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TMI BlogRecognition of an eligible entity as startup - revised policyX X X X Extracts X X X X X X X X Extracts X X X X ..... rking 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. Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a 'Startup'. Explanation- An entity shall cease to be a Startup on completion of seven years from the date of its incorporation/ registration or if its turnover for any previous year exceeds ₹ 25 crore. In respect of Startups in the biotechnology sector, an entity shall cease to be a Startup on completion of ten years from the date of its incorporation/ registration or if its turnover for any previous year exceeds ₹ 25 crore. (b) "Act" means the Income-tax Act,1961; (c) "Board" means the Inter-Ministerial Board of Certification comprising of the following members: - (i) Additional Secretary, Department of Industrial Policy and Promotion, Convener (ii) Representative of Ministry of Corporate Affairs, Member (iii) Representative of Ministry of Electronics and Information Technology, Member (iv) Representative of Department of Biotechnology, Member (v) Represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (c) of clause (ii) of the Explanation below sub-section (4) of section 80-IAC of the Act; or (ii) reject the application by providing reasons 2[Approval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act. 4. (1) A Startup which is recognised by DIPP under para 2(iii) (a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2) to section 56 of the Act for the shares already issued or proposed to be issued if the following conditions are fulfilled- (i) aggregate amount of paid up share capital and share premium of the startup after the proposed issue of share, if any, does not exceed ten crore rupees; (ii) The investor/ proposed investor shall have - (a) returned income of ₹ 50 lakh or more for the financial year preceding the year of investment/proposed investment; and (b) net worth exceeding ₹ 2 crore or the amount of investment made/proposed to be made in the startup, whichever is higher, as on the last date of the financial year preceding the year of investment/proposed investment. (2) (i) Application for approval under this para shall be made in Form-2 to DIPP and shall be accompanied by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Declaration I/ We hereby certify that the above information furnished by me is true and no relevant information has been concealed. For (Name of the Startup) (Name of the authorised signatory) Designation Place: _______ Date: _______ This form shall be accompanied by the following documents (if applicable)- 1. Annual Accounts of the startup for the last three financial years 2. Copies of income-tax returns for the last three financial years 5[Form-2 Application for approval for the purposes of section 56(2)(viib) of the Income-tax Act, 1961 1. Name of the Startup- ....................................... 2. Date of incorporation of Startup as company 3. Incorporation No-....................................... 4. Address and business location-....................................... 5. Nature of business- ....................................... 6. Contact details of Startup (Phone No. and Email)-....................................... 7. Permanent Account No-....................................... 8. Startup Recognition number allotted by DIPP- ....................................... 9. Existing/proposed activities-....................................... 10. Deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);" 2. Substituted vide NOTIFICATION G.S.R. 34(E). dated 16-01-2019 before it was read as "Approval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act 4. (1) A Startup being a private limited company and in conformity with the definition as per definition stipulated at Para 1(a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2) of section 56 of the Act, if the following conditions are fulfilled: - (i) the aggregate amount of paid up share capital and share premium of the startup after the proposed issue of shares does not exceed ten crore rupees, (ii) the investor/ proposed investor, who proposed to subscribe to the issue of shares of the startup (hereinafter in this notification referred to as "investor") has, - (a) the average returned income of twenty five lakh rupees or more for the preceding three financial years; or (b) the net worth of two crore rupees or more as on the last date of the preceding financial year, and (iii) the startup has obtained a report from a merchant banker s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Association, LLP/partnership Deed, Board Resolution etc.) 10. Details of certificate granted under section 80-IAC of Income-tax Act,1961 , if any............ 11. Details of share capital as on the date of application- (i) Amount of share capital……… (ii) Amount of share premium…… (iii) Type of shares………… (iv) Number of shares......... (v) Face value..................... (vi) Issue price.................... 12. Details of proposed issue of shares- (i) Type of shares……….. (ii) Number of shares......... (iii) Face value..................... (iv) Premium per share………. (v) Issue price.................... (vi) Proposed date of issue of shares…………………. 13. Details of the investor- (i) Name of the investor(s)- ………………………………………………..… (ii) Address - ……………………………………………… ..... X X X X Extracts X X X X X X X X Extracts X X X X
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