In a significant policy update, the Government of India has officially included sole proprietors as a recognized category under the Startup India initiative, expanding the reach of the flagship program to a broader base of individual entrepreneurs. The Department for Promotion of Industry and Internal Trade (DPIIT), which administers the scheme, announced the latest startup policy forum, marking a strategic step to formalize and empower single-owner businesses that were previously outside the eligibility framework for startup benefits.
With this change, sole proprietors who meet innovation and scalability criteria will now be able to register their ventures as startups under the Startup India portal. Previously, only entities registered as Private Limited Companies, LLPs, or Partnerships were eligible. The inclusion of sole proprietorships acknowledges the vital role individual innovators and freelancers play in driving local economies, especially in sectors like technology services, crafts, education, wellness, and agribusiness. This move opens doors to a range of benefits, including tax exemptions for three years, easier access to government funding schemes, self-certification under labor and environment laws, and participation in government tenders earmarked for startups.
Officials stated that the registration process for sole proprietors will be simplified, with Aadhaar-based authentication and minimal documentation, while eligibility will still require proof of innovation, scalability, or job creation potential. Startup India’s support infrastructure—including incubators, mentorship networks, intellectual property assistance, and funding access through the Fund of Funds—will now be available to qualifying sole proprietors as well. The move has been widely welcomed by trade associations and industry observers, who see it as a long-overdue step toward leveling the playing field for independent entrepreneurs and encouraging grassroots-level innovation across India.
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