The startup India is a government aided scheme, which was initiated with the aim of promoting the startup businesses of India. This scheme was launched on January 16, 2017, by Prime Minister Mr Narendra Modi. This scheme provides financial support to startup businesses. The businesses which are newly started or started by 1 person or a group of individuals are generally known as startup businesses. Most of the startup businesses come up with innovative ideas in their businesses. Those businesses generally develop a new product or upgrades a product or service. The startup India is the scheme to motivate those innovative entrepreneurs by giving them recognition with a financial backup.
The benefits of the scheme can be enjoyed only if you are eligible for it. There are several eligibilities criterion to meet to qualify for startup India loan. Let’s look at the eligibility criteria to qualify for startup India scheme.
Get Qualified for Startup India Scheme
1. The Start-up Business must be Registered as a Private Company, LLP or Partnership Firm
The first criteria to get qualified for startup India is the registration of the company which has to be done under any of the mentioned below acts.
- Private Limited Company under the Indian Companies Act, 2013,
- Limited Liability Partnership (LLP) under Indian Limited Liability Partnership Act, 2008 or
- Partnership firm under the Indian Partnership Act, 1932.
2. Must not be Formed by Restructuring
If your startup wants to avail the benefits of startup India scheme, it must be a primary company. No companies will be getting the benefits of startup India if it is formed by restructuring a previous company of splitting from another company. In such scenarios, your startup will be considered ineligible.
3. The Business Must Not Have More Than 5 Years of Functioning
The startup India benefits the companies which are less than 5 years of business. The startup India action plan came to effect from 16th February 2016. Hence, the companies which are registered before 15th February 2011 are not eligible for the benefits of this scheme.
4. The Annual Turnover Must Exceed 25 Crores
If your company has a turn over of more than 25 crores in a financial year, it will automatically become ineligible for startup benefits. The startup India scheme is designed to support businesses with a low turnover.
5. Innovation in the Business
Innovation is the key to startup success. The government support is also given to the businesses who have a new product or a new service for the customer. The innovation in the business has to meet three points-
- Startups must aim to develop and commercialize a new product or service. If the startup is not developing a new product or service, it must significantly improve the existing product or service so that it can add value to customers or workflow.
- The business aspiring to get the benefits of startup India must work towards development, innovation, deployment or commercialization of new products, services driven by technology or intellectual property.
- The business must have a commercialisation prospect in the business. The business should not only be engaged with developing products or services which do not have the potential for commercialization.
6. Getting approval from DIPP
Every startup aspiring to get benefits from startup scheme must obtain approval from the Inter-Ministerial Board set up by the Department of Industrial Policy and Promotion (DIPP). The DIPP approval is obtained to maintain uniformity among the applicants of startup scheme.
The documents required for getting approval from DIPP are
- A patent has to be filed and published in the Journal of Indian Patent Office.
- Recommendation from Incubators established in postgraduate college
- A Recommendation from an Incubator who is funded from Central or state government
- Recommendation from an Incubator recognized by the Government of India.
- Letter of at least 20% Equity Funding from an Incubation Fund or Angel Fund or Private Equity Fund or Accelerator or Angel Network. The funding entity must be registered with SEBI.
- Letter of funding from Central or state government
The Last Lines
This government scheme is meant to help those growing entrepreneurs who have innovative ideas to implement in their businesses. It is undeniable that this scheme is very helpful for the growing businesses but sadly only a few of the businesses can qualify for the same. Innovation is a must have for businesses to get qualified for startup India scheme. Along with the same, getting recommendations at different levels, filing and publishing patent etc. undergoes a quite lengthy process. Because of all those conditions, many of the young entrepreneurs stay beyond the qualifying line of standup India scheme.