Start-up Registration in Telangana
Contributed by: Kanikka P Indi
Email id: cs@simplybiz.in
Introduction
Telangana has emerged as a hotbed for startup innovation in recent years. The State Government’s proactive initiatives and investor-friendly policies have made it an ideal destination for entrepreneurs looking to turn their innovative ideas into thriving businesses. One crucial step in this journey is registering the startup, which ensures legal compliance and provides access to various benefits and incentives.
- a Private limited company, a Registered Partnership Firm, or a Limited Liability Partnership and
- involved in innovation, development, deployment, or commercialization of new products, processes, or services and
- the entity should not be more than ten years old from the date of its incorporation/registration and
- should have a Turnover of less than INR 100 Crores in any of the previous financial years
Advantages of a Startup: –
- Government Support: Telangana State has rolled out numerous policies and initiatives aimed at nurturing and promoting startups. By registering as startup, one become eligible for various benefits and support schemes offered by the government, including grants, subsidies, and tax incentives.
- Access to Funding: Registering a startup can help attract potential investors and secure funding opportunities.
- Network and Collaboration: A startup registration often leads to inclusion in the state’s official startup directory. This exposure can help you connect with like-minded entrepreneurs, mentors, and industry experts, fostering collaborations and partnerships.
- Intellectual Property Support: Telangana State Innovation Cell (TSIC) provides support for protecting intellectual property, including filing patents and trademarks, which are essential for many tech-based startups.
- Government Tenders: Registered startups enjoy priority access to Government tenders, providing opportunities for business development through Government contracts.
- Seed Funding Scheme:
- A grant of INR 20 Lakhs will be provided to startups, if a startup is in Non – revenue generating stage.
- A Debt Fund of INR 50 Lakhs will be provided to startups over a period of 6 years at an interest refund of 6.25% (the interest rate varies as per RBI norms) with the first year being moratorium period.
- A startup shall be eligible to avail the benefit of this scheme only till two years of its incorporation.
- Income Tax exemption (Section 80 IAC of Income Tax Act):
- A startup can avail a tax holiday for a period of 3 consecutive years.
- A startup shall be eligible to apply for the clearance of this Tax Exemption till 10 years of its incorporation.
- Exemption from inspection Audit
- A startup will be allowed to self-certify their compliance under 9 Labour laws and 3 Environmental laws for a period of 5 years from the date of its incorporation.
- Trademark and Patent Registration
- The Central Government would bear the entire fee of the facilitations for any number of patents, trademarks or designs that a startup may file up to a period of 10 years from the date of its incorporation.
- Such a startup will have to pay an amount only to the extent of the statutory fee payable.
- Tendering Benefits
- They are exempted from the “prior experience/turnover” criteria applicable for normal companies answering to government tenders, i.e. a startup need not have a prior experience to apply for the tenders.
The Registration Process of a Telangana Start-Up Certificate
- Documents required:
- Business plan
- Certificate of Incorporation/Registration
- Memorandum Of Association and Articles of Association of the company or
- Partnership Deed (for partnership firms) or
- LLP Agreement (for LLPs)
- PAN card of the entity
- Aadhar card of the founders/partners
- Passport-sized photographs of the founders/partners
- Address proof of the entity’s office space
- Register on the official website of Start-up Telangana Portal:
Visit the official website of Start-up Telangana Portal (https://startup.telangana.gov.in/) and register for the Same.
- Fill the Application Form:
Log in to the account and fill out the start-up registration application form. Provide accurate information about the business, its innovative nature, and any funding received.
- Upload the required Documents:
Scan and upload the necessary documents as mentioned above.
- Application Review:
The Telangana State Innovation Cell (TSIC) team will review the application and documents. If everything is in order, you will receive a notification of approval.
- Certificate Issuance:
Once approved, you will receive a start-up recognition certificate from the Telangana State Government.
- 100% SGST paid to the state of Telangana will be reimbursed for a period of 3 years subject to an overall ceiling of INR 10 Lakhs for the entire period of eligibility. (For amounts exceeding 2 lakhs, a startup shall obtain the details of the net tax paid, duly certified by Commercial Tax authorities)
- The Government shall provide reimbursements of 30% of the actual costs including travel incurred in international marketing through trade shows. This incentive will be subject to a maximum of Rs. 5 Lakhs per year per company.
- Reimbursement of the expenses incurred for patent registration within six months from the date of obtaining patent along with required documents mentioned in the application on the portal. Eligible start-ups which have paid all the mandatory fees/expenses in this regard, will get a 100% reimbursement of the expenses incurred for patent registration limited to Rs. 2 Lakhs for Indian patent awarded.
- The Government shall offer recruitment assistance of Rs. 10,000 per employee for the first year of commercial operations, provided the employees are Telangana domiciled employees who have been employed with the company for at least a period of 8 months as on the date of the appointment.
- Based on the performance of a startup, a startup that record a year-on-year growth rate of 15%, as per audited accounts, shall be eligible to get a grant of 5% on Annual Turnover, subject to a limit of Rs.10 lakhs within a period of three years from the date of incubation.
- Telangana Government will expedite the launch of its early-stage investing vehicle T-Fund (Telangana Innovation Fund), which is being launched in concert with leading global investors, in collaboration with T-Hub. Telangana Government will be a Limited Partner (LP) in the fund. This fund which will function as a master fund and invest in sector-specific and general venture capital funds shall be set up with an initial target of INR 2000 crore.
- In addition, there will also be a T-SEED fund to fund startups in the seed stage. This fund with an initial size of INR 250 Crore is aimed at encouraging innovators who need early-stage funding to work on their research discoveries, college project ideas etc. T-Seed Fund aims to ease the costs incurred at an early stage such as company registration, patent filing, quality certifications, travel etc.
- Additionally, in a first-of-its-kind initiative, a ‘Phoenix Fund’ will also be launched in collaboration with the private sector. The aim of the Phoenix fund will be to identify and attract entrepreneurs who have attempted at least one venture previously (and have met with some degree of success and derived key learnings). There will be specific criteria to ensure that only those entrepreneurs who have actually attempted something, with key metrics that can be verified, pass the filter for investments from the Phoenix fund.
- The Government shall setup (either on its own or in partnership with a private enterprise) a “Rural and Social Enterprise” incubator/accelerator for the growth of startups in this sector.
- There will be outposts of T-Hub built in Tier II cities of Telangana that will act as focal points for enterprises focusing on these regions.
- Enterprises falling under this category will have access to the entire T-Hub network and events funding.
- The Government shall create a specific “Impact Fund” that will focus on Rural and Social Enterprises. This fund shall be managed by the “Rural and Social Enterprise” vertical of T-Hub.
- The Government and T-Hub shall partner with the leading entities such as World Bank, WHO etc. to fund and support projects with social causes in Telangana.
- Additionally, Telangana shall be marketed as an ideal testbed for students, youth, and social entrepreneurs across the world to come and work on live projects in the State. For achieving this goal, the Government shall work with leading educational institutions in the State to identify, develop and support such projects.
- The Government will create a mechanism to outsource work and adopt technologies developed by rural entrepreneurs. The Government aims to become their largest customer.
- The Government will encourage entrepreneurs by giving access to classified information for the purpose of creating apps and technologies for the public good.
Startups and incubators in the State will be permitted to file self-certifications, in the prescribed formats under prescribed acts and rules.
General permission shall be available for 3-shift operations for women working in the night for startups, subject to such units taking the prescribed precautions in respect of the safety and security of employees in addition to providing the required welfare and health amenities as prescribed under applicable labour laws and obtaining the necessary approvals from the competent authority of the Government under the Telangana shops and commercial establishments act and rules or the Factories Act 1948 and rules, there under as the case may be.
ConclusionRegistering a startup in Telangana is a significant step towards realizing your entrepreneurial dreams. It not only provides legal recognition but also opens doors to a wealth of opportunities and support from the State government. With a robust ecosystem of mentors, investors, and fellow entrepreneurs, Telangana continues to foster innovation and entrepreneurship, making it an ideal destination for startups. So, if you have a groundbreaking idea and the passion to bring it to life, don’t hesitate to embark on your entrepreneurial journey in Telangana.
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