The term start-up refers to a company in the first stage of their operation. Start-up is the idea of one or two entrepreneur who brings this into existence by view that the product has the huge demand in market and will be helpful for the development of the country. The start-up can be of any type such as one Person Company, Limited Liability Company, partnership firm etc.
The growth of every state is depends upon the developments in the business and country will grow consequently with the states. Start-ups and entrepreneurship are the key pillars for economic growth, job creation, competitiveness and wealth creation.
An initiative has been taken by the Government of Punjab to promote start-ups i.e. “Invest Punjab”, this is an one hand portal for contact of facilitation for investors. The mission to promote start-ups is to develop the State of Punjab in each perspective. The state gave financial and other assistance to the start-ups companies for the development of Punjab.
What is the main mission of Punjab to promote start-ups?
- At the very initial stage the state desires to create an industry linkage with academy for entrepreneurship skills in students.
- The state is trying to create infrastructure and environment that is necessary for new emerging businesses.
- To develop a conducive ecosystem by addressing the challenges in areas such as Market, Enterprise, Knowledge, Product, Ideas and Culture.
- Creating start-up friendly environment by enacting rules and regulations for start-up companies.
Stand Up India for SC/ST and women:
The scheme is launched for the uplifment of these people and some extra benefits are provided to them so that they feel motivated and come with the new ideas. The scheme was launched by Honourable Prime Minster of India on April 5 2016. The main objective of this scheme is to provide loan for setting up a green field enterprise to at least 1 SC, 1 ST and 1 women amounting rupees 10 lacs to 100 lacs each per bank branch of all scheduled commercial banks.
What are the laws applicable on start-ups?
- Taxation and Accounting Laws: The various exemptions are provided under the government schemes, one of those exemptions is tax. The start-up companies get tax exemption for the time period of 07 years and the additional 03 years liberty is given to the biotech industries. It is marked here that the turnover of the company must be less than 25 crores.
- Foreign Exchange Management Act (FEMA), 2000: Schedule 6 of the FEMA Act defines the procedure in which the foreign investment can be done in the start-ups. According to the schedule 100 % foreign investment can be done in the start-ups in return of equity or debt document instead of foreign remittance in a firm.
- Intellectual Property Rights: Start-up comes with the unique and different ideas and that is why it is important to protect that unique idea, therefore the patent fee are reduced by 80 % to ensure the protection of unique idea.
- Labour Laws: The start-up companies are exempted from the labour inspection if they follow all the guidelines provided under the various labour laws.
- Contract Laws: Various contracts have been drafted when any new company started such as employment contracts, non-disclosure agreements, and so forth that should be drafted while keeping in view the provisions of the Contract Act.
The Government of Punjab launched with its own start-up Punjab portal to build a strong ecosystem of nurturing innovation of start-up. Start-up cell is established under the Head of Department of Industries and Commerce. The department take cares of all the matters of start-up and handles the entire matter single handed.
A single start-up portal is also opened on which a person can register himself to get the numerous benefits of start-up companies given by the state of Punjab. 60+ start-ups are already registered with start-up portal and a total 45 lacs is disbursed as a seed grant to start-ups.
What are the fiscal benefits provided by the Government of Punjab for start-up companies?
- Seed grant of INR 03 lacs for start-ups, routed through nodal agencies.
- 8% p.a. subsidy on interest up to INR 05 lakhs for 05 years.
- Reimbursement of 25% lease rental up to 03 lacs p.a. for 01 year.
- Full exemption from electricity and stamp duty.
- Financial assistance for access to technology, market and finance.
- All benefits which are guaranteed to MSME under Punjab Industrial and Business Development Policy, 2017 are available to start-ups also.
The proper measures and initiative have been taken to promote start-ups in India at central as well as state level. The universities are linked with incubators so that the motivation of becoming an entrepreneur can be build in the students at university level and instead of searching jobs after degree. With this initiative students are able to contribute in the growth of economy by starting their own start-up and helps in generating employment opportunities in the nation.
Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali