What is Startup India?

Startup India is an initiative of the Government of India. The action plan of this initiative is focussing on three areas:

  1. Simplification and Handholding.
  2. Funding Support and Incentives.
  3. Industry-Academia Partnership and Incubation.
    1. An additional area relating to this initiative is to discard restrictive States Government policies within this domain, such as License Raj, Land Permissions, Foreign Investment Proposals, and Environmental Clearances. It was organized by The Department for promotion of industry and internal trade.A startup defined as an entity that is headquartered in India, which was opened less than 10 years ago, and has an annual turnover less than ₹100 crore (US$13 million). Under this initiative, the government has already launched the I-MADE program, to help Indian entrepreneurs build 10 lakh (1 million) mobile app start-ups, and the MUDRA Bank's scheme (Pradhan Mantri Mudra Yojana), an initiative which aims to provide micro-finance, low-interest rate loans to entrepreneurs from low socioeconomic backgrounds. Initial capital of ₹20,000 crore (equivalent to ₹240 billion or US$3.0 billion in 2020) has been allocated for this scheme. Recently Indian Prime Minister announced "India will celebrate January 16 as ‘National Start-up Day".Hon’ble PM awarded 48 startups on the eve of first National startup day. This time from Pune, Maharashtra, four startups got the award.

      Eligibility for Startup India
      • As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as Startup :
      • Has not yet completed a period of ten years from the date of incorporation/registration.
      • Is a private limited company or registered as a partnership firm or a limited liability partnership.
      • Has an annual turnover not exceeding Rs. 100 crore for any of the financial years since incorporation/registration.
      • 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.
      • It is not formed by splitting up or reconstructing a business already in existence.

Benefits of Startups in India

Tax Exemption Benefits
Startups that are registered under the Startup India scheme are tax-free. This exemption is only available for the first three years. Incubators are free from paying taxes on any investment that is worth more than the market price. Angel investor investments are likewise excluded from the scheme’s taxation. The company can spend all of its profits for business expansion if it receives a tax credit for the first three years or reaches a certain threshold limit.

Beneficial for Research and Innovation
Research and Innovation is the most important of all the other advantages. Startup India also encourages those who want to be entrepreneurs to conduct research and innovate. There are proposals in the works to build seven new research parks. Students and businesses will be able to use these parks to conduct research and develop their products/services.

Exploring more business options
Startup India is a programme that allows startups to interact with other startups at a certain location and time. These gatherings are held twice a year in the form of a festival. These festivals are hosted both domestically and internationally. As a result of this advantage, companies can explore more funding options as well as business ideas to ensure growth.

Benefits at the time of acquiring Government Tenders
The majority of government projects are substantial and come with significant financial incentives. It is, however, quite difficult to obtain one. The main reason for this is the competitive nature of them. Startups, on the other hand, are offered incentives to receive government tenders under this scheme. They are also not required to have any prior experience in order to be considered for these bids.

Helpful in Patent Protection
If you have ever tried to register a patent, you will know how time-consuming it can be. The system, on the other hand, makes a variety of attempts to protect important intellectual property. This includes expedited patent application review. The efforts are not limited to expedited patent applications. Once the patent is filed, an additional rebate of 80% of the entire patent price is given.

Advantages of Self Certification
Startups are more prone to failure in the early stages of their development. These organisations were frequently faced with the challenge of preserving their existence in the face of adversity, including government regulations. However, thanks to Startup India programmes, which provide businesses with a buffer against such turbulence by removing some stringent rules, they can weather the storm. Startups can now self-certify in accordance with nine labour and environmental standards.

Recommended For Startups & Growing Companies Sole Promoters Professional Services Companies Small Businesses Firms Small Traders, Agents & Manufactures
Prevailing laws Companies Act Companies Act LLP Act Partnership Act NA
Charter Documents MOA & AOA MOA & AOA LLP Agreement Partnership Deed NA
Limit of Members 2-200 1 2-Unlimited 2-20 NA

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Simplified Performa for Incorporating Company Electronically, also known as SPICe, was introduced in the year 2016 for the purpose of incorporation of the companies. Under the Ease of Doing Business (EODB) initiative, the MCA released the new form SPICe+ to further ease the company incorporation process. The new SPICe+ form encompasses more features than the earlier SPICe form. Name approval is integrated as part of the SPICe+ form. The AGILE form has been converted to AGILE Pro to provide GSTIN / ESIC / EPFO / Bank account as well along with company incorporation. Apart from that, even after affixing DSC in the form, information can be modified in the SPICe+ form.

After the introduction of the SPICe+ form, the name approval has been integrated with SPICe+. Part-A of SPICe+ is for name approval. Therefore, from 15th February 2020, the RUN form can only be used for a change of name.

Company Limited by Shares: The liability of the shareholders is limited only to the amount that is unpaid on the shares held by them. Company Limited by Guarantee: A company having no share capital where the liability of the shareholders is limited up to the amount undertaken to be contributed by them in the event of liquidation of the company.

Yes. private limited companies are eligible for attracting foreign direct investments in compliance with the relevant laws and regulations.

DIN, also known as Director Identification Number, is an identification number of a person intending or has become a director in a company. DPIN, also known as Designated Partner Identification Number, is an identification number for a designated partner in LLP. It is similar to DIN in the case of companies. DIN and DPIN are issued by the Ministry of Corporate Affairs.

Yes. Even a foreign national can become a director in a private limited company.

As per the Companies Act, 2013, only an individual natural person can become a director in a company. Therefore, neither a company, firm, or association can become a director in any company. This is to ensure the fixation of duties and responsibilities that would be difficult in the case of companies and firms becoming directors.

The private limited company registration cost depends upon various factors like authorized capital, number of directors, etc. Initiate your Pvt. Ltd. Company Registration with eAuditor Office as your partner in corporate compliance! Reach out to us for any professional assistance.