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

Rohit runs a technology startup and wants to use the Startup India portal. Which is the primary purpose of the DPIIT recognition process for his entity?

DPIIT recognition is sought so that an eligible entity can avail startup benefits such as tax incentives, easier compliance and other support. It does not replace incorporation with the Registrar, does not make the entity listed, and gives no general customs duty exemption.

  1. ATo obtain recognition as a startup so that it can access benefits such as tax incentives and simplified compliance, subject to eligibilityCorrect
  2. BTo convert the entity automatically into a listed company
  3. CTo obtain a licence to import goods without any customs duty
  4. DTo register the entity under the Companies Act in place of the Registrar of Companies

Explanation

DPIIT recognition lets an eligible entity claim startup benefits. It does not replace incorporation with the Registrar, which must happen first, and it does not list the company or give customs exemptions. The option on replacing the Registrar is wrong because the entity must already be incorporated or registered.

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