The compliance and encouragement behind a startup worth building.

DPIIT recognition is the government's formal acknowledgement that your entity qualifies as a startup under the Startup India programme. It's the gateway credential: without it, you cannot apply for the Section 80-IAC (now Section 140 under the Income Tax Act 2025), tax holiday, the angel tax exemption, the Credit Guarantee Scheme, or public procurement relaxations. It is the first step we get for eligible Startups.

Four entities qualify:

• a Private Limited Company,
• a Limited Liability Partnership,
• a registered Partnership Firm, or
• a Cooperative Society.

So if you are running a proprietorship in Borivali, its not eligible. Hence our first conversation with you is about converting to the right entity.

Yes.

A startup does not have to be profitable before incorporation or DPIIT recognition. An early-stage business may be developing its product, validating its market, building a prototype or acquiring its first customers.

However, DPIIT recognition requires the entity to satisfy the applicable recognition criteria. Simply having an idea does not automatically qualify an entity as a recognised startup.

Four tests.

• Your turnover must stay under ₹200 crore in any previous financial year.
• The entity must be no more than 10 years old from incorporation.
• It must be working towards innovation or improving existing products, services or processes, with potential to generate employment or create wealth.
• And it must not be formed by splitting up or reconstructing an existing business.

Yes, and meaningfully so. DeepTech startups get a longer runway: recognition is available for up to 20 years from incorporation (against 10 for others), and the turnover ceiling is ₹300 crore (against ₹200 crore). This reflects the reality that deep technology — advanced materials, biotech, semiconductors, space — takes far longer to commercialise than a consumer app.

No.

Calling a business “AI”, “SaaS”, “blockchain” or “deep tech” does not by itself establish Deep Tech status.

The current Startup India recognition process has specific Deep Tech criteria, including questions around novel systems/processes, R&D intensity and capital, proprietary IP/know-how and related characteristics.

Applications now route through the National Single Window System (nsws.gov.in). You create an account, add the "Registration as a Startup" approval to your dashboard, and file with your incorporation details and the innovation narrative. The same portal also handles a range of central and state approvals — useful, but genuinely fiddly the first time through.

It's a three-year income-tax holiday. A recognised startup that clears the 80-IAC (Now 140) application can claim 100% deduction on profits for three consecutive financial years, chosen out of its first ten years since incorporation. Since most startups aren't profitable early, the real skill lies in choosing which three years to claim — a decision worth planning, not defaulting into.

Three conditions, all of which must hold.

• The entity must already be a DPIIT-recognised startup.
• It must be a Private Limited Company or an LLP — a registered partnership firm, though eligible for recognition, is not eligible for 80-IAC (Now Section 140)
• And it must have been incorporated on or after 1 April 2016.

So an LLP in Pune qualifies on form; the rest turns on recognition and the application.

Check out our Private Limited registration page here.

No — and this confuses founders out regularly.

Recognition and the 80-IAC (now Section 140) exemption are two separate applications. Recognition makes you eligible to apply; the tax exemption is then assessed on its own merits by the Inter-Ministerial Board. Many startups get recognised, assume the tax benefit follows automatically, and discover otherwise at their first profitable year.

Yes — recognition is a benefit, not an exemption from compliance. Your routine MCA annual filings, income tax returns, GST, TDS and board-level obligations all continue exactly as they would otherwise.  That's precisely why we stay on as advisors after the launch work is done. You can refer to our annual MCA Compliance page here.

There is no single “Startup India grant”.

The June 2026 Startup India schemes playbook lists a broad ecosystem of schemes covering areas such as seed funding, credit guarantees, intellectual-property protection, deep-tech, biotechnology, agriculture, electronics, defence, telecommunications and technology development. Examples include:

• Startup India Seed Fund Scheme;
• Startup India Fund of Funds 2.0;
• Credit Guarantee Scheme for Startups;
• SIPP for intellectual-property protection;
• NIDHI programmes;
• Biotechnology-related schemes;
• MeitY startup programmes;
• iDEX and defence-technology initiatives;
• Technology Development Fund;
• Chips to Startup; and
• sector-specific programmes.

Eligibility and application routes are scheme-specific.

The Startup India Seed Fund Scheme is designed to provide financial assistance to eligible early-stage startups for activities such as proof of concept, prototype development, product trials, market entry and commercialisation.

The scheme operates through eligible incubators. The current official FAQ provides for up to ₹20 lakh as grant support for specified early-stage purposes and up to ₹50 lakh through debt/convertible instruments for market entry, commercialisation or scaling, subject to the scheme's conditions.

CGSS lets DPIIT-recognised startups access collateral-free debt. The government, through the trustee NCGTC, guarantees loans made by member institutions — scheduled commercial banks, eligible NBFCs, and SEBI-registered Alternative Investment Funds running venture debt. The guarantee is what makes a lender comfortable without security, which is the usual obstacle for an asset-light startup.

The maximum has been raised to ₹20 crore per borrower (up from ₹10 crore). On transaction-based cover, the trust guarantees 85% of the amount in default for loans up to ₹10 crore, and 75% for loans above ₹10 crore. Umbrella-based cover for venture debt funds works differently — capped at 5% of the pooled investment, subject to the same ₹20 crore ceiling.

Broadly: due diligence, valuation, and a share purchase or share subscription agreement with the accompanying warranties and indemnities. Your compliance history is examined closely at diligence — clean MCA filings, proper share allotments and correctly documented ESOPs directly affect price and deal certainty. If the buyer is foreign, FEMA reporting and pricing guidelines apply on top.

It is better not to transfer the money first and decide its legal character afterwards.

If the amount represents equity investment, the company needs to consider the applicable foreign-investment rules, pricing and reporting. If it is intended as a loan, a different FEMA framework may apply.

It is strongly worth considering.

The agreement should ideally address ownership, roles, IP, founder exits, future funding, dilution, decision-making, confidentiality and what happens if one founder stops working in the business.

A founders' agreement cannot eliminate every future dispute, but it can make the founders' expectations explicit while the relationship is still good.

Yes, subject to the applicable Companies Act, tax, FEMA and transaction-specific requirements.

An acquisition can take different forms, including a share acquisition or acquisition of specified assets/business operations. The appropriate structure depends on the buyer's objectives, liabilities, contracts, IP and tax position.

Entrecap has an active buy/sell page to trade Companies and LLPs. You can access here.

The clauses that decide who actually controls the company. Liquidation preference, anti-dilution, board composition, reserved matters, drag-along and tag-along rights, ESOP pool sizing — these shape your outcome far more than the headline valuation. When you get your first term sheet, our job is to make sure the documents keep control where it belongs: with the founder.

No, though there is some relief. Recognised startups can self-certify compliance with a set of labour and environment laws, which reduces the inspection burden in the early years. But self-certification means declaring you are compliant — it doesn't remove the underlying obligations. The laws still apply; only the verification process is lighter.

It's a deliberate exception to our standard terms. For a small number of startups each year, we work on discounted or barter arrangements — because we would rather be part of the journey than priced out of it. It exists for founders whose idea and seriousness are evident but whose early cash isn't, and it comes in two forms: concessional engagement, or an exchange of services.

In a few cases, where there's genuine professional value both ways, we're open to barter — our services against yours, valued at fair professional rates and documented in writing. It suits startups in design, marketing, content, technology or training. To be explicit: no equity and no IP transfer. It is service-for-service, nothing more.

No. Our startup programme is explicitly structured without equity. The barter route is services for services. We sit on your side of the table as advisors, and that is the only side we sit on. Taking a stake would change that relationship, so we don't.

Entrecap Business Services, headquartered in Kandivali West, Mumbai, works with founders across Borivali, Kandivali and across India — from choosing the right entity through DPIIT recognition, the 80-IAC application, and the compliance that follows. Most of the work is handled remotely, so you're not making trips to an office to get a company started.

Yes. Entrecap can assist with assessing the startup's eligibility, DPIIT recognition and, where applicable, the process relating to Section 80-IAC (now Section 140) depending on eligibility.

The India-side work can involve corporate structuring, share issuance, valuation/pricing considerations, FEMA/FDI compliance, RBI reporting, tax considerations and investor documentation. You can read about FEMA Compliance here.

Where necessary, Entrecap can also coordinate with the investor's overseas lawyers or tax advisers. The Entrecap website specifically describes this cross-border coordination model for international clients.

No. Incorporation, DPIIT recognition and the ongoing compliance are all handled remotely — for founders across India, and for foreign founders too, who sign in their own jurisdiction with documents apostilled or notarised. Our Kandivali West office is there if you'd prefer to sit down and talk it through, but nothing requires it.

Yes.

Startup incorporation, DPIIT recognition, tax, accounting, corporate and many regulatory matters can be handled remotely. We presently have clients from Gujarat, Punjab, Delhi, Maharashtra.