Wednesday 8 July 2015

Legal Advice on Company Registration and Firm Registration


The Companies Act 1956 lays down the guidelines for the formation and registration of a Company in India. This Act applies to the whole of India and to all types of Company’s thus making it an important legislative body governing all registrations and closures.
The start of a company means a lot of work. It’s like giving birth to a child. It’s an exciting phase with a lot of anxiety and hope. Every new business requires company registration by law of the land. One should follow the state law as well when registering a Company.
The offices of the registry of the records have all the information regarding all the companies registered in India and the Registrar of Companies has all the authority and responsibility of registering a company in various states and union territories. It is to be noted that all the companies registered have to comply with all the statutory compliances falling under this Company Act.
Some points should be kept in mind when getting registering for the new business is done.
Legal advice:
The first and foremost important step is to ensure that the legal angle is taken care of. One should get the Director Identification Number for the business. Then is the chance of Company registration and then submitting the necessary documents to the government. Some basic documents are mandatory for company registration like, address proof, PAN card, photographs.
One should remember to select at least four suitable names for the new company. It should not be a copied one and should not violate the copyrights and patents.
Once the name is approved by the Registrar of companies, one can move ahead for company registration.

The Memorandum of Association and Articles of Association are legal documents which should be drafted by legal experts, different opinions sought and finally printed.
The application for registering a company has to be forwarded to the Registrar of Companies and should be accompanied with names, Memorandum of Association and Articles of Association besides other requisite documents.This has to be filed with theRegistrar of companies of the state where the company is being set up.
Under the Companies Act 1956, one can form two types of Companies, Private Company or a public company and get them registered as per the procedures laid down in the statute of the Companies Act.
Once the company is registered, one can patent a product or get a copyright to protect your company.

20 Types of Taxes in India


Types of taxes

Ever since I started working full time & earning at age of 23 years, I have started complaining to my father see how much I paid in taxes, my father always use to say “if you have started paying taxes its good thing that you earned an income.”
How many of you actually love to pay tax & how many of you know that government ask us to pay tax via 20 different manners?  In this article I will provide you brief information about these 20 taxes in India.
Also Read – 20 Tax Free Incomes in India


Tax is imposing financial charges on individual or company by central government or state government. Collected Tax amount is used for building nation (infrastructure & other development), to increase arms and ammunition for defense of country and for other welfare related work. That’s why it is said that “Taxes are paid nation are made”.
Type of Taxes in India:-
Direct Taxes:-
These types of taxes are directly imposed & paid to Government of India. There has been a steady rise in the net Direct Tax collections in India over the years, which is healthy signal. Direct taxes, which are imposed by the Government of India, are:
(1)   Income Tax:-
Income tax, this tax is mostly known to everyone. Every individual whose total income exceeds taxable limit has to pay income tax based on prevailing rates applicable time to time.
By doing investment in certain scheme you can save Income Tax.

(2)   Capital Gains Tax:-
Capital Gain tax as name suggests it is tax on gain in capital. If you sale property, shares, bonds & precious material etc. and earn profit on it within predefined time frame you are supposed to pay capital gain tax. The capital gain is the difference between the money received from selling the asset and the price paid for it.
Capital gain tax is categorized into short-term gains and long-term gains. The Long-term Capital Gains Tax is charged if the capital assets are kept for more than certain period 1 year in case of share and 3 years in case of property. Short-term Capital Gains Tax is applicable if these assets are held for less than the above-mentioned period.
Rate at which this tax is applied varies based on investment class.
Example:-
If you purchase share at say 1000 Rs/- (per share) and after two months this price increased to 1200 Rs/-(per share) you decide to sale this stock and earn profit of 200 Rs/- per share. If you do so you have to pay Short term CGT (capital gain tax) @ 10% +Education cess on profit as it is short term capital gain. If you hold same share for 1 year or above it is considered as long term capital gain and you need not to pay capital gain tax.it is considered as tax free.
Similarly if you purchase property after two year if you find that property price in which you invested has increased and you decide to sale it you need to pay short term capital gain tax.
For property it is considered as long term capital gain if you hold property for 3 years or above.

(3)   Securities Transaction Tax:-
A lot of people do not declare their profit and avoid paying capital gain tax, as government can only tax those profits, which have been declared by people. To fight with this situation Government has introduced STT (Securities Transaction Tax ) which is applicable on every transaction done at stock exchange. That means if you buy or sell equity shares, derivative instruments, equity oriented Mutual Funds this tax is applicable.
This tax is added to the price of security during the transaction itself, hence you cannot avoid (save) it. As this tax amount is very low people do not notice it much.
Current STT Rates are:-
Tax Rates
(4)   Perquisite Tax:-
Earlier to Perquisite Tax we had tax called FBT (Fringe Benefit Tax) which was abolished in 2009, this tax is on benefit given by employer to employee. E.g If your company provides you non-monetary benefits like car with driver, club membership, ESOP etc. All this benefit is taxable under perquisite Tax.
In case of ESOP The employee will have to pay tax on the difference between the Fair Market Value (FMV) of the shares on the date of exercise and the price paid by him/her.
(5)   Corporate Tax:-
Corporate Taxes are annual taxes payable on the income of a corporate operating in India. For the purpose of taxation companies in India are broadly classified into domestic companies and foreign companies.
corporate tax
In addition to above other taxes are also applicable on corporates.
 Indirect Taxes:-
 (6)   Sales Tax :-
Sales tax charged on the sales of movable goods. Sale tax on Inter State sale is charged by Union Government, while sales tax on intra-State sale (sale within State) (now termed as VAT) is charged by State Government.
Sales can be broadly classified in three categories. (a) Inter-State Sale (b) Sale during import/export (c) Intra-State (i.e. within the State) sale. State Government can impose sales tax only on sale within the State.
CST is payable on inter-State sales is @ 2%, if C form is obtained. Even if CST is charged by Union Government, the revenue goes to State Government. State from which movement of goods commences gets revenue. CST Act is administered by State Government.

(7)   Service Tax:-
Most of the paid services you take you have to pay service tax on those services. This tax is called service tax.  Over the past few years, service tax been expanded to cover new services.
Few of the major service which comes under vicinity of service tax are telephone, tour operator, architect, interior decorator, advertising, beauty parlor, health center, banking and financial service, event management, maintenance service, consultancy service
Current rate of interest on service tax is 14%. This tax is passed on to us by service provider.


(8)   Value Added Tax:-
The Sales Tax is the most important source of revenue of the state governments; every state has their respective Sales Tax Act. The tax rates are also different for respective states.
Tax imposed by Central government on sale of goods is called as Sales tax same is called as Value added tax by state government.VAT is additional to the price of goods and passed on to us as buyer (end user). Around 220+ Items are covered with VAT.VAT rates vary based on nature of item and state.
Government is planning to merge service tax and sales tax in form of Goods service tax (GST).
Also Read:- Download new 15G/15H Forms
(9)   Custom duty &Octroi (On Goods):-
Custom Duty is a type of indirect tax charged on goods imported into India. One has to pay this duty , on goods that are imported from a foreign country into India. This duty is often payable at the port of entry (like the airport). This duty rate varies based on nature of items.
Octroi is tax applicable on goods entering in to municipality or any other jurisdiction for use, consumption or sale. In simple terms one can call it as Entry Tax.
(10) Excise Duty:-
An excise or excise duty is a type of tax charged on goods produced within the country. This is opposite to custom duty which is charged on bringing goods from outside of country. Another name of this tax is CENVAT (Central Value Added Tax).
If you are producer / manufacturer of goods or you hire labor to manufacture goods you are liable to pay excise duty.
At some of places you need to pay tax in order to use infrastructure (road, bridge etc.) build from your money given to government as Tax. This tax is called as toll tax. This tax amount is very small amount but, to be paid for maintenance work and good up keeping.
So in total you pay 20 different taxes in direct or indirect way. At the end in order to make you laugh i will tell you one small joke on tax.

Friday 3 July 2015

Company Incorporation in India

5 reasons private limited companies are back in fashion


“Is it better for startups to opt for an LLP instead of a privatelimited Companies?” “Doomsday for private limited companies!” “Draconian Companies Act 2013 makes life for private limited companies a bed of thorns!”“Startups…forget about private limited, LLP is the next big thing!”Even a few months back, consultants were advising startups against registering a private limited company. I cannot say I blamed them. There were good reasons.
The Companies Act, 2013, brought in its wake lots of practical dilemmas. The whole point of uprooting the old Companies Act was to prune age-old and, now, irrelevant provisions. This purpose seemed to have miserably failed. However, the present Government has amended the entire Companies Act. Additionally, various new measures have been introduced in order to facilitate doing business in India. By virtue of these initiatives, private limited companies are back in fashion.

1. No minimum capital required to start a private limited companyLLP always had an edge over the private limited companies when it came to this clause. In India, one can start an LLP (Limited LiabilitiesPartnership)with Rs 1 as contribution whereas, earlier, for a private limited company a minimum capital of Rs 100, 000 had to be provisioned for.
Impact of this amendment:
There is no minimum capital requirement and hence no burden of putting in such a large amount, as previously required, into the company bank account. This amount can be introduced as per the convenience of the business owners.

2. Introduction of Fast Track Mode of Incorporation:The Ministry of Corporate Affairs (MCA) introduced this new scheme, effective from 1st May, 2015. Now, instead of filing separate e-forms for allotment of Director Identification Number, Name of Company and Incorporation of a company in India, startups needto file one single form, INC 29, to incorporate their company.Now startups have two options:
·         The Fast Track Route: Filing of INC 29 with a fee of Rs2,000 in addition to the normal filing fees
·         The Regular Route: with the normal filing fees
Impact of this introduction:
This initiative was brought in to incorporate companies in a couple of days.After incorporating around over 15 startups by this method, we have found that incorporation, in reality, takes around around five days. Nevertheless, this indeed is a huge improvement over the existing timeline of 15 to 20 days.
3. Exemption from Filing of INC 21: A newly formed company could not commence operations until it has filed with the RoC a declaration that the paid-up capital has been subscribed by the signatories to the Memorandum. Hence, technically, startups had only one option–deposit the Rs 100,000 as soon as the company gets incorporated.
Impact of this exemption:
This requirement has been done away with. Hence, there is no undue pressure on startups to subscribe to the shares immediatelyon incorporation. Startups, take a deep breath and kick-start your operation.
4. Acceptance of Deposits from Members:In India, private limited companies are generally formed as closely held companies. In these types of entities, loans and advances from relatives and members are the most important sources of finance. Companies Act 2013 made it practically impossible for startups to run their businesses by categorizing loan from any party apart from directors of the company as “Deposits”. Moreover, the Directors were not allowed to advance such loans from borrowed funds. Companies accepting deposits were required to follow the rigorous provisions as applicable at par with the public limited companies, which included:
·         Issuance of  Circular
·         Filing of circular with ROC
·         Maintaining Deposit repayment reserve
·         Provision of  deposit insurance
Hence, the companies could take loans either from its directors or from banks. While it practically gets very difficult for directors to dish out personal resources, it also takes a lot of time and troubleto avail loans from banks. After numerous representations from various parties and councils, the Government has come up with a partial exemption.
Impact of this exemption:
Private Companies can now borrow money from members up to aggregate limit of paid-up share capital andfree-reserves. They would not need to comply with “Deposit”conditions. This in turn has again ensured the free flow of hassle-free resources.
5. Loans to Director: While private companies were not allowed to borrow money from any one apart from the directors, they were not allowed to advance money to anyone includingits directors. It was further prohibited for these entities to even provide guarantee for the loan that the directors availed intheir personal capacity. These provisions pertaining to loans faced severe criticisms.
 Impact of this exemption:
 A private limited company is now allowed to provide loan orguarantee/security to directors, subject to the following conditions:
·         Such guarantor company should not have a body corporate as a shareholder
·         Such company should not have borrowed money from bank/ financial institution/ body corporate exceeding twice its paid-up capital or Rs 50 crore, whichever is lower.
·         No repayment default is subsisting of such borrowings at time of giving the loans
Few others notable exemptions to private limited companies include:
·         Definition of Related Party relaxed: Holding, Subsidiary Company, Associate Company and sister concerns out of ambit.
·         Minimum time limit for rights issue relaxed. Minimum offer period can be reduced, if 90% members give their consent in writing or electronic mode.
·         Articles of Association may contain over-riding provisions to Companies Act pertaining to content andlength of notice, explanatory statement, quorum, chairman, proxies, restriction on voting right, show of hands and poll (subject to certain conditions).
·         Interested directors can now participate in board meeting subject to the disclosure of their interest.

In all, the Government has summarised the pain points of the businesses and tried to bring about a restorative mechanism. While we consultants had our fair share of trouble resolving the practical difficulties of companies Act, 2013, the startups suffered the most. While measures like no minimum capital requirement would grease the entry points for starting up, relaxations in deposit norms and provision for loans would lubricate the maintenance of the businesses

Monday 29 June 2015

Company Registration in India

Company Registration in India
For fast, flawless, and economical company formation in India and incorporation in places all across entire India, ours internationally admired law firm is now rather famous and popular by Indian and foreign individuals and companies. Superb and punctilious legal services connected with the company law, business and commercial law, intellectual property law, international business, foreign direct investment, labor and employment law, corporate taxation and insurance, and so on, have been ours highly appreciated services of ours internationally prominent IPR law firm of India, which is located in Delhi. For a long time, we have been extending these expert and reliable services in cities all across India, and other countries worldwide, with inspiring success and high commendations. In this truly informative webpage, we are providing comprehensive and vital information about ours internationally reputed company registration services in India.
So far, almost all hugely popular and highly preferred forms of companies have been formed and established in all around the whole country of India, on behalf of Indian and foreign people and companies, inevitably including the varieties of the private limited companies, public limited companies, limited liability partnership companies, unlimited companies, One person Companies, joint ventures, mergers and acquisitions, and branch offices, project offices of international corporations in India and subsidiary company in India. These types of companies can be set up in any interested economic fields and anywhere in India, for doing businesses at regional, national, or worldwide levels. The section below offers more information about the process of company registration, and our dutiful and expert company registration services.
List of Documents Required for Company Registration in India

The process for registering a public limited company is almost the same as the private (pvt) company registration process. For registration of both these forms of limited companies, immediately concerned is the registrar of companies (ROC) appointed in the targeted State of India, under the Section 396 of the Indian Companies Act, 2013. Along with impeccable services for private limited company registrations, ours public company registration services too, are internationally reputed. For knowing the difference between the private limited company and the public limited company, please visit our other pertinent articles. All tasks and services that exist during the entire company registration process in India, are handled adroitly by ours well-experienced, expert, and internationally renowned company lawyers. The following are the main and most important documents required during the process of company incorporation in India:
·         Complete Personal Details, along with Proof of Identity and Address.
·         Director Identification Numbers (DINs)
·         Digital Signature Certificates (DSCs)
·         Minimum one and Maximum Six Proposed Names of the company, in order of preference (Form INC  1)
·         Form INC 7 (For Incorporation of a Company)
·         Form INC  22 (associated with the address of the company being registered)
·         Form DIR  12 (related with appointment of Directors)
MOA and AOA

Company Registration in India




Company Registration in India

For fast, flawless, and economical company formationin India and incorporation in places all across entire India, ours internationally admired law firm is now rather famous and popular by Indian and foreign individuals and companies. Superb and punctilious legal services connected with the company law, business and commercial law, intellectual property law, international business, foreign direct investment, labor and employment law, corporate taxation and insurance, and so on, have been ours highly appreciated services of ours internationally prominent IPR law firm of India, which is located in Delhi. For a long time, we have been extending these expert and reliable services in cities all across India, and other countries worldwide, with inspiring success and high commendations. In this truly informative webpage, we are providing comprehensive and vital information about ours internationally reputed company registration services in India.
So far, almost all hugely popular and highly preferred forms of companies have been formed and established in all around the whole country of India, on behalf of Indian and foreign people and companies, inevitably including the varieties of the private limited companies, public limited companies, limited liability partnership companies, unlimited companies, One person Companies, joint ventures, mergers and acquisitions, and branch offices, project offices of international corporations in India and subsidiarycompany in India. These types of companies can be set up in any interested economic fields and anywhere in India, for doing businesses at regional, national, or worldwide levels. The section below offers more information about the process of company registration, and our dutiful and expert company registration services.
List of Documents Required for Company Registration in India

The process for registering a public limited company is almost the same as the private (pvt) company registration process. For registration of both these forms of limited companies, immediately concerned is the registrar of companies (ROC) appointed in the targeted State of India, under the Section 396 of the Indian Companies Act, 2013. Along with impeccable services for private limited company registrations, ours public company registration services too, are internationally reputed. For knowing the difference between the private limited company and the public limited company, please visit our other pertinent articles. All tasks and services that exist during the entire company registration process in India, are handled adroitly by ours well-experienced, expert, and internationally renowned company lawyers. The following are the main and most important documents required during the process of company incorporation in India:
·         Complete Personal Details, along with Proof of Identity and Address.
·         Digital Signature Certificates (DSCs)
·         Minimum one and Maximum Six Proposed Names of the company, in order of preference (Form INC  1)
·         Form INC 7 (For Incorporation of a Company)
·         Form INC  22 (associated with the address of the company being registered)
·         Form DIR  12 (related with appointment of Directors)
MOA and AOA

Tuesday 23 June 2015

REGISTRATION OF PRIVATE LIMITED COMPANY IN INDIA:

To Register a Private Limited Company in India, you have to fulfill the following requirements:
Minimum 2 Members.
Minimum capital for the Company should be Rs. 1,00,000/-
Members should have valid individual proofs and identity.
A valid address proof for your registered office address.
Apart from this a Private Limited Company should be properly named. Name of a company has a vital role, it should be unique and have to reflect the business of the company.
Name of a Company contains two parts- Prefix and Suffix. The Prefix should be unique and Suffix has to reflect your company’s main business nature. Check with MCA website to find you name availability, click here.
To Incorporate a Private Limited Company, kindly follow the below four simple steps:
Step 1: Obtain DSC and DIN
To get started with formation of private limited company, you need to get a DSC- Digital Signature Certificate and once obtaining DSC you need to apply for DIN i.e Director Identification Number. This DIN is a unique eight number allotted to the respective Directors of the Private Company. You have to file an e-form DIR-3 to get an DIN, to download the necessary form click here.
Step 2: Name Reservation
For a Private Limited Company you have to apply with six names to the Registrar of Companies i.e. RoC and any one name from the six would be approved. Name has to be applied through Form INC-1 along with the prescribed fee. To know your fee, click here.
Step 3: Submission of Legal Documents
After the allotment of name, in order to complete the process of company registration, you need to draft MOA, AOA and other legal documents, which has to be submitted along with valid registered office address proof. If you don’t have the proof during incorporation, you can submit after incorporation but within 30 days from the date of receipt of Certificate of Incorporation.
When all the necessary documents are being submitted to the Registrar of Companies, the RoC after verification of documents would issue the Certificate of Incorporation.
POST INCORPORATION PROCESS
The Incorporation is over after the receipt of Certificate from the Registrar of Companies, but Private limited Companies needs to follow certain Post incorporation compliance which is mandatory.
The post incorporation compliance would be as following:
File form for Commencement of Business.
Registered Office address of the Company.
Appointment of Auditor for your company.
Maintenance of Statutory Registers and records.
Convening First Board Meeting and recording it in Minutes Books of the Company.
Apart from this a Private company has to file the Annual returns to the RoC annually without fail. If you need assistance for the above you can avail our retainer services or if you need more information you can check our Start-up tool kit.
To understand the private limited company procedural aspects of same in easy manner, check out our infographics.

If you have any doubts kindly get in touch with us by filing a simple form given in this page http://www.companyformationindia.com/contact-us.html . Our team member would contact you within short span of time to answer your doubts.