Start-up Licence

Start-up Licence

Start up licence is granted by DPIIT under start up India Scheme launched in 2016. All the companies getting start up recognition are eligible for various incentives and subsidies provided by Government.

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As the words itself suggests, Start up licence is the new initiative or newly started business. India is a developing country and is one of the fastest growing economies in the world. Considering boosting the new innovation in the economy, Government of India has launched Start-up India Scheme in 2016. Start-up India scheme is regulated by Department for Promotion of Industry and Internal Trade (DPIIT) which comes under Ministry of Commerce and Industry.

Eligible companies can be recognized as Start up licence by DPIIT under the Start-up India initiative, so lets have a look on term “Eligible Companies”

Eligible Companies for start up licence are:

  1. Any company which is registered as a Private Limited Company or Limited Liability Partnership (LLP) or a registered Partnership Firms are eligible to apply for Start-up recognition.
  2. The date of incorporation of company / registration of Firm should not exceed 10 years.
  3. The turnover of Company / LLP / Firm should not exceed INR 100 crore in any financial year after its incorporation.
  4. The Company / LLP / Partnership Firm should be incorporated by the promoters and it should not have been formed by splitting-up or reconstruction of any existing business.
  5. The Company / Firm / LLP should have plan for innovation / development / improvement of any product or service and are capable of scalability in future.

Apart from above mentioned eligible companies, no other form of entities are eligible to get registered under Start-up India initiative.

Benefits of Start up licence Recognition

  1. Start-up recognised by DPIIT can be able to self-certify 6 Labour law Compliances and 3 Environmental Law Compliances.

Labour Law Compliances are The Employees Provident Fund and Miscellaneous Provisions Act 1952, The Employees State Insurance Act 1948, The Payment of Gratuity Act 1972, The Contract Labour Act 1970, The inter-state migrant workmen Act 1979 and The Building and other construction worker Act 1996.

There will be no inspection during the first 5 years by the Labour Department, Start-up will be inspected only if the inspector of Labour Department receives serious complain regarding violation in writing.

Environment Law Compliances are The Air (Prevent & Control of pollution) Act 1981, The Water (Prevention & Control of Pollution) Act 1974 and The Water (Prevention & Control of Pollution) Cess Act 2003. The Start up licence companies can submit self-certification of compliance for the first 5 years after DPIIT recognition.

  1. Start up licence recognised by DPIIT can avail 100% income tax benefit under section 80IAC of Income Tax Act for 3 consecutive financial years out of first 10 years since incorporation, for this the start-up need to apply for the exemption on the portal of after getting recognised by DPIIT.

Apart from section 80IAC, start-up can also avail exemption under 56 of Income Tax Act, this is capital gain exemption, for availing this exemption, the conditions are:

  • Investments made by Listed Companies in the eligible start-up are exempt from capital gain if their net worth is more than INR 100 crore and turnover more than INR 250 crore.
  • Shares received by start-up are exempted upto eligible limit of INR 25 crore.
  1. Start-up recognised by DPIIT can avail financial assistance, for example Start-up are eligible for 80% rebate in filing patent applications, The Start UP India Portal provide incubator facility for assistance and application for IPR, Patent and Copyright.

Registration of Start up licence Entities

Registration can be done online on the portal of, for application the user need to create profile by submitting the incorporation details, PAN, address and other information as asked. The user needs to submit pdf copies of incorporation certificate, PAN and address proof details.

 With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your Start-up registration in India and thereafter will provide you detailed analysis mentioning the law requirement and compliance need to fulfill in order to operate it economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliance. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliance need.