Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The criteria
- Entity: Pvt Ltd, LLP or registered partnership
- Age: within 10 years of incorporation
- Turnover: under ₹100 crore in every year since incorporation
- Nature: innovative product/service/process or a scalable, high-potential model
Common disqualifier
An entity formed by splitting up or reconstructing an existing business is not eligible. Confirm the current thresholds, which can change by notification.
Reading the 'innovation' and 'reconstruction' tests
Two criteria carry the most weight in practice. The innovation-or-scalability test is qualitative: the entity should be working on a new or improved product, process or service, or on a scalable, technology-led or differentiated model with potential for employment or wealth creation — a plain trading, reselling or routine-services business with nothing distinctive struggles here, which is the usual reason a borderline application is declined. The not-by-splitting-or-reconstruction test rules out an entity formed by carving up or rebuilding an existing business; converting a proprietorship or partnership into a fresh company for a genuinely new venture is generally fine, but moving an existing business into a new shell to reset the clock is not. The other limbs are mechanical: a Private Limited company, LLP or registered partnership (not a proprietorship), within ten years of incorporation, with turnover under ₹100 crore in every year since incorporation. Meeting all of them gets recognition; the innovation write-up is where the application is won or lost, so it’s worth framing clearly with whatever product, traction or technology evidence you have. Confirm the current thresholds, which can change by notification.