A startup is an entity that is in the first stage of its operations. It is basically business model that aims to meet a marketplace need by developing or offering an innovative product, process or service.
On January 16, 2016 the government of India launched the Startup India Initiative. This was undertaken in order to support entrepreneurs, create vigorous startup ecosystem as well as shift India towards creating jobs rather than seeking them.
The very objective of the Startup India Scheme was to build a strong ecosystem for promoting innovation and startups in the country.
- Startups are allowed to self-certify their compliance under six labor laws and three environment laws. This is allowed for a period of five years from the date of incorporation of the entity.
- The profits earned by the recognized startups having granted inter-ministerial board certificate are exempted from income tax for three consecutive years.
- Startups also known as fast track firms can be wound up within 90 days as against 180 days for other companies.
- The government of India has set aside a corpus fund of Rs. 10,000 crore. This fund is managed by SIDBI and is intended to provide equity funding support for the development and growth of innovation driven enterprises.