Eligibility Based on Incorporation

• A subsidiary can register under Startup India if it is incorporated as a Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm.
  
• It must be registered in India and should not have completed 10 years from the date of incorporation.
  
• The subsidiary must be a new entity and not formed by splitting or reconstructing an existing business.
  
• It must be working toward innovation, development, or improvement of products or services.
  
• Routine businesses without innovative elements may be ineligible even if incorporated recently.
  

Ownership and Control Criteria

• The entity must be independently operated and not merely an extension or restructuring of the foreign parent.
  
• Even if a foreign company or group holds shares, the Indian subsidiary can be eligible if it operates independently and meets other criteria.
  
• The holding company’s turnover or nature of business must not influence the subsidiary’s eligibility.
  
• The ownership must not be such that the parent company transfers a regular business model without innovation.
  
• The focus should be on creating a scalable business model with high potential for employment or wealth creation.
  

DPIIT Recognition Process

• The subsidiary must apply online for recognition through the Startup India portal.
  
• It must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).
  
• The application requires documents such as Certificate of Incorporation, Startup Pitch, and Details of Directors and Funding.
  
• The entity must declare that it is working on innovation and is not engaged in prohibited sectors.
  
• Upon successful verification, DPIIT grants Startup Recognition Certificate for availing benefits.
  

Tax and Regulatory Benefits

• DPIIT-recognized subsidiaries may apply for income tax exemption under Section 80-IAC if they meet turnover and innovation norms.
  
• They are also eligible for Angel Tax exemption under Section 56(2)(viib).
  
• Recognition enables access to government tenders, funding schemes, and incubation support.
  
• Startups can self-certify under certain labor and environmental laws for 5 years.
  
• Patent filing and IPR benefits are available at discounted rates with fast-track processing.
  

Restrictions and Sectoral Limitations

• Subsidiaries operating in real estate, finance, and trading sectors without innovation are typically not eligible.
  
• DPIIT may reject applications where the entity is a franchise, distributor, or support arm of an established business.
  
• The subsidiary must show a distinct identity, purpose, and innovative model.
  
• Evidence such as product prototypes, R&D activities, and future roadmap must support the application.
  
• Continued eligibility is subject to compliance with conditions and periodic updates.