India is the world’s third-largest startup ecosystem. To promote startups, the government is set to provide major relief in regulatory ordinances. According to sources in the Ministry of Corporate Affairs, start-ups can be allowed to file regulatory returns for up to 10 years. At the same time, under the new rules, startups will be able to issue 50 percent of the paid-up capital as “sweet shares.”
Regulatory filing and relaxation of rules by the government for 10 years is possible to promote startups. At present, relief is granted in regulatory filings for only 5 years. Now, incentives will also be available for founders, directors, and employees. After the new rules are implemented, 50% of paid-up capital will be issued as a sweet share. At the same time, shareholders will be able to take more deposits than paid-up capital. For this, the government is preparing to change the rules soon. However, regulatory regulations will require a change in company law.
India remains the third-largest country in terms of the Start-Up environment. The country added 1,100 startups in 2019 and with this, the total number of technology startups has increased from 8,900 to 9,300 in the last five years. Nasscom, an organization of information technology companies said. Bengaluru has been at the forefront of startups. Delhi-NCR stood second in this list. 12 to 15 percent of tech startups are from developing cities. The number of tech startups in the report has been 8,900 to 9,300 last year. The funding was US $ 4.2 billion last year. In this way, funding has increased.
Plans to clear startups from registering cash flow reports in their yearly filings and empowering them to hold only one council meeting every six months instead of four every year may need parliamentary approval. The government has taken various steps to boost the startup ecosystem, including giving them relief from what was popularly dubbed angel tax, which is levied when firms get investments at higher than their fair business value.
