Startup Registration in Madhya Pradesh

Once recognized, startups in Madhya Pradesh can access incentives under the MP Startup Policy, along with applicable benefits under the central Startup India framework. Key state and central benefits include:

• Monthly sustenance allowance: Under the MP Startup Policy and Implementation Scheme 2022 (Department of MSME, Government of Madhya Pradesh), startups incubated at a partner incubator can receive ₹10,000 per month for up to one year, or until the startup reaches the prescribed post-traction stage, whichever is earlier. It is disbursed after three months of joining the incubator to help cover early operating expenses.
• Three-year income-tax holiday: Beyond the state incentives, a DPIIT-recognized startup can claim a 100% deduction of eligible profits for any three consecutive years within its first ten, under Section 140 of the Income Tax Act, 2025 (formerly Section 80-IAC of the Income-tax Act, 1961). It is available to a Private Limited Company or LLP incorporated before 1 April 2030, with turnover up to ₹100 crore in the claim year, and requires a certificate from the Inter-Ministerial Board (IMB).
• Angel-tax relief: With the abolition of Section 56(2)(viib) from AY 2025-26, recognized startups can raise capital from angel investors without valuation-based tax scrutiny.
• Investment-linked grants up to ₹60 lakh: The state provides 15% assistance up to ₹15 lakh per funding round for funding raised from eligible SEBI- or RBI-recognized institutions, across up to four stages. SCs, STs, and women-led startups receive an additional 20% assistance (18% assistance capped at ₹18 lakh per instance), subject to applicable conditions.
• Lease rental support: Startups can receive 50% of workspace rent, up to ₹5,000 per month for three years (depending on the policy), reducing the cost of maintaining an eligible workspace in locations such as Crystal IT Park, MPSEDC IT Park, or private co-working facilities.
• Employment-generation grant: Product-based startups can receive ₹5,000 per employee per month for up to 25 new employees for three years, supporting eligible startups that create employment in Madhya Pradesh.
• Patent and margin-money support: Eligible startups can receive up to ₹5 lakh for patent-related expenses, along with 15% margin-money assistance up to ₹12 lakh. The policy also provides an annual 5% interest subsidy, increased to 6% for SC/ST/OBC and women entrepreneurs, subject to applicable conditions.
• Government procurement access: Recognized startups can receive exemptions from prior turnover and experience requirements in eligible state tenders up to ₹1 crore, subject to the applicable procurement rules.

Startup eligibility in Madhya Pradesh involves two stages: first, incorporating or registering the business entity, followed by meeting the separate criteria for DPIIT recognition.

Stage 1: Incorporate the Entity

First, establish an eligible business entity with a registered office in Madhya Pradesh. You can use an address in Indore, Bhopal, Gwalior, Jabalpur, or any other district, provided you have valid address documentation. The premises can be a commercial office, IT park, incubator facility, or home office where permitted and properly documented.

Stage 2: Qualify for Startup India (DPIIT) Recognition

After incorporation, the entity must meet the criteria specified in DPIIT Notification G.S.R. 108(E), dated February 4, 2026:

• Entity type: Private Limited Company, including an OPC, LLP, registered Partnership Firm, or registered cooperative society.
• Age: Within 10 years of incorporation or registration, or 20 years for recognized deep-tech startups.
• Turnover: Not more than ₹200 crore in any financial year, or ₹300 crore for recognized deep-tech startups.
• Innovation or scalability: Must work toward innovation, development, or improvement of products, processes, or services, or operate a scalable business model with potential for employment or wealth creation.
• Originality: Must not be formed by splitting up or reconstructing an existing business.

DPIIT recognition is applied for after the entity has been incorporated or registered. The application primarily requires basic entity details and information demonstrating the startup's innovation, development, or scalability.

Startup registration generally has two stages: incorporating or registering the business entity, followed by DPIIT recognition if the Madhya Pradesh entity meets the applicable criteria. DPIIT recognition is a separate application and does not replace entity incorporation.

Phase 1: Incorporate the Entity

Choose the appropriate business structure and complete the applicable incorporation process through the MCA portal. Companies file through SPICe+, while LLPs use FiLLiP. After approval, the company receives its Certificate of Incorporation, with PAN and TAN issued through the incorporation process where applicable.

The filing sequence, required documents, and Madhya Pradesh incorporation costs are covered in our Company Registration in Madhya Pradesh guide.

Note: Madhya Pradesh levies professional tax under its MP Vritti Kar Adhiniyam, 1995 Act, which is not integrated into AGILE-PRO-S. The form integrates professional tax registration only for Maharashtra, Karnataka, and West Bengal. A recognized startup in Madhya Pradesh must therefore register separately with the Commercial Tax Department.

Phase 2: Apply for Startup India (DPIIT) Recognition

• Create your profile: Register on the Startup India portal, which routes the recognition application through the National Single Window System (NSWS). Add “Registration as a Startup” under Central Approvals.
• Complete the application: Provide the entity's incorporation or registration details, PAN, business information, and required innovation or scalability details.
• Submit and receive recognition: Submit the application for DPIIT review. If approved, the Certificate of Recognition is issued through the Startup India system. DPIIT does not charge a government fee for recognition.

Note: After incorporation, startups can also register on the Startup MP portal to explore applicable state-level incentives, funding, and incubation programs.

DPIIT recognition has no government application fee. The main cost therefore comes from incorporating the business entity and paying the applicable Madhya Pradesh stamp duty.

Although getting DPIIT recognition is nil, there are some additional costs needed at different stages. Know the breakdown of Startup India Registration fee for complete information.

Madhya Pradesh supports startups through the MP Startup Policy and Startup MP portal, alongside central Startup India programs. Beyond the state incentives discussed, recognized startups can explore these funding, incubation, and credit programs:

• ₹100 crore Seed Capital Fund: The state has committed a ₹100 crore fund, deployed through SEBI-registered Alternative Investment Funds (AIFs), to provide early-stage capital to eligible MP-based startups.
• Structured incubation: Startups can use incubation networks such as the IIM Indore incubation cell, IIT Indore's incubation centre, AIC-Prestige in Indore, and MANIT Bhopal for mentoring, workspace, and investor connections.
• Startup India Seed Fund Scheme (SISFS): DPIIT-recognized startups can receive up to ₹20 lakh for proof of concept, prototype development, or product trials and up to ₹50 lakh for market entry, commercialization, or scaling through eligible incubators.
• Fund of Funds for Startups (FFS): The scheme provides indirect equity funding through SIDBI-backed AIFs, which invest in eligible startups rather than providing capital directly to individual startups.
• Credit Guarantee Scheme for Startups (CGSS): Eligible startups can obtain guarantee-backed debt financing without conventional collateral, subject to the scheme's conditions, eligible lenders, and applicable limits.