To aid small startup businesses financially, the government of India launched the ‘Startup India’ scheme on January 16, 2017. The scheme was flagged off by PM Narendra Modi. A startup is a new term which is taking over the business sector these days. When a single person or a group of persons come with some innovative business idea it is called a startup. To overcome the funding aspect which the new businessmen face, this initiative will help young and innovative minds to convert their ideas into reality.
To qualify for Startup India Action Plan, the below-given pointers must be considered.
1. Register the business
The foremost thing to qualify for Startup India Action Plan is to have your business registered as a Private Limited Company under the Indian Companies Act, 2013, Limited Liability Partnership (LLP) under Indian Limited Liability Partnership Act, 2008 or as a Partnership firm under the Indian Partnership Act, 1932.
Read More: Get Business Funding for Short and Long Term Business
2. No Restructuring
Startup India Action Plan pertains to primary companies only and not to the ones which are formed by dividing and restructuring the previous company. The business will stand ineligible if found of restructuring.
3. Business must not be active for more than 5 years
One only qualifies for the Startup India Action Plan if their business is not functioning for over 5 years. This means that the companies which have been registered before 15th February 2011 are not eligible for Startup India Action Plan which came into existence from 16th February 2016.
4. The annual turnover of the business should not be more than 25 crores
If your business wants to avail the benefits of Startup India Action Plan, then for any financial year, it’s turnover must not exceed 25 crores. The core purpose of this scheme is to help businesses which are still struggling to get a decent turnover.
Read More: Getting Your Business Ready for 2020
5. The business should be innovation defined
To qualify for Startup India Action Plan, your business must be defined by innovation in a way that it must be offering new product or services. Innovation needs to be defined by the following points:
- The business must offer either an improvised version of existing products and services or shall offer new ones which add meaning to the customer market.
- The business must inculcate technology or intellectual property for designing, development, commercialisation and innovation of new products and services.
- The products and services so developed must have commercialisation attribute else there is no point of innovation and development.
6. Shall obtain approval from Department of Industrial Policy and Promotion (DIPP).
Department of Industrial Policy and Promotion (DIPP) is the authorising body which takes care of approving the startup. The approval is required to maintain uniform conduct among the scheme applicants.
For this purpose, the applicants need to furnish few documents like letter of funding from state or central government, patent filed and published in the Journal of Indian Patent Office, Recommendation from Incubators which have been established in a post-graduate college, Recommendation from any incubator which receives funds from Central or State government, Recommendation from an Incubator having recognition from the Indian government, letter of minimum 20% equity funding from any SEBI registered entity.
Read More: Exploring the Benefits of a Business Loan
The Start-up India Action plan is a great help for young businesses which requires funding and recognition. However, due to stringent qualification criteria and lengthy documentation requirements, many ideas and start-ups are unable to avail the scheme. Thus if one wishes to qualify for this initiative, it is mandated for them to get hold of all the above-stated pointers.
Once your business gets qualified for the Startup India Action plan, you can work day and night to take your products and services to the wider base. To take care of the financial aspect, one can also avail a business loan which is being offered by several lenders in the market today. Business loan interest rates are competitive and one can get a good deal if one applies for an online business loan in India through the digital platform of the lenders. It is, however, advisable to compare different lenders before choosing on the one. LoansJagat offers an excellent comparative platform for the borrowers to compare and choose the business loan provider.
