The end of decade showed us difficult times, but it also left us with an expectation of an enormous rise in the Indian economy in form of the forecasted V-shape rise in the economy. As a result of this rise, startups are expected to play a pivotal role in such growth.
Loss of jobs, lockdown are the various factors that have given people the valuable time to re-think upon the un-executed business ideas they have always had or come up with new ones. The government has always been supportive of such small businesses which is evident from the various startup India schemes it has to offer on the startup India ecosystem it created back in 2016 for the young entrepreneurs and such support has been nothing but incremental. Spreading awareness to support and buy from Indian manufacturers is just a small example to depict seriousness of the government towards the pursuance of a self-reliant India.
Eligibility Criteria set by government for Startup Recognition:
- 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 INR 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
- The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Startup”
The government is also cognizant of the fact that all startups might not be backed by big financers who ensure that they thrive during their infancy period, which is why there are various tax benefits that these recognized startups might apply for, to provide them some monetary relief for 3 consecutive financial years out of its first ten years since incorporation by virtue of section 80 IAC.
Eligibility Criteria for applying to Income Tax exemption (80IAC):
- Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC
- The Startup should have been incorporated after 1st April, 2016
- Post recognition, the startup may also apply for angel tax exemption under section 56 of the Income Tax Act.
Creation and protection of intellectual property is an important aspect to ensure success of any new business as it is your valuable time that was spent in creation of that ‘one of a kind’ product and it is only you who should reap the benefits of your creation. Unfortunately, the intellectual property regime is not popular in India due to the lack of awareness, it however remains extremely important for businesses to ensure protection of their ideas before injecting the better and competitive product into the spurring market.
Why startups need to get their technology Patented?
Getting a patent on your product is best sort of leverage, a startup can ensure a certain monopoly in the market. It is the only way to guarantee that your finished product is not reverse engineered and sold by some other competitor.
Patents are also a decisive factor to ensure that the investors would go all in to support your business as holding a patent shows your seriousness towards the business and also documents the value of your business. Moreover, the investor is also relieved that his investment would be fruitful as the product would be protected from any other competitor. Apart from sizeable monetary compensation from a patent infringer, these can also be sold as a property or licensed to any big company if you no longer want to undergo the cumbersome process of commercialization of your invention.
In short, Patents are the asset that you create to save your spot in the line of success. Timing of filing a patent is a detrimental factor for any business. As a startup you do not want to be too early to file a patent application and lose out on precious time or be too late, which is why having a patent attorney is very important. Extensive research, guidance and timing of filing for a patent are pivotal aspects to get a patent provided by Talwar Advocates as you do not want to be wasting your valuable time on un-novel inventions which are non-patentable.
Why is it important for startups to get their marks registered?
Trademark is another type of intellectual property which can be protected by the startups as they represent a brand and their services. These trademarks once properly registered can be recognized globally. For example, golden arches in a particular shade of yellow anywhere on the globe are representative of the brand McDonalds. These trademarks need protection as the valuable hours that were spent by the company in its designing to make the product or the brand stand out from other products in the market. Needless to mention, these also develop a certain amount of trust amongst the consumers towards the brand as they know that the product they are holding in their hands is not a counterfeit.
Many a times, startups tend to make a logo or design for their product and pay little to no attention to getting their trademark registered, resulting in the logo getting copied by other players in market and them receiving unjust advantage of the reputation built by the startup. Thus, registering a trademark is as important as any other step for any brand to protect its customers from being deceived by other brands. Also, a trademark is a way of documenting the value the company and creation of assets which can be monetized by the startup upon infringement as it is the value of the startup which is being affected when the trademark is copied. Talwar advocates provides hassle-free preliminary search and application of trademarks for your startup.
Copyright and Startups- how we can protect your original works?
The pandemic has created a situation where online culture has been imposed on us because almost everything has gone virtual, including offices and teaching profession. There are various startups coming up providing services better than the existing ones to fill the gap of adequacy in those sectors and many of those are related to the online businesses.
Copyright is another form of intellectual property which needs protection in this virtual era and such property may include books, lectures, poems, photographs, maps, sculptures etc., basically anything that come under the purview of ‘expression of ideas’. To explain in simple terms, the words we use as our tool for expression are already there and are not copyrightable, but when we weave these words into synchronized sentences in form of any lecture or book, it becomes a creation of our mind and it becomes a natural right of any person to receive monetary benefits upon the commercial use of such works, however, this benefit can only be reaped when your work is copyright protected. There are numerous benefits of such copyright protection apart from compensation from infringers, these benefits include rights to distribute such copies, recordings for public sale or any other form like rent, lease, and to perform the work publicly in person or through an audio transmission which generates royalties for startups.
It is therefore highly recommended to apply for copyright protection of your work as the author would is regarded as the owner of the work till his lifetime and 60 years after his death, which means the your startup would be ensured of benefits for a long period of time.