Commerce · Ch 2 — Entrepreneurship
Start-ups: Concept and Registration
Start-ups: Concept and Registration
A start-up is a young, newly established business, typically built around an innovative idea, a new technology, or a scalable business model, with the potential for rapid growth, high-value job creation, and wealth creation. A start-up is not simply "any new business" -- a newly opened neighbourhood shop replicating an existing business model is a new business, but it is not, in the technical sense used in Indian government policy, a start-up, because it does not involve innovation or a scalable model.
In India, the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, formally recognises entities as "start-ups" for the purpose of government benefits, subject to conditions that are periodically revised by notification. Broadly, at the time this chapter is written, an entity is eligible for DPIIT start-up recognition if it satisfies conditions along these lines:
| Condition | Broad requirement (subject to revision by notification) |
|---|---|
| Legal form | Incorporated as a private limited company, or registered as a partnership firm or a limited liability partnership (LLP) in India |
| Age | Not more than a specified number of years (currently up to 10 years) have passed since incorporation/registration |
| Turnover | Annual turnover has not exceeded a specified ceiling (currently ₹100 crore) in any financial year since incorporation |
| Nature of the entity | Working towards innovation, development, or improvement of products, processes, or services, or is a scalable business model with high potential for employment generation or wealth creation |
| Origin | Not formed by splitting up or reconstructing an already existing business |
Broad procedure for registration and DPIIT recognition:
- Incorporate the business as a private limited company, partnership firm, or LLP under the relevant law.
- Register on the Startup India portal / DPIIT's start-up recognition system and fill in details of the entity, its directors/partners, and the business.
- Upload supporting documents -- a brief write-up on how the business is innovative and has a scalable model, incorporation/registration certificate, and other prescribed documents.
- On verification, DPIIT issues a Certificate of Recognition, which makes the entity eligible for the benefits described below. …