Start-up India Action Plan unveiled by the Government of India on 16^th January 2016, defined who would be called a ‘Start-up’ to avail the benefits that the Government proposes to give. The big news is that the Government walks the talk by notifying the definition of ‘Start-ups’ bringing about uniformity and to ensure that genuine start-ups get benefit.

The Notification defines a ‘Start-up’ as follows:

• The turnover of the Entity should not have exceeded Rs.25 crore for any of the financial years upto 5 years from the date of its registration.

 

• The Entity shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification. The Board would consist of Joint Secretary, Department of Industrial Policy and Promotion, Representatives of Science and Technology, and Department of Biotechnology.

 

• The Entity would be required to submit an application with certain documents including a letter of funding of not less than 20 percent in equity by any incubation fund/ angel fund/ private equity fund, duly registered with SEBI that endorses innovative nature of business.

 

• The Entity should be working towards innovation, development, deployment, or commercialization of new products, processes or services driven by technology or intellectual property.

 

It has also been clarified by the Government that entities formed by splitting or re-construction of existing business will not be considered ‘start-ups’.

Further, the whole process of recognition of a ‘start-up’ would be through mobile app / portal of Department of Industrial Policy and Promotion.

Government of India by this notification proposes to offer the budding entrepreneurs of start-ups with tax breaks and other benefits for a period of 5 years. The notification is definitely a news to cheer about which is going to boost the upcoming entrepreneurs and bring a smile on their face.