As per a recent notification by the Ministry of Commerce and industry, the definition of Start up has been revised. As per the recent notification, an entity shall be considered as a Startup:
- Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.
- Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
- Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’.
A start up to be recognized as one, has to make an application online or on the mobile Application of Department for Promotion of Industry and Internal Trade (DPIIT).
The application has to be accompanied by a copy of certificate of incorporation or registration and a write up about the nature of business etc. The DPIIT, after calling for such documents or information and making such enquires, as it may deem fit, —(a) recognise the eligible entity as Startup; or (b) reject the application by providing reasons.