InvestorQ : Has the government tweaked the rules to favour start up companies?
Katherine Gonsalves made post

Has the government tweaked the rules to favour start up companies?

Answer
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diksha shah answered.
3 months ago


That is correct and there have been some important changes in the way start ups will be treated. The Ministry of Corporate Affairs (MCA) has stipulated that start-ups can issue shares to employees up to 10 years from the date of incorporation as against 5 years previously. Start ups can also issue sweat equity up to 15% of the paid up capital of the company. MCA has also done away with the provision that companies placing debentures must set aside a reserve each year. The idea of this amendment is to give a boost to the start-up system in India to catalyze the “Make in India” plan. These start-ups are central to the Make in India plan of the government.