STARTUP INDIA SCHEME

The proclamation of ‘Startup India Scheme’ in January 2016 has boosted the enthusiasm of the many entrepreneurs who own a startup company. The zeal of young entrepreneurs reached its peak, knowing that finally, the Government has extended its helping hand to lift the startup companies up.

Who Can Avail The Benefits?

1. Must be a Private Company, LLP or Partnership Firm

Private Limited Company under the Companies Act, 2013; or

Registered Partnership firm under the Indian Partnership Act, 1932; or

Limited Liability Partnership under the Limited Liability Partnership Act, 2008.

2. Must not be Formed by Restructuring

The startup applying for benefits under the scheme must be a primary one.

Your startup should not come into existence by splitting from other company or by the restructuring of an old one.

In such cases, your company will be considered ineligible.

3. Not More Than 5 Years Have Elapsed

The Startup India benefits the companies which are incorporated within past five years from the effective date of this policy i.e. 16th February 2016. It means any company registered after 15th February 2011 are eligible to participate in this scheme.

4. Annual Turnover Has Never Exceeded 25 Crores

The Annual turnover of the company has a vital role to play in determining the eligibility of your startup. The annual turnover of the startup must not cross 25 cores in any financial year since the registration of the company.

5. Entirely New Product or Service-

Startups must be working towards innovation, development, deployment or commercialization of new products.

Startups must aim to develop and commercialize a new product or service that will create or add value to customers or workflow.

The startup must not have limited incremental value for customers or workflow.

6. Obtain Approval from DIPP that Your Business is Innovative

To obtain approval from Inter-Ministerial Board of DIPP, you will to submit an application along with the below-mentioned documents.

Recommendation from Incubators established in postgraduate college.

Recommendation from an Incubator is funded from Central or state government.

Letter of funding of not less than 20 percent in equity.

Recommendation from an Incubator recognized by the Government of India.

Letter of funding from Central or state government.

Patent filed and published in the journal.

Conclusion

The scheme would cover only Startups of innovative nature who also obtain recommendation letters from incubators or are funded by the Government or funds registered with SEBI.