Up-Start for Indian Start-Ups: To Get 10-Year Waivers with regulations


Up-Start for Indian Start-ups: To Get 10-Year Waiver
from Regulatory Filings

Indian government has proposed recently to let start-ups issue sweat equity and grant additional exemptions, as the government is determined to ease norms for them under the Companies Act with a view to boost entrepreneurship in the country. According to the news, the ministry of corporate affairs plans to allow start-ups to issue 50% of their paid-up capital as sweat equity and extend the period of exemptions from other regulatory filings for up to 10 years instead of five now.

They will be exempted for 10 years from a rule that bars private companies from raising deposits exceeding 100% of their paid-up share capital.  Exemptions already given to start-ups for 5 years will be available for 10 years, in line with the revised definition by the Department for Promotion of Industry and Internal Trade.

The DPIIT expanded the definition of start-ups earlier this year to state that entities would be considered start-ups for up to 10 years from the date of their incorporation. News suggest that a notification would be issued soon to put into effect the proposed changes, although relaxation of norms on financial filings for start-ups would require an amendment to the Companies Act of India.

Provisions to exempt start-ups from filing cash flow statements in their annual filings and allowing them to hold only one board meeting every six months instead of four every year may need parliamentary approval. These exemptions help start-ups that are under 10 years old in raising funds for expansion plans and provide flexibility to compensate employees or directors using sweat equity.

The government has taken several measures off late to boost the start-up ecosystem, including giving them relief from what was popularly dubbed angel tax, which is levied when companies get investments at higher than their fair market value. It is looking to enhance the start-up fund of funds, which invests in venture capital and alternative investment funds that in turn invest in start-ups.

For any queries, feel free to write to us at info@gjmco.in or call: +91 7600.482.982

Thanks & Regards,
Knowledge Base team
GJM & Co.
Chartered Accountants
www.gjmco.in

Out SOURCE to Out PERFORM

Comments

Post a Comment

Popular posts from this blog

Significance of Financial Controller in your Business

Image
  Significance of Financial Controller in your Business We come across this terminology of “Financial Controller” many a times across business enterprises, however the average businessman doesn’t have a clear understanding of what financial controllers can do for their business and how can they a significant part in the success of their venture.   For anyone owning or managing a growing business and not having a financial controller, should read this article and understand how important it is to consider evaluating the need of one for their business. In this article, we shall explain the job of a financial controller, how they differentiate from CFOs, why are they needed, and when should a business be eligible to hire the services of one.   Job of a Controller: Accounting and Bookkeeping functions in every growing business typically benefit substantially when they are supervised and guided by an expert finance professional.   CPA/Chartered Accountants are s...
Read more

Tax on Cryptocurrency gains – Unlocking the Mystery

Image
  Tax on Cryptocurrency gains – Unlocking the Mystery   The first Cryptocurrency – Bitcoin was introduced more than a decade ago in 2009 by the so-called father of bitcoin – Satoshi Nakamoto, and since then there has been a flux of cryptocurrencies getting introduced from time to time. Bitcoin and several other rival cryptocurrencies like Litecoin, Ethereum, Ripple, Dogecoin etc. have experienced path breaking growth in the recent years, leading to lot of complexities into the accounting of such currencies and their tax implications globally.   To any first-time reader here, Cryptocurrency is digital currency that uses encryption techniques, rather than a central bank, to generate, exchange, and transfer units of currency. Unlike cash transactions, no bank or government authority regulates these forms of currency or verifies the transfer of funds. Instead, these virtual transactions are recorded in a digitized public ledger called a “blockchain.” Individual units of the...
Read more

How to form a Private Limited Company in India?

Image
How to form a Private Limited Company in India? As new ideas to do business keep emerging, the importance of having the right form of business entity becomes a crucial element prior to initiating any commercial activity.  Indian laws offer a wide and complex variety of vehicles to do business like Sole-proprietorships, Hindu undivided families (HUF), Partnerships, Limited liability partnerships, Private limited companies and Public limited companies.  The choice of your business entity form depends on the volume, scale, complexities and parties involved and one must do a thorough analysis beforehand to determine the choice to be opted for as changing business entity form of an ongoing business at later stages, although doable, can be cumbersome.  It is best to consult a Chartered Accountant firm and discuss your business plans to help arrive at the right decision. In today’s article, we shall deal briefly with the formational aspects of a Private limited company in India...
Read more