CA Desk

Startup India

A startup is a newly established business, usually small, started by 1 or a group of individuals. What differentiates it from other new businesses is that a startup offers a new product or service that is not being given elsewhere in the same way. The keyword is innovation. The business either develops a new product/ service or redevelops a current product/service into something better.

Startups are becoming very popular in India. In order to develop Indian economy and attract talented entrepreneurs, the Government of India, under the leadership of PM Narendra Modi, has started and promoted Startup India initiative to recognize and promote startups.

Eligibility Criteria for
Startup India Scheme

The start-up must be registered as a Private Company, LLP or Partnership Firm

To be eligible under this scheme, a start-up must be incorporated as a 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.

The Startup must not be older than 5 years

All business startup in India that have been incorporated in the past five years from the effective date of the policy will be eligible under this scheme. Simply, all businesses incorporated or registered after February 15, 2011, are eligible to participate in this government startup scheme.

The start-up must not be a product of restructuring

The start-up should not be formed out of splitting or reconstructing of a subsisting business. A business formed out of splitting an organisation into two or more businesses, won’t be eligible under this scheme.

Annual turnover of the start-up must not be more Rs. 25 crores

To be eligible under this scheme, the start-up’s annual turnover should not exceed Rs. 25 crores in any of the past 5 years since its incorporation.

The Business must be Involved in a New Product or Service

Only start-ups developing a new product or service or process are eligible under this scheme. This criterion has three conditions: 

The start-up must be working towards innovation, development, deployment or commercialization of a new product, process or service driven by technology or intellectual property.
The start-up must aim to develop and commercialize a new product or service or a significantly improved existing product or service that will create or add value to customers or workflow.
The start-up must not be merely engaged in developing products or services which do not have the potential for commercialization, undifferentiated product or service with no or limited incremental value for customers or workflow.

The Start-up must have Obtained Approval from DIPP that the Business is Innovative:

Every start-up has to obtain approval from the Inter-Ministerial Board set up by the Department of Industrial Policy and Promotion (DIPP)(2). To obtain approval from Inter-Ministerial Board of DIPP, a start-up should submit an application to validate the innovative nature of business along with supporting documents which are as follows:

Recommendation from an Incubator established in Post-Graduate College in India
Recommendation from an Incubator funded by Government of India in relation to a scheme to promote innovation
Recommendation from an Incubator recognized by Government of India
Letter of at least 20% Equity Funding from an Incubation Fund or Angel Fund or Private Equity Fund or Accelerator or Angel Network, registered with Securities Exchange Board of India (SEBI). Such fund must not be listed in the negative list of funds as may be issued by DIPP in future
Letter of funding from Central Government or State Government as a part of any scheme to promote innovation
The patent filed and published in the Journal of Indian Patent Office in areas affiliated with the nature of business being promoted

Description of your Business
in Brief

A brief description of the innovative nature of your products/services.

CA Desk is a team of highly professional CA, CS, Lawyers who driving towards the integration of technology with traditional practices to cater to the need of MSMEs in the fast-moving and cost-effective world.

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