India proposes to let startups issue sweat equity and grant additional exemptions as it eases norms for them under the Companies Act with a view to boost entrepreneurship in the country.
The ministry of corporate affairs plans to allow startups to issue 50% of their paidup capital as sweat equity and extend the period of exemptions from other regulatory filings for up to 10 years instead of five now. They will be exempted for 10 years from a rule that bars private companies from raising deposits exceeding 100% of their paid-up share capital.
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“Exemptions already given to startups for five years will be available for 10 years, in line with the revised definition by the Department for Promotion of Industry and Internal Trade,” a government official told ET.
Source: Economic Times
