Legal Guide for Startups – PART 1

A Start-Up may be defined as a newly established business, incorporated either as a Private Limited Company, Sole Proprietorship firm, registered Partnership firm, or a Limited Liability Partnership (hereinafter referred to as “LLP”). A Start-Up is engaged in developing new products or providing services through the use of innovation. It is nothing but an idea that manifests into a commercial undertaking. The Department of Industrial Policy and Promotion (hereinafter referred to as “DIPP”) defines a Start-Up as an entity incorporated or registered in India comprising the following: Not more than Ten years have elapsed since the date of incorporation/registration of the entity; The start-up entity should be a Private Limited Company, a registered Partnership Firm, or a LLP firm; Turnover of the entity have not exceed 100 crore rupees in any of the financial years since its incorporation. The entity should be working towards innovation, development, or improvement of products or processes and services or if it is a scalable business model with a high potential for employment generation or wealth creation.