A startup is term used to identify and promote entrepreneurs in establishing business undertakings. Several benefits/relaxations are offered to startup entities from compliance’s which would have been otherwise applicable to them. Benefits/Relaxations are offered for the initial period of establishment. Exemptions are granted from complying certain provisions of the Companies Act, 2013 such as minimum number of board meetings to be conducted, signing of annual return etc. Before getting recognition as a startup, an entity should be formed either as a Private Company (including One Person Company) or a Registered Partnership Firm or a Limited Liability Partnership.
Ministry of Corporate Affairs explained the terms “start-up” or “start-up company” as a private company incorporated under the Companies Act, 2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956) and recognized as start-up in accordance with the notification issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.” Continue reading