ARE YOU A STARTUP?
ARE YOU ELIGIBLE FOR THE BENEFITS OFFERED?
LET’S HAVE A LOOK…
The Government of India has announced ‘Startup India’ initiative for creating a conducive environment for startups in India. The various Ministries of the Government of India have initiated a number of activities for the purpose.
To bring uniformity in the identified enterprises, the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India has come out with a definition for an entity to be considered as a Startup.
(Definition is limited only for the purpose of Government schemes)
The Ministry of Commerce and Industry released a notification on April 1, 2015, to define a startup. According to it, an entity will be identified as a startup
1. Till up to five years from the date of incorporation.
2. If its turnover does not exceed 25 crores in the last five financial years.
3. If its working is driven by technology or intellectual property towards innovation, deployment, and commercialization of new products, processes or services.
- Provided that such entity is not formed by splitting up or reconstruction of a business already in existence.
Provided further that a startup shall be eligible for tax benefits only after it has obtained certification from Inter-Ministerial Board, set up for such purpose.
- To have more clarification about the definition of a startup, you can visit http://startupindia.gov.in/ The companies or entrepreneurial ventures that are in their initial phase of development are termed as Start-up companies. They are most commonly associated with high-tech projects, development, and production, distribution of new products, processes or services.
Measures taken by the Startup India Action Plan are benefited only to those who are eligible. Let’s have a look at whether you are eligible for the benefits that were announced as a part of Startup India Action Plan.
(**specifically applicable for startups seeking tax exemptions**)
Hope you are clear about the eligibility for fitting the definition of a STARTUP. If you are a startup, let’s have a look at fund related doubts that startup entrepreneurs have. Click Here (link to Fundraising for Startups)
DIPP: (link to DIPP in “E section” in above table)
Department of Industrial Policy & Promotion (DIPP) is responsible for formulation and implementation of promotional and developmental measures for growth of Industrial sector, keeping in view the national priorities and socio-economic objectives.
While individual Administrative Ministries look after the production, distribution, development and planning aspects of their specific industries, Department of Industrial Policy & Promotion (DIPP) is responsible for the overall industrial policy.
Incubators: (link to DIPP in “F1, F2, F3 section” in above table)
Incubators are companies that provide services such as management training or office spaces to new and startup companies in order to help them develop. Incubation programmes are sponsored by private companies, municipal entities or public institutions such as colleges and universities.
Incubators benefit startups in many ways – Office buildings and manufacturing space are offered at discounted market rates, advice given on staff supplies, much-needed expertise in developing business to a higher level and help in forming marketing plans as well as funding for fledgling businesses.
If you have a specialized idea for your business and want to find an incubator in your state, visit National Business Incubation Association (link to http://www2.nbia.org/about_nbia/)
Angel Network: (link to DIPP in “F4 section” in above table)
It is Network of Angel investors (affluent individuals – former entrepreneurs or professionals) that provide funding at initial stages of business. They provide small amount of funding. They mostly do not get very technical and invest in the business if they have a good gut feeling about it.