Monday, August 29, 2016

Startup India Campaign

A startup is a company that is in the first stage of its operations. It is basically business model that aims to meet a marketplace need by developing or offering an innovative product, process or service

India has truly become a start-up ‘Nation’. Since last one year tremendous initiatives been taken by the government in startup world. The purpose of Startup campaign is to boost entrepreneurship and encourage startups. The government is really putting a lot of efforts to build a strong startup ecosystem in India for nurturing innovation and generate employment opportunities.

Startup India Campaign:

The campaign was first announced by Prime Minister Shri Narendra Modi in his 15 August, 2015 address from the Red Fort, after that The Prime Minister of India formally launched Startup India initiative on January 16, 2016 from Vigyan Bhawan, New Delhi. In order to meet the objectives of the initiative, Government of India announced Action Plan in this event to address all aspects of the Startup ecosystem. The purpose of the Action Plan was to accelerate Startup movement.

The Government of India has announced ‘Startup India’ initiative for creating a conducive environment for startups in India.


Definition of Startup by DIPP:

On 17th February, 2016, the department of industrial policy and promotion (DIPP) has issued a notification to provide clarity surrounding startups.

An entity shall be considered as Startup:
Up to five years from the date of its incorporation/registration,
If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property;

Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘startup’;

Provided further that in order to obtain tax benefits a startup so identified under the above definition shall be required to obtain a certificate of an eligible business from the lnter-Ministerial Board of Certification consisting of:

a) Joint Secretary, Department of Industrial Policy and Promotion,

b) Representative of Department of Science and Technology, and

c) Representative of Department of Biotechnology

Explanation:

1. An entity shall cease to be a startup on completion of five years from the date of its incorporation/registration or if its turnover for any previous year exceeds Rupees 25 crore.

2. Entity means a private limited company (as defined in the Companies Act, 2013), or a registered partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2002).

3. Turnover is as defined under the Companies Act, 2013.

4. An entity is considered to be working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize:

a. A new product or service or process, or

b. A significantly improved existing product or service or process that will create or add value for customers or workflow.

Provided that the mere act of developing:

a. products or services or processes which do not have potential for commercialization, or

b. undifferentiated products or services or processes, or

c. products or services or processes with no or limited incremental value for customers or workflow would not be covered under this definition.

5. The process of recognition as a ‘startup’ shall be through mobile app portal of the Department of Industrial Policy and Promotion. Startups will be required to submit a simple application with any of following documents:

a) a recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any Incubator established in a postgraduate college in India; or

b) a letter of support by any incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or

c) a recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any incubator recognized by Government of India; or

d) a letter of funding of not less than 20 per cent in equity by any Incubation Fund,/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or

e) a letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or

f) a patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.

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