Prime Minister Narendra Modi proclaimed the Startup India campaign in 2016 to boost entrepreneurship in India. The action plan aimed at promoting bank financing for startups, simplifying the incorporation of startup process and grant of various tax exemptions and other benefits to startups.
But all the benefits and exemptions are available to the startups only if they come under the criteria of an ‘Eligible Startup’.
So first let’s understand the conditions to be met to qualify as an “Eligible Startup”
Eligibility for Startup India
As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as Startup :
- Being incorporated or registered in India for less than seven years and for biotechnology startups up to 10 years from its date of incorporation.
- Annual turnover not exceeding Rs 25 crores in any of the preceding financial years.
- Aims to work towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
- It is not formed by splitting up or reconstruction of a business already in existence.
- It must obtain certification from the Inter-Ministerial Board setup for such a purpose.
- It can be incorporated as a private limited company, registered partnership firm or a limited liability partnership.