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CSEET · Economic and Business Environment · Entrepreneurship Scenario

Recognition as a start-up by DPIIT requires, among other conditions, that the entity is a private limited company, a registered partnership firm or an LLP. Which additional condition is part of the framework?

A DPIIT-recognised start-up must be working towards innovation or improvement of products, processes or services, or have a scalable business model with high potential for employment or wealth creation. There is no minimum capital requirement, and entities formed by splitting or reconstructing an existing business do not qualify.

  1. AIt must be working towards innovation, development or improvement of products, processes or services, or be a scalable business model with high employment or wealth creation potentialCorrect
  2. BIt must be a subsidiary of a listed company
  3. CIt must have a minimum paid-up capital of rupees one crore
  4. DIt must be formed by splitting up or reconstructing an existing business

Explanation

The entity must be engaged in innovation or improvement of products, processes or services, or be a scalable model with high potential for employment or wealth creation. Entities formed by splitting up or reconstructing an existing business are not eligible, and no minimum paid-up capital is prescribed. Being a subsidiary of a listed company is not a condition.

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