What is Startup India ?
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower startups to grow through innovation and design.
What qualifies as a “Startup” under the Startup India Scheme ?
An entity shall be considered as a Startup:
- It is incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India.
- Up to ten years from the date of its incorporation/registration.
- Its turnover for any of the financial years since incorporation/registration has not exceeded INR 100 Crores.
- It is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
Note: An entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘Startup’.
What are the benefits provided under startup scheme ?
For availing various benefits under the Startup Indi
a scheme, an entity would be required to be recognized by DIPP.
The benefits provided to recognized startups under the Startup India initiative are:
- Self-Certification: Self-certify and comply under 3 Environmental & 6 Labour Laws for a period of 3 to 5 years from the date of incorporation.
- Tax Exemption:Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above Fair Market Value out of 7 years since incorporation.
- Easy Winding of Company:In 90 days under Insolvency & Bankruptcy Code, 2016
- Startup Patent Application & IPR Protection: Fast track patent application with up to 80% rebate in filling patents.
- Easier Public Procurement Norms:Exemption from requirement of earnest money deposit, prior turnover and experience requirements in government tenders.
- SIDBI Fund of Funds:Funds for investment into startups through Alternate Investment Funds. To provide equity funding support for development and growth of innovation driven enterprises, the Government has set aside a corpus fund of 10,000 Crores managed by SIDBI.
The Flow of Funds for Strtup are as under:
Government —— SIDBI —– Venture Capitals —– Startups.