{"id":17153,"date":"2019-02-01T12:00:53","date_gmt":"2019-02-01T12:00:53","guid":{"rendered":"https:\/\/www.legalraasta.com\/blog\/?p=17153"},"modified":"2026-04-07T17:17:26","modified_gmt":"2026-04-07T11:47:26","slug":"startup-india","status":"publish","type":"post","link":"https:\/\/www.legalraasta.com\/blog\/startup-india\/","title":{"rendered":"Startup India: Benefits of the Government Initiative for startups"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Startup_India_and_Government_Initiatives\" title=\"Startup India and Government Initiatives\">Startup India and Government Initiatives<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Definition_of_a_Startup\" title=\"Definition of a Startup\">Definition of a Startup<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Startup_India_Action_Plan\" title=\"Startup India Action Plan\">Startup India Action Plan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Legal_Requirements_for_Establishing_a_Startup\" title=\"Legal Requirements for Establishing a Startup\">Legal Requirements for Establishing a Startup<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Startup_Compliance_India\" title=\"Startup Compliance India\">Startup Compliance India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Benefits_of_Startup_India\" title=\"Benefits of Startup India\">Benefits of Startup India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Financial_Benefits\" title=\"Financial Benefits\">Financial Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Registration_Benefits\" title=\"Registration Benefits\">Registration Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Income_Tax_Benefits\" title=\"Income Tax Benefits\">Income Tax Benefits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/#Special_Benefits\" title=\"Special Benefits\">Special Benefits<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Startup_India_and_Government_Initiatives\"><\/span><strong>Startup India and Government Initiatives<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">In India, a wide array of incentives and schemes have been brought\u00a0in to promote the growth of up and coming businesses also known as startups. The government is very passionate about facilitating the ease of doing business in India. Some of these incentives\u00a0include <a href=\"https:\/\/www.legalraasta.com\/blog\/one-day-company-incorporation\/\">one-day company incorporation<\/a>.\u00a0 In addition, India encourages developing an ecosystem of entrepreneurs, investors,\u00a0 along with incubation centers linking up with research institutes as well as mentorship programs; tax and fiscal benefits; and <a href=\"https:\/\/www.legalraasta.com\/patent-registration\/\">patent registration<\/a> rights reform. These create a system that helps startups help each other to grow and promote the make in India initiative. Along with this, the government encourages investment in startups with the removal of tax on angel investments and cutting down taxes on Foreign Venture Capital\u00a0in Indian Startups.\u00a0One of these initiatives called startup India which aims to help promote the startup culture in India.<\/p>\n<p style=\"text-align: justify;\">These initiatives, including startup India, have been pivotal in promoting business acumen amongst the aspiring entrepreneurs\u00a0in the country. Many startups have sprung up all across the country in the past 5 years in a wide variety of sectors of the economy such as IT, AI, Financial Sectors, Healthcare, Biotech,\u00a0 Agriculture.\u00a0 These schemes and promotions have resulted in\u00a0 India becoming the world&#8217;s 3rd largest technology hub.\u00a0 With 1000&#8217;s of<a href=\"https:\/\/companyregistrationonline.in\/private-limited-company-registration\/\"> company incorporations<\/a>\u00a0happening in the year 2018 alone.<\/p>\n<p style=\"text-align: justify;\">\u00a0In this piece, we will take a brief look at the startup India program. We will also look at how it helps the startups achieve their potential and beyond. In addition to this, we will also see some benefits of this program.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Definition_of_a_Startup\"><\/span><strong>Definition of a Startup<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In legal terms, the term startup applies to those companies which have been incorporated within the past 7 years. For biotech companies, the startup label can be attached to a firm till within 10 years.<\/p>\n<p>The Department of Industrial Policy and Promotion has also laid out some criteria which need to be met by a company to be termed as a startup.<\/p>\n<ul>\n<li>The organization&#8217;s turnover does not exceed \u20b9 25 Crores in any of the preceding financial years.<\/li>\n<li>The organization is headquartered in India<\/li>\n<li>The organization has been recognized to be working towards innovation, development, deployment, and commercialization of products\/ delivery of services powered by technology or intellectual property.<\/li>\n<\/ul>\n<p>However,<\/p>\n<p>If a company crosses 7 years from the date of incorporation or achieves a turnover of more than \u20b9 25 crores in a financial year, it will no longer be classified as a startup.<\/p>\n<p>These norms and definitions are not set in stone, as they are prone to change by the directives from the concerned departments and the government. These definitions are up to date as per the notification issued on April 11, 2018.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Startup_India_Action_Plan\"><\/span><strong>Startup India Action Plan<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">The Modi government emphasizes the achievement\u00a0of economic goals as one of the core focuses of the administration.\u00a0 The governance for the betterment aims to promote job creation, foreign investment,\u00a0 skill development, and entrepreneurship.\u00a0 \u00a0In order to culminate all these objectives under one umbrella\u00a0policy framework for the entire nation, the Startup India Action Plan was launched.<\/p>\n<p style=\"text-align: justify;\">Under the provisions of this policy,\u00a0 startups are entitled to a lot of benefits some of these being\u00a0regulatory and tax benefits, capital gains exception,\u00a0 in addition to government help for <a href=\"https:\/\/www.legalraasta.com\/blog\/startup-funding-techinques\/\">startup funding<\/a>. In addition to taxation benefits, startups will also enjoy the assistance of a self-certification compliance system with respect to labor and environmental laws. this means that the startups will be exempt from any inspections of the place of business from up to 3-5 years.<\/p>\n<p style=\"text-align: justify;\">Some other key benefits that startups in India will be entitled to include 80% reduction patent registration fees as well as a 50% reduction in the <a href=\"https:\/\/www.legalraasta.com\/trademark-registration\/\">trademark filing<\/a>.\u00a0Startups will also benefit from free of cost legal assistance\u00a0in conjunction with simplified entry and exit norms and protection of <a href=\"https:\/\/www.legalraasta.com\/blog\/intellectual-property-rights\/\">Intellectual Property Rights<\/a> (IPR).<\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Legal_Requirements_for_Establishing_a_Startup\"><\/span><strong>Legal Requirements for Establishing a Startup<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>For any organization, entity, business to be termed as a startup they should come under the jurisdiction of the following rules of Company Registration:<\/p>\n<ul>\n<li>Registration under the Companies Act, 2013<\/li>\n<li>Have registration under the Indian Partnership Act, 1932<\/li>\n<li>Limited Liability Partnership Act, 2002, for <a href=\"https:\/\/www.legalraasta.com\/llp-registration\/\">LLP registration<\/a><\/li>\n<\/ul>\n<p>This also implies that firms under the <a href=\"https:\/\/www.legalraasta.com\/proprietorship-firm-registration\/\">Sole Proprietorship Registration<\/a>\u00a0are not covered by the provisions of this scheme.<\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Startup_Compliance_India\"><\/span><strong>Startup Compliance India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">The norms for compliance for startups in India have been simplified in order to facilitate businesses to focus on their primary and core operations. The startups who fall under the category of\u00a0 the 36 white\u00a0 category\u00a0 industries will not require\u00a0 an environmental clearance under the following environmental laws:<\/p>\n<ul>\n<li>Water (Prevention and\u00a0 Control of Pollution) Act, 1974<\/li>\n<li>The Water\u00a0 (Prevention and Control of Pollution ) Cess\u00a0 (Amendment) Act, 2003<\/li>\n<li>The Air (Prevention and Control of Pollution) Act, 1981<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">The Ministry of Skill Development and Entrepreneurship (MSDE)\u00a0issued an advisory to the various states. This advisory basically outlines the guidelines for a self-certification of the compliances for a time-period of one-year with the Apprenticeship Rules, 1992 and Apprenticeship Act, 1961. The advisory issued by the federal labor ministry on December 1, 2016, startups may self-certify compliances under the six labor laws. The tenure for the self-certification has been extended to 5 years.<\/p>\n<h2 style=\"text-align: justify;\"><span class=\"ez-toc-section\" id=\"Benefits_of_Startup_India\"><\/span><strong>Benefits of Startup India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">Incentivized Schemes and initiatives from the Government of India in conjunction with the Department of Industrial Policy and Promotion have yielded fantastic results for the business sector of India. With over 19,000 startups operational across the country with 8 of those valued at $ 1million and more (Unicorn Club). The Startup India initiative was put in place to ensure that the increasing number of startups in the country have the right resources to grow. New startups registering themselves right now or in their early stags can really benefit from these schemes. Here are some of the benefits of the Startup India initiative.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Financial_Benefits\"><\/span><strong>Financial Benefits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"text-align: justify;\">As mentioned before,\u00a0 startups will tend to gain an 80% rebate on the government fees of patent costs. The government will also pay the fees of the facilitator and help in obtaining the patent in a faster more streamlined fashion. Basically, the processing of the Intellectual Property Rights (IPR) will be easier and simpler for startups.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Registration_Benefits\"><\/span><strong>Registration Benefits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>On the 1st of April 2016, the government launched a mobile application which opened up a portal allowing the companies to register themselves within a day. Registration based queries have been streamlined via a single point of contact at the startup-hub India.\u00a0 \u00a0 In addition to this, there is a single clearance window for all types of clearances, approvals, and registrations,\u00a0 which makes the\u00a0procedure easier for all.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Income_Tax_Benefits\"><\/span><strong>Income Tax Benefits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Under the provisions of startup India, up and coming businesses are eligible for exemption from Income tax as a whole for the first three years. However, in order to obtain the income tax exemption,\u00a0 a startup has to obtain a certificate from an Inter-Ministerial Board setup for the same purpose. If the money is invested in a fund of funds, the startups can also avail the tax benefit on capital gains.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Special_Benefits\"><\/span><strong>Special Benefits<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Manufacturing sector startups are exempted from the criteria of &#8216;prior experience&#8217; or turnover. There is, however, no relaxation in the quality standards or the technical parameters with regards to public procurement.<\/li>\n<li>National Credit Guarantee Trust Company or SIDBI ensures guaranteed funds for over 4 years<\/li>\n<li>\u00a0Labor Laws inspections will not be held in the first three years of incorporation<\/li>\n<li>Environment law compliances are only mandatory after self-certification<\/li>\n<li style=\"text-align: justify;\">Winding up of the company can be done in just under 90 days under <a href=\"https:\/\/www.legalraasta.com\/blog\/insolvency-bankruptcy-code-amendment-act2018\/\">Insolvency and Bankruptcy Code<\/a><\/li>\n<\/ul>\n<p style=\"text-align: justify;\">Well, Startup India has proven to be a miracle worker for enforcing the flourishing of the startup culture as well as empowering these businesses with the proper tools and facilities to help them leapfrog from the startup phase into a successful business stage.\u00a0 You can go ahead and visit the Startup India Website &#8211;\u00a0https:\/\/www.startupindia.gov.in\/\u00a0 to help your venture on the path to success.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Startup India and Government Initiatives In India, a wide array of incentives and schemes have been brought\u00a0in to promote the growth of up and coming businesses also known as startups. The government is very passionate about facilitating the ease of doing business in India. Some of these incentives\u00a0include one-day company incorporation.\u00a0 In addition, India encourages developing [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":17155,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[556],"tags":[1178,1185,1180,1182,1181,1179,1184,1183],"class_list":["post-17153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-articles","tag-startup-india","tag-startup-india-essay","tag-startup-india-hub","tag-startup-india-in-hindi","tag-startup-india-learning-program","tag-startup-india-loan","tag-startup-india-logo","tag-startup-india-pdf"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Startup India: Whats is it and its benefits to startups? |LegalRaasta<\/title>\n<meta name=\"description\" content=\"Startup India is an initiative started by the government to enable the ease of operation of startups and facilitate up and\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalraasta.com\/blog\/startup-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Startup India: Whats is it and its benefits to startups? 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