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What is a Startup?

A startup is a newly established business formed to solve a problem using innovation, technology, or scalable ideas. As per the Government of India, an entity is considered a startup if it is less than 10 years old, has an annual turnover below Rs. 100 crore, and works towards innovation or product development rather than traditional trading.

Why Should a Startup Get Recognised?

Startup recognition provides multiple benefits such as easier compliance, self-certification under labour and environment laws, access to government funding schemes, patent fee concessions, tax exemptions, and improved credibility with investors. Compliance consultants like MACS Edge help entrepreneurs with company incorporation, documentation, and startup recognition under state and national frameworks.

Kerala Startup Mission (KSUM) Registration

Kerala Startup Mission is the state-level authority that promotes entrepreneurship. Startups in Kerala can apply by submitting company details, pitch deck and innovation summary through the KSUM portal. Once approved, startups receive recognition along with benefits such as incubation support, grants, innovation funding and mentorship. Startups often take professional support for preparing pitch decks, funding applications and compliance documentation.

Eligibility for KSUM Recognition

To qualify, the business must be incorporated in Kerala as a Private Limited Company, LLP or Partnership Firm, be less than 10 years old, have turnover within Rs. 100 crore, and be working on innovation, technology, or product development. Pure trading, marketing or reselling businesses are not eligible.

DPIIT – National Startup Recognition (Startup India)

Under the Department for Promotion of Industry and Internal Trade (DPIIT), startups can apply for national-level recognition on the Startup India portal. Recognition offers benefits such as reduced compliance burden, intellectual property rights support, fast-track patent examination, exemption from angel tax, and access to government tenders.

Eligibility for DPIIT Recognition

Eligible entities include Private Limited Companies, LLPs and Registered Partnerships. The entity must be less than 10 years old, with turnover below Rs. 100 crore, and working towards innovation, design, improvement of products or services. It should not be formed by splitting an existing business.

Income Tax Benefits for Startups – Section 80-IAC

DPIIT-recognised startups can apply to the Inter-Ministerial Board (IMB) for income tax exemption under Section 80-IAC. Once approved, startups can claim 100% tax deduction on profits for 3 consecutive financial years out of the first 10 years of incorporation. This helps preserve capital for reinvestment and growth.

Other Tax Advantages Available

Recognised startups may also benefit from:

• Angel Tax Exemption under Section 56(2)(viib)
• Capital Gains Exemption under Section 54GB
• Carry forward of losses even if there is a change in shareholding

MACS Edge support startups in preparing financial projections, declarations and IMB submissions to claim these benefits.

Difference Between KSUM, DPIIT & Income Tax Exemption

• KSUM – State-level recognition (Kerala), grants, incubation, innovation funding.
• DPIIT – National-level recognition, legal compliance relief, patent rebates, access to Startup India benefits.
• Income Tax Exemption – Granted by IMB after DPIIT approval; offers tax holiday under Section 80-IAC.

Startups typically follow the sequence: Incorporation → KSUM/DPIIT Recognition → Tax Exemption.

Role of MACS Edge – Professional Startup Support

MACS Edge provides end-to-end support for company incorporation, LLP registration, drafting partnership deeds, DPIIT registration, KSUM application, tax exemption filing, legal documentation, compliance management and investor documentation. This ensures the startup is registered correctly and remains legally compliant while founders focus on business and innovation.

Frequently Asked Questions (FAQs)

Can a proprietorship become a startup?

No. Only Private Limited Companies, LLPs or Registered Partnership Firms are eligible.

Does Startup India recognition automatically grant tax exemption?

No. A separate application must be submitted to the Inter-Ministerial Board (IMB).

How long does DPIIT recognition take?

Normally 3–7 working days if all documents are valid.

Can service-based businesses apply for startup recognition?

Yes, if the service is innovation-driven, technology-based or scalable.

Do I need both KSUM and DPIIT recognition?

Not compulsory, but highly beneficial for availing both state and national-level benefits.

 

Startup recognition under KSUM, DPIIT and Income Tax laws provides credibility, funding access, compliance relief and tax savings. With structured documentation and professional guidance, the process becomes smooth and hassle-free. MACS Edge ensures that startups are legally structured, properly registered and fully compliant while unlocking all eligible government benefits.

 

Thinking about starting a company in India? A Private Limited Company is one of the most trusted and widely used business structures among entrepreneurs, startups, and growing businesses. It offers limited liability, credibility, better funding opportunities, and perpetual existence.

Today, thanks to the SPICe+ (online incorporation) system by MCA, registering a company has become faster, paperless, and more transparent.

At MACS Edge, we help entrepreneurs like you complete the entire process—right from name approval to incorporation—smoothly, legally, and on time.

Key Requirements for Private Limited Company Registration

Basic Eligibility Criteria

Before diving into the documentation requirements, it’s essential to understand the fundamental prerequisites:

• Minimum Directors: At least 2 directors required (maximum 15)
• Minimum Shareholders: At least 2 shareholders required (maximum 200)
• Resident Director Requirement: At least one director must be an Indian resident (residing in India for more than 182 days in the previous financial year)
• Unique Company Name: Must end with “Private Limited” and comply with MCA naming guidelines
• Registered Office: A physical address in India where official correspondence will be sent

Documents Required from Indian Nationals (Directors and Shareholders)

Identity Proof (Mandatory)

• PAN Card: Permanent Account Number is mandatory for all Indian directors and shareholders
• Aadhaar Card: Alternative identity proof option
• Passport: For foreign nationals
• Voter ID Card: Alternative identity proof
• Driving License: Can be used as identity proof

Address Proof (Choose one)

• Recent Utility Bills: Electricity, water, or gas bill (not older than 2 months)
• Bank Statement: Latest bank statement (within 2 months)
• Telephone/Mobile Bill: Recent bill (within 2 months)
• Aadhaar Card: Can serve as both identity and address proof
• Passport: For address verification
• Rent Agreement: Along with utility bill if using rented premises

Additional Requirements

• 3 Passport-sized Photographs: For each director and shareholder
• Educational Qualifications: Details required in application forms
• Occupational Details: Business/Professional/Employment classification

Documents Required from Foreign Nationals

Identity Proof (Mandatory)

• Passport: Valid passport is mandatory for foreign nationals

Address Proof (Choose one)

• Driver’s License: From country of residence
• Bank Statement: Recent statement from foreign bank
• Residence Card: Proof of residence in foreign country
• Utility Bills: Recent electricity, water, or gas bills from country of residence

Additional Documents for Foreign Nationals

• Visa: If residing in India
• Notarized and Apostilled Documents: All foreign documents must be properly attested
• English Translation: All non-English documents must be translated

Proof of Office Address (Mandatory)

• Rent Agreement: If office is rented, along with rent receipts
• Sale Deed/Conveyance Deed: If office premises is owned
• Utility Bills: Recent electricity, water, or gas bill (not older than 2 months)
• No Objection Certificate (NOC): From the property owner
• Property Documents: Title documents of the premises

Additional Office Requirements

• Longitude and Latitude: Geographic coordinates of the registered office
• Contact Details: Phone number, mobile number, and email ID for the office
• Municipal Tax Receipt: In some states, municipal tax receipt may be required

Frequently Asked Questions (FAQs)

General Questions

Q1. What is a Private Limited Company?

A Private Limited Company is a separate legal entity distinct from its owners, providing limited liability protection to shareholders up to their investment amount. It cannot raise capital from the public and is limited to a maximum of 200 shareholders.

Q2. Can a single person start a Private Limited Company?

No, a Private Limited Company requires a minimum of 2 directors and 2 shareholders. However, the same individuals can be both directors and shareholders. For single-person entities, One Person Company (OPC) is the appropriate structure.

Q3. Can foreign nationals incorporate a Private Limited Company in India?

Yes, foreign nationals can incorporate a Private Limited Company in India. However, the company must have at least one director who is an Indian resident.

Q4. Is a physical office mandatory for company registration?

Yes, a company must have a registered office address in India. However, a residential address can be used as the registered office, provided proper documentation is available.

Q5. Can the registered office be changed after incorporation?

Yes, the registered office can be changed after incorporation by filing appropriate forms with ROC and paying the prescribed fees.

Documentation Questions

Q6. What happens if documents are in a language other than English?

All documents not in English must be translated into English by a certified translator and properly notarized.

Q7. How long are the submitted documents valid?

Utility bills and bank statements should not be older than 2 months. Other documents should be current and valid at the time of submission.

Q8. Can photocopies of documents be submitted?

All documents must be self-attested by the concerned individuals. Original documents are not required to be submitted, but certified copies may be needed.

Q9. What if a director doesn’t have a PAN card?

All Indian directors must have a PAN card before incorporation. Foreign directors need a valid passport.

Process Questions

Q10. What is SPICe+ form?

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is an integrated form that allows incorporation along with applications for PAN, TAN, DIN, EPFO, ESIC, and GST registration in a single submission.

Q11. How long does the registration process take?

The typical timeline is 10-15 working days, but it can be completed in 7-10 days if all documents are accurate and there are no complications.

Q12. What happens after receiving the Certificate of Incorporation?

After incorporation, the company must:

• Open a bank account
• Apply for necessary licenses (GST, profession tax, etc.)
• File commencement of business declaration within 180 days
• Appoint first auditor within 30 days
• Issue shares to subscribers within 2 months

Q13. Can the company name be changed after incorporation?

Yes, but it requires a special resolution by shareholders, ROC approval, and payment of prescribed fees. The process can take 2-4 weeks.

Financial Questions

Q14. What is the minimum capital requirement?

There is no minimum capital requirement prescribed under the Companies Act 2013. However, shareholders must invest adequate capital for business operations.

Q15. Can the authorized capital be increased later?

Yes, authorized capital can be increased by passing a special resolution and filing Form SH-7 with ROC along with the prescribed fees.

Q16. What is the difference between authorized and paid-up capital?

Authorized capital is the maximum amount of share capital the company can issue, while paid-up capital is the actual amount paid by shareholders for shares issued.

Q17. Can loans be taken by the company?

Yes, Private Limited Companies can take loans from banks, financial institutions, and other sources. The borrowing power is usually defined in the Articles of Association.

Post-Incorporation Questions

Q18. When can the company start business operations?

The company can start operations immediately after incorporation, but must file a declaration of commencement of business within 180 days if required.

Q19. How many bank accounts can a company open?

A company can open multiple bank accounts as per business requirements, but must maintain at least one current account for business transactions.

Q20. Can directors be changed after incorporation?

Yes, directors can be appointed or removed after incorporation by following the prescribed procedures under the Companies Act and filing appropriate forms with ROC.

Q21. What is the validity of Certificate of Incorporation?

The Certificate of Incorporation is valid perpetually and does not require renewal. The company continues to exist until it is wound up or struck off.

Q21. Can the company be converted to another business structure?

Yes, a Private Limited Company can be converted to a Public Limited Company, LLP, or other structures by following the prescribed conversion procedures.

Conclusion

Registering a Private Limited Company in India has become more efficient with digital processes, but proper documentation and compliance with regulations remain crucial. The key to successful registration lies in thorough preparation of documents, understanding the process requirements, and ensuring accuracy in all submissions.

Whether you’re a startup founder, small business owner, or investor, MACS Edge can help you register your Private Limited Company quickly, legally, and without stress. We handle documentation, name approval, SPICe+ filing, MOA/AOA drafting, and post-incorporation compliance.