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CS Executive · Setting Up of Business, Industrial and Labour Laws · Startups and its Registration

Arjun and Meera in Pune have built a mobile app for rural farmers and plan to register a private limited company in 2026. Which feature is the primary basis on which the entity gets recognised as a 'startup' by DPIIT under the Startup India initiative?

A startup is recognised by DPIIT when an eligible entity is working towards innovation, development or improvement of products, processes or services, or has a scalable business model with high potential for employment or wealth creation. Employee numbers, listing or partnership-only status are not the test.

  1. AIt is working towards innovation, development or improvement of products, processes or services, or is a scalable business model with high employment or wealth creation potentialCorrect
  2. BIt must have at least 50 employees at the time of application
  3. CIt must be a listed company with positive net worth
  4. DIt must have been registered as a partnership firm only

Explanation

DPIIT recognition requires an eligible entity (private limited company, registered partnership firm or LLP) that is working towards innovation or improvement or has a scalable model with high employment or wealth creation potential. There is no minimum employee count, no listing requirement, and a company is eligible, so the other options are wrong.

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