Guidelines for Start Ups Haryana Entrepreneur & Startup Policy 2017

Government of Haryana/ gfj;k.kk ljdkj Secretariat for Information Technology lwpuk izks ksfxdh lfpoky; Guidelines for Start Ups Haryana Entrepreneur & Startup Policy 2017 9 th Floor, Haryana Civil Secretariat, Chandigarh/ukaSoh eafty] gfj;k.kk flfoy lfpoky;] p.mhx<+ Tel./nwjHkk"k:Secretary/lfpo: 0172-2704922, Fax/QSDl:0172-2705529 E-mail/bZ&esy: mdhartron-hry@gov.in Website/oSclkbZV:www.haryanait.gov.in

1. Definitions (Ref: Haryana Entrepreneur & Startup Policy 2017) 1.1 Startup Startup means an entity (Private, Public, Proprietary, Partnership Firm), incorporated in India, As a private limited company (as defined in the Companies Act, 2013) or registered as a Partnership firm (registered under Section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India; and Not prior to seven years and in the case of Biotechnology Companies this period shall be up to 10 years; and With annual turnover not exceeding INR 25 crore in any preceding financial year; and Sector agnostic policy i.e. eligible for all startups and across all sectors ; Working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation Provided that such entity is not formed by splitting up, or reconstruction, of a business already in existence and should not have been formed by the demerger or reconstitution of a business already in existence; Provided that such entity is not a holding company and it is not a subsidiary of any firm already in existence or except the subsidiary of any startup; 1.2 Steering Committee The Steering Committee is responsible for the conduct of due diligence for all applications submitted for Startup recognition, Incubators, Mentors and Angel Investors. In addition, the Steering Committee shall recommends the selected Startups to the Additional Chief Secretary to Govt. of Haryana, Electronics & Information Technology Department, for final approval to avail desired fiscal incentives. The Committee comprises seven members: i. Secretary E&IT, Government of Haryana (Chairman) ii. MD, Haryana Knowledge Corporation (HKCL) iii. PM, HARTRON (Haryana State Electronics Development Corporation Limited) Page 2 of 16

iv. Three Members from NASSCOM v. Member from IT/ITeS sector skill council vi. Member from other Sectors such as Irrigation, Agriculture, Health, Sanitation, Green Energy, Food, water management, Manufacturing, power utilities, Bio Technology or any other innovative technology/process 2. Startups 2.1 Eligibility Conditions (Ref: Haryana Entrepreneur & Startup Policy 2017) Location: The company/entity be registered in Haryana under the Haryana Shops and Commercial Establishment Act, 1958 ; and Employment: The company employs at least 50 (fifty) per cent of its total qualified workforce in Haryana, which shall not include contract employees Exit Conditions If the company is found guilty on any charges of fraud or if the company is found to have made any false declarations to claim any benefits from or derived under this policy. Legal action shall be initiated to recover all financial assistance provided to such an entity. Once an entity ceases to be recognized as a start-up; the Government or entity through which the Government makes its investment will be eligible to exit its investment in the startup and guidelines for exit will be framed for channelizing investments into the startup A Startup recognized by DIPP and fulfilling the above mentioned eligibility criteria may avail the financial incentives under this Policy. 2.2 Recognition/Registration & Seed Funding The registration by an eligible startup entity for recognition & availing one time support in terms of Seed Funding (A Seed Grant up to INR 3 Lakhs per start-up shall be provided for validation of idea, prototype development, assistance towards travelling costs and carrying out field/ market research/ skill training/ marketing and initial activities to set up a startup etc.) can be done on the online portal via a Startup Registration Form along with selfcertification for a set of documents & proof of innovation. Application Form attached at Annexure-1 of these guidelines. 2.2.1 Proof of Innovation DIPP Startup India recognition certificate; OR Page 3 of 16

Startup has a patent filed in the entity name and published in the Journal by the India Patent Office in areas affiliated with the nature of business being promoted; OR Sanction Letter of funding / grant to the entity by Government of India or any State Government as part of any specified scheme to promote innovation; OR Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business; OR If an entity does not possess any of the above mentioned four documents, it may submit a one page write-up / note explaining the innovative nature of its product. The applicant entity is encouraged to share its business plan along with the note on innovation 2.2.2 Application Process for Recognition / Registration The application for recognition is submitted by the Startup on the Startup Haryana portal The application is then forwarded for further assessment Due diligence is carried out The application is forwarded to the Steering Committee for review In case Startup is applying for Seed Funding, The Startup will be required to make a presentation to the Steering Committee focusing on details such as Business Plan, Revenue Model, 5-year projections etc. The selected application is forwarded to the Secretary, Electronics & IT, Govt. of Haryana, for final approval The overall time for processing of application would be 10 days, within this timeline either the application has to be approved/rejected or may be pending at applicant end for any further clarification If there are any concerns raised by the concerned authority, the applicant must respond within 1 week from the date on which the query was raised 2.2.3 Time limit to apply An enterprise shall forfeit its entitlement for benefits if it does not submit its claim, complete in all respects within one month from the date of the end of the each quarter. 2.3 Benefits available to recognized startups 2.3.1 Fiscal support- Quantum of Assistance (Ref: Haryana Entrepreneur & Startup Policy 2017) Page 4 of 16

a) Lease rental subsidy: Reimbursement of 25% of lease rental subsidy to eligible startup units established in the state, operating from Incubators/IT Parks/Industrial Clusters or any other notified location shall be eligible for a period of 1 year subject to the ceiling of INR 1 lakh per annum Documents required: - Proof of operation from a notified location - Rent payment receipt - Rent agreement b) Innovation promotion subsidy: Cost reimbursement for max 3 Patent/Quality certification per Unit up to a limit of INR 2 lakh for domestic & INR 5 lakh for International Patent/Quality certification upon successfully receiving them Documents required: - Patent certificate - Payment proof for patent certification c) EPP 2015 MSMEs Incentives: Incentives/ provisions under Enterprise Promotion Policy 2015 in force will be available to startups. However the incentive for the same component cannot be claimed from more than one scheme. The applicant has to get the UAM as prescribed by Industries Department, Government of Haryana. d) Assistance for Program/App development: The Recognized startup would get the fiscal support for development of software/mobile app by the agency/proprietor, having incubated in the Mobile Application Centre operational in Startup warehouse, Gurugram. Reimbursement would be to the tune of 60% of development cost, to a ceiling of INR 1 lakh per startup Documents required: - Contract/Agreement between the app developer and eligible startup - Proof of payment made to the agency/proprietor Application Form attached at Annexure-2 of these guidelines. 2.4 Application process for obtaining the Fiscal Incentives & Disbursement Mechanism After receiving the recognition certificate, the eligible Startup can apply for Fiscal Incentives via the application form on the Startup Haryana portal This application is forwarded to the Steering Committee for verification of documents Page 5 of 16

The recommended application is then forwarded to the Secretary, Electronics & IT, Govt. of Haryana, for final approval The overall time for processing of application would be 10 days, within this timeline either the application has to be approved/rejected or may be pending at applicant end for any further clarification If there are any concerns raised by the concerned authority, the applicant must respond within 1 week from the date on which the query was raised 2.5 Appellate Authority (Ref: Industries Department Incentive Schemes) Appeal against orders passed by the Competent Authority (HARTRON) shall lie with the PS E&IT, Government of Haryana within a period of 30 days from the date of communication of orders appealed against and orders passed by the PS E&IT shall be final. 2.6 Penal action (Ref: Industries Department Incentive Schemes) In case, it is found at any stage that the applicant has claimed fiscal support on the basis of wrong facts, the applicant shall besides refunding assistance with compound rate of interest @12% per annum and facing legal action, will be debarred from grant of any incentive/assistance from the State Government. 3. Incubators The Government shall facilitate setting up of Incubators in Government Institutions as well as Private Institutions. Basic plug & play facilities will be provided by the Approved Host Institutes (work space, internet broadband connectivity, training and mentoring facilities etc.) Approved Host Institutes housing the Incubators shall also be responsible to provide - Minimum 3000 sq. ft. of area to finish/furnish the required Startup Incubator cum Centre of Excellence - Free access to the assigned space as per the area defined in the agreement - Payment of all legal and statutory clearances in concern with the property including property tax, Municipal Corporation Charges etc. - Payment of electricity and water expenses - Any other infrastructural support required 3.1 Application process For an Incubator to register with Startup Haryana, the Incubator will be required to fill out an online application form and will be required to submit the following documents: Page 6 of 16

Registration/Incorporation Certificate Copy of floor plan Summary on activities carried out by Incubator (Vision, Mission, Revenue Model, Programs to support Startups, details of the management team etc.) Application Form attached at Annexure-3 of these guidelines 3.2 Terms and Conditions for Incubator Recognition All incubators fulfilling the following terms and conditions will be approved and notified as well as published on the portal. 1. The incubator would be required to provide the requisite physical infrastructure such as workshop facilities, support services and utilities along with networking and mentoring within a period of six months from the date of release of capital grant and other benefits. 2. The incubator will be headed by a full time Chief Executive Officer who will possess sufficient management expertise and will be supported by a core team/support staff for successful and efficient functioning of the incubator. These posts should be filled within two months of the date of release of funds. 3. The incubator will create a transparent system for selection of incubatees. The incubatees would only be admitted if they fulfill the admission criteria and an appropriate agreement is entered into by the incubator and the incubatee. 4. Each incubator will have a website of its own, which will be updated on a continuous basis. 5. The grantee is required to send an online progress report; and an audited statement of accounts and Balance Sheets to the Committee at the end of each financial year as well as at the time of seeking further installments of the grant, if any. However, companies and individuals would be required to submit a yearly expenditure statement for the full amount (including their own contribution) to ensure that matching funding is received. 6. The incubator will be reviewed quarterly both for financial and physical (infrastructural) performance. 7. Officers of the Committee/ Government may visit the organization periodically to monitor the progress of work and resolving any difficulties that might be encountered during the course of implementation. Page 7 of 16

8. Government/ Committee reserves the right to terminate support to the incubator at any stage, if it is convinced that the grant is not being utilized properly for the purpose for which it has been released. 9. All assets acquired and created from the grant will be entered and maintained in a separate register and should not be disposed of or encumbered or utilized for purpose other than those for which the grant has been sanctioned without the prior permission of the Committee. 10. The grantee must not entrust the implementation of the work for which the grant is being sanctioned to another institution and divert the grant receipts as assistance to the latter institution. 4. Angel Investors (Ref: DIPP Framework) For an angel investor to register with Startup Haryana, the investor will be required to fill out an online application form and will be required to submit the following documents: - Incorporation structure - Investment facilitation declaration certified by a registered Chartered Accountant Application Form attached at Annexure-4 of these guidelines All applications will be reviewed by the Steering Committee and will be forwarded to Govt. Of Haryana officials for approval. 5. Mentor (Ref: DIPP Framework) For a potential mentor to register with Startup Haryana, the mentor (global accelerator/private company/trade association/foreign government/ think tank/ any non-government organization/ industry expert) will be required to fill out an online application form and will be required to submit the following documents: - Incorporation certificate - Other available credentials Application Form attached at Annexure-5 of these guidelines Page 8 of 16

Annexure-1 Application Form for Startups S. No Fields Entity Details 1 Nature of Entity <drop down menu> 2 Focus Area <Product or Service> 3 Nature of incorporation <drop down menu> Private Limited (under The Companies Act, 2013) Limited Liability Partnership (under The Limited Liability Partnership Act, 2008) Registered Partnership One Person Company (OPC) 4 Industry <drop down menu> 5 Name of Entity 6 Registration No 7 Registration Date 8 PAN 9 Website URL Contact Details 10 Promoter s Name 11 Promoter s Email ID 12 Promoter s Mobile Number Other Information 13 Will you be applying for Seed Funding? Yes/No 14 What is the current stage of development of your startup <drop down menu- Ideation/ Early Traction/ Scalable business> 15 Innovation check DIPP Startup India recognition certificate; OR Page 9 of 16

Startup has a patent filed in the entity name and published in the Journal by the India Patent Office in areas affiliated with the nature of business being promoted; OR Sanction Letter of funding / grant to the entity by Government of India or any State Government as part of any specified scheme to promote innovation; OR Letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business; OR If an entity does not possess any of the above mentioned four documents, it may submit a one page write-up / note explaining the innovative nature of its product. The applicant entity is encouraged to share its business plan along with the note on innovation 16 Total number of employees 17 Total number of employees employed in Haryana (excluding contractual employees) 18 What is the employment potential of your Startup? Documents required Upload registration certificate Upload any additional documentation/provide links to support your case during evaluation Self-Declaration Meeting all eligibility criteria <tick box> Accepting all terms and conditions <tick box> Remarks of Steering Committee Remarks of Secretary E&IT Page 10 of 16

Annexure-2 Application Form for Fiscal Incentives for Startups S. No Fields Entity Details 1 Registration Number 2 Name of the Startup 3 Name of Bank 4 Startup s Account Holders Name 5 Account Number 6 IFSC Code Contact Details 7 Full Address (Including City/Village, State/UT, Pin Code) 8 Email ID 9 Website URL 10 Contact Person Name 11 Contact Person Designation 12 Contact Person Mobile Number 13 Name of contact person at the Agency recommending the proposal 14 Email ID of contact person at the Agency recommending the proposal 15 Mobile Number of contact person at the Agency recommending the proposal Types of Benefits 16 Assistance required? Availed previously? Reimbursement of lease rental subsidy Yes No Yes No Reimbursement of innovation promotion Yes No Yes No subsidy Reimbursement of development cost for Program/App development Yes No Yes No Page 11 of 16

Additional incentives Yes Yes provisioned under EPP 2015 No No for MSMEs Amount of assistance required 17 Lease rental subsidy Innovation promotion subsidy Assistance for Program/App development EPP 2015 for MSMEs (Please specify the component(s)) Documents Required Recognition Certificate Signed Shareholder s Agreement and covering letter duly certified by a registered Chartered Accountant/statutory auditor authorizing the funding Copies of Balance Sheets and Profit and Loss Accounts duly certified by a registered Chartered Accountant/statutory auditor Workforce Proof (applicable for units not incorporated in Haryana): Employee State Insurance (ESI) and Provident Fund (PF) Challan for the startup highlighting the workforce duly certified by a registered Chartered Accountant/statutory auditor Any additional documentation/provide links to support your case during evaluation Patent approval, cost approval Rent receipt, Rent agreement Receipt for cost involved in Program/App development Remarks of Steering Committee Remarks of Secretary E&IT Page 12 of 16

Annexure-3 Application Form for Incubators <Please refer to the Terms and Conditions mentioned in Section 3.2> S. No Fields Details 1 Name of the Incubator 2 Name of the organization/university in which the incubator is situated 3 Sector focus (if any) 4 Incorporation No 5 Date of Establishment 6 Nature of incorporation <drop down menu> Society (under The Societies Registration Act, 1860) Section 25 Company (under the Companies Act, 1956) Section 8 Company (under The Companies Act, 2013) Private Limited (under The Companies Act, 2013) Public Company (under The Companies Act, 2013) Limited Liability Partnership (under The Limited Liability Partnership Act, 2008) 7 No. of people employed for Operations & Maintenance Contact Details 8 Full Address (Including City/Village, State/UT, Pin Code) 9 Email ID 10 Website URL 11 Contact Person Name 12 Contact Person Designation 13 Contact Person Mobile Number Other Information 14 Floor area 15 Facilities available Page 13 of 16

16 Availability of internet <yes/no> 17 Details of existing incubation programs running (if any) <table> 18 No. of incubatees enrolled (as on date) 19 No. of incubatees graduated (as on date) Summary on activities carried out by Incubator <provide space for 300-500 words> 20 Include: Vision/Mission Specific programs formed to nurture startups Revenue model Brief description of the management team Documents required Registration/Incorporation Certificate Copy of floor plan Any additional documentation/provide links to support your case during evaluation Remarks of Steering Committee Remarks of Secretary E&IT Page 14 of 16

Application Form for Angel Investor Annexure-4 S. No Fields Details 1 Name of the Organization 2 Incorporation Number 3 Incorporation Date 4 Focus Sector of investment <drop down menu> 5 Nature of incorporation <drop down menu> Society (under The Societies Registration Act, 1860) Section 8 Company (under The Companies Act, 2013) Private Limited (under The Companies Act, 2013) Public Company (under The Companies Act, 2013) Limited Liability Partnership (under The Limited Liability Partnership Act, 2008) Contact Details 6 Full Address (Including City/Village, State/UT, Pin Code) 7 Promoters Name 8 Promoters Mobile No. 9 Promoters Email ID Other Information 10 Number of investments facilitated in the past 11 Average Investment Size Documents required Registration/Incorporation Certificate Investment Facilitation Declaration duly certified by a CA Remarks of Steering Committee Remarks of Secretary E&IT Page 15 of 16

Annexure-5 Application Form for Mentor S. No Fields Details 1 Name of the Organization 2 Incorporation Number 3 Incorporation Date 4 Industry <drop down menu> 5 Nature of incorporation <drop down menu> Society (under The Societies Registration Act, 1860) Section 8 Company (under The Companies Act, 2013) Private Limited (under The Companies Act, 2013) Public Company (under The Companies Act, 2013) Limited Liability Partnership (under The Limited Liability Partnership Act, 2008) Contact Details 6 Full Address (Including City/Village, State/UT, Pin Code) 7 Contact Persons Name 8 Contact Persons Mobile No. 9 Contact Persons Designation 10 Promoters Email ID Other Information 10 Number of projects mentored in the past Documents required Registration/Incorporation Certificate All related credentials Remarks of Steering Committee Remarks of Secretary E&IT Page 16 of 16