STARTUP DEFINITION AS PER STARTUP INDIA ACTION PLAN
PM Narendra Modi concluded what might be India’s biggest start- up conference for entrepreneurs with its action plan, which included new policies and initiatives that would make it easier for investors and start- up founders to incubate their businesses in India.
Utilizing the benefits of the Start-up India action plan therefore below are certain conditions that the start-ups fulfil.
Conditions for benefiting from the start-up scheme:
- It must be a registered / incorporated entity as:
- LTD company under companies act, 2013
- Registered partnership company under Indian Partnership act, 1932
- LTD liability partnership under LTD liability partnership act, 2008
- Five years from the date of incorporation / registration must not have elapsed.
- The annual turnover (as defined in the Companies Act, 2013) shall not exceed Rs 25 crores in any previous financial year.
- Start-up must work to innovate, develop, deploy or market new technology or intellectual property products, processes or services.
- The start-up must aim to develop and market:
- a new product or service or process; or
- An existing product or service or process that will create or add value for customers or workflows that is significantly improved.
- The start-up must not just be involved in:
- Developing products or services or processes that have no marketing potential;
- Products or services or processes undifferentiated; or
- no or limited incremental value of products or services or processes for customers or workflows
- The start- up should not be formed by the division or reconstruction of a company that already exists.
- The company was certified by the Inter- Ministerial Board, established by DIPP to validate the innovative nature of the company and
- be supported by a recommendation( in view of the innovative nature of the business) from an Incubator established in a postgraduate college in India in the format specified by the DIPP
- be supported by an incubator funded by GoI( in connection with the project) as part of any specific innovation promotion scheme
- be supported by a recommendation( in view of the innovative nature of the business) from an Incubator recognized by GoI in the format specified by the DIPP
- be funded by the duly registered SEBI* Incubation Fund / Angel Fund / Private Equity Fund / Accelerator / Angel Network endorsing the innovative nature of the business; or e. be funded by GoI as part of any innovation promotion scheme
- Have an Indian Patent and Trademark Office patent granted in areas related to the nature of the business to be promoted.
*A ‘negative’ list of funds not eligible for this initiative may be published by DIPP.
From tax exemptions to start- ups to the creation of a corpus fund to facilitate the start- up of the new company, Prime Minister Narendra Modi unleashed a range of incentives at the start of his pet project: Start- up India.
Here are the top ten PM speeches which cheered the start-ups in the arena.
- Tax exemption for start-ups for three years.
- 10,000 crore corpus fund to support start-ups.
- Tax on capital gains to be exempted from investment in venture capital.
- 80% reduction in patent registration fee.
- To ensure that start- ups close businesses with a 90-day window.
- self-certification compliance for start-ups across India
- No government inspection for newly formed start- ups for three years.
- New scheme to protect IPRs for start- ups and new companies.
- Program for innovation to start 5 lakh schools for 10 lakh children.
- The government is prepared to launch an app to create a platform for start- up interaction.
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