Exit Policy for Startups under the Bihar Startup Policy 2022
The Bihar Startup Policy 2022 provides a framework for startups to thrive and grow in the state. However, there are certain criteria and conditions under which startups may choose to exit the policy.
In the dynamic landscape of entrepreneurship, the Bihar Startup Policy 2022 provides a comprehensive framework for startups contemplating an exit. As a startup matures and evolves, understanding the criteria, consequences, and the exit process is crucial for a seamless transition. Let’s delve into the key aspects of the exit policy and its implications.
This article aims to provide a comprehensive understanding of the exit policy for startups under the Bihar Startup Policy 2022.
Criteria for Exit:
i. Time Frame:
Startups can bid farewell to the policy after a decade since their incorporation or registration. This ten-year threshold reflects the state’s acknowledgment of the natural evolution and growth trajectory of businesses.
ii. Turnover Threshold:
Achieving a turnover of Rs. 100 crores in any financial year serves as a significant milestone for exit eligibility. This criterion emphasizes the startup’s successful scaling and market presence.
iii. Change of Office:
Transparency and commitment to the region are emphasized, as moving the registered office out of Bihar triggers the exit clause.
iv. Fraudulent Activities:
Maintaining ethical business practices is paramount. Exit is mandated if a startup is found guilty of fraud or making false declarations, aligning with the policy’s integrity-driven ethos.
v. Founder Members’ Actions:
The departure of founder members, whether through selling, transferring, or winding up the startup, marks a pivotal moment for exit considerations.
vi. Non-performance or Fund Diversion:
A startup’s core business focus is under scrutiny. Non-performance or diverting funds to an entirely different business prompts an exit, ensuring the policy supports businesses aligned with their original mission.
vii. Suo-moto Application:
The policy acknowledges the autonomy of startups. Suo-moto exit applications are welcomed, empowering startups to make decisions aligned with their strategic vision.
viii. Non-compliance with Reporting:
Regular reporting is a cornerstone. Failure to submit performance reports annually until loan repayment is considered a violation, potentially leading to exit.
2. Consequences of Exit:
- Repayment Obligations: Startups must repay the full/balance amount of the seed fund and any benefits received.
- Interest Recovery: The Bihar Startup Policy allows for the recovery of interest on matching loans (if applicable), ensuring financial commitments are fulfilled.
- Revocation of Certification: The Startup Certificate issued by BSFT stands revoked from the date of exit, emphasizing the finality of the decision.
- Ineligibility for Benefits: Post-exit, startups cannot avail any benefits under the Bihar Startup Policy, reinforcing the importance of adherence to policy terms.
3. Process for Suo-moto Exit:
The outlined process for voluntary exits ensures a transparent and structured approach:
| Sl. No. | Particulars | Duration (in working days) |
|---|---|---|
| 1 | Apply for exit from policy by Startup through Portal or e-mail id (In case portal is not working) and submit all the relevant reports instructed in the portal | T0 |
| 2 | Repay the unpaid amount of loan plus interest thereon (if any) through RTGS/NEFT in the bank account details given in the portal | T0+7 |
| 3 | Evaluation of the application and verification of the loan repaid plus interest paid (if any) by the SSU Team/ PMU / TPA / Manpower hired by DoI and reply to startup for any further documents/clarification (if required) | T1+7 |
| 4 | Reply from startup and submission of documents asked by Department | T2+5 |
| 5 | Final Evaluation done by the SSU Team/ PMU / TPA / Manpower hired by DoI | T3+3 |
| 6 | Approval by PSC | T4+5 |
| 7 | Approval by SMIC (Post Facto) | Post Facto |
This table outlines the step-by-step process and the corresponding durations for a Suo-moto Exit under the Bihar Startup Policy.
4. Actions if Exit Policy is Not Fulfilled:
- Financial Recovery: Unpaid amounts may be recovered under the Public Demand Recovery Act, reinforcing the financial commitments made by startups.
- Relevant Action: BSFT/SMIC may decide on further actions based on the prevailing situation and laws, ensuring accountability.
Bihar Startup Policy 2022’s exit provisions reflect a balanced approach, acknowledging the realities of business evolution while maintaining integrity and transparency. For startups, understanding and navigating these exit guidelines are key to a responsible and successful departure from the policy.
I’m Shweta Bharti, and I’m not just a blogger; I’m a storyteller with an unending love for Bihar. Bihar is not just my home; it’s my muse. I was born and raised in the heart of this culturally rich state, and that’s where my journey as a writer began.My passion is to share the beauty and depth of Bihar through my words. Bihar isn’t just a place; it’s a treasure trove of history, traditions, and untapped potential. Through my blog, BiharLinks.com, I aim to change perceptions and uncover the hidden gems of Bihar.
