empower startups to achieve growth through innovation and technology. To promote growth and help Indian economy, many benefits are being given to entrepreneurs establishing startup. Under this initiative, eligible companies get recognised as startup by DPIIT, in order to access a host of tax benefits, easier compliance, IPR fast-tracking and many more. The startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership. Turnover should be less than Rs 100 crores in any of the previous financial years.

An entity shall be considered as a startup up to 10 years from the date of its incorporation. India's unemployment rate reached a four-month high of 7.91 per cent in December as compared to 7 per cent and 7.75 per cent in November and October 2021, data from the Centre for Monitoring Indian Economy (CMIE) showed on Monday. The unemployment rate hit its highest rate since 8.3 per cent in August, the CMIE data shows. Eleven per cent of adult population in India is engaged in "early-stage entrepreneurial activities", and only five per cent of the country's people go on to establish their own business, a survey has found. In the present world, we definitely need more entrepreneurs to capture the rising possibilities of business development in India. Promoting entrepreneurship means encouraging people to be self-reliant in taking economic decisions and creating wealth and employment. To promote growth and help Indian economy, many benefits are being given to entrepreneurs establishing startup. The startup recognised through the startup India initiative are provided ample benefits for starting their own business in India.

Process: The government of India has launched a mobile app and a website for easy registration for a startup. Anyone interested in setting up a startup can fill up a simple form on the website and upload certain documents. The entire process is completely online.

Less cost: The government also provides lists of facilitators of patents and trademarks. They will provide high-quality Intellectual Property Right Services including fast examination of patents at lower fees. The government will bear all facilitator fees and the startup will bear only the statutory fees. They will enjoy 80 per cent reduction in the cost of filing patents.

Access to funding: A 10,000 crore rupees fund is set-up by government to provide funds to the startup as venture capital. The government is also giving guarantee to the lenders to encourage banks and other financial institutions for providing venture capital.

Tax benefit for 3 years: Startup will be exempted from income tax for 3 years provided they get a certification from Inter-Ministerial Board (IMB).

Apply for tenders: Startup can apply for government tenders. They are exempted from the "prior experience/turnover" criteria applicable for normal companies answering to government tenders.

Research facilities: Seven new Research Parks will be set up to provide facilities to startup in the R&D sector

Simplified compliances: Various compliances have been simplified for startup to save time and money. Startup shall be allowed to self-certify compliance (through the Startup mobile app) with 9 labour and 3 environment laws.

Tax saving for investors: People investing their capital gains in the venture funds setup by the government will get exemption from capital gains. This will help startup to attract more investors.

Choose your investor: After this plan, the startup will have an option to choose between the VCs, giving them the liberty to choose their investors.

Easy exit: In case of exit – A startup can close its business within 90 days from the date of application of winding up

Networking: The government has proposed to hold 2 startup fests annually both nationally and internationally to enable the various stakeholders of a startup to meet. This will provide huge networking opportunities. Startup are being highly encouraged by the government. The benefits enjoyed by them are immense, which is why more people are setting up startup. More number of entrepreneurs means more competition which saves the country from monopoly in any one field. This will force companies to come up with newer and more cost-effective ideas to secure profit margins and build a base which are beneficial to the customer.