Startup Definition as per Startup India Action Plan
PM Narendra Modi concluded what was perhaps the largest startup conference for entrepreneurs in India with his action plan, which included new policies and initiatives that would make it easier for for investors and startup founders to incubate their ventures in the country.
So taking the Benefits of the Startup India action Plan here are below some conditions which is fulfilled by the startups.
Conditions for taking benefits of Startup Scheme:
1. It must be an entity registered/incorporated as a:
a. Private Limited Company under the Companies Act, 2013; or
b. Registered Partnership firm under the Indian Partnership Act, 1932; or
c. Limited Liability Partnership under the Limited Liability Partnership Act, 2008.
2. Five years must not had elapsed from the date of incorporation/registration.
3. Annual turnover (as defined in the Companies Act, 2013) in any preceding financial year must not exceed Rs. 25 crores.
4. Startup must be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
5. The Startup must aim to develop and commercialise:
a) a new product or service or process; or
b) a significantly improved existing product or service or process, that will create or add value for customers or workflow.
6. The Startup must not merely be engaged in:
a. developing products or services or processes which do not have potential for commercialization; or
b. undifferentiated products or services or processes; or
c. products or services or processes with no or limited incremental value for customers or workflow
7. The Startup must not be formed by splitting up, or reconstruction, of a business already in existence.
8. The Startup has obtained certification from the Inter-Ministerial Board, setup by DIPP to validate the innovative nature of the business and
a. be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator established in a post-graduate college in India; or
b. be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
c. be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI; or
d. be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
e. be funded by GoI as part of any specified scheme to promote innovation; or
f. have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.
* DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative.
From providing tax exemption to start-ups to setting up a corpus funds to enable the new firm start business with ease, Prime Minister Narendra Modi unviled an array of incentives while kick-starting his pet project: Start-Up India.
Here are the top 10 take-aways from the PM’s speech that cheered the start-ups in the arena.
1. Tax exemption for start-ups for three years.
2. Rs. 10,000 crore corpus fund to support start-ups.
3. Capital gains tax to be exempted for venture capital investments.
4. 80% reduction in patent registration fee.
5. Govt. to ensure 90-day window for start-ups to close businesses.
6. Self-certification compliance for start-ups across India.
7. No government inspection for three years for newly-formed start-ups.
8. New scheme to provide IPR protection to start-ups and new firms.
9. Innovation programme to start 5 lakh schools to target 10 lakh children.
10. Government is all set to launch an app to create a platform for interaction with start-ups.
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