Most of the businessmen like to use the term “STARTUP” without knowing the actual meaning of STARTUP. There is a big difference between a “STARTUP” and a “STARTING ORGANIZATION”.
There are 3 criteria for being called a STARTUP as per notification issued by DPIIT:
- Entity should be a private limited company or registered partnership firms or LLP for a period of 10 years only from its incorporation.
Most of the proprietors and unregistered partnership firms claim to be a STARTUP without knowing the fact that they can never be called a STARTUP. Further they can never be approached by anyone to takeover of the Business of the entities in view of unlimited liability which they are carrying with their business.
Facility of transferring shares and easy exit is available in private limited companies that are why most of STARTUPS choose to form a private limited company over other available options.
- Turnover should not exceed Rs 100 Crores since incorporation.
This condition looks very lucrative and fascinating to the starting organizations because of which they would like to be called as a STARTUP, whereas they don’t like to fulfil other conditions of being a STARTUP.
- Entity should work in innovation, development of products / services, high potential of employment generation.
One of most important aspects i.e. innovation which is missing in the most of the starting organizations. Other aspects like development / improvement of products / services and high potential of employment generation are also being ignored by the starting organizations at the time when they think of being a STARTUP.
The starting organizations are always desirous of availing tax benefits without fulfilling the eligibility criteria required for being a “STARTUP”. Tax benefits are not being discussed here knowingly to shorten the length of message.
On the basis of various queries received from many members, we have made this short message. If anyone is interested to discuss further, they may call or WhatsApp to discuss further.
Please spread this awareness to your business friends.
You may WhatsApp on 91-9820089394 for any further information and discussions.
Team- Intellex Strategic Consulting Private Limited (India)
Intellexconsulting.com, Startupstreets.com, IntellexFinance.com