Hi Folks
Last time I had written “Different doors need to be opened. Simply widening the existing doorway will not do !“ This was with reference to the liberalisation for Start Ups. A fortnight later, on reviewing the Start Up Action Plan and watching the Startup India, Standup India programme on 16th Jan, 2016, I can say to a large extent different doors are being opened. More importantly there is an attempt to create a ‘free corridor’ and remove the so-called ‘door keepers’ for start ups.
‘Seeing is believing’.
  • Can you believe in less than 6 months from his 1st announcement for a Startup-friendly regime, our PM actually did release a Startup India Action Plan ?
  • Can you believe it is not a Policy seeped in bureaucratic legalese but a clear, concrete Action Plan ?
  • Can you believe it looks like a corporate hand book or brochure with sleek pictures and easy-to-understand, uncluttered business English with a clear intent ?
  • Can you believe it was available online simultaneous with its release offline ?
  • Can you believe the Startup India, Standup India event had a tagline “WE UNOBSTACLE” – yes Government believes it is an obstacle for entrepreneurs ?
  • Can you believe the event was compered by none other than the Secretary of the DIPP (Dept of Industrial Policy & Promotion) Mr. Amitabh Kant, a top ranking IAS officer ?
  • Can you believe his introductions to each speaker was crisp, uplifting and business like ?
  • Can you believe during the day 15 Secretaries of various government departments were actually grilled by the start up founders ?
  • Can you believe there was table-thumping and whistling in an official government launch programme ?
  • Can you believe start up founders shared the dias with the PM and 2 of his important ministers ?
  • Can you believe there was no government protocol of long, boring speeches but short, interesting, intense talks ?
You have to believe because all of us actually SAW all this happening !!

This is a commendable start to Startups which was followed by actual action. 1st evidence was easing the name approval process while incorporating a company. See the notifications we are carrying in this edition. However what I see missing is the zeal, enthusiasm and commitment of the grass root level government officials to actually supporting entrepreneurs. 1 day company registration app may be in place soon but at the local ROC office, it still takes more than 10 days for e-files to be processed. This requires a change in mind-set, a change in attitude. Hope this happens soon. Or else it will only remain an ACTION PLAN and not ACTION !

Highlight of this issue of Lexspeak is the Startup India Action Plan and a few notifications that have followed. Should you wish to refer to any of our older issues of Lexspeak, do visit our Resource Centre at sharadasc.com.

Warm regards

The much awaited Startup India Action Plan was launched by PM Narendra Modi on 16th January, 2016 at Vigyan Bhavan as part of the “Startup India Standup India” Initiative.

Highlights :

  • Simplifying the startup process
  • Compliance regime based on self-certification
  • Rolling out of Mobile app and portal
  • Legal support and fast-tracking patent examination
  • Startup India Hub
  • Exemption from Capital Gain Tax
  • Tax exemption for Startups
  • Faster exit for startups
  • Rs. 10,000 crore for funding startups
  • Relaxed norms for public procurement
  • Setting up of 35 new incubators in institutions
  • Setting up of 7 research parks
  • Promote Entrepreneurship in Biotechnology

For the first time startup has been defined by the Government for the purpose of availing Government scheme. Do read Annexure I of Action Plan to know what the startup is.

As part of the ease of doing business and follow up to the announcement made in Start-up India Action Plan, the crucial step of getting the desired name for a company registration has been modified –
  • Name availability approval has been centralized in Delhi and
  • Approval norms have been simplified
Name availability form centralized
  • The Central Registration Centre (CRC) shall process applications for reservation of name i.e. e-Form No. INC-1 under the administrative control of ROC Delhi w.e.f. 26th January, 2016. Integrated incorporation e-Form i.e. INC – 29 shall continue to be done by the respective ROCs.

Name approval norms get easy and simplified
To ease the process of company incorporation, the Ministry of Corporate Affairs (MCA) has amended Rules in regards to reservation of name of companies. With the amendment, reservation of name for the proposed company is less restrictive with more opportunities.

Highlights :

  • Now, the name shall be considered desirable even if it is not in consonance with the principle objects of the Company.
  • Abbreviated name of company based on the name of the promoter will be allowed.
  • There is no need to show the scope, scale of activity in the name of Company while incorporation and change in name.
  • If the proposed name is based on the name of the relatives of the promoters / any other person, no need to obtain​/ attach NOC and proof of relationship of such person.
  • There are 3 re-submission opportunities instead of 2 opportunities.
  • Total period for re-submission of documents shall not exceed a total period of 30 days.

MCA has clarified that Hindu Undivided Family (HUF) / its Karta cannot become partner or designated partner in LLP. It is now clear that only an individual or body corporate can become a partner in a Limited Liability Partnership (LLP).
The Investor Education & Protection Fund (IEPF) Rules notified by MCA. Rules contains appointment of chairperson & members, composition of authority, functions of authority, holding meetings, provision for offices & officers etc.
To make the public issue process more efficient and robust, SEBI has issued clarification circular on streamlining the process of public issue of Equity Shares and Convertibles.
Note: The contents of this
Newsletter are only a summary and has not dealt with any issue in detail. Any action
taken or proposed to be taken must be in consultation with professionals and not
merely based on the articles / news updates. Lex Valorem disclaims all liability on action taken without professional advice.

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