The government of India has taken many positive initiatives after the launch of the start-up movement in the year 2016. The start-up movement was launched to encourage the youth to head towards the establishment of their own empire and provide jobs to other people rather than looking one for self. Also, it was a great decision to provide such an impeccable platform to the citizens of India.
The reason is:
- It keeps them engaged in business life rather than revolving around the vicious circle of unemployment.
- It has opened a vast pool for people and generated employment services for the youth;
- People are no more heading towards abroad in search of employment services;
- No doubt, the traditional businesses may witness some downfall. But, the start-ups are growing impeccably.
For instance: Even now very fewer people know about content writing services, yet this business has touched the heights of the sky in a very short span of time, and it has done wonders for the business entrepreneurs as well as for the job seekers.
Following are the provisions and incentives facilitated by the government of India to the start-ups since the year 2016:
- An entity is to be considered as a start-up for up to five years from its commencement;
- Exemption period of regulatory filings is up to five years;
- Tax exemption is given for three years from the commencement of the business;
- Tax exemptions on capital gains are given for three years from the commencement of the business;
- Reduction in filing patent fee ids provided up to 80 %
- Loan facilities are given to the start-ups to motivate the initiatives of the youth;
- The government of India has also upturned the angel tax, which is usually levied when the company gets the investment higher than its market value.
However, recently the government of India has taken several steps to amend the provisions of Companies act. Here are the highlights of the proposed provisions:
- An entity will be considered as a start-up up to 10 years from its commencement;
- The period for regulatory filings will be increased from 5 years to 10 years for start-ups;
- The exemption will be given in filing cash flow statements to the start-ups.
- Start-ups can hold only one board meeting every six months while other businesses have to hold it four times per year;
- Plans to allow the start-ups to issue 50% of their paid capital in sweat capital;
- Relaxation in the other rules for the start-ups by amendments under the company’s act.
Now India’s new generation start-up entrepreneurs can utilize their precious time on working over enhancing their production efficiency and on generating new customers. They do not have to beat around the filing process of the government paperwork. These changes will bring liberalization for the company to compensate its employees and directors in the form of sweat equity shares.
The proposed amendment
Under all these amendments the main provision that has given a sigh of relief to the start-up enthusiasts is a waiver of 10 year’s period from regulatory filings. However, up till now, the exemption period was up to 5 years only.
This news has come into vogue after the statement given by a government official. According to the official, the period of exemption will be enhanced from 5 to 10 years for regulatory filings. Also, an official notification will be released in this regard which would further require amendment in Companies Act.
The initiative will be taken after making compliance with the definition of start-up entity given by DPIIT i.e. Department for promotion of industry and internal trade. Earlier, DPIIT had expanded the scope and definition of start-ups; and stated that the entities would be called a start-up until they do not complete the tenure of ten years.
What is sweat equity?
Sweat equity is a kind of non-monetary investment made by the existing employees or the shareholders or the directors of the company. In this kind of investment, the company provides the sweat equity shares to the above-mentioned persons in place of the remuneration given to them. Due to this, such persons become the shareholders of the company.
The way the government of India is putting efforts into providing such schemes to the people of India; the day is not so far when no one will leave the country to settle abroad in search of employment. Rather, people from other countries would dream to come and settle here to earn a good livelihood.
Hence, it is the high time for the people of India to leave any kind of second thoughts and head towards the establishment of their own empire. Want to set up your own business? What you are waiting for? Hurry up and take your first step. Wish you all the very best in your future endeavours.