India is one of the fastest growing economies and is a home for millions of emerging startups every year. On January 16, 2017 the Honorable Prime Minister of India Mr. Narender Modi launched the start- up India Initiative. The main motive behind the scheme was to promote the business doing in India and boosting the confidence of the blooming entrepreneurs. Some of the other motives that the government intends to fulfill with scheme includes the Employment generation and giving the boost to economy. Under the startup India scheme there are number of benefits provided to the registered members assisting them in growing fast and contributing to the economy.
Most of the entrepreneurs are well aware about this scheme and are planning to get registered under it to avail the benefits. However, one thing about which they are not aware is that to get registered under the Startup India every company is required to fulfill certain eligibility criteria. Through this article we will be taking a look at the eligibility criteria for the registration under the startup India scheme.
- The first and most important criteria of being eligible under the startup registration scheme is to be registered as under any one of the following acts namely Private Limited Company under Indian Companies Act, 2013, a Limited Liability Partnership (LLP) under Indian Limited Liability Partnership Act, 2008 or a partnership firm under the Indian Partnership Act, 1932. Thus an individual is not eligible to be registered under the start- up India
- The startup formed should not be a result of the reconstruction or the reorganization of any existing company. Any startup which is formed by the split up of existing company is not eligible for the registration under the Startup India scheme.
- There is also a limit on the turnover for the startups. Thus, in order to be registered under the Startup India scheme the turnover limit should not exceed 25 crores in any of the year since the past 5 years.
- In order to be registered under the startup India scheme not more than 5 years should have been elapsed since the incorporation of the company.
- One of the other important criteria is that the proposed startup is required to obtain the approval of DDIP in order to prove that their business idea is innovative. In order to obtain the approval from the Department of Industrial Policy and Promotion (DIPP) the applicant is required to make an application along with the below mentioned documents –
- The startup is required to get the recommendation letter from the incubator established in the post graduate college in India.
- Obtaining the recommendation letter from the incubator funded by the government of for the scheme related to innovation.
- Obtaining the recommendation letter from the incubator recognized by government of India.
- The application of the patent filed and also published in the Indian Patent Office along with the business activities being promoted.
- Government of India issued certificate of funding as a part of the scheme to promote innovation.
- Equity funding letter of at least 20% from an Incubation Fund or Angel Fund or Private Equity Fund or Accelerator or Angel Network, registered with Securities Exchange Board of India (SEBI).
Only after fulfilling the above mentioned criteria’s the start up will be eligible to get registered under the startup India scheme launched by the government of India and avail its benefits.