Freequently Asked Questions
ACCOUNTING AND BOOKKEEPING
The purpose for both is keeping track of your company's income and how it spends that money. Bookkeeping is the day-to-day record keeping such as managing the receiving and payment of bills, managing the sales and receiving of payment from customers payroll processing. Accounting was the next step after bookkeeping. It starts where bookkeeping left off: Reviewing the bookkeeping processing, completing bank reconciliation, credit card reconciliation, completing payroll tax returns, sales tax returns, Tax returns, and compiling the periodic financial reports that summarize all of the record-keeping data.
A professional bookkeeper provides an out-sourced bookkeeping service to companies that cannot afford to have an in-house bookkeeper on their payroll, or do not have the volume to justify a dedicated staff member to perform the bookkeeping tasks. The professional bookkeeper comes into the client's office on a pre-determined basis to open the mail, keep track of the bills, prepare bills for payment and mailing, oversees the processing of payroll, enters invoices to customers, receives payments from customers, and enters sundry bank activity.
A professional accountant (non-CA) provides accounting services to companies that do not need to pay a CA for accounting issues un-related to income tax preparation. The professional accountant comes into the client's office (or remotely handles the work) on a monthly, quarterly, or other pre-determined basis to review the bookkeeper's work, complete bank and credit card reconciliations, complete sales, property, payroll, tax returns when necessary, and compile financial statements to review with client.
Both the bookkeeping and accounting can be handled from Business-keepers’s office if the client wants a “hands-off” approach to their accounting duties.
Bookkeeping and accounting is an ongoing, integral part of your business. Whether you hire Business-keepers or bring someone in-house on your payroll, it is important that the work be maintained to provide you with intrinsic reports to better serve your company's financial goals.
The line can blur somewhat in a small company, but generally - bookkeepers are primarily concerned with recording the daily transactions in a business, such as bills, invoices, and payroll. They often prepare tax forms for signature. Senior accountants may also do this work, or supervise others to do it, but their primary focus is on presenting facts to the owners of a business to assist in cash management and business planning.
DSC
A digital signature is a very simple, secure, convenient, and a time-saving way of signing electronic documents or authenticating certain online transactions. Technically, it is a code, unique to the person who is signing the electronic document or authenticating the transaction.
For sending and receiving digitally signed and encrypted emails/ documents.
For carrying out secure web-based transactions.
In eTendering, eProcurement,for Registrar of Companies e-filing,Income Tax for e-filing income tax returns and also in many other applications.
For signing documents like MS Word, MS Excel and PDFs.
A Digital Signature Certificate (DSC) explicitly associates the identity of an individual/device with a two keys - public and private keys. The certificate contains information about a user's identity (for example, their name, pincode, country, email address, the date the certificate was issued and the name of the CA. These keys will not work in the absence of the other. They are used by browsers and servers to encrypt and decrypt information regarding the identity of the certificate user. The private key is stored on the user's computer hard disk or on an external device such as a USB token. The user retains control of the private key; it can only be used with the issued password. The public key is disseminated with the encrypted information. The authentication process fails if either one of these keys in not available or do not match. This means that the encrypted data cannot be decrypted and therefore, is inaccessible to unauthorized parties.
Yes, the Information Technology Act, 2000 in India has given legal validity to digital signatures.
Yes, the Indian Evidence Act, 1858 has been modified and amended on lines with the Information Technology Act, 2000 and thus any electronic document signed with a valid digital signature is considered a valid piece of evidence similar to a physical document signed with a hand-written signature
The Ministry of Company Affairs (MCA), Government of India (GoI) has initiated MCA21 program, for easy and secure access to MCA services in a manner that best suits the businesses and citizens. MCA21 is envisioned to provide anytime and anywhere services to businesses. It is a pioneering program being the first mission mode e-governance project being undertaken India.
Besides, use of digital signature has also been made mandatory for certain transactions. In certain cases, though usage of digital signature is not mandatory, it offers a lot of convenience over the traditional methods.
Thus, the usage of digital signatures has increased dramatically in India in recent years and is very much likely to increase further.
No, a digital signature is unique and thus two or more individuals/entities cannot have the same digital signature.
It is practically impossible to forge a digital signature. It is secure and has be applied online for authentication. Thus it is more secure than a hand-written signature which can be seen and potentially imitated by any person who sees a document bearing the hand-written signature.
We provide all types of digital signatures viz.
Class 2 Individual (class 2a)
Class 2 Organization (class 2b)
Class 3 Individual (class 3a)
Class 3 Organization (class 3b)
DGFT
Our digital signatures are certified by Safescrypt (Sify) or eMudhra as we are authorised provider.
Note that stock availability of certain type of digital signatures might vary on certain occasions.
You can choose to obtain a digital signature of 1 year or 2 year validity from date of issuance.
Class 2 Digital Signature Certificate is required for Income Tax filing, ROC and MCA filing. Class 2 Digital Signature Certificate can be issued for 1 year or 2 years. After the valid period , user need to renew class 2 digital signature certificates. Class 2 Digital Signature certificate can be issued to individual / organization.
After expiry of the validity period, the digital signature becomes invalid. You can then obtain a valid digital signature by following a simple procedure.
No, we do not specifically charge higher for renewal. In fact, we usually give a discount for renewal. The exact rates will be the rates prevailing at the time of renewal.
EPF
The EPF (Employee Provident Fund) – most popular investment for salaried individuals is maintained solely by the Employees Provident Fund Organisation of India (EPFO). As a statutory rule, any company having more than 20 employees, have to register with the EPFO.
For those who have a basic salary of up to INR 6500, contributing to the EPF is mandatory. Contributions are voluntary for those whose basic salary exceeds INR 6,500.
As per the new 2012 rules issued recently, The EPFO has made amendments to the way in which employee and employer contribution would be calculated hereon.
For employees, this amendment is particularly important as it impacts his/her take home salary and income tax liability as well.
The Central Government revises Employee Provident Fund interest rates every year depending upon the revenues made by EPFO on its earlier years’ deposits.
For FY 2012-13, the EPF interest rate is 8.50% p.a.
EPF members can now access their account statements online atwww.epfindia.gov.in.
This facility is available only to active members who are currently contributing to their EPF accounts.
You can withdraw from your EPF account on the account your children’s education, marriage of self, children and siblings, purchase/construction of a house or any medical emergencies.
However, withdrawal is subject to certain conditions, non-compliance of which would result in penal interest:
• You should have completed minimum 7 years of service;
• Withdrawal can be made only 3 times in the period during which you hold the EPF Account;
• Maximum aggregate withdrawal would be 50% of the total contributions made by you.
For medical emergencies, there is no minimum service period. However, the maximum amount one can withdraw is 6 times the basic salary and proof of hospitalization is required.
Withdrawal from EPF Account for purchase/construction of a house is available only once in an individual’s entire working life. The minimum service period is 5 years and the maximum withdrawable amount is 36 times your total salary (for construction of property) and 24 times (for purchase of property).
At such times, the Provident Fund balance could be transferred from one employer to another. The existing balance would continue to stay, with fresh contributions made by the new employer.
When you quit your job, Provident Fund could be withdrawn. You need to provide a declaration that you do not intend to work for the next 6 months
Yes, you can. The additional contribution is called as ‘voluntary contribution’. But such additional contribution will not be matched by your employer.
All the same rules and interest rate will apply to your voluntary contribution regarding withdrawal, transfer, interest rate and so forth.
COPYRIGHT
Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.
Copyright ensures certain minimum safeguards of the rights of authors over their creations, thereby protecting and rewarding creativity. Creativity being the keystone of progress, no civilized society can afford to ignore the basic requirement of encouraging the same. Economic and social development of a society is dependent on creativity.
The Copyright Act, 1957 protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorized uses. Unlike the case with patents, copyright protects the expressions and not the ideas.
No. Acquisition of copyright is automatic and it does not require any formality. Copyright comes into existence as soon as a work is created and no formality is required to be completed for acquiring copyright. However, certificate of registration of copyright and the entries made therein serve as prima facie evidence in a court of law with reference to dispute relating to ownership of copyright.
The procedure for registration is as follows:
a) Application for registration is to be made on Form XIV ( Including Statement of Particulars and Statement of Further Particulars) as prescribed in the first schedule to the Rules ;
b) Separate applications should be made for registration of each work;
c) Each application should be accompanied by the requisite fee prescribed in the second schedule to the Rules ;
d) The applications should be signed by the applicant. The Power of Attorney signed by the party and accepted by the advocate should also be enclosed, if applicable.
e) The fee is to be paid either in the form of Demand Draft or Indian Postal Order favouring "Registrar Of Copyrights Payable At New Delhi" or through E payment Each and every column of the Statement of Particulars and Statement of Further Particulars should be replied specifically.
e) The fee is either in the form of Demand Draft,Indian Postal Order favoring "Registrar Of Copyright Payable At New Delhi" or through E payment
Each and every column of the Statement of Particulars and Statement of Further Particulars should be replied specifically.
An Presently there are three registered copyright societies in India, namely;
I. For Literary works associated with Musical Works: The Indian Performing Right Society Limited (IPRS)
II. For Reprographic (photo copying) works: Indian Reprographic Rights Organization (IRRO)
III. For Performers (Singers) Rights: Indian Singers Rights Association (ISRA)
Copyright does not ordinarily protect titles by themselves or names, short word combinations, slogans, short phrases, methods, plots or factual information. Copyright does not protect ideas or concepts. To get the protection copyright a work must be original.
After you file your application and receive diary number you have to wait for a mandatory period of 30 days so that no objection is filed in the Copyright office against your claim. In case any objection is filed, the Registrar of Copyrights after giving an opportunity of hearing to both the parties, may decide to register the work or otherwise.
If no objection is filed the application is examined by the examiners. If any discrepancy is found the applicant is given ordinarily 45 days time to remove the same. Therefore, it may take around 2 to 3 months time for registration of any work in the normal course. The cooperation of the applicant in providing necessary information is the key for speedy disposal the matter.
AUDIT
A Tax audit is a process to verify whether the books of account prepared by the taxpayer are in compliance with the generally accepted accounting principles and the provisions of the Income-tax Act. A Tax audit can be conducted only by a Chartered Accountant in practice.
Section 44AB provides for the audit of books of account of an assessee engaged in business or profession. The table below demonstrates the requirement to get the books of account audited by different taxpayers
| Nature of Business or Profession | Category of Taxpayer | Threshold Limits for Gross Turnover or Receipts |
|---|---|---|
| Specified Professions | Any | 50 lakhs |
| Non-Specified Professions | Any | 50 lakhs |
| Business | Any | 1 Crore |
| Presumptive Tax Scheme under section 44AD | Resident Individual or HUF | Taxpayer opted for this scheme in any of the last 5 previous years but do not opt for it in current year and his total income exceeds the maximum amount which is not chargeable to tax. |
| Presumptive Tax Scheme under section 44AD | Resident Partnership Firm | Taxpayer opted for scheme in any of last 5 previous years but do not opt for in current year. |
| Presumptive Tax Scheme under section 44ADA | Resident Assessee | Taxpayer claims that his profits from profession are lower than the profits deemed under section 44ADA and total income exceeds the maximum amount which is not chargeable to tax. |
| Presumptive Tax Scheme under section 44AE | Any Assessee engaged in plying, hiring or leasing goods carriage | Taxpayer claims that his profits are lower than the deemed profit under section 44AE. |
| Presumptive Tax Scheme under section 44BB | Non-resident assessee engaged in exploration of mineral oil | Taxpayer claims that his profits are lower than the deemed profits under section 44BB. |
Applicability of tax audit under section 44AB depends upon gross receipts, sales or turnover of an assessee, so the first and foremost thing is their calculations. As per ‘Guidance Note on Terms Used in Financial Statement’ published by the ICAI, the meaning of ‘Turnover’ shall be the aggregate amount for which sales are effected by an enterprise. The terms ‘gross turnover’ and ‘net turnover’ are sometimes used to differentiate the sales aggregate before and after deduction of returns and discounts. In case of professionals “Gross receipts” include all receipts arising from carrying on a profession. If a professional collects out of pocket expenses separately, they shall not form part of gross receipts. However if these expenses are recovered collectively by way of consolidated fees, the whole amount would form part of gross receipts. Where a professional received an advance for services which are yet to be rendered, it will not form part of the gross receipts till the services are rendered. Where an assessee is carrying on more than one business activity, turnover of all the businesses will be clubbed together. However, where any business of assessee is covered by section 44AD or 44AE and he has opted for the same, turnover of such business shall be excluded. In case of sale by a commission agent or by a person on a consignment basis, if the property in goods or all significant risks and rewards of ownership of goods continue to belong to the principal the relevant sale price shall not be part of turnover of commission agent. In this case, the turnover shall be the amount of commission earned by the agent. However, if the property in the goods, significant risk and reward of ownership belongs to the commission agent, the sale price received/receivable shall form part of his turnover.
It is mandatory to file the tax audit report by 30th September of the relevant assessment year, However, if an assessee is liable for transfer pricing audit then tax audit report has to be filed by 30th November of the relevant assessment year.
Any Chartered Accountant (CA) in full time practice can do Tax audit. However, it is not mandatory to file income tax audit return by CA. Only audit report is mandatory to be filed by CA.
Internal Auditors (UConn employees) and external experts who augment internal audit capabilities
External auditors include Federal, State and independent auditors
• Financial Audits
• Compliance Audits
• Operational Audits
• Information Technology Audits
• Special investigations
• Consulting
• Liaison to external auditors
Category of Taxpayer Form for Audit Report Annexure to Audit Report If books of account of assessee are required to be audited under any other law Form 3CA Form 3CD In any other case Form 3CB Form 3CD
• Evaluates the adequacy and effectiveness of internal controls
• Reviews the reliability and integrity of financial and operating information
• Reviews the fiscal, operational, and administrative operations
• Reviews systems established to ensure compliance with policies, plans, procedures, laws, and regulations that could significantly impact operations
• Evaluates the effectiveness and efficiency with which resources are employed
• Evaluates the accomplishment of established objectives and goals
• Statutory/regulatory requirements
• Board of Trustees requirements and requests
• Senior administrators request
• Annual risk assessment process
• Hot line calls
• Whistleblower complaints
• Management requests
• Research audit area
• Determine criteria
• Notify auditee
• Assess risk
• Plan audit
• Refine scope/objective/methodology
• Develop audit program
• Perform field work
• Communicate results
• Issue draft report
• Obtain management responses
• Issue final report
• Follow-up review
• Feedback from auditee
• Interview key staff and management
• Observe established procedures
• Examine supporting documentation and evidential materials
• Document organizational control activities
• Perform analytical reviews
ESI
• Employees’ State Insurance Scheme of India is a multi-dimensional Social Security Scheme tailored to provide Socio-economic protection to the 'employees' in the organized sector against the events of sickness, maternity, disablement and death due to employment injury and to provide medical care to the insured employees and their families.
• How does the scheme help the employees?
• The scheme provides full medical care to the employee registered under the Employees’ State Insurance Act, 1948 during the period of his incapacity, restoration of his health and working capacity. It provides financial assistance to compensate the loss of his/ her wages during the period of his abstention from work due to sickness, maternity and employment injury. The scheme provides medical care to his/her family members also.
• Who administers the ESI Scheme?
• The Employees’ State Insurance (ESI) Scheme is administered by a statutory corporate body called the Employees' State Insurance Corporation (ESIC), which has members representing Employers, Employees, the Central Government, State Government, Medical Profession and the Hon’ble Members of Parliament. Director General is the Chief Executive Officer of the Corporation and is also an ex-officio member of the Corporation.
• What are the other bodies of the Employees’ State Insurance Corporation?
• At the National level, the Standing Committee (a representative body of the Corporation) for administering the affairs of the Corporation, and the Medical Benefit Council, a specialized body that advises the Corporation on administration of Medical Benefit, are functioning. At the Regional Level, the Regional Boards and Local Committees have been constituted to review the functioning of the scheme and make suggestions for its improvement. In addition to above, Hospital Development Committees have been set up for improvement of hospital and State Executive Committee for monitoring the performance of ESIS Hospitals and Dispensaries in a given State/UT. 3
• The ESI scheme is a self financing scheme. The ESI funds are primarily built out of contribution from employers and employees payable monthly at a fixed percentage of wages paid. The State Governments also bear 1/8th share of the cost of Medical Benefit.
Implemented Area
• Employees’ State Insurance Scheme is implemented in phases in different part of the country through Gazette notification after making the infrastructure available towards dispensation of medical as well as other benefits provided under the provisions of the Act to the prospective beneficiaries.
In an area notified u/s 1(3) by Central Govt.? In an area notified u/s 1(3) by Central Govt. all factories where 10 or more persons are employed attract coverage under Section2(12) of ESI Act. Further, according to the notification issued by the appropriate Government (Central/State) under Section 1(5) of the Act, the following establishments employing 10 or more persons attract ESI coverage. (i) Shops (ii) Hotels or restaurants not having any manufacturing activity, but only engaged in 'sales'. (iii) Cinemas including preview theaters; (iv) Road Motor Transport Establishments; (v) News paper establishments.(that is not covered as factory under Sec.2(12)); (vi) Private Educational Institutions (those run by individuals, trustees, societies or other organizations and Medical Institutions (including Corporate, Joint Sector, trust, charitable, and private ownership hospitals, nursing homes, diagnostic centers, pathological labs). In some states coverage is still for 20 or more persons employed under sec 1(5). A few State Governments have not extended scheme to Medical & Educational Institutions.
FSSAI License
The FSSAI License and Registration is the basic requirement to commence any food business in India. The individuals and organizations often face difficulty in understanding the regulations and compliance requirements for FSSAI Licensing or Registration. Based on the queries received from our readers and industry partners, we have listed below the most frequently asked questions and their answers for your ease of understanding
For a change of any information contained in the License or registration certificate – Form C, the fee equivalent to the fee of one-year new license or registration is applicable. No fee is required for modification of non – Form C details.
The FSSAI license or registration cannot be renewed if it is not applied within 30 days from the expiry of license/registration. Once the license/registration is expired, the FBO has to apply afresh.
FSSAI license is based on premise. All kinds of food business activities which are being carried out at the same premise can be applied for in a single FSSAI license.
FSSAI Registrations are granted to petty or small Food Businesses whose turnover is less than Rs. Twelve lakhs per annum. The registration certificate obtained in Form C is required to be displayed in the food business premise at a prominent place. The registration is issued by the Authority who may be a Food Safety Officer or a Designated Officer or any other official in Municipal Corporation or any other local body or Panchayat in an area. These officials are notified by the State Food Safety Commissioner.
All Food business operators including pharmacies or medical stores selling Health supplements or Nutraceutical products need to apply for the FSSAI license or registration.
Food Business Operators (FBOs) with food business in two or more states has to apply for an additional Central License for its registered Office or Head Office. The separate license or registration has to be obtained for each unit or premise depending upon their individual capacity or turnover from the concerned Central or State licensing authority.
An Importing FBO can file for only one Importer license with its IEC Code. The Importer cannot submit another application with the same IEC Code after it has been used once unless the applicant deletes the application that is incomplete or have already been submitted.
For Food business premises that are under Railways, the FSSAI licenses or registrations are issued by the FSSAI notified designated officer or Food Safety officers of Railways. The FSSAI license for food businesses in Airport/Seaport are issued by FSSAI notified Airport Health Officer (APHO)/Port Health Officer (PHO).
For the export of food products from India, there is no requirement of obtaining a NOC from FSSAI.
The DO may suspend the license of a Food Business Operator (FBO) if they are not complying with the improvement notice. The DO may also cancel the license, after giving the FBO an opportunity to show cause.
Food Safety and Standards Authority of India and State Food Authorities are jointly responsible for implementation & enforcement of FSSA, 2006. The details are provided Section 29 of FSS Act, 2006.
The details are available on FSSAI’s Official website:http://www.fssai.gov.in/home/compliance/compliance-orders.html
The FSO shall be liable to a penalty which may extend up to one lakh rupee if he / she is found to be guilty of an offence mentioned under section 39 of the Act. Provided that in case the complaint made against the Food Safety Officer is false, the complainant shall be punishable with fine which shall not be less than fifty thousand rupees and may extend to one lakh rupees.
The improvement notice is the notice issued by Designated Officer if FBO fails to comply with the regulations as mentioned in Section 32 of the FSS Act, 2006.
If the food business operator fails to comply with an improvement notice, his licence may be suspended.
If the food business operator fails to comply with the improvement notice, the DO may, after giving the licensee an opportunity to show cause, cancel the licence.
Yes, any FBO aggrieved by an improvement notice may appeal to the State Commissioner of Food Safety whose decision thereon shall be final. The same can be challenged in the Food safety Appellate Tribunal/ high court of his respective States/Uts
Fifteen days from the date on which notice of the decision was served on the person desiring to appeal or the period specified in the improvement notice whichever expires earlier.
GST
Goods and Services Taxes (GST), is an Indirect tax, applicable on sale of Goods and Services. Multiple taxes like VAT, Service Tax, etc are subsumed into Goods and Services Taxes (GST).
1. Tax paid to Central Government (IGST) can be claimed as input. Removes double taxation.
2. Exports will be zero rated, unlike the present system where refund of some taxes is not allowed due to fragmented nature of indirect taxes between the Centre and the States.
3. Fixed tax rates. The Central Goods and Services Taxes and State Goods and Services Taxes are to be paid to the accounts of the central and states respectively.
4. Transparent tax system. Enhances transparency in the indirect tax framework and is expected to bring down the rate of inflation. Subsumed multiple taxes like VAT, ST, etc. No confusion on applicable taxation.
Steps in Final GSTIN
o TRN: Once the new user has registered in gst.gov.in , the entity will get a TRN (Temporary Reference Number) .
o ARN: the entity will get the ARN (Application Reference Number), after successful submission of GST Registration Application.
o GSTIN: After submitting the form, government will issue GSTIN number after due verification of the information with the respective state, central authorities.
1. PAN Card.
2. Aadhaar card where ever possible.
3. Digital Signature in case of companies and LLP.
4. Valid mobile number and Email ID.
5. Photograph of Proprietor, partners, authorized signatories.
6. Registration Certificate obtained under earlier Tax laws.
7. Proof of appointment of authorized signatory and their personal details.
8. Proof of principal place of business.
9. Opening page of Bank statement held in name of Business or Proprietor.
Every entity whose taxable supply of Goods or Services or both exceeds the threshold limit has to be registered for GSTIN.
North Eastern States 10 Lakhs within 30 days from the date on which he become liable to registration State Threshold Time Limit Rest of India Rs 20 lakhs in Services and/or 40L in Products within 30 days from the date on which he become liable to registration
Every entity who has registered under GST has to file GST return within due dates. Check the below table for knowing the due dates,
Return Form Description Due Date GSTR 1 Sales: Furnishing details of outward supplies Within 10th of succeeding Tax period GSTR 2 Purchases: Furnishing details of inward supplies Within 15th of succeeding Tax period GSTR 3 Monthly Return after finalization of outward supplies and inward supplies Within 20th of succeeding Tax period
GSTR 1 needs to be filed even if there is no business activity (NIL return) in the tax period.
GSTR 1 can be prepared through the following modes.
• Online entry in the GST portal.
• Uploading of invoice and other data using returns offline tool.
• Using third party application like ASPs through GSP’s.
The following taxpayers are not required to file GSTR 1
1. TaxPayers registered under Composition scheme.
2. Non-resident foreign taxpayers.
3. Input Service Distributors.
4. Tax Deductor. E Commerce operators deducting TCS.
A normal taxpayer is required to discharge tax liability at the time of filing GSTR 3. The current due date for filing GSTR 3 is 20th of succeeding month.
1. The taxpayer should have a valid GSTIN and login credentials.
2. The taxpayer should have active DSC if DSC is mandatory.
3. If taxpayer wants to use E- Sign, he must have valid Aadhaar number with access to mobile number and email.
4. If taxpayer wants to use EVC he must have valid mobile number and e mail id.
DSC is not mandatory for all types of taxpayers. It is mandatory for all public & private limited companies, Limited Liability Partnerships(LLPs).
• B2B: It refers to supplies between registered taxable entities.
• B2C: It refers to supplies between registered supplier & Unregistered buyer.
GSTR 2 contains invoice level inward supply information rate wise as reported by the supplier in GSTR 1. Most of the details are auto populated from the other party return.
The taxpayer can accept, reject, modify (if information provided by supplier is incorrect) or keep the transactions pending for action (if goods or services have not received).
Yes. The taxpayer can add invoice if he is in possession of invoices and have received the goods or services.
Every registered taxable person other than input service distributor/Composition taxpayer / TDS Deductor/TCS Collector is required to file GSTR 2.
When GTSR 1 is filed after filing of GSTR2 by the counterparties, the details declared in GSTR 2 gets auto populated to GSTR 1 and the supplier is expected to take action on such details before filing of its GSTR 1.
GSTR 3 is a monthly return based on the finalization of GSTR 1 and GSTR 2 .GSTR 3 can be generated only when GSTR 1 and GSTR 2 for the tax period have been filed by the taxpayer.
Yes, it is mandatory to discharge the liability before filing GSTR 3. If not discharged, it is treated as invalid return.
ISO
ISO Certification is a seal of approval from 3rd party body that a company runs to one of the internationally recognized ISO management systems. The certification can be used to tender for business as a proof of a company’s credibility but also to install confidence in the potential client that you will keep your promises.
The International standard supports its own benefits within every industry, however, the common benefits across the certifications include widened market potential, compliance to procurement tenders, improved efficiency and cost savings, a higher level of customer service, and therefore satisfaction, and heightened staff morale and motivation. By having a recognized management standard it tells your customers that you are serious about their needs.
When ISO certified you will receive a certificate bearing a unique certificate number. Using such unique number over accreditation’s body website we can verify that your business is an ISO certified entity.
On providing the correct documents and information of business you can obtain the final certificate within 2-3 working Days.
For customers, the worldwide compatibility of technology which is achieved when products and services are based on International Standards brings them an increasingly wide choice of offers, and they also benefit from the effects of competition among suppliers.
There are over 16,500 different management standards, therefore finding the ones that are right for your business can sometimes be confusing. The best place to start is ISO 9001 quality management, as this is the core standard that most of the other well-known standards are based on. It’s focused on customer service and ensuring your customer receives the service they want, at a time that’s relevant for a cost that’s fair. Based on your company’s activities there may be additional ‘bolt on’ standards that might complement the business i.e. as waste and recycling company may benefit from the ISO 14001 environmental management as this is a fundamental element for their industry, or a manufacturing business might benefit from the ISO 45001 health and safety as they use lots of heavy machinery which could have risks associated. The best way to find out which standards are most relevant is to contact us today and let us know about your business. We can then send you the details of the standard/s most relevant to your company.
The system promotes efficient management of sensitive corporate information, highlighting vulnerabilities to ensure it is adequately protected against potential threats. It encompasses people, process and IT systems. An ISO 27001 certification can be achieved by any business of any size, in any given sector, which is looking to increase and enhance the company’s security of its data.
There isn’t any difference between accreditation bodies, all of them are providing ISO Standards Certifications. The only difference you can mark is of market recognition, branding, and their prices.
ISO 9001 is a quality management system that can be integrated into any business. It is focused on ensuring the business delivers a consistent level of quality to its customers by having well defined and regularly reviewed processes and procedures. The system fully integrates within the existing business procedures and becomes part of the culture within the organisation. Eventually a business will not perform a task to conform to the ISO 9001, it will perform the task for the good of the business. The system covers eight main business principles which are: Customer focus Leadership Involvement of people Process approach System approach to management Continual improvement Factual approach to decision making Mutually beneficial supplier relationships.
ISO
ISO Certification is a seal of approval from 3rd party body that a company runs to one of the internationally recognised ISO management systems. The certification can be used to tender for business as a proof of a company’s credibility but also to install confidence in the potential client that you will keep your promises.
The International standard supports its own benefits within every industry, however, the common benefits across the certifications include widened market potential, compliance to procurement tenders, improved efficiency and cost savings, a higher level of customer service, and therefore satisfaction, and heightened staff morale and motivation. By having a recognized management standard it tells your customers that you are serious about their needs.
When ISO certified you will receive a certificate bearing a unique certificate number. Using such unique number over accreditation’s body website we can verify that your business is an ISO certified entity.
On providing the correct documents and information of business you can obtain the final certificate within 2-3 working Days.
For customers, the worldwide compatibility of technology which is achieved when products and services are based on International Standards brings them an increasingly wide choice of offers, and they also benefit from the effects of competition among suppliers.
There are over 16,500 different management standards, therefore finding the ones that are right for your business can sometimes be confusing. The best place to start is ISO 9001 quality management, as this is the core standard that most of the other well-known standards are based on. It’s focused on customer service and ensuring your customer receives the service they want, at a time that’s relevant for a cost that’s fair. Based on your company’s activities there may be additional ‘bolt on’ standards that might complement the business i.e. as waste and recycling company may benefit from the ISO 14001 environmental management as this is a fundamental element for their industry, or a manufacturing business might benefit from the ISO 45001 health and safety as they use lots of heavy machinery which could have risks associated. The best way to find out which standards are most relevant is to contact us today and let us know about your business. We can then send you the details of the standard/s most relevant to your company.
The system promotes efficient management of sensitive corporate information, highlighting vulnerabilities to ensure it is adequately protected against potential threats. It encompasses people, process and IT systems. An ISO 27001 certification can be achieved by any business of any size, in any given sector, which is looking to increase and enhance the company’s security of its data.
There isn’t any difference between accreditation bodies, all of them are providing ISO Standards Certifications. The only difference you can mark is of market recognition, branding, and their prices.
ISO 9001 is a quality management system that can be integrated into any business. It is focused on ensuring the business delivers a consistent level of quality to its customers by having well defined and regularly reviewed processes and procedures. The system fully integrates within the existing business procedures and becomes part of the culture within the organization. Eventually a business will not perform a task to conform to the ISO 9001, it will perform the task for the good of the business. The system covers eight main business principles which are: Customer focus Leadership Involvement of people Process approach System approach to management Continual improvement Factual approach to decision making Mutually beneficial supplier relationships.
IEC
IEC Stands for IMPORTER EXPORTER CODE Legal Provisions As per section -7 of Foreign Trade (Development and Regulation) Act, 1992 Importer-Exporter Code Number – “No person shall make any import or export except under an Importer-exporter Code Number granted by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General.”
Any bonafide person/ company starting a venture for International trade. Following categories of importers or exporters are exempted from obtaining IEC number:
(i) Importers covered by clause 3(1) [except sub-clauses(e) and (l)] and exporters covered by clause 3(2) [except sub-clauses (i) and (k)]
(Exemption from application of Rules in certain cases) Order, 1993.
(ii) Ministries / Departments of Central or State Government.
(iii) Persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture.
(iv) Persons importing / exporting goods from / to Nepal,Myanmar through IndoMyanmar border areas and China (through Gunji, Namgaya Shipkila and Nathula ports), provided CIF value of a single consignment does not exceed Indian Rs.25, 000. In case of Nathula port, the applicable value ceiling will be Rs.100,000. However, exemption from obtaining IEC number shall not be applicable for export of Special Chemicals, Organisms, Materials, Equipments and Technologies (SCOMET) as listed in Appendix- 3, Schedule 2 of ITC (HS) except in case of exports by category (ii) above.
(v) Following permanent IEC numbers shall be used by non-commercial PSUs and categories of importers /exporters mentioned against them for import / export purposes:
1. IEC- 0100000011- All Ministries / Departments of Central Government and agencies wholly or partially owned by them.
2. IEC- 0100000029- All Ministries / Departments of any State Government and agencies wholly or partially owned by them.
3. IEC- 0100000037- Diplomatic personnel, Counselor officers in India and officials of UNO and its specialized agencies.
4. IEC- 0100000045- Indians returning from / going abroad and claiming benefit under Baggage Rules.
5. IEC- 0100000053- Persons / Institutions / Hospitals importing or exporting goods for personnel use, not connected with trade or manufacture or agriculture.
6. IEC- 0100000061- Persons importing / exporting goods from / to Nepal
7. IEC- 0100000070- Persons importing / exporting goods from / to Myanmar through Indo-Myanmar border areas
8. IEC- 0100000088- Ford Foundation
9. IEC- 0100000096- Importers importing goods for display or use in fairs / exhibitions or similar events under provisions of ATA carnet. This IEC number can also be used by importers importing for exhibitions/fairs as per Para 2.29 of HBPv1.
10. IEC- 0100000100- Director, National Blood Group Reference Laboratory, Bombay or their authorized offices.
11. IEC- 0100000126- Individuals / Charitable Institution / Registered NGOs importing goods, which have been exempted from Customs duty under Notification issued by Ministry of Finance for bonafide use by victims affected by natural calamity.
12. IEC- 0100000134- Persons importing / exporting permissible goods as notified from time to time, from / to China through Gunji, Namgaya Shipkila and Nathula ports, subject to value ceilings of single consignment as given in Para 2.8(iv) above.
13. IEC- 0100000169- Non-commercial imports and exports by entities who have been authorized by Reserve Bank of India.
No. IEC forms a primary document for recognition by Govt. of India as an Exporter/ Importer
Documents are listed below:
1.Bank Receipt /Demand Draft details evidencing payment of application fee of Rs. 250/-. DD should be in favour of DGFT
2. Certificate from the Banker of the applicant(on the letter head of the bank) firm in the format given in Appendix 18A (Part B)with full address of bankers including telephone numbers. Name of proprietor/partner/director etc. should be mentioned below the photo and it should be attested by banker. Name ,Designation &Managers employee code also be included in the BC.
3. Self certified copy of Permanent Account Number (PAN) issued by Income Tax Authorities (both sides).
4. Two additional copies of 3x3 size photographs of the applicant. Photograph on the bank certificate should be attested by the banker of the applicant.
5. Other Additional documents
For companies registered under companies Act-Incorporation Certificate issued by Registrar of Companies& Memorandum of Articles and Association.
For partnership Firms - Certificate of registration issued under section 59 of Indian Partnership Act, 1932 along with consent letters of all partners for issuance of IEC
For Proprietorship Firms- Any of the following documents. Registration certificate under Kerala Value Added Tax Act, 2003 or Registration certificate under The Kerala Shop and Establishment Act, 1960.
6. Self addressed envelope affixed with postage stamps of Rs.30/-.
7. These documents may be kept securely in a file cover.
If informed after 90 days from the date of change/amendment/modification, a penalty of Rs. 1000/- is levied for condonation of delay.(As per Public Notice 37, AM2010).Applicant is also required to furnish documentary proof to prove that they have applied within 90 days for modification.
On the basis of IEC, companies can obtain various benefits on their exports/ imports from DGFT, Customs, and Export Promotion Council etc.
Rs.200/- payable in form of D.D/TR
MSME
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
(a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.
The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under
Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises More than five crore rupees but does not exceed ten crore rupees
Service Sector
Enterprises Investment in equipments
Micro Enterprises Does not exceed ten lakh rupees:
Small Enterprises More than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises More than two crore rupees but does not exceed five core rupees
In accordance with the M/o MSME (earlier M/o SSI) Notification no. S.O. 1642(E) dtd.29-09-2006 while computing the value of Plant and Machinery, the original Value of the machinery is to be taken in to account. The components, to be excluded while computing the value of Plant and Machinery, are detailed in the said notification.
A market survey or a market assessment must be made before setting up a project. The prevailing price, the level of competition and the quality of your product must be seen and examined before deciding to set up a unit. Experience has shown that SSIs do well in markets in the following conditions:-
a. Where markets are local and the unit can cater to local tastes
b. As part of a larger chain whereby the SSI product is used by a larger unit.
c. Where the SSI is able to meet a specific requirement for a specific scheme commonly known as niche requirements.
Any SSI unit must try to place itself in any of these three categories. It must also register with NSIC under its Single Point Registration Scheme to take advantage of Government's Price and Preference Policy. In some States, the Small Industries Development Corporation plays an active role in promoting SSI units. SSIs can also join together and form a consortium to market their products jointly.
O/O DC (MSME) participates in a limited number of international exhibitions every year. For this purpose, Office of DC (MSME) books space, and selected SSI units are given the facility of free display space and free shipment of their exhibits from Mumbai to the fair and back. To get selected for participation, the unit must be registered and be producing goods, which are export worthy. A team of SISI Officers of your State who will recommend participation of your unit assesses export worthiness. Preference is given to units, which are ISO-9000 certified. You may also attend the fair in your individual capacity after availing shipment from O/O DC (MSME) at your own cost or through financial assistance under the Market Development Assistance (MDA) scheme of the Ministry of Commerce. O/O DC(MSME) has also launched its own scheme called MSME-MDA to encourage MSME entrepreneurs to participate more actively in international exhibitions.
OPC
The One Person Company (OPC) is a new form of company in India introduced by the Indian Companies Act of 2013. To form an OPC required are only one director and one member, both can be the same person. Thus, this one person company offers the benefits of both a sole proprietorship and a duly incorporated limited company. Moreover, this OPC is given the great facilities of the simpler legal and governance regimes for activities and operations of this, and lesser compliance requirements relating to the General Meetings and Board Meetings, as compared to those the private limited company and public limited company in India. Thus, an OPC is undoubtedly very suitable for professionals or businesspersons for starting a legally robust and secure company to nurture their respective professional or entrepreneurial skills and ambitions. Here, it may be noted that, a one person company cannot be incorporated as or converted into a section-8 company. Before its introduction in India, the one person companies got high prominence in many countries worldwide including USA, UK, China, Australia, Singapore, etc. However, these one person companies are not entitled to carry out activities of a non-banking financial company in India.
To form a One Person Company anywhere in India, the concerned director/member must be either an Indian citizen or a Resident in India. A minor, foreign national/citizen, or NRI are restricted from establishing an OPC in India. A "Resident in India" is the person who has resided in any place of India for a period of at least 182 days in the immediately preceding calendar year.
For incorporation of an OPC in any place of India, involved are the following tasks or processed to be performed with the relevant ROC:
1. Filing Form INC-1
2. Filing Forms INC-2 and INC-3
3. Filing Forms DIR-12 and INC-22
In general, the documents and enclosures required for OPC registration anywhere In India, are the following:
• DIN, DSC, and PAN Card of the Director and Shareholder
• Photographs of Director and Shareholder
• ID Proof and Address Proof of Director and Shareholder
• Address Proof of the location/registered office of the OPC
• And, other necessary documents
The following are the most outstanding advantages associated with an OPC in India, over the private limited or public limited companies:
• To form an OPC, only one Director is needed.
• The Section 173 which dictates that a limited company should conduct at least four Board meetings every year, is not applicable for OPCs.
• The provisions and regulations given in Section 98 and Sections from 100 to 111, which relate with general meetings, are also not applicable to OPCs.
• An OPC also enjoys relaxations and exceptions from many other legal, governance, ad regulatory compliances.
• The mandatory rotation of auditor after every five-year period, is also not applicable to an OPC.
No, no other persons than an Indian citizen or a Resident in India, can register a one person company anywhere in India. This means, a non-resident Indian (NRI), or a foreign national, cannot set up an OPC in India.
No, FDI into a one person company in India is restricted.
As per the Companies (Incorporation) Rules, 2014, a One Person Company has to change itself compulsorily into a private limited company or a public limited company, if at any point of time, its paid-up capital exceeds INR 50 Lac OR its average annual turnover of three immediately preceding consecutive financial years becomes more than INR 2 Crore. Under any of these conditions, the OPC is necessarily required to inform the relevant ROC through Form INC-5, within 60 Days of the exceeding threshold limits. Here, it may also be noted that an OPC cannot voluntarily change itself into any type of company, within two years of its incorporation, except under any of these two cases of exceeding the threshold limits.
Both in the cases of the voluntary conversion and the mandatory conversion, the concerned OPC is strictly required to follow the rules, provisions, and regulations provided in the Companies Act of 2013 under its Section 18, and in the Rule 7(4) of the Companies (Incorporation) Rules of 2014. Roughly, in addition to meeting the statutory requirements of the desired form of company, the OPC has to make certain necessary changes in its MOA and AOA to suit the targeted type of company. Here it should be noted that, for conversion into a private limited company, the interested OPC is required to have at least two directors and two shareholders. On the other hand, for conversion into a public limited company, the OPC needs to have at least seven shareholders and three directors. For voluntary or mandatory conversion of an OPC into a private limited company or a public limited company, the Application Form used will be Form INC-6.
In the case of the voluntary conversion, the OPC is required to submit the Form INC-6 along with the MGT-14 (containing the passing of a Special Resolution in the General Meeting in support of the proposed private limited or public limited company), to the concerned ROC within 30 Days of such a resolution. On the other hand, in case of the compulsory conversion, the OPC is required to file the Form INC-6 within Six Months counted from the date of exceeding any of the two threshold limits.
Since the concept of a one person company has recently been introduced by the new Indian Companies Act of 2013, at present, there are no specific taxation laws available for OPCs in India, and therefore, these OPCs are put in the same bracket of taxation as the private limited companies. Again, in general, no tax-related advantages are available to OPCs in India, though some industry-specific advantages may be available to these from time to time. Hence, the OPCs in India are taxed in the following ways and rates:
• Corporate Income-Tax: 30% of the Total Income/Net Profits
• Surcharge: 5% of such income, if it exceeds INR One Crore
• Education Cess: 3% of the total of Income-Tax and Surcharge
• Dividend Distribution Tax (DDT): 15%
Lastly, the provisions of the Minimum Alternative Tax (MAT) are also applicable.
Nidhi Company
A Nidhi Company is a Company which carries on the business of accepting deposits and lending the same on demand. Nidhi Company is similar to NBFC but the only basic difference between the two is that Nidhi Companies accept deposits only from its members. The main aim of these companies is to work for the mutual benefit of its members. These companies are not entitled to carry on the business of Hire Purchase Financing, Insurance, Chit Funds and Acquisition of securities or Issue of any Debt Instruments.
Following provisions are applicable to Nidhi Companies.
1. As they are incorporated into the nature of Public Company so rules and regulations of Companies Act, 2013 are applicable.
2. RBI provisions related to Interest rate payable on deposit are applicable to Nidhi Companies. But the core provisions of RBI are not applicable to Nidhi Companies as RBI has exempted the Nidhi Companies from the same.
3. Nidhi Rules, 2014.
As to incorporate a Nidhi Company it is to be registered as a Public Limited Company. So, to incorporate a Nidhi Company it is necessary to fulfill following criteria:
1. It should have at least three Directors.
2. It should have at least seven Members.
3. The main objective to be written in the MOA should be to cultivate the habit of thrift and savings among its members. And it can accept deposits and lend money only to its members and shall work for the mutual benefit of its members
Once the Nidhi Company is incorporated it must fulfill the following requirements:
1. It must have at least 200 members/shareholders.
2. Minimum Net Owned Fund should be Rs. ten Lakhs.
3. Unencumbered term deposit must be at least ten percentage of the term deposit.
4. The ratio of Net Owned Fund to term deposit should not be less than 1:20.
The exclusive advantage which is offered by Nidhi Companies are:
1. It is a single office institution governed exclusively by its members with no involvement of the third party.
2. Provide loans at minimal interest rates and minimum documentation.
3. Secured investments are guaranteed by such companies.
Yes, the Deposits with such companies are safe and secure because the Ministry of Corporate Affairs and Reserve Bank of India has framed rules and regulations to ensure the safety and security of Deposits. And the Nidhi Company compulsorily abide by the rules of Central Government.
The Nidhi Company uses the funds in lending to shareholders as per Nidhi Rules. It lends such money in the form of small loan for business and finance.
Any person who is above 18 years of age as per the standard age proof can become a member of the Nidhi Companies. The person desirous of becoming a member should have valid ID Proof and Address Proof.
A minor shall not be admitted as a member in a Nidhi company, But deposits may be accepted in the name of minor , if they are made by natural or legal guardian who is a member of the respective Nidhi.
Following are the documents required for Nidhi Company Registration:
1. Digital Signature Certificate of all the Directors.
2. Directors Identification of all the Directors.
3. Copy of a PAN Card.
4. Copy of Identity Proof (i.e. Voters ID Card, Driving License, Aadhar Card).
5. 2 Passport size photograph.
6. Registered Office Address Proof (Electricity Bill, Telephone Bill).
7. If the registered address is a rented premise then rent agreement with rent receipt.
Nidhi can provide loans to its members only after the members have given/ provided some securities like gold, silver jewelry or any type of financial securities against the loan.
Nidhi Companies are not allowed to do the following business:
1. They are not allowed to start the business of chit funds, Insurance, Hire Purchase Finance, Leasing Finance and acquisition of shares issued by companies.
2. Nidhi Company cannot issue securities such as preference shares, debentures etc.
3. They are prohibited from opening any current account with its members.
4. It cannot enter into partnership for doing lending and borrowing business.
5. It is not allowed to acquire any other company.
Nidhi are not expected to engage themselves in the business of Chit Fund, hire purchase, insurance or in any other business including investments in shares or debentures.
Nidhi shall not issue preference shares.
Every Nidhi shall, within a period of one year from the commencement of these rules, ensure that it has not less than two hundred members;
The Director shall be a member of Nidhi. Therefore, it is mandatory for director of Nidhi Company to hold shares.
The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi. The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
Every Nidhi shall issue equity shares of the nominal value of not less than ten rupees each.
Every Nidhi shall allot to each deposit holder at least a minimum of ten equity shares or shares equivalent to one hundred rupees.
Nidhi shall not accept deposits exceeding twenty times of its Net Owned Funds (NOF) as per its last audited financial statements
Nidhi shall not declare dividend exceeding twenty five per cent or such higher amount as may be specifically approved by the Regional Director for reasons to be recorded in writing.
LLP
LLP is defined as partnership formed and registered under Limited Liability Partnership Act is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name. The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the Limited Liability Partnership. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership.
The following are the features of Limited Liability Partnership:
1) Legal Existence
It is a body corporate with distinct legal entity and perpetual succession.
2) Rights and Duties of Partners
Mutual rights and duties of the members are governed by the agreement between the partners or between the LLP and its partners subject to the provisions of the LLP Act 2008. The act provides flexibility to devise the agreement as per their choice. In the absence of any such agreement, the mutual rights and duties shall be governed by the provisions of proposed the LLP Act.
3) Liability of Partners
The LLP will be liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP;
4) Designated Partner
Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law;
5) Books of Accounts
The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year;
6) Investigation
The Central Government have powers to investigate the affairs of an LLP, if required, by appointment of competent Inspector for the purpose;
7) Merger and Amalgamation of LLPs
The compromise or arrangement including merger and amalgamation of LLPs shall be in accordance with the provisions of the LLP Act 2008;
8) Conversion of firm, private company and unlisted company into LLP
A firm, private company or an unlisted public company is allowed to be converted into LLP in accordance with the provisions of the Act. Upon such conversion, on and from the date of certificate of registration issued by the Registrar in this regard, the effects of the conversion shall be such as are specified in the LLP Act. On and from the date of registration specified in the certificate of registration, all tangible (moveable or immoveable) and intangible property vested in the firm or the company, all assets, interests, rights, privileges, liabilities, obligations relating to the firm or the company, and the whole of the undertaking of the firm or the company, shall be transferred to and shall vest in the LLP without further assurance, act or deed and the firm or the company, shall be deemed to be dissolved and removed from the records of the Registrar of Companies;
9) Winding up of Limited Liability Partnership
The winding up of the LLP may be either voluntary or by the Tribunal to be established under the Companies Act, 1956. Till the Tribunal is established, the power in this regard has been given to the High Court;
10) The Indian Partnership Act, 1932 shall not be applicable to LLPs.
Every Limited Liability Partnership shall be required to have at least two Designated Partners who shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Every Designated Partner would be required to obtain a “Designated Partner’s Identification Number” (DPIN) on the lines similar to “Director’s Identification Number” (DIN) required in case of directors of companies apply for application of DPIN as provided in Form 7.
First Obtain designated partner identification number (DPIN / DIN) for the designated partners and also obtain Digital Signature.
a) Reservation of LLP name (e-form 1)
• Address of Registered Office
• Description of proposed business activity
• Proposed monetary value of partner’s contribution (Minimum 1 Lac)
• Proposed name of the Limited Liability Partnership (6 names in preference serial)
• Significance of the key or coined word(s), if any, in the proposed name(s) (in brief)
b) Incorporation Documents (e-form 2)
• Address of Registered Office
• Office Phone No.
• Email id of LLP
• Contribution of each partner
• Disclosure of partner towards:
– Number of LLP(s) in which he is a partner
– Number of company(s) in which he is a director
• Proof of Registered Office (Electricity Bill / Landline Bill etc.)
• Subscribers Sheet
c) Details to LLP Agreement (e-form 3)
• Profit sharing Ratio
• Form of Contribution
• Initial Agreement copy
d) Consent of Partners (e-form 4)
It contains information about appointment, cessation, change in name/ address/designation of a designated partner or partner and consent to become a partner/designated partner). Format of consent is given in Form -9 available.
Provided that in case of incorporation, the individual who has given his consent to act as Partner or designated Partner shall file consent in Form 2 along with fee.
Persons, who subscribed to the “Incorporation Document” at the time of incorporation of LLP, shall be partners of Limited Liability Partnership. Subsequent to incorporation, new partners can be admitted in the LLP as per conditions and requirements of LLP Agreement.
A person may cease to be a partner in accordance with the agreement or in the absence of agreement, by giving 30 days notice to the other partners. Notice is required to be given to ROC when a person becomes or ceases to be partner or for any change in partners.
There is any change in Partner and DP (admission, resignation, cessation, death, expulsion) should be filed e- form 4 within 30 days of change with fees. And also Supplementary LLP Agreement to be filed e- form 3 with ROC within 30 days with fees given the alteration in mutual rights and duties of partners and Form 4 shall include a statement signed by the incoming partner that he consents to become a partner.
An Limited Liability Partnership shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. The Statement of Account & Solvency in Form-8, essentially signed by the designated partners, is to be filed within 30days from the six months from the closure of the respective financial year i.e. by 30th October. If there is any delay filing of Form 8 then the penalty would be Rs. 100/- after the above specified period
ITR
Income tax returns is the tax forms used to declare the details of your income to the Income Tax Department for assess the amount you need to pay as income tax in a financial year. The tax return, usually in a predefined worksheet format, is also necessary to claim a refund of any additional amount that might have been deducted at source (TDS) and deposited with the income-tax department.
Every Indian citizen whose gross total income exceeds the taxable limit must file an ITR. This implies, individuals and Hindu Undivided Families (HUFs) with total annual income exceeding Rs 250,000 lakh are required to file income tax returns. For senior citizens (individuals between 60 years and 80 years of age) the threshold is Rs 300,000, and that for very senior citizens (aged above 80 years) it is Rs 500,000.
India follows a progressive tax regime, which means that high-income earners are taxed more than low-income ones. The government has categorised taxpayers into different groups based on their annual income. These groups are referred to as tax slabs. This year, Finance Minister Nirmala Sitharaman announced in her Union Budget 2019-20 speech that there would be no change in the tax slabs for individuals.
Income Tax Slab Income Tax Rate Income up to Rs 250,000 Nil Income between Rs 250,001 - Rs 500,000 5% of Income exceeding Rs 250,000 Income between Rs 500,001 - Rs 1,000,000 <20% of Income exceeding Rs 500,000 Income above Rs 1,000,000 30% of Income exceeding Rs 1,000,000 Income Tax Slab Rate for men and women below 60 Years of Age
Income Tax Slab Income Tax Rate Income up to Rs 300,000 Nil Income between Rs 300,001 - Rs 500,000 5% of Income exceeding Rs 300,000 Income between Rs 500,001 - Rs 1,000,000 20% of Income exceeding Rs 500,000 Income above Rs 1,000,000 30% of Income exceeding Rs 1,000,000 Income Tax Slab Rate for Senior Citizens (Age 60 years or more but less than 80 years)
Income Tax Slab Income Tax Rate Income up to Rs 500,000 Nil Income between Rs 500,001 - Rs 1,000,000 20% of Income exceeding Rs 500,000 Income above Rs 1,000,000 30% of Income exceeding Rs 1,000,000 Income Tax Slab Rate for Senior Citizens (Age 80 years or more)
Filing ITR can be a tedious task for some. Before filing ITR, you will need to create your e-filing account on the Income Tax website, incometaxindiaefiling.gov.in and register yourself. Registration is completed after you click the activation link sent via e-mail and provide the one-time password (OTP) received on your mobile. Click on 'Registered User' if you have already registered yourself on the website. Here's a complete step-by-step guide on filing Income Tax Returns (ITR) electronically
You can download a copy of your Income Tax Return acknowledgement after filing it online. The I-T department sends your ITR-V acknowledgement to your registered e-mail id.
If you are unable to access it, log into your incometaxindiaefiling.gov.in account and follow these steps:
Step 1: Click on 'My Account' and go to 'e-Filed Returns/Forms' on the official Income Tax department e-filing website.
Step2: You will see a list of e-Filed returns. Click on the Acknowledgement Number of the Assessment Year for which you want to download ITR-V.
Step 3: Under the Download/Status Description, you will find ITR-V/Acknowledgement. Click on the same and the acknowledgment will be downloaded.
Step 4: The downloaded PDF will be password protected. Unlock it by using your PAN in lower case and date of birth (DoB) in the DD/MM/YYYY format.
If you have filed ITR physically, you will need to approach Jurisdictional Income Tax Officer and request for a duplicate copy of your acknowledgement
No, it is not mandatory to file an income tax return if your annual income is below Rs 250,000. However, even those who are out of the tax net should consider filing a 'Nil Return' to maintain a record. There are several instances where income tax returns are considered a proof of employment — for instance, when you are applying for a passport or taking a loan.
You are eligible to receive an income tax refund if you have paid more tax to the government than your actual tax liability.
Process to claim a tax refund: In order to claim an income tax refund, it is mandatory to file an ITR.
Once you have filled up the ITR form, click on the validate button on the 'Taxes paid and Verification' sheet. The system will auto calculate the refund due to you and the refund amount will appear in the 'Refund' row.
Remember that this is the refund amount that you have claimed, not necessarily the amount that will be accepted and paid by the I-T department. Once the income-tax department has verified your ITR and the refund claim made by you, it will communicate the outcome to you. If you have filed ITR electronically, the I-T department will send you an e-mail or an SMS.
Alternatively, one can track the refund status by visiting tin.tin.nsdl.com/oltas/refundstatuslogin.html.
Refund, if accepted as due, will normally be directly credited to the bank account you had given for this purpose in your tax return.
Often, mismatches and discrepancies in actual TDS and TDS credit under Form 26AS are attributed to wrong information provided in the TDS return. Approach your employer/deductor to file a revised TDS return after making the necessary corrections.
The income-tax department allows an assessee to mention the reason for mismatch in the online portal in answer to a notice sent by it.
There are many advantages of filing ITR online. Some of the benefits are as follows:
* Quick processing: You will get the acknowledgement of ITR promptly. Refunds, if any, are processed faster online than paper-filed returns.
* Accuracy: E-filing software minimises errors
* Convenience: E-filing facility is available 24x7 and can be done at your convenience
* Privacy: The data entered by you are safe as they cannot be accessed by anyone
* Record of past ITRs: It is easier to access previous data, should you need them at any time in future.
INCOME-TAX
It is a tax levied by the Government of India on the income of every person. The provisions governing the Income-tax Law are given in the Income-tax Act, 1961.
Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1 st April and ending on 31 st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.
The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.
e.g., Income earned during the period of 1 st April, 2018 to 31 st March, 2019 is treated as income of the previous year 2018-19. Income of the previous year 2018-19 will be charged to tax in the next year, i.e., in the assessment year 2018-19.
The revenue functions of the Government of India are managed by the Ministry of Finance. The Finance Ministry has entrusted the task of administration of direct taxes like Income-tax, Wealth tax, etc., to the Central Board of Direct Taxes (CBDT). The CBDT is a part of Department of Revenue in the Ministry of Finance.
CBDT provides essential inputs for policy framing and planning of direct taxes and also administers the direct tax laws through the Income-tax Department. Thus, Income-tax Law is administrated by the Income-tax Department under the control and supervision of the CBDT.
Income-tax is to be paid by every person. The term 'person' as defined under the Income-tax Act covers in its ambit natural as well as artificial persons.
For the purpose of charging Income-tax, the term 'person' includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.
Thus, from the definition of the term 'person' it can be observed that, apart from a natural person, i.e., an individual, any sort of artificial entity will also be liable to pay Income-tax.
Taxes are collected by the Government through three means: a) voluntary payment by taxpayers into various designated Banks. For example, Advance Tax and Self Assessment Tax paid by the taxpayers, b) Taxes deducted at source [TDS] from the income of the receiver, and c) Taxes collected at source [TCS]. It is the constitutional obligation of every person earning income to compute his income and pay taxes correctly.
The rates of Income-tax and corporate taxes are available in the Finance Act passed by the Parliament every year. You can also check your tax liability by using the free online tax calculator available at www.incometaxindia.gov.in
You can take the help of tax professionals or the help of Public Relations Officer [PRO] in the local office of the Income-tax Department. You may also take assistance from Tax Return Preparers [TRPs]. You can locate your nearest TRP at www.trpscheme.com
Generally, the tax on income crystallizes only on completion of the previous year. However, for ease of collection and regularity of flow of funds to the Government for its various activities, the Income-tax Act has laid down the provisions for payment of taxes in advance during the year of earning itself. It is called as ‘pay as you earn’ concept. Taxes may also be collected on your behalf during the previous year itself through TDS and TCS mode. If at the time of filing of return you find that you have some balance tax to be paid after taking into account the credit of your advance tax, TDS & TCS, the shortfall is to be deposited as Self Assessment Tax.
Advance tax is to be calculated on the basis of expected tax liability of the year. Advance tax is to be paid in instalments as given below:
a) In case of all the assessees (other than the eligible assessees as referred to in section 44AD) :
i) Up to 15 per cent – On or before 15th June
ii) Up to 45 per cent – On or before 15th September
iii) Up to 75 per cent – On or before 15th December
iv) Up to 100 per cent –On or before 15th March
b) In case of eligible assessee as referred to in Section 44AD:
Up to 100 per cent – On or before 15th March
Note: Any advance tax paid on or before 31st day of March shall also be treated as paid during the same financial year.
[Substituted by the Finance Act, 2016 w.e.f. 1-6-2016]
The deposit of advance tax is made through challan ITNS 280 by ticking the relevant column, i.e. , advance tax.
Under the Income-tax Act, every person has the responsibility to correctly compute and pay his due taxes. Where the Department finds that there has been understatement of income and resultant tax due, it takes measures to compute the actual tax amount that ought to have been paid. This demand raised on the person is called as Tax on regular assessment. The tax on regular assessment has to be paid within 30 days of receipt of the notice of demand.
PUBLIC LIMITED COMPANY
The Public Limited Company is a wider form of the limited company, which has no restriction on the maximum number of shareholders, listing its shares in the stock market, transfer of shares, and raising funds from public and accepting public deposits; all of these activities cannot be done by a private limited company. Again, unlike a private limited company, a public limited company is governed and managed by a Board of Directors constituted as per the unanimous consent of the shareholders. However, a public limited company has much more compliance burden, as compared to that necessary for a private limited company.
For setting up a public limited company anywhere in India, there are required a minimum of Seven Shareholders and Three Directors; the directors can also be shareholders. The requirement of the minimum paid-up share capital worth INR 5 Lac, has been removed by the Companies (Amendment) Act, 2015.
As a public limited company deals with public money, it has to make rather heavy compliances strictly, which are bulkier than those performed by a private limited company. Apart from the regular compliances related with income tax, there are many periodic and annual compliances to be made by a public limited company with ROC/MCA, SEBI, RBI, etc. These regulatory liabilities are in addition to securing and promoting steadily the profits and welfare of all shareholders of the public limited company.
In addition to enjoying all those features and facilities which a private limited company relishes, a public limited company is entitled to go public, issue its shares in the stock market, or accept public deposits. The following are the main and most significant exclusive features of a public limited company:
• A public limited company can have a rather huge magnitude of capital, much more than that gathered by a private limited company.
• It is legally authorized to trade on stock exchanges.
• There is no limit to the maximum number of shareholders in a public limited company.
• The shareholders of a public limited company have limited liabilities, limited roughly to the face value of the shares they own. Again, shareholders do not have to take part in the day-to-day management of the business of the company.
• Shareholders of a public limited company are entitled to transfer their shares freely without needing consent of someone.
There are the following two authentic options for registering a public limited company anywhere in India :
OPTION 1
Register the company through filing the Integrated Incorporation Form INC-29, with the MCA.
OPTION 2
• Apply for getting approval and reservation of any of the proposed names, through Form INC-1, sent to the Central Registration Centre.
• Filing Form INC-7 for incorporation of the public limited company.
• Filing Form INC-22, Form DIR-12, etc., together with all required documents.
Yes, an NRI or Foreign National can also be a shareholder or director in a public limited company of India. For becoming a director, besides the basic requirement of being a sensible adult, such a person must possess the DIN issued by MCA.
PATENT
Patent is an exclusive right granted by a government for an invention that is new, involves inventive step and is capable of industrial application. Section 2(1)(m) of the Indian Patent Act, 1970 defines patent as: "patent" means a patent for any invention granted under this Act.
An invention means solution to a problem, usually technical in nature. A new product or process or modification of an already existing one qualifies for being an invention if made through human intervention, as against mere discovery of something already existing in nature. Section 2(1)(j) of the Indian Patent Act, 1970 defines invention as: "invention" means a new product or process involving an inventive step and capable of industrial application.
An invention must meet certain requirements to satisfy the patentability criteria. These can be listed as follows:
• Patentable subject matter criteria: The Patents Act does not list the subject matter that is patentable. However it does list the subject matter that is not patentable. This is covered by Section 3 of the Patents Act and the list is as follows:
What are not inventions.—The following are not inventions within the meaning of this Act,—
(a) an invention which is frivolous or which claims anything obviously contrary to well established natural laws;
(b) an invention the primary or intended use or commercial exploitation of which could be contrary public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment;
(c) the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature;
(d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant. Explanation.—For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;
(e) a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance;
(f) the mere arrangement or re-arrangement o or duplication of known devices each functioning independently of one another in a known way;
(g) Omitted by the Patents (Amendment) Act, 2002
(h) a method of agriculture or horticulture;
(i) any process for the medicinal, surgical, curative, prophylactic diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products.
(j)plants and animals in whole or any part thereof other than micro organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals;
(k) a mathematical or business method or a computer programme per se or algorithms;
(l) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions;
(m) a mere scheme or rule or method of performing mental act or method of playing game;
(n) a presentation of information;
(o) topography of integrated circuits;
(p) an invention which in effect, is traditional knowledge or which is an aggregation or duplication of known properties of traditionally known component or components.
Novelty requirement: An invention is deemed to be new or novel if it is not a part of the prior art. Section 2(1)(l) of the Indian Patents Act, 1970 defines new invention as: "new invention" means any invention or technology which has not been anticipated by publication in any document or used in the country or elsewhere in the world before the
date of filing of patent application with complete specification, i.e., the subject matter has not fallen in public domain or that it does not form part of the state of the art.
Non-obviousness Requirement: An invention is considered to be non obvious or possess an inventive step if the features of the invention embodying the advancement are not obvious to a person skilled in the art. Section 2(1)(ja) of the Indian Patents Act, 1970 defines inventive step as: "inventive step" means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.
Industrial Application requirement: An invention must be capable of being made or used in industry. Section 2(1)(ac) of the Indian Patents Act, 1970 defines capable of industrial application as: "capable of industrial application", in relation to an invention, means that the invention is capable of being made or used in an industry
Disclosure Requirement: An invention must be disclosed in a clear and succinct manner for it to be carried out by a person skilled in the same technical field. Section 10 of the Indian Patents Act, 1970 describes the disclosure procedure. Subsection 4 of section 10 reads as:
“(4) Every complete specification shall—
a) fully and particularly describe the invention and its operation or use and the method by which it is to be performed;
(b)disclose the best method of performing the invention which is known to the applicant and for which he is entitled to claim protection; and
(c)end with a claim or claims defining the scope of the invention for which protection is claimed;
(d)be accompanied by an abstract to provide technical information on the invention”
The right granted by a patent is the right to exclude unauthorized persons from commercially using the invention and in India it lasts for 20 years from the date of filing. Section 48 of the Patents Act, 1970 deals with the rights of patentees and reads as:
"Rights of patentees.—Subject to the other provisions contained in this Act and the conditions specified in section 47, a patent granted under this Act shall confer upon the patentee—
(a) where the subject matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act of making, using, offering for sale, selling or importing for those purposes that product in India;
(b) where the subject matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India"
Exceptions to the rights of patentees are delineated in section 47 of the Patents Act that reads as:
“Grant of patents to be subject to certain conditions.—The grant of a patent under this Act shall be subject to the condition that—
(1) any machine, apparatus or other article in respect of which the patent is granted or any article made by using a process in respect of which the patent is granted, may be imported or made by or on behalf of the Government for the purpose merely of its own use;
(2) any process in respect of which the patent is granted may be used by or on behalf of the Government for the purpose merely of its own use;
(3) any machine, apparatus or other article in respect of which the patent is granted or any article made by the use of the process in respect of which the patent is granted, may be made or used, and any process in respect of which the patent is granted may be used, by any person, for the purpose merely of experiment or research including the imparting of instructions to pupils; and
(4) in the case of a patent in respect of any medicine or drug, the medicine or drug may be imported by the Government for the purpose merely of its own use or for distribution in any dispensary, hospital or other medical institution maintained by or on behalf of the Government or any other dispensary, hospital or other medical institution which the Central Government may, having regard to the public service that such dispensary, hospital or medical institution renders, specify in this behalf by notification in the Official Gazette”.
An invention is written as a patent application and filed at the Indian Patent Office along with the prescribed forms and prescribed fees.
India’s patent office has four branches in Kolkata, Mumbai, Delhi and Chennai. Each patent office has jurisdiction over some states. An application can be filed in any one of them. The criteria to determine the appropriate patent office where the patent application should be filed depends on the place of residence or business of the applicant, place where the invention originated or the address of service in India if there is no place of business or domicile in India. A foreign applicant is required to give an address for service in India if there is no place of business or domicile in India.
An application for patent can be made by completing and submitting a set of forms along with the prescribed fees with the Indian Patent Office (IPO). To file an application the following information or documentation is required:
- Application for grant of patent in the prescribed format along with the prescribed fees. The official filing fees is a fixed amount for a specification that is 30 pages long and consists of 10 claims. Additional official fees is payable for every extra page in addition to 30 and for every extra claim in addition to 10. Every application must be for one invention only. On filing, the application will be accorded date and a serial number.
- Complete specification in the prescribed format. The specification must describe the best method of performing an invention.
- The applicant has a choice of filing a provisional application first if he is not fully ready with the invention. Based on this a complete specification can be filed within 12 months of filing the provisional application.
- In an application for a patent made by virtue of an assignment of the right to apply for a patent for the invention, a proof of right to make the application needs to be submitted. The proof of right is either an endorsement at the end of the application for grant of patent or a separate assignment. The proof of right may be submitted within six months of the date of filing the application in India.
- Statement and undertaking regarding foreign applications. Such information may be submitted, in the prescribed format, within six months of filing application in India.
- Declaration as to the inventorship of the invention in the prescribed format along with the application. This may be submitted within one month’s time from the date of filing of the application if extension of time is sought in the prescribed format along with the prescribed fees.
- Power of Authority in the prescribed format. This can be filed subsequent to the filing of application. In cases where a General Power of Attorney from the applicant has already been filed, a copy attested by the agent/attorney can be filed for subsequent filing.
-If the application pertains to any biological material obtained from India, it is required to submit permission from the National Biodiversity Authority. This may be done any time before the grant of the patent.
- The geographical origin of any biological material used in the specification needs to be indicated.
- If biological material is deposited with an International Depository Authority, it is necessary to include its details in the specification that includes the name and address of the depository institution and date and number of the deposit of the material. For international applications such reference may be made within 3 months from the date of filing.
There are two routes for applying abroad:
1. Convention Route: An Indian national can apply to any of the 173 countries that are party to the Paris Convention for the Protection of Intellectual Property (called the Paris Convention in short and the countries are called Convention Countries) within 12 months of applying in India and claim priority of the earliest filed application in India. This way the applicant has the choice of entering several countries within a year’s time of filing in India.
2. Patent Cooperation Treaty (PCT) Route: This is another way of applying in a foreign country and PCT is administered by the International Bureau (IB) of the World Intellectual Property Organization (WIPO). It begins with the International Phase and ends with the National Phase. The application filed in the International Phase is called the International Application (IA) and filing of this application makes the applicant eligible to enter 143 other countries that are signatories to the PCT via this application. There are three ways in which an Indian applicant can apply to IB:
I) File in India first and after six weeks and within 12 months of such filing, file the PCT International Application (IA) with India as the receiving office. If IA is filed within six weeks of filing in India, permission u/s 39 has to be taken from the Indian Patent Office.
II) File the IA at the Indian Patent Office as the receiving office. For this permission u/s 39 has to be taken first from the Indian Patent Office.
III) File the IA directly at the IB. For this permission u/s 39 has to be taken first from the Indian Patent Office.
If the last two options have been exercised, the applicant can enter India via National Phase Application within 31 months of the date of priority. This deadline is not extendable. The applicant can enter 143 other countries at the end of 30/31 months from the date of earliest priority. The date of filing the International Application is reckoned as the filing date in India.
At the end of eighteen months from the date of priority the application gets published. It is possible to expedite publication on request in the prescribed format along with the prescribed fees. The publication will have the following particulars:
- Application Number
- Date of Filing
- Title of Invention
- Publication Date
- International Patent Classification
- Name and address of the applicant
- Name of the inventor(s)
- Priority details like priority document number, date, country etc.
- Abstract
- Number of Claims
- Drawings (if any)
After publication, the details of the specification and drawings filed with the application are open to public on the Indian Patent Office’s website. A patentee can claim damages from the date of publication of the application. However, the patentee can institute a suit for infringement only after a patent is granted.
Request for examination can be filed within 48 months of the date of priority in the prescribed format along with the prescribed fees. The Controller issues a First Examination Report (FER) that may contain objections to the grant of a patent. If the applicant fails to respond to the FER within 12 months of the date of issuance of FER, the application is deemed to have been abandoned.
The process of examination can be expedited for a PCT application before the expiry of 31 months by applying in the prescribed format along with the prescribed fees.
- Pre-grant opposition: There is provision for opposing a published application by submitting in writing to the Controller of Patents. There is no official fee for this procedure. However, it is necessary that a request for examination has already been filed for the application. It may be noted that no patent is granted before the expiry of six months before the grant.
- Post-grant opposition: Any patent can be opposed by an interested person within one year of the publication of grant of patent in a prescribed format along with prescribed fees. A successful opposition results in revocation of patent.
To keep a patent in force renewal fees is payable at the expiration of second year from the date of the patent or of any succeeding year. In other words renewal fee has to be every year up to the completion of 20 years. Renewal fees can be paid beyond the due date within a period of 6 prescribed fees. If a patent is granted later than two years from the date of filing of the application, the fees which have become due in the meantime may be made within a period of 3 months from the date of recording the patent in the register. This time is also extendable by 6 months as described earlier.
The term of the patent is 20 years from the date of filing of the application. In case of PCT applications it is 20 years from the date of filing of the International Application under PCT.
PRIVATE LIMITED COMPANY
A company which has a minimum of two members and a maximum of two hundred members and that offers limited liability or legal protection for its shareholders are called Private Limited Company. A private limited company lies between a partnership and widely owned public company. It is identified by the company name, number of members, formation, directors, meetings, shares, etc.
There is a minimum of 2 shareholders required to start a Private Limited Company and the number can extend maximum from fifty to two hundred beyond which is not permitted.
A minimum of 2 directors are required to establish a private limited company and the maximum amount cannot exceed beyond fifteen.
The minimum authorized capital to start should be Rs. 100,000 and it can be increased to any amount (no upper limit).
The steps for incorporating a Pvt Ltd company are as follows:
a. Getting DSC(Digital Signature Certificate) and DIN(Director Identification Number)
b. Approving the name of the Company
c. registering the Company address
d. Drafting MOA(Memorandum Of Association) & AOA(Article of Association)
e. Filing of e-form(INC-7) with the ROC(Registrar Of Company)
f. payment of ROC fees & getting a stamp on the documents.
g. verification by the ROC
h. Finally the certificate of incorporation to be given by ROC
No, LLP cannot be converted to a Private Limited Company as it is not permissible by the government of India. Both the LLP Act, 2008 and the Companies Act,2013 are silent about the matter and haven't done any amendments on the same. However, if you want to expand your business you can register a Private Limited Company with INC-29 which has simplified the process of registration.
For the proper execution of the idea choosing the right form of business is important and for start-ups Private Limited is the best option for the following reasons:
• Legal Compliances
• Number of people required are low
• Funding requirements can be fulfilled with the help of shareholders and financial bodies.
• Limited liability of the members
• Growth of Business can be done by converting a Private Limited to a Public Limited, but an LLP cannot be converted to a Private Limited hence it restricts the growth.
• Even though Private Limited Company is expensive but to execute the Big idea into a successful long term business Private Limited Company is the best choice for start-ups.
The documents requirements are as follows
• Pan Card
• ID proof- Any one (Voter ID / Aadhar Card / Driving License / Passport)
• Address Proof- Any one (Electricity Bill / Telephone Bill / Mobile Bill / Bank Statement)
Yes, a salaried person become the director in private limited company, there are no legal bondages in this, but you have to go through with your employment agreement if it contains any restrictions on doing so.
Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.
No You can open a company to your residential address there is no requirement to have a commercial place to open up a company
For Registered Office Address
• Rent agreement along with latest rent receipt (in case the premises are rented)
• House tax receipts (in case premises are owned)
• Electricity bill
• NOC from the Owner (Format will be shared once your company name approved)
First ensure that company name is not similar to any other Private Limited, OPC, LLP or Public limited company. Also, do check If your first is not a registered trademark taken by anybody under the IP Act. Also, make sure the name is not too generic to be accepted by the ROC land also, try not to use abbreviations, adjectives. While choosing the name make sure that name should contain the objective of the business like if the objective is I then word is Technology, Technosoft, IT consultancy.
It is a strict No, a government employee cannot run a business or do a part time job and for that matter anything except the designated work in the government.
It is a written document which is signed on behalf of a corporation/company to serve as a legal proof of ownership of shares/stock that the company indicates to have. It is also termed as Stock Certificate.
There are two types of a private limited company:
• Private company limited by guarantee, which is a company without shares but is guaranteed by the members who agree to pay a fixed amount of capital in the event of the company liquidation.
• Private company limited by shares, herein the company has shareholders with limited liability and its shares are not generally offered to public.
There are certain myths associated with the Private Limited Company, they are as follows:
• Private Limited Company is costly.
• Meeting of shareholders must be conducted frequently.
• The Tax rates are lower for the proprietorship and Partnership.
PARTNERSHIP
A partnership is an association of two or more persons who carry on as co-owners and share profits. There can be a contribution of money (capital investment in the business project) or services in return for a share of the profits.
There are three types of partnerships -- general partnerships, joint ventures, and limited partnerships. In a general partnership, the partners equally divide management responsibilities, as well as profits. Joint ventures are the same as general partnerships except that the partnership only exists for a specified period of time or for a specific project.
Limited partnerships consist of partners who maintain an active role in the management of the business, and those who just invest money and have a very limited role in management. These limited partners are essentially passive investors whose liability is limited to their initial investment. Limited partnerships have more formal requirements than the other two types of partnerships.
There are no formalities for a business relationship to become a general partnership. This means you don't have to have anything in writing for a partnership to form. The key factors are two or more people who are carrying on as co-owners and sharing profits. Even if you don't intend to be a partnership, if that's how you hold yourself out to the public, then your relationship will be deemed a partnership and all partners will be liable for the obligations of the partnership (see liability issues below). Although there's no requirement for a written partnership agreement, often it's a very good idea to have such a document to prevent internal squabbling (about profits, direction of the company, etc.) and give the partnership solid direction.
Limited liability partnerships do have a writing requirement. It's a document that states that a limited partner has invested money into the partnership and retains little or no control over the partnership's operations. In this way, limited partners will not be held liable for the partnership's debt obligations and the partnership won't be influenced too greatly by the limited partner.
The only requirement is that in the absence of a written agreement, partners don't draw a salary and share profits and losses equally. Partners have a duty of loyalty to the other partners and must not enrich themselves at the expense of the partnership. Partners also have a duty to provide financial accounting to the other partners.
For example, if you're in a partnership, you cannot make a deal to buy from a supplier at an inflated price with the understanding that you will receive a kickback from the supplier. It's a violation of your duty to the partnership, and your partners can demand an accounting from you regarding the deal. If you're found to have violated your duties, the partners can sue you for damages and strip you of your profits from the deal.
On the other hand, if you simply make a bad deal by signing a contract to pay a supplier an inflated price, the partnership will be forced to accept the deal. One of the potential drawbacks of a partnership is that the other partners are bound to contracts signed by each other on behalf of the partnership. Choosing partners you can trust, and who are savvy, is critical.
The only other rules would be found in a written partnership agreement. Such an agreement could outline procedures for making major business decisions, how profits and losses will be split, and how much control each partner maintains.
Partnerships are unique business relationships that don't require a written agreement. However, it's always a good idea to have such a document. Because partners share profits equally in the absence of a written agreement, you could run into situations where you feel that you're doing all of the work, but your partner is still getting half of the profits. It's always smart to cover major issues related to your business in writing.
Partners are personally liable for the business obligations of the partnership. This means that if the partnership can't afford to pay creditors or the business fails, the partners are individually responsible to pay for the debts and creditors can go after personal assets such as bank accounts, cars, and even homes.
For example, if the partnership dissolves and there are still outstanding debts to suppliers or lenders, those creditors can sue you personally to pay for the debts. Debts of the partnership will expose your personal assets to liability unless you're a limited partner, in which case your liability is limited to the money you've invested.
The major difference is that in a partnership, creditors can sue you personally to repay business debts, whereas if you form a corporate entity, such as a limited liability company (LLC) or an S-corporation, the debt trail ends with the business.
In the example above, if you had formed an LLC instead of a partnership, your personal assets would be safe from creditors of the business. In legal parlance, creditors cannot "pierce the corporate veil", meaning the formation of the corporate entity forms a protective shield around your personal assets. It's a major advantage of forming an LLC, but LLCs also require more paperwork and money to register, start up, and maintain.
Taxes are paid through the personal income tax filings of individual partners. As a partner, you have income through your share of the profits (or a loss if the partnership is losing money), and you report this income on your personal taxes. The partnership itself reports profits and losses to the IRS on a special form (so that the IRS knows how much you receive), and you pay the taxes on your portion.
In the absence of a written agreement, partnerships end when one partner gives notice of his express will to leave the partnership. If you don't want your partnership to end so easily, you can have a written agreement that outlines the process through which the partnership will dissolve. For example, the partnership can dissolve if a certain event happens or it can provide a mechanism whereby the partnership can continue if the remaining partners agree to do so.
• easy to establish
• raising funds may be easier with more owners
• profits go right into partners' pockets, providing for easier tax reporting
• partners can combine their individual talents to complement each other and strengthen the partnership
• employees may be attracted to work for the partnership if they have an opportunity to become a partner
partners are individually liable for business debts
• partners are subject to the actions of other partners
• limited life of a partnership -- if one partner leaves the partnership can end
• shared decision making means you do not have full control, which could lead to disagreements or paralysis of the partnership
Get Legal Help with Your Partnership Needs
The type of business organization you form is a decision you must make on your own. However, an experienced business attorney will be able to guide you and your partners through the process and find any potential trouble spots before they become actual problems.
TDS
TDS stands for tax deducted at source. According to the income tax act, in case of certain prescribed payments (for e.G. Interest, commission, brokerage, rent, etc.), the person making payment is required to deduct tax at source (tds) if payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.
The company or person that makes the payment after deducting tds is called a deductor and the company or person receiving the payment is called the deductee.
The one who deducts tax at source is required to obtain TAN and quote it in every correspondence related to TDS.
Registering on TRACES
Reconciliation Analysis and Correction Enabling System or TRACES is mandatory before use.
• The ‘Deductor Dashboard’ informs about TDS performance (statement status, challan status, default payable, deductor compliance profile).
• The ‘TDS CPC Communications’ on TRACES homepage gives access to the communications sent CPC (TDS)
• It is possible to make online and offline TDS statement corrections directly on TRACES. The TDS certificates, Transaction Based Report (TBR) for non-PAN deductees reported in Form 27Q, consolidated file, justification report, TAN-PAN consolidated file can also be downloaded on the site.
• Aggregated TDS Compliance Report is a consolidated default summary of all TANs corresponding to a PAN in case of corporates/banks (available in taxpayer login on TRACES).
• The site also has e-tutorials, FAQs, circulars and notifications and CPC (TDS) communications.
• Deductor can also make Grievance Module Request for Resolutions on TRACES.
Tax is deducted at the time of making the prescribed payment or credit of the income/payment to the deductee, whichever is earlier. In case of TDS on salary, the tax is deducted at the time of actual payment. In case of TDS on rent, tax is deducted at the time of credit of rent for the last month of the year.
TDS is credited to the government by using Challan No. ITNS-281
Every Income Tax Challan is identified by CIN which contains the Bank BSR code, date of deposit and challan serial no.
TDS is deposited as cash or cheque in the bank through challan either manually or through electronic transfer. Electronic payment of TDS is mandatory for:
(a) All corporate assessees
(b) Non-corporate assessees who are subject to audit under section 44AB
Mode of TDS payment Due date of payment When is the tax paid without an Income Tax Challan? On the same day (applicable in case of book adjustment.) TDS made during the month of March 2020 On or before 30th April 2020 T DS made during months other than March On or before 7 days from the end of the month. TDS on purchase of immovable property (1941A)* On or before 30 days from the end of the month of deduction. TDS on rent (1941B)* On or before 30 days from the end of the month of deduction.
(*challan cum statement in Form 26QB 26QC needs to be filed)
Note: In certain cases, quarterly payment of TDS can be permitted with the prior approval of the Assessing Officer.
Particulars Form No. The frequency of certificate issuance T DS certificate on salary Form 16 Annually TDS certificate on payments other than salary Form 16A Quarterly TDS certificate on purchase of immovable property Form 16B 15 days of filing 26QB T DS certificate on rent Form 16C 15 days of filing 26QC TCS certificate Form 27D Quarterly
Multiple payments can be clubbed in quarterly TDS certificate
Every deductor has to issue a certificate to the deductee in respect of tax deducted by him in the following form:
• Download TDS certificate (Form 16/16A/27D) (www.tdscpc.gov.in) bearing unique TDS certificate number and issue to the taxpayers within due date.
• Part A of Form 16 shows PANs that are reported in Annexure I of 24Q statement for the fourth quarter. Salary details for whole or part of the year in Annexure Il of Quarterly TDS statement for the fourth quarter is mandatory.
The TDS certificate contains the following details:
(a) Valid PAN of the deductee
(b) Valid TAN of the deductor
(c) Challan Identification Number (CIN), which is number generated by a combination of BSR code of the bank where tax is deposited, date of deposit and the challan serial number allotted by the bank
(d) BIN Number consists of receipt number of 24G, DDO Serial Number in 24G, date of transfer voucher.
TRADEMARK
A trademark (popularly known as brand name) in layman’s language is a visual symbol which may be a word signature, name, device, label, numerals or combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking. The legal requirements to register a trademark under the Act are:
• The selected mark should be capable of being represented graphically (that is in the paper form).
• It should be capable of distinguishing the goods or services of one undertaking from those of others.
• It should be used or proposed to be used mark in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and some person have the right to use the mark with or without identity of that person.
If it is a word it should be easy to speak, spell and remember. The best trademarks are invented words or coined words or unique geometrical designs.
Please avoid selection of a geographical name, common personal name or surname. No one can have monopoly right on it.
Avoid adopting laudatory word or words that describe the quality of goods (such as best, perfect, super etc.)
Under modern business condition a trademark performs four functions
• It identifies the goods / or services and its origin.
• It guarantees its unchanged quality
• It advertises the goods/services
• It creates an image for the goods/ services.
Any person, claiming to be the proprietor of a trademark used or proposed to be used by him, may apply in writing in prescribed manner for registration. The application should contain the trademark, the goods/services, name and address of applicant and agent (if any) with power of attorney, the period of use of the mark. The application should be in English or Hindi. It should be filed at the appropriate office.< /p>
The applications can be submitted personally at the Front Office Counter of the respective office or can be sent by post. These can also be filed on line through the e-filing gateway available at the official website.
• Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark.
• An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service.
• Letters or numerals or any combination thereof.
• The right to proprietorship of a trademark may be acquired by either registration under the Act or by use in relation to particular goods or service.
• Devices, including fancy devices or symbols
• Monograms
• Combination of colors or even a single color in combination with a word or device
• Shape of goods or their packaging
• Marks constituting a 3- dimensional sign.
• Sound marks when represented in conventional notation or described in words by being graphically represented.
The Registered Proprietor of a trademark can create establish and protect the goodwill of his products or services, he can stop other traders from unlawfully using his trademark, sue for damages and secure destruction of infringing goods and or labels.
The Government earns revenue as a fee for registration and protection of registration of trademarks
The Legal professionals render services to the entrepreneurs regarding selection registration and protection of trademarks and get remunerations for the same
The Purchaser and ultimately Consumers of goods and services get options to choose the best.
The registration of a trademark confers upon the owner the exclusive right to the use the trademark in relation to the goods or services in respect of which the mark is registered and to indicate so by using the symbol (R), and seek the relief of infringement in appropriate courts in the country. The exclusive right is however subject to any conditions entered on the register such as limitation of area of use etc. Also, where two or more persons have registered identical or nearly similar marks due to special circumstances, such exclusive right does not operate against each other.
For filing new applications there are prescribed forms depending on the nature of application such as Form TM-1, TM-2, TM-3, TM-8, TM-51 etc. Fees: Rs.4000/
To file a Notice of Opposition to oppose an application published in the Trade Marks Journal (FormTM-5). Fees: Rs. 2,500/- for each class covered
• For Renewal of a Regd. trademark (Form TM-12 ). Fees: Rs.5,000/-
• Surcharge for belated renewal (Form TM-10).Fees: Rs. 3,000/-
• Restoration of removed mark (Form TM-13) Fees: 5,000/-
• Application for rectification of a registered trademark (Form TM-26) Fees: Rs. 3,000/-
• Legal Certificate (Form TM-46) (Providing details of entries in the Register) Fees: Rs.500/-
• Copyright search request and issuance of certificate (Form TM-60) Fees: Rs, 5,000/-.