Laws Relating to Startups in India
By Team Legistify / 2016-10-12
Nurturing a new business includes many things. One such stepping stone is knowing basics of the startup laws. Before diving into a deep legal sea, let’s have a look at the vital startup laws with which you can start the long journey

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The Prime Minister Narendra Modi had in his Independence Day speech announced “Startup India“ initiative in 2015. The objective of this initiative is to make India a nation of ' Job creators' instead of being a nation of 'Jobseekers' . Fostering a fruitful culture of innovation in the country is a long and important journey which India has taken up to make itself a hub of innovation, design and startup.
Starting a new business involves a number of criteria’s, one such criterion is knowing the correct procedure and laws relating to startups in India. As per new legal norms, a business entity is identified as a startup for up to five years from the date of its incorporation which needs to meet following criteria set by DIPP to access government benefits:

1. Its turnover should not exceed Rs. 25 Cr in the last five financial years
2. Its headquarters should be located in India
3. It must work towards innovation, development, deployment and commercialization of new products, processes, or services driven by technology or intellectual property.

The legal definition means that sole proprietorship firms cannot come under the startup India scheme. For an entity or business to be termed as a startup it must establish itself under either of the following legal frameworks:

  • Company’s Act, 2013
  • Partnership Act, 1932
  • Limited Liability Partnership Act, 2008

On initiation of an organization, the first step should be to decide the type of business that is to be taken up vis-à-vis Public company, private company, one person company so on and so forth. This might seem unreasonable but it goes a long way in deciding the company’s visibility, sustainability and profitability in a long run as different types of business ventures adhere to the different set of laws. Talk to the best startup lawyers in India to know more.

Nurturing a new business includes many things. One such stepping stone is knowing basics of the startup laws. Before diving into a deep legal sea, let’s have a look at the vital startup laws with which you can start the long journey

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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