GOI Revises ‘Startup’ Definition; Here’s All You Need to Know
Modi gets it modified!
‘Startup’ definition in India gets few changes.They were done to promote entrepreneurship under ‘Startup India’ and for also making it easy for business ventures to avail incentives. Earlier only tech companies or companies with innovation and intellectual property were considered a ‘startup’ by DIPP (Department of Industrial Policy and Promotion) which is the only nodal body for ‘Startup India’. Recently, few other companies have also been made eligible.
Broadened scope of the ‘start-up’ definition
- In its revised definition, DIPP has included Non tech companies, also scalable businesses having ‘high’ potential of employment generation or wealth creation to be recognized as a ‘startup’.
Furthermore, an entity now shall cease to be a startup on completion of seven years from the date of its incorporation/registration which was five years completion earlier or if its turnover for any previous year exceeds Rs.25 crore.
- However, the process of startup recognition henceforth will be done through an online application made over the mobile app/portal set up by DIPP. Entities will be required to submit an online application along with a certificate of incorporation/registration and other relevant details.
- Department of Industrial Policy and Promotion (DIPP)made a statement yesterday that an entity shall now be considered a start-up up to seven years from the date of its incorporation/registration, taking into account the long gestation period in establishing start-ups. Till now, the period of consideration was five years.
- But, for start-ups in biotechnology sector, the period will be up to 10 years from the date of incorporation/registration.Besides, startups would no longer require a letter of recommendation from an incubator or an industry association either for recognition or tax benefits under Start-up India.
The campaign of ‘Start-up India’; completing a year of operation, was launched by Prime Minister Narendra Modi on 16 January 2016 to encourage innovation, drive economic growth and employment opportunities in India. This campaign still has really long, long way to go.
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