In a major boost to startups in the state of Andhra Pradesh, the state government has signed a Memorandum of Understanding (MoU) with Chennai-based online legal services startup Vakilsearch to provide free incorporation of companies.
The idea is to make it extremely simple for aspiring entrepreneurs to set up companies without having to bear the cost of incorporation.
â€śOur company will support Andhra Pradesh government in making the state the startup capital of the country. If any person wants to incorporate company in the state, Vakilsearch will provide them with all the legal support required absolutely free of cost. Generally, if you want to register a company, it costs at least Rs 10,000-15,000. And sometimes, the cost involved deters people from setting up companies and instead look for partnerships. We want to eliminate these roadblocks,â€ť Aashish Krishna Kumar, Product Evangelist and Channel Tie-ups (Partnerships & Affiliations) at Vakil Search says.
Vakilsearch has created a seamless technology-led mobile-first process, which will be a part of APâ€™s government website. All a person needs to do is raise a request and incorporate their company free of cost.
However, what is being waived off is the professional fee involved with incorporating a company. Companies will still need to pay government fee and stamp duty.
Vakilsearch is also setting up a free legal helpline number where common men can raise any legal queries or any clarification they need regarding incorporation or other related queries.
As part of the non-fiscal incentives given to startups as part of the AP Innovation & StartUp Policy, the state created a single-window clearance mechanism.
â€śA single window clearance will be provided for VAT, Labour, Municipal and other local registrations and compliances. It would be supported by a state-of-the-art centralized help desk on 24Ă—7 basis duly leveraging the e-Biz portal set up by GoI. The objective of this window would be to (a) reduce time to set up business and (b) reduce cost of doing business,â€ť the state governmentâ€™s The Information Technology Wing website states.
Aashish further adds that while the process is made extremely simple and free of professional charge, there will be no change in the process in terms of the due diligence carried out by the government before granting permission for the incorporation of a company.
â€śThe first by any state in the country, we believe that with this MoU, the number of incorporations will increase three-fold and will also lead to more creation of jobs,â€ť he adds.
The government of AP has been aggressively pushing to boost entrepreneurship in the state after its sister state Telangana has grown to be known as the startup state of India. After Telanganaâ€™s IT Minister KT Rama Rao led the setting up of technology startup incubator T-Hub in Hyderabad two years ago, the state has seen immense growth in terms of both startups and incubators. T-Hub is currently the largest startup incubator in the country housing over 200 startups. It is in the process of building its phase 2, which is touted to be the second largest in the world.
In fact, with the push given by the government, Hyderabad is slowly gearing up to take on Bengaluru as the startup hub of the country.
But Andhra Pradesh isnâ€™t far behind either. It is aggressively pushing for business-friendly policies, technology-led initiatives to foster entrepreneurship and attract startups to the state.
In fact, APâ€™s IT Minister Nara Lokesh reportedly said that the stateâ€™s startup model will be purely based on providing mentoring and market access to startups and not on providing them with a working space.
â€śIf you want an office it is going to cost me two million dollars, I would rather put that money on 20 companies and mentor those companies and grow thoseâ€ť, a website Telugu360 quotes him as saying at the recent CII partnership summit.
AP is also in the process of creating a digital platform with the help of high-speed fibre network that will allow entrepreneurs to test their business ideas.
The stateâ€™s startup policy also includes establishing over 100 incubators and accelerators. It is also looking at setting up a one-million square feet of incubation space by 2019. It has also committed a Rs 500 crore fund for companies that are set up in Andhra Pradesh.