TAXAJ - TAXAJ Knowledge Base , Start-Up

Limited Liability Partnership (LLP) Registration in Bangalore

Mon, 12 Feb 2024 12:10:19 +0530

Comprehensive Guide to Limited Liability Partnership (LLP) Registration in Bangalore

Limited Liability Partnership (LLP) registration in Bangalore is a crucial step for entrepreneurs and business owners looking to establish a legally recognized entity in the vibrant business ecosystem of Bangalore, India. Bangalore, also known as the Silicon Valley of India, boasts a dynamic environment conducive to startups, tech ventures, and innovative enterprises. Registering an LLP in Bangalore offers numerous advantages, including limited liability protection, flexible management structure, and tax benefits.

In this comprehensive guide, we delve into the intricacies of LLP registration in Bangalore, outlining the process, requirements, benefits, and key considerations for aspiring entrepreneurs and business owners.

Understanding Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a unique business structure that combines the benefits of a traditional partnership with limited liability protection for its partners. In an LLP, partners are not personally liable for the debts and liabilities of the business, thereby shielding their personal assets from business-related risks. LLPs are governed by the Limited Liability Partnership Act, 2008, and offer a flexible and transparent framework for conducting business activities.

Advantages of LLP Registration in Bangalore

LLP registration in Bangalore offers several advantages for entrepreneurs and business owners:

Limited Liability Protection: One of the key benefits of LLP registration is limited liability protection, which safeguards the personal assets of partners against business debts and liabilities.
Separate Legal Entity: An LLP is recognized as a separate legal entity distinct from its partners, enabling it to enter into contracts, own property, and incur obligations in its own name.
Flexible Management Structure: LLPs allow for a flexible management structure, giving partners the freedom to define roles, responsibilities, and decision-making processes according to their business requirements.
Tax Benefits: LLPs enjoy favorable tax treatment, with profits taxed at the partnership level rather than at the individual partner level, resulting in potential tax savings for partners.
Minimal Compliance Requirements: Compared to other business structures such as companies, LLPs have fewer compliance requirements, making them ideal for small and medium-sized enterprises (SMEs) and startups.

LLP Registration Process in Bangalore

The process of LLP registration in Bangalore involves the following steps:

Name Reservation: The first step in LLP registration is selecting a unique name for the partnership. The proposed name must comply with the naming guidelines prescribed by the Ministry of Corporate Affairs (MCA) and should not infringe upon existing trademarks or corporate names.
Obtain Digital Signature Certificates (DSCs): All designated partners of the LLP must obtain digital signature certificates (DSCs) from certifying authorities recognized by the MCA. DSCs are used to digitally sign the LLP registration documents.
Obtain Director Identification Numbers (DINs): Designated partners are required to obtain director identification numbers (DINs) from the MCA. DIN is a unique identification number assigned to individuals intending to serve as directors or partners in registered entities.
File LLP Registration Form: Once the name is reserved and DSCs and DINs are obtained, the partners must file the LLP registration form with the MCA. The form should include details such as the registered office address, partners' information, capital contribution, and LLP agreement.
LLP Agreement: Partners are required to execute an LLP agreement defining the rights, duties, and obligations of each partner, profit-sharing ratios, management structure, and other relevant provisions. The LLP agreement must be stamped and notarized.
Certificate of Incorporation: Upon submission of the LLP registration form and supporting documents, the Registrar of Companies (RoC) will review the application and issue the Certificate of Incorporation upon satisfaction of all requirements.
PAN and TAN Application: After obtaining the Certificate of Incorporation, the LLP must apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.

Compliance Requirements for LLPs in Bangalore

LLPs registered in Bangalore are required to comply with various statutory and regulatory requirements, including:

Annual Filings: LLPs must file annual returns and financial statements with the MCA within the prescribed deadlines. Failure to comply may result in penalties and legal consequences.
Tax Compliance: LLPs are required to comply with the provisions of the Income Tax Act, including filing income tax returns and maintaining proper accounting records.
Statutory Audit: LLPs meeting certain turnover and capital thresholds are required to undergo a statutory audit by a qualified auditor.
Changes in LLP Agreement: Any changes to the LLP agreement, such as admission or retirement of partners, changes in profit-sharing ratios, or alteration of business activities, must be duly recorded and filed with the MCA.

Conclusion

LLP registration in Bangalore offers entrepreneurs and business owners a flexible and efficient vehicle for conducting business activities in one of India's most dynamic economic hubs. By understanding the LLP registration process, complying with statutory requirements, and leveraging the benefits of limited liability protection and tax efficiency, entrepreneurs can embark on their business journey with confidence and clarity.

Whether you're a tech startup, consulting firm, or creative agency, establishing an LLP in Bangalore provides a solid foundation for growth, innovation, and success in the competitive business landscape.

In summary, LLP registration in Bangalore is a strategic decision that can unlock a world of opportunities for ambitious entrepreneurs and visionaries seeking to make their mark in India's thriving business ecosystem. With the right guidance, expertise, and commitment to compliance, the journey from LLP registration to business success in Bangalore is within reach.

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Private Limited Company Registration in Bangalore

Fri, 22 Dec 2023 10:55:44 +0530

Private Limited Company Registration in Bangalore

For online Private Limited Company Registration in Bangalore, a minimum of 2 directors can be appointed whereas a maximum of 15 directors can be appointed.

To register a Private Limited Company in Bangalore no minimum paid-up capital is required. And it necessary to have Pvt Ltd at the end of the name.

Company registration in Bangalore is easy if the following requirements are complied with:

A minimum of 2 directors who are residents of India
Minimum of 2 shareholders and a maximum of 200 shareholders are required.
For company registration in Bangalore the government fees to be paid for a minimum of shares worth Rs.1 Lakh.
A registered address is required.

Private Limited Company Registration in Bangalore can be done easily in 10 days. TAXAJ has been providing registration services all over India at a very affordable rate.

What are the Advantages of Private Limited Company Registration in Bangalore ?

1. Limited risk to personal assets – The shareholders of a private limited company have limited liability. This means that as a shareholder you will be liable to pay for company’s liability only to the extent of the contribution made by you. The shareholders do not have any personal liability and hence need not pay for the company’s liability out of their own assets.

2. Legal Entity – A private limited company has a separate legal entity different from its directors and shareholders. This means that the company is responsible for the management of its assets and liabilities, debtors and creditors. The shareholders will not be held responsible for the losses of the company. So, the creditors cannot proceed against the directors or shareholders to recover the money.

3. Raising Capital – Even though registering a private limited company comes with compliance requirements, it is preferred by entrepreneurs as it helps them raise funds through equity, expand and at the same time limits the liability.

4. Trustworthiness – Companies in India are registered with the Registrar of companies (ROC) under the Companies Act 2013. Anyone can check the details of the company through the Ministry of Corporate Affairs (MCA) portal. Also, details of all the directors are provided while the formation of the company. Hence a private limited company form of business structure is trusted more.

5. Continue Existence – A company has ‘perpetual succession’, i.e. continue or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or cessation of any member but continues to be in existence irrespective of the changes in membership.

How to Register Private Limited Company in Bangalore ?

Looking to register your private limited company in bangalore? Registering your company as a private limited company in bangalore is difficult as the procedure is complicated and involves many compliances. Do not fear as our experts can help you in every step of the private limited company registration in bangalore. Instead of reading through the entire registration process, you can avail our expert service.

Step 1: Obtain Digital Signature Certificate (DSC)

Step 2: Obtain DIN

Step 3: Name Availability*

Step 4: Form SPICe+ INC-32

Step 5: e-MOA and e-AOA

Step 6: PAN and TAN Application

* The RUN Web service earlier available for name availability will be available only for change in name of an existing company. The change is effective from 23 February 2020.

Detailed Process of Private Limited Company Registration in Bangalore

Step 1: Obtain DSC (Digital Signature) Digital signatures are required to file the forms for company formation. The registration process is completely online and the forms require a digital signature. DSC is mandatory for all subscribers and witnesses in the Memorandum of Association (MOA) and Articles of Association (AOA).

You must obtain the digital signature certificates from government recognized certifying authorities. The list of such certified authorities can be accessed here. Or you can get your DSC online in just two days from here. The cost of obtaining DSC varies depending upon the certifying authority. You must obtain class 3 category of DSC.

Step 2: Apply for DIN (Director Identification Number) DIN is an identification number for a director. It has to be obtained by anyone who wants to be a director in a company. One DIN is enough to be a director in any number of companies.

There are 3 ways of obtaining DIN:

Option 1: File form DIR 3. The Form DIR-3 is applicable to a person who wants to become a director in an existing company. This form required basic details of the proposed director along with identity proof like PAN, Aadhaar Card, etc and address proof. With effect from 23 February 2020, in case of new companies, DIN can be applied within SPICe+ form for up to three directors.

Option 2: With filing SPICe+, DINs gets issued to the proposed directors who do not have a DIN. Under this process of filing through SPICe+ (INC 32), a maximum of three directors can apply for DIN. If the applicant wants to incorporate Company with more than 3 Directors and more than 3 persons doesn’t have DIN, in such a situation the applicant has to incorporate a Company with 3 Directors and have to appoint new directors later on after incorporation.

Option 3: Click on the link & let a TAXAJ expert procure DIN for you. If you go for Private Limited Company – Registration with TAXAJ, up to 2 DINs are covered in the plan & there is no need to apply for DIN separately.

Step 3: Name Approval

To get the name approval, there are following options:

Option 1: Reserving the name via Part-A of SPICe+ Form: In an attempt to ease procedures for new as well as existing companies,w.e.f 23 February 2020, the Ministry of Corporate Affairs (MCA) has introduced SPICe+ web service for the incorporation of a company. Part-A of the SPICe+ form allows for ‘name reservation’ with two proposed names and one re-submission (RSUB) while reserving Unique Names for the Companies.

In case of rejection of the name due to any similarity of name with a registered company, an LLP or trademark or due to non-adherence of the Companies (Incorporation Rules) 2014, the applicant has to re-file another SPICe+ form with prescribed fee. However, after the approval of the name, it will be reserved for a period of 20 days within which the company must proceed for incorporation by filing Part-B of the SPICe+ form.

Please note that DSC and DIN shall not required for filling of SPICe+ form for reservation of name. Only MCA Account is mandatory.

Option 2: Name approval by filing Part-A and Part-B of SPICe+ Form together: You can apply for the proposed name along with the application for incorporation. Part-B of the SPICe+ enables applying for incorporation. Similar to the earlier SPICe form, SPICe+ also enables combined application for incorporation and name approval. That means the Part-A and Part-B of SPICe+ form can be submitted together. However, only one name can be applied to this form.

In case of a combined application, in case of rejection due to non-approval of the name, the applicant will get a second chance of refilling the same SPICe+ form without any further charges. It means you get two chances of filing the same form without any extra charge of paying Rs. 1000/- both the times. The resubmission of the SPICe+ form (both for standalone name approval and incorporation) can be made using the ‘name applied for’ or ‘application number’ link available on the user’s dashboard.

In case of failure to get the name approved in the second go, you can file the SPICe form again from scratch. This will any day prove to be cheaper than opting for the first option. The whole process including name approval and incorporation takes around 2-3 days

Step 4: Form SPICe+ (INC-32) The MCA has introduced Form SPICe+ for the registration of new companies from 23 February 2020. The incorporation under Part-B of the SPICe+ form is also web based and streamlines the incorporation of companies.

Upon the name approval, the applicant can click on the link of the approved name (available on the user’s dashboard) and continue to complete the incorporation. The Part-B of the new SPICe+ form enables the web based incorporation and serves the following purposes with the benefit of a single application:

Application for allotment of DIN (Director Identification Number)
Reservation of company name
Incorporation of a new company
Application for PAN and TAN (mandatory)
Application for EPFO registration (mandatory)
Application for ESIC registration (mandatory)
Application for Professional tax registration (only for Maharashtra)
Application for opening a bank account for the company (mandatory)
Allotment of GSTN (Goods and Service Tax registration number) if applied for (optional)

The new SPICe+ form facilitates web based entries and real time validation of data making incorporation a seamless and quick process. The details filled in Part-A and Part-B of SPICe+ will be automatically filled in the linked forms AGILE-PRO, eAoA, eMoA, URC1, INC-9 (as applicable).

All these forms have to be downloaded in PDF and digitally signed, and later submitted for incorporation purposes. Upon the filling of the SPICe+ form, the user has to also download the form SPICe+ in a PDF format and affix the DSC to digitally sign the form.

The digital signature of a professional is required to file Form INC-32. The professional must certify that all the information given in the form is correct. The professional can be Chartered Accountant, Company Secretary, Cost Accountant or advocate.

Prior to May 2015, the registration of companies required the filling up of several documents, such as the DIR–3 for acquiring the DIN (Director Identification Number), INC-1 for obtaining a name, INC–7 for registering the company with the Memorandum and Articles of Association, INC–22 for the registered office and finally, Form DIR-12 for the directors. With effect from January 2018, New Process of Name Approval “RUN” notified and e-form INC-1 omitted. INC-7 form omitted.

Now, all of these forms have been merged together in the SPICe+ form and RUN service is available only to change existing name. Only way out for incorporation of Company is SPICe+ form. No ROC fees for Incorporation of Company up to 10 lack of authorized capital.

Step 5: e-MoA(INC-33) and e-AoA (INC-34) e-MoA refers to an electronic Memorandum of Association and eAoA is electronic Articles of Association. These forms have been introduced to simplify the process of company registration in India.

Memorandum represents the charter of the company while articles of association contain the internal rules and regulations of the company.

Earlier memorandum of association and articles of association were required to be filed physically. But now these forms are filed online on MCA portal as a linked form with SPICe+ (INC-32). Both these forms must be digitally signed by subscribers to the Memorandum and Articles of Association.

Step 6: PAN and TAN Application Through this single form SPICe+, you can also apply for company’s PAN and TAN. The system will auto-generate these forms after the submission of SPICe+ form. The Certificate of Incorporation of PLC is issued with the PAN as allotted by the Income Tax Department after approval of the SPICe+ Form. An email containing the Certificate of Incorporation, PAN and TAN will be sent by the MCA. The Income Tax Department will issue the PAN card.

If all the details in the form are duly filled in along with the required documents, MCA will approve the registration and a CIN (Corporate Identity Number) will be allocated. You can also track this CIN online on MCA portal.

Documents required for filing SPICe+ (INC-32)

The following documents must be filed with SPICe (INC-32) for a private limited company registration:

A. Where Director and Subscriber are Indian Nationals

An Affidavit on a Stamp Paper is to be given by all the subscribers of the Company to state their willingness to become the shareholders of the Company
Proof of office address – Rental Agreement or Ownership Deed such as Sale Deed
Copies of utility bills such as electricity bill, water bill or gas bill not older than two months
Copies of utility bills that are not older than two months
Copy of approval in case the proposed name of the company contains any word(s) or expression(s) that require approval from central government
If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
NOC from the owner of the property, if the registered office is on a rented/leased property.
In case of subscribers/ Director does not have a DIN, it is mandatory to attach, proof of identity and address proof of the subscribers

B. Where Director/Subscriber is a Foreign National

Passport

Address proof: It can be driving license, residence card, bank statement, Government issued form of identification containing an address

How TAXAJ Helps in Private Limited Company Registration in Bangalore ?

With TAXAJ, you can establish your private limited company in Bangalore seamlessly. You can register your Private Limited Company in Bangalore in just 4 simple steps:

Step 1: Purchase the Plan

Purchase our Private Limited Company (PLC) Registration in Bangalore plan. You can even chat with our experts by entering your email, phone number and request a callback. Our experts will contact you and clear all your queries.

Step 2: Upload the Documents on our Website

Upload the below-mentioned documents on our website to incorporate your company:

Passport size photos of directors
Address proof of directors
Photo ID proof of directors
Specimen signature
Self-declaration about your directorship in other companies
Rent agreement of your registered office
No objection certificate from the owner of the property of the property
Aadhaar card
PAN card

The company registration from TAXAJ is completely online and thus, you can save time and money as you need not have to visit our office.

Step 3: Document Verification by our Experts and Signature of Documents

Our experts will verify the documents uploaded by you. You will need to attest your signature on the documents.

Step 4: Our Experts will File Forms on the MCA portal to Incorporation your Company

Our experts will file the below forms on behalf of you on the MCA portal –

Digital Signature Certificate (For 2 proposed directors) Application
Company Name Reservation
Filing of e-forms with ROC

After the company forms are filed on the MCA portal, the Registrar of Companies (ROC) and the respective departments will verify the forms submitted by our expert. The verification process takes around 10 days (subject to departmental approval and reverts from the respective departments).

Our experts will follow up with the respective authorities till you receive the Incorporation Certificate. After the verification process is complete, you will receive the Incorporation Certificate along with PAN and TAN in about 10 days.

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Indian Subsidiary Company Incorporation

Wed, 11 Oct 2023 17:33:58 +0530

India Business Setup - Setting up a Subsidiary

Welcome to TAXAJ, your trusted partner for seamless and hassle-free business setup in India. Expanding your business by registering a subsidiary company in India is a strategic move that promises many advantages. With its vast market potential, burgeoning middle class, improved regulatory climate, access to a diverse talent pool, government incentives, and more, India offers a compelling proposition for business growth.

However, unlocking these benefits comes with its set of challenges. Navigating the Indian business landscape requires a deep understanding of local regulations and the ever-evolving business environment. This is where TAXAJ steps in, offering our expertise to simplify the complex process.

At TAXAJ, we are dedicated to helping you seamlessly establish your presence in India. Our team of legal and business experts is committed to making your subsidiary setup hassle-free, ensuring that you can focus on growing your business.

Lets dive into the detailed process and steps to Incorporate a Subsidiary Company in India.

Step 0: Minimum Requirements for an Indian Subsidiary/Company

Directors: Minimum Two Directors are required to incorporate a Private Limited Company in India. Both should be Individuals and at-least one of whom should be a Resident of India. (A resident of India is a person who has stayed in India for at-least 182 days in the previous year).

Shareholding: Companies Act, 2013 requires that a Private Limited Company have a Minimum of Two Shareholders. There is no condition for residential status of shareholders. Shareholders can be either individuals or entities or a combination of both. In case of Foreign Holding Company, the Authorised Person of Foreign Entity can not hold shares in his Individual Capacity.

Wholly Owned Foreign Subsidiary: 100% Foreign Shareholding is possible in an Indian Subsidiary with a Minimum of Two Shareholders.

Registered Address: A Registered Address is mandatory for any legal entity to be incorporated which we also call as Corporate Address, this can be a physical office or a Virtual Office for Incorporation purpose and later on shifting to a Physical Office to save time.

Step 1: Receipt of Documents from Foreign Stakeholders

The next step towards Incorporating a Legal Entity in India is Receiving Complete Set of Documents from Foreign Stakeholders which can be explained below:

1. Passport Copy as a Identity Proof

2. Business Visa (if visiting India)

3. Driving License as an Address Proof

4. Bank Statement/Mobile Bill as a Residency Status Proof. (Latest Month's)

4. Passport Size Photograph

5. Valid Phone Number & Email Address

6. Father's Name of Foreign Stakeholder

If Foreign Entity is going to hold the shares of Indian Company then additional documents for Foreign Entity required:

1. Apostille Copy of Resolution of Foreign Company Mentioning the name of Authorized Representative, Number of Subscription of Shares.

2. Apostille Copy of Charter of Foreign Company (MOA, AOA, Certificate of Incorporation or any other Equivalent Document as per the Country of Incorporation).

3. Apostiled Copy of ID Proof of Authorised Representative, if such person is Non-Resident of India

- If the documents are in any other language other than english, then it must be transcripted/translated to english; that transcripted copy along with the original must also be apostilled by the Indian Embassy in their country (If they are not visiting India for Incorporation).

- All the documents for foreign citizens should be apostilled by the Indian Embassy in their country (If they are not in India).

- All the documents for foreign citizens should be apostilled by their own country's Embassy in India (If they are in India).

Step 2: Receipt of Documents from Resident Indian Director

The next step towards Incorporating a Legal Entity in India is Receiving Complete Set of Documents from Indian Stakeholder which can be explained below:

1. PAN Card as a Identity Proof

2. Aadhar Card as an Address Proof

3. Bank Statement/Mobile Bill as a Residency Status Proof. (Latest Month's)

4. Passport Size Photograph

5. Valid Phone Number & Email Address

- All Documents needs to be Self Attested, meaning Signed by Self.

Step 3: Application of Name Reservation for Company

The Registrar of the Companies (ROC) across Indian expects the applicant to follow certain criteria while Naming a Company. The approval is also subject to the officer handling the application. The more closely the rules that are listed are followed the better are th4e chances of getting the name of the Company approved.

Uniqueness: The name of the company is a unique component. A name once registered won't be allocated to another company. This name needs to be descriptive For example if the company is a finance company, the word "Finance" should be included in the name. This word describes the nature of the company. So if the company is in the Logistic or restaurant business they cannot have "Finance" in the name.

Avoid abbreviations: Abbreviations, adjectives and generic words will be rejected. The words banks, exchange, and the stock exchange should be approved by RBI.

Trademark: Proposed company name cannot infringe on a registered trademark or an application for registration of a trademark unless the consent of the registered trademark owner or trademark applicant is submitted along with the name approval application.

Patronage: Proposed company name cannot imply association or connection with or patronage of a national hero or any person held in high esteem or important personages who occupied or occupying important positions in Government. The proposed name cannot imply an association with the Indian or Foreign Government.

Block your domain name: An applicant must block the domain name to avoid duplication.

Regulatory approval: The name of the company which has words like insurance, bank, stock, exchange, venture capital, asset management, mutual fund, etc may require regulatory approvals from RBI, SEBI, IRDAI, etc.

Step 4: Drafting of Incorporation Documents

Apart from the Shareholder's Documents additional details are also needed for incorporating a legal entity in India which are discussed below:

1. Utility Bill for the Virtual/Registered Office of the Company (Latest Month's)

2. Rent Agreement for the Virtual/Registered Office of the Company (If Rented)

3. No Objection Certificate for the Virtual/Registered Office of the Company (If Owned)

4. Total Authorised Capital of the Company

Known as the Registered Capital or Nominal Capital of the Company, Authorised Capital is the Maximum Amount of Share Capital that a company is allowed to issue to its shareholders as per its constitutional documents. Shares are defined as the financial instruments that form units of the overall capital. It is used to raise funds from the general public.

5. Total Paid Up Capital of the Company

Paid-up capital is the amount of money received by the company when it issues or sells its shares to the shareholders and investors. In other words, it is the money that the investors give to the company on buying a share in that company and this amount has to be deposited into the company's bank account within 180 days of Incorporation of Legal Entity in India which can thereafter be withdrawn and used for business purposes.

6. Shareholding or Ownership Ratio of the Company: Shareholding Ratio means for each Shareholder, the ratio of the number of the Shares held by each such Shareholder bears to the total number of the Shares then issued and outstanding.

7. Main Objects/Activities of the Company

The Main Object Clause of MOA defines the Scope of a Company’s Business Activities. The Object Clause is the one of the 6 clauses a Company’s Memorandum of Association contains, that aims to define the primary business activities of a Company. The company is restricted to conduct only those activities which are mentioned in the Object Clause. So, to expand and alter the scope of its activities, a company will have to first change the object clause of its MOA. Understanding the process of changing the Object clause is thus, quite crucial in this context.

8. Passport of Witness for Memorandum & Articles of Association: Details of One Witness shall be required for Memorandum of Association & Articles of Association who needs to be resident of the same country from where the Stakeholder's belong.

Step 5: Getting Documents Apostille & Notarised from Indian Embassy

An apostille is a certificate that authenticates a document to be used in proceedings in a foreign country. An apostille guarantees the authenticity of a document signature and any notarial stamps/ seals affixed to the document. Apostilles are attached to the original document they are certifying and ensure that the certification will be accepted in any other countries that are members of the Hague Apostille Convention.

Apostilles are used to ensure that notarized legal documents are recognized as valid across borders. While every country has its own set of laws and procedures for notarizing documents, apostilles provide an international guarantee that these requirements have been met.

Apostilles are issued either by the Secretary of State from the state in which it originated or by the U.S. Department of State when federal documents are involved or by the Indian Embassy in respective country in which project is required/documents are to be verified.

List of Documents to be Apostille:

Personal Documents

1. Passport Copy as a Identity Proof

2. Business Visa (if visiting India)

3. Driving License as an Address Proof

4. Bank Statement/Mobile Bill as a Residency Status Proof.

To Be Prepared By TAXAJ

5. Memorandum of Association of Indian Company

6. Articles of Association of Indian Company

7. Not Having PAN Declaration of Foreign Stakeholders

8. DIR-2 of Foreign Stakeholders

9. INC-9 of Foreign Stakeholders

If Foreign Entity is going to hold the shares of Indian Company then additional documents for Foreign Entity required:

10. Apostille Copy of Resolution of Foreign Company Mentioning the name of Authorized Representative, Number of Subscription of Shares.

11. Apostille Copy of Charter of Foreign Company (MOA, Certificate of Incorporation or any other equivalent document as per the country of Incorporation).

12. Apostiled Copy of ID Proof of Authorised Representative, if such person is Non-Resident of India

Step 6: Applying for Digital Signature Token (DSC) for Stakeholders

Digital Signature Certificate has now become a prominent digital tool for the signing of personal or essential documents, records, and forms. Hence it is a tool for digitally signing the documents and forms to be filed with Ministry of Corporate Affairs for Incorporating a Legal Entity in India and also for compliances after that its used on regular basis for day to day business tax management.

Steps For Creation of Digital Signature Token

1. Sharing of One Time Password on Email or Clicking on "Verify Email" Option sent on Email while DSC Process.

2. Completing Video Verification

Open the e-mail received for video recording on your Smart Phone or Computer.

Record video using camera on smartphone or computer.
Read the statement shown on screen - loud and clear.
Show documents to camera - Original Passport and Driving License (Both Sides)
Applicant Face must be visible
Duration of video will be for 30 seconds
Click Upload after Completion.

Once done you will get rejection/approval email will be received, if its Rejected then try again and if its Approved the Cheers!

Step 7: Receipt of Apostille Documents from Foreign Stakeholders

Once the Apostiling process is done please share the scanned copies of the same over the email to connect@taxaj.com and courier the physical copies in 2 sets to our Registered Address mentioned in Footnote. The apostiled documents shall also be needed for bank account opening process thereafter.

This way we can continue the process without any delay.

Step 8: Filing of Incorporation Forms with Ministry of Corporate Affairs

As soon we receive the scanned copies of apostille documents, we shall be filing the same with Ministry of Corporate Affairs which takes usually 2-7 working days for processing and issuing the Incorporation Documents such as Certificate of Incorporation, Pan Card, TAN Number and related documents.

Step 9: Immediate Post Incorporation Compliances

Once the Company is Incorporated then next step is completing the Immediate Post Incorporation Compliances which are as mentioned below:

Step I : Opening of Bank Account of Company.

Step II : Receipt of Subscription Money from Foreign Subscriber.

Step III : Filing of e-Form 20A – Declaration of Commencement of Business. (Within 180 Days of Incorporation)

Step IV : Collect FIRC Certificate from the Bank as per FDI Guidelines.

Step V : Issue Share Certificate to the subscribers.

Step VI : File FCGPR with RBI as per FDI Guidelines. (Within 30 Days of Incorporation)

Step VII: Appointment of Statutory Auditors for the Company (Within 30 Days of Incorporation)

Step 10: Regular Post Incorporation Compliances

After a business gets registered there is a long list of Compliances like maintaining Books of Accounts, Filing of Tax Returns, GST Returns, TDS returns, Secretarial Compliances and so on.

Taxation & Accounting

Preparation of Books of Accounts (Balance Sheet, P&L, Cash Flow statement).
Income Tax Returns Filing.
GST Returns.
TDS Returns.
Support in Statutory Audit of Accounts.

Secretarial Services

Filing of Annual Company Returns.
Maintenance of Statutory Registers and Records .
Preparation of Director’s Report and Board Report for Annual General Meeting and Board Meetings as mandated by MCA.
Expert Advisory for the year.
Any Additional Filings shall be on Ad-Hoc Basis as and when needed.

Payroll Compliances

Personal Income Tax Return filing of all the Directors
Employees Salary Structure & Pay Slips Preparation for Optimum Tax Savings
Employees applicable Taxes calculation & payment on Monthly Basis as EPF, TDS, ESI, Professional Tax, etc.
Employees applicable tax returns filing on Monthly/Quarterly Basis such as EPF, TDS, ESI, Professional Tax, etc.
Form 16 Generation at the end of the year

Additional Licenses or Compliances may be applicable depending upon the nature of company or business activities.

Talk To Us To Help You Launch Your Legal Entity in India

Appointment of Nominee Director in India

Wed, 04 Oct 2023 17:54:28 +0530

Appointment of Nominee Director in India

A Nominee Director is a director in a company who has been appointed by financial institutions, banks or investors to form part of the Board of Directors. Appointment of nominee directors is governed by and subject to the provisions of the articles of association of the company. In this article, we briefly discuss the concept of the Appointment of a Nominee Director.

As per the rules laid out in Section 149 (3) of India's 2013 Companies Act, all Indian businesses will need to have a resident director. To be considered a resident, this candidate must reside in India for a minimum of 182 days per year.
A nominee director then refers to a qualified person who is appointed as your Indian entity's resident director. The appointment of a nominee director by a Board for an Indian business is authorized under Section 161(3) of the Companies Act.
Although the Ministry of Corporate Affairs waved the resident director requirement for the financial years of 2019 to 2021 given the difficulties in acquiring a resident director during the COVID-19 pandemic, the Ministry did not extend this to the financial year of 2021 to 2022, hence new entities incorporated in 2021 onwards would still have to appoint a resident director to fill the role.
As finding a suitable candidate to take up the position of nominee director in India is time-consuming and challenging, TAXAJ serves to bridge this gap by providing a cost-effective nominee and resident director service in India, ensuring that all our clients can fulfil the India minimum officeholder

Purpose of Nominee Director

A nominee director is nominated to ensure that the interests of the financial institution in question are adequately safeguarded. Also, the nominee director is appointed to perform the duty towards the borrower company and its stakeholders. The nominee director will be liable for the institution or investor and also monitors the activities of the borrower company or investee.

Conditions for Appointing the Nominee Director

The following are the conditions for appointing the nominee director under companies act:

When a financial institution contemplates the appointment of or decides to appoint a nominee director, the appointment should be made in pursuance of any law or terms of an agreement entered into by the company.
The appointment of the director can be made by the Central/ State Government or by any other person in whom the authority is vested according to the relevant legal provisions.
The person appointed as a Nominee director should represent the interests of the organisation or institution in which he is appointed.

Under what conditions can company appoint a nominee director in India?

	• There are certain conditions that must be met before the nominee director can be appointed. These are:
	• The appointment must comply with the conditions of any applicable legal contract the company is a part of, as well as applicable corporate laws.
	• Parties who can appoint a director can be natural persons who possess the legal authority to do so, or a State or Central government in India.
	• The nominee must represent the company or institutions' best interests at all times.
	• The appointment must comply with the clauses of the business' Articles of Association, otherwise, the Articles of Association will need to first be amended to include provisions for the appointment of such a

Legal Duties of Indian Nominee Director

Section 116 of the Companies Act makes provisions for the duties of the nominee director and terms that he or she must abide by. These include:
To act in the best interests of the company and in good faith for the company's and company members' wellbeing.
To avoid any conflict of interest.
To carry out duties with skill, care and diligence.
To monitor the company's activities to ensure compliance with all regulations and laws.
Will be held personally liable towards the company and nominator.
Must participate actively in board meetings and non-executive decisions.
To comply with the articles of association.
Must not attempt to gain any inappropriate advantage to self or to external parties associated with the director, and will have to pay compensation to the company if found guilty of such acts.

Advantages of Having Indian Nominee Director

Meet residency requirements while saving overhead costs

• Appointing a representative director in India will not only allow your business to remain compliant with local corporate regulations, but also enable you to save overhead expenses. This will prevent your business from incurring additional costs during the incorporation process.

Possesses relevant knowledge of local regulations to ensure compliance

• The India representative director will possess knowledge and experience of local regulations, including annual accounting and tax obligations, to ensure your entity's compliance. Our nominees will all possess the relevant qualifications and expertise to be able to monitor your corporate activities strictly to ensure full compliance with legal regulations.

Navigate Language Barrier

• The resident director India is also able to bridge language barriers and act as a local representative. As corporate and copyright legal documents in India may be written in the official language of Hindi, and business meetings and communication within the country may also be in Hindi, engaging our nominee director service India will allow you to more easily navigate and circumvent the language barriers. The local nominee will be able to assist you in translating documents to and from Hindi, speeding up the paperwork procedures greatly.

Legal duty to act in company's best interest

• In addition, as one of the directors, the nominee director is bound by law under the Companies Act 2013 to act in the best interests of your company, instead of in his or her own self-interest, hence you will not have to worry about a conflict of interest.

Act as local representative to banks and authorities

• When you are opening an India corporate bank account for your newly established entity, local banks may require a local representative to visit a local branch for an interview. At no additional fees, our qualified India representative director will attend the interview on your behalf.

Minimal role that will not undermine your authority over your company

• Engaging a resident director service will allow you to fulfil the required director residency requirements without interfering in the day-to-day operations of your company, so that you can maintain full control of your company. Unless specifically requested, nominee directors will not be a bank signatory nor have a significant role in your company's decision-making process.

Risk of Appointing a Nominee Director in India

As with all undertakings, there are some risks involved in the appointing of nominee directors. The risk is namely that the individual, as one of the company's directors, has the legal power to participate in the decision-making process and even veto certain decisions of the company, according to the Companies Act.
However, as nominee directors are also bound by law under Section 166 of the 2013 Companies Act to always act in the company' best interests instead of his or her own self-interest, you will not have to worry about him or her making decisions that threaten your company.
In addition, before the appointment, TAXAJ's legal team will lay out strict terms in the Nominee Director Agreement we will draft, that will prohibit the nominated person from interfering significantly in the day-to-day running of your business. The nominee director will mostly take a passive role and act on your instructions, and he or she will not have access to your corporate bank account. This will ensure that you are able to maintain full control over your company at all times.

Risks undertaken by a Nominee Director under Companies Act 2013

There are also some personal risks that will be undertaken by the representative director, in agreeing to play the role for your company.
Under Section 166 of the Companies Act, executive and non-executive directors are seen as the same in the eyes of the law, with the same authorities and duties. Consequently, under Section 149(2), nominee directors will also be held liable under the law in the case where the nominee director was aware of the offense or mistake or if it occurred due to his or her negligence.
In addition, under Section 167 of the Companies Act, in the event that a nominee director fails to uphold any legal duties or comply with any regulations, such as being found guilty of any criminal offence or not attending board meetings, he or she can be disqualified from office.
Under the agreement of the shareholder, the nominee director is also liable to uphold and represent the nominator's interests and rights.

Why Choose TAXAJ's Nominee Director Services?

Unlike other firms, we do not charge our international clients with deposits and there are no hidden costs. All payment information will be transparently and clearly stated in the appointment letter prior to the start of the engagement.
The nominee director appointed by TAXAJ will be subject to strict KYC checks and be knowledgeable of the local India regulations, such that he is able to assist your business in maintaining full compliance with all laws.
By engaging TAXAJ's nominee director service India, you will also be able to maintain full authority and control over your business, as the nominee director we appoint will not be able to interfere in the daily operations and running of your business as per the provisions of the Nominee Director Agreement.

Process to Appoint a Nominee Director in India

TAXAJ's compliance team will first provide a suitable candidate that has relevant experience in corporate governance and annual reporting or filing and has passed our enhanced due diligence checks. Our nominees are all either our in-house employees or long-term partners and are mostly professionals in the field of accounting or tax or law such that they will be equipped with the necessary skills for the role.
Once engaged, TAXAJ will provide you with the KYC documents of the India nominee director. This includes the nominee's latest resume, copy of his or her passport, proof of address and non-criminal records. We will also provide you with the nominee director's Director Identification Number (DIN) as well as any relevant forms.
Our legal team will also draft a nominee director agreement and statutory declaration to be signed by all parties involved. This is to guarantee that the company is completely and fully under your management and that you are indemnified as well. Unless requested specifically, the role of the nominee director appointed will not include playing an active part in your business, nor acting as a signatory to the bank.
After the settlement of the nominee director fee, TAXAJ will proceed to register the India company and appoint the India nominee director with the Ministry of Corporate Affairs.

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Due Dates in the Month of October

Tue, 03 Oct 2023 17:07:42 +0530

Compliance Due Dates in the Month of October

Important due dates for the GST Returns in the Month of October, 2023

Due date	Form to be filed	Period	Who should file?
10.10.2023	GSTR 7	September 2023	GSTR 7 is a return to be filed by the persons who is required to deduct TDS (Tax Deducted at Source) under GST
10.10.2023	GSTR 8	September 2023	GSTR-8 is a return to be filed by the e-commerce operators who are required to deduct TCS (Tax collected at source) under GST
11.10.2023	GSTR 1	September 2023	Taxpayers having an aggregate turnover of more than Rs. 1.50 Crores or opted to file Monthly Return
13.10.2023	GSTR 1 (QRMP)	July to September 2023	GST return for the taxpayers who opted for the QRMP scheme (Optional)
13.10.2023	GSTR 6	September 2023	Input Service Distributors
18.10.2023	CMP- 08	July to September 2023	CMP 08 for July to Sep 2023 (Composition)
20.10.2023	GSTR 5 & 5A	September 2023	Non-Resident Taxpayers and ODIAR services provider
20.10.2023	GSTR 3B	September 2023	The due date for GSTR-3B having an Annual Turnover of more than 5 Crores
22.10.2023	GSTR 3B	September 2023	The due date for GSTR-3B having an Annual Turnover of less than 5 Crores (Note: Due date may vary according to the states)
25.10.2023	GST Challan Payment	September 2023	GST Challan Payment if no sufficient ITC for September (for all Quarterly Filers)

Important due dates for Income Tax Returns / PF / ESI in the Month of October 2023

07.10.2023	Challan No. ITNS-281	September 2023	Payment of TDS/TCS deducted /collected in August 2023.
15.10.2023	TDS Certificate	August 2023	Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month of August 2023
15.10.2023	TDS Certificate	August 2023	Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month of August 2023
15.10.2023	TDS Certificate	August 2023	The due date for issue of TDS Certificate for tax deducted under section 194M in the month of August 2023
15.10.2023	TDS Certificate	August 2023	Due date for issue of TDS Certificate for tax deducted under section 194S in the month of August 2023 Note: Applicable in case of a specified person as mentioned under section 194S
15.10.2023	Provident Fund (PF)	September 2023	Provident Fund (PF) & ESI Returns and Payment for August, 2023
15.10.2023	Provident Tax (PT)	September 2023	Professional Tax (PT) on Salaries for August 2023. Professional Tax Due Date Varies from State to State, kindly contact Ebizfiling.com for expert help.
15.10.2023	Form 24G by Government officer	September 2023	Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of September, 2023 has been paid without the production of a challan
15.10.2023	Form No. 3BB	September 2023	Due date for the furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in which client codes have been modified after registering in the system for the month of September 2023
15.10.2023	TCS Payment	July to September 2023	Quarterly statement of TCS deposited for the quarter ending September 30, 2023
30.10.2023	TDS Challan-cum-statement	September2023	The statutory due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA, 194 IB, 194M
30.10.2023	TCS Certificate	July to September 2023	Quarterly TCS certificate (in respect of tax collected by any person) for the quarter ending September 30, 2023
31.10.2023	Form 3CEAB	FY 2023-24	Intimation by a designated constituent entity, resident in India, of an international group in Form no. 3CEAB for the accounting year 2023-24
31.10.2023	TDS Payment	July to September 2023	Quarterly statement of TDS deposited for the quarter ending September 30, 2023
31.10.2023	Annual Audited Account	FY 2022-23	The due date for furnishing of Annual audited accounts for each approved program under section 35(2AA)
31.10.2023	Form 3CEB	AY 2023-24	Report to be furnished in Form 3CEB in respect of international transaction and specified domestic transaction.
31.10.2023	Non-TDC Return	July to September 2023	Quarterly return of non-deduction of tax at source by a banking company from interest on time deposit in respect of the quarter ending September 30, 2023
31.10.2023	Copies of Form No. 60	April to September 2023	Copies of the declaration received in Form No. 60 during April 1, 2022 to September 30, 2023 to the concerned Director/Joint Director
31.10.2023	ITR (Income Tax Return)	AY 2023-24	The statutory due date for filing of income tax return for the assessment year 2022-23 if the assessee (not having any international or specified domestic transaction) is (a) corporate-assessee or (b) non-corporate assessee (whose books of account are required to be audited) or (c)partner of a firm whose accounts are required to be audited or the spouse of such partner if the provisions of section 5A apply
31.10.2023 (As Extended)	Audit Report	AY 2023-24	Audit report under section 44AB for the assessment year 2023-34 in the case of an assessee who is also required to submit a report pertaining to international or specified domestic transactions under section 92E
31.10.2023 (As Extended)	Form 10B/10BB	AY 2023-24	The statutory due date for furnishing audit reports in Form 10B/Form 10BB for the AY 2023-24

Important due dates for Company and LLP Annual Filing in the Month of October 2023

14.10.2023

ADT 1

FY 2022-23

For Appointment of an Auditor (If the AGM is held on 30.09.2023)

29.10.2023

Form AOC 4

FY 2022-23

AOC 4 filing by Companies (If AGM is held on 30.09.2023)

– If the AGM was not held on 30.09.2023, then AOC 4 needs to be filed within 30 days date of the conclusion of the AGM

30.10.2023

LLP Form 8

FY 2022-23

Every LLP should submit the data of its profit or loss and balance sheet. Financial Report of LLP

Sometimes, government authorities may grant deadline extensions in consideration of prevailing circumstances to facilitate business owners and stakeholders. However, such extensions are not guaranteed for every situation. So, it’s good to be ready and finish all your required paperwork before the deadlines. This way, you can avoid any penalties or trouble from the government for being late with your submissions.

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Resident Director Service for Company Formation

Wed, 06 Sep 2023 13:35:04 +0530

Local Resident Director Service in India

According to the Companies Act, 2013 of India, it is mandatory for foreign companies to appoint a Resident Director in India if they want to set up a subsidiary, joint venture or branch office in the country.

The relevant section is Section 149 (1) of the Companies Act, 2013, which states:

“Every company shall have a whole-time director or a manager who has been residing in India for a total period of not less than 182 days in the immediately preceding calendar year.”

Therefore, it is mandatory for foreign companies to appoint a Resident Director who has been residing in India for a minimum of 182 days in the preceding calendar year. This requirement is to ensure that the company has a local representative who is familiar with the laws and regulations of the country and can assist the company with its operations in India.

Incorporating a foreign subsidiary in India can be a complex and challenging process, especially for foreign companies looking to establish a presence in the country. One crucial aspect of this process is the appointment of a local resident director. In this blog article, we will explore the role of a local resident director in India and the services they provide to foreign companies during the incorporation process.

What is Local Resident Director?

In India, the Companies Act, 2013, mandates that every company registered in the country must have at least one director who is a resident of India. This requirement is essential for ensuring compliance with Indian laws and regulations and facilitating smooth business operations within the country.

A local resident director is an individual who meets the following criteria:

Is a citizen of India.
Has stayed in India for at least 182 days during the previous calendar year.
Holds a valid Permanent Account Number (PAN) in India.
Is not disqualified under any law from being appointed as a director.

Services Provided by a Local Resident Director:

Legal Compliance: One of the primary responsibilities of a local resident director is to ensure that the foreign subsidiary complies with all applicable Indian laws and regulations. This includes adhering to tax laws, labor laws, and corporate governance norms.
Representing the Company: The local resident director serves as the official face of the foreign subsidiary in India. They can represent the company in legal proceedings, sign legal documents, and communicate with Indian authorities on behalf of the company.
Board Meetings: The local resident director is required to attend board meetings of the foreign subsidiary in India. Their presence is crucial for decision-making and governance within the company.
Taxation and Financial Matters: The local resident director plays a vital role in ensuring that the foreign subsidiary meets its tax obligations in India. They may work closely with the finance and accounting teams to handle financial matters and ensure timely tax filings.
Address for Communication: The local resident director provides an official address for communication with Indian authorities. This address is often the registered office of the company.
Compliance Reporting: They are responsible for filing various compliance reports with the Registrar of Companies (RoC) and other relevant authorities as required by law.
Local Market Insight: A local resident director can provide valuable insights into the Indian market, business culture, and regulatory landscape. This information can be crucial for the foreign subsidiary's strategic decisions.

How to Appoint a Local Resident Director:

Appointing a local resident director for a foreign subsidiary in India typically involves the following steps:

Identify a suitable candidate who meets the eligibility criteria.
Obtain their consent to act as a director.
Appoint them through the board resolution of the foreign subsidiary.
Ensure they have a valid PAN card and other necessary documentation.
Update the company's records with their appointment and contact details.

Conclusion

In conclusion, a local resident director plays a pivotal role in the successful incorporation and operation of a foreign subsidiary in India. They ensure legal compliance, represent the company, and provide valuable local insights. Foreign companies seeking to establish a presence in India should carefully select and appoint a qualified local resident director to navigate the complexities of the Indian business environment effectively.

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Corporate Social Responsibility for Companies

Mon, 15 Mar 2021 10:45:26 +0530

Corporate Social Responsibility under Companies Act

Applicability

The provisions of CSR applies to

every company
its holding company
its subsidiary company
foreign company

Having in the preceding financial year

Net Worth > 500 Crore
Turnover > 1000 Crore
Net Profit > 5 Crore

Importance of Corporate Social Responsibility

Corporate Social Responsibility (CSR) is an immense term which is used to explain the efforts of a company in order to improve society in any other way.

CSR improves the public image by publicizing the efforts towards a better society and increase their chance of becoming favorable in the eyes of consumers.
CSR increases media coverage as media visibility throws a positive light on the organization.
CSR enhances the company’s brand value by building a socially strong relationship with customers
CSR helps companies to stand out from the competition when companies are involved in any kind of community.

Role of Board of Directors

The role of the Board of Directors is explained below

After considering the recommendations made by the CSR Committee, approve the CSR policy for the Company.
The Board must ensure only those activities must be undertaken which are mentioned in the policy
The Board of Directors shall make sure that the company spends in every financial year, minimum 2% of the average net profits made during the 3 immediately preceding financial years as per CSR policy.
In case a company has not completed 3 financial years since its incorporation, the average net profits shall be calculated for the financial years since its incorporation.
The Board’s Report shall disclose –
CSR Committee’s composition
- the contents of CSR Policy
- In case CSR spending does not meet 2% as per CSR Policy, the reasons for the unspent amount, and details of the transfer of unspent amount relating to ongoing project to a specified fund (transfer within a period of six months from the expiry of the financial year).

Transfer and Use of Unspent Amount

The specified funds for transfer of unspent amount are:

A contribution made to the prime minister’s national relief fund.
Any other fund which is initiated by the central government concerning socio-economic development, relief and welfare of the scheduled caste, minorities, tribes, women and other backward classes.
A contribution made to a incubator which is funded either by the central government, the state government, public sector undertaking of state or central Government, or any other agency.
Contributions made to public-funded universities, National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Indian Institute of Technology (IITs), Indian Council of Medical Research (ICMR), Defence Research and Development Organisation (DRDO), Ministry of Electronics and Information Technology), and Department of Science and Technology (DST) engaged in conducting research in technology, science, medicine, and engineering aimed at encouraging Sustainable Development Goals (SDGs).
In case of the unspent amount relating to an ongoing project under the company’s CSR policy, the amount shall be transferred by the firm in less than 30 days from the end of the financial year to a exclusive account to be opened by a firm in any scheduled bank. The account shall be designated ‘Unspent Corporate Social Responsibility Account’, and the funds shall be used towards its obligations under the CSR policy within a period of three financial years from the date of the transfer. In a case where the company fails to utilise the funds at the end of the three financial years, the funds should be transferred to the specified fund mentioned above within a period of thirty days upon completion of the third financial year.

Constitution of the CSR Committee

Every company to which CSR criteria is applicable shall constitute a Corporate Social Responsibility of the Board (i.e. CSR Committee).
Minimum 3 or more directors must form CSR Committee.
Among those 3 directors, at least 1 director must be an independent director.
An unlisted public company or a private company shall have its CSR Committee without any independent director if an independent director is not required.
In case of a foreign company, the CSR Committee shall comprise of at least 2 persons of which one person shall be a person resident in India authorized to accept on behalf of the foreign company – the services of notices and other documents. Also, the other person shall be nominated by the foreign company.

Duties of the CSR Committee

The CSR Committee shall formulate and recommend a CSR policy to the Board. CSR policy shall point out the activities to be undertaken by the company as enumerated in Schedule VII.
CSR Committee shall recommend the amount of expenditure to be incurred on the CSR activities to be undertaken by the company.
CSR Committee shall monitor the CSR policy of the Company from time to time.
The committee shall establish the transparent controlling mechanism for the implementation of the CSR projects or programs or activities undertaken by the company

CSR Reporting

With respect to CSR Reporting, the provisions are as follows :

The Board’s Report referring to any financial year initiating on or after the 1st day of April 2014 shall include an annual report on CSR.
In case of a foreign company, the balance sheet filed shall contain an annexure regarding report on CSR.

CSR Policy

CSR Policy elaborates the activities to be undertaken by the Company as named in Schedule VII to the Act and spend. The activities should not the same which are done by the company in its normal course of business

Contents of CSR Policy should be placed on the company’s website by the Board
The activities mentioned in the policy must be undertaken by the company
The Company can join hands with other companies for undertaking projects or programs or CSR activities and report separately on such programs or projects
The CSR policy shall monitor the projects or programs.

List of Permitted Activities To Be included in accordance with Schedule VII of the Companies Act, 2013

The Board shall ensure that the activities included by a company in its CSR Policy fall within the purview of the activities included is schedule VII. Some activities are specified in Schedule VII as the activities which may be included by companies in their Corporate Social Responsibility Policies. These activities are related to :

Sr.No	CSR Activities
1	abolishing poverty, malnourishment and hunger, improvising health care which includes preventive health care and sanitation and making available safe drinking water
2	improvement in education which includes special education and employment strengthening vocation skills among children, women, elderly and the differently abled and livelihood enhancement projects
3	improving gender equality, setting up homes and hostels for women and orphans
4	introducing the measures for reducing inequalities faced by socially and economically backward groups
5	Safeguarding environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining a quality of soil, air and water which also includes a contribution for rejuvenation of river Ganga
6	protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts
7	areas for the advantage of skilled armed forces, war widows and their dependents
8	training to stimulate rural sports, nationally recognized sports, Paralympic sports and Olympic sports
9	contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development providing relief and welfare of the Scheduled Castes, the Scheduled and backward classes, minorities and women
10	contributions or funds provided to technology incubators which are approved by the Central Government
11	rural development projects
12	disaster management, including relief, rehabilitation and reconstruction activities
13	slum area development where ‘slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force

Explanation: For the purposes of this item “slum area” shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.

Fines and Penalties for Non-Compliance

In case a company fails to comply with the provisions relating to CSR spending, transferring and utilising the unspent amount, the company will be punishable with a minimum fine of Rs 50,000 which may increase to Rs 25 lakh. Further, every officer of such company who defaults in the compliance will be liable for a punishment which is imprisonment for a term which may extend to three years or with a minimum fine of Rs 50,000 which may increase to Rs 5 lakh , or with both.

Reason For Introduction of CSR for Companies

We live a dynamic life in a world that is growing more and more complex. Global scale environment, social, cultural and economic issues have now become part of our everyday life. Boosting profits is no longer the sole business performance indicator for the corporate and they have to play the role of responsible corporate citizens as they owe a duty towards the society. The concept of Corporate Social Responsibility (CSR), introduced through Companies Act, 2013 puts a greater responsibility on companies in India to set out clear CSR framework. Many corporate houses like TATA and Birla have been engaged in doing CSR voluntarily. The Act introduces the culture of corporate social responsibility (CSR) in Indian corporate requiring companies to formulate a CSR policy and spend on social upliftment activities CSR is all about corporate giving back to society. The Company Secretaries are expected to be known about the legal and technical requirements with respect to CSR in order to guide the management and Board.

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Add CA on Income Tax e-Filing Portal

Fri, 31 Jul 2020 14:14:22 +0530

Steps to Add CA on Income Tax e-Filing Portal

The assessee who is subject to tax audit as per the income tax act should add the appointed CA from the income tax e-filing account. Once the assessee will add CA from the account on the income tax e-filing portal, the CA can upload the Tax Audit Report.The steps to add CA on Income tax e-filing Portal are as below:

1. Login to Income Tax Account

2. Go to My Account then click My CA

Remember to fill up entire details in your income-tax portal. Like Present address, complete permanent & Temporary address, all email address and mobile numbers, and most important of all do not forget to mention your updated bank details. Most of the times we have seen that people complaining about their refund not reaching them on time, or getting returned or hitting wrong bank accounts.

To avoid these silly mistakes, make sure you are updating your Income Tax portal from time to time.

3. Click My Chartered Accountant

4. Add Form details and Membership details

Click on Add and enter the following details:
a. Enter the membership number of CA( It will be a 5 or 6 digit number)
b. Select Form Name from drop-down list. (Please confirm it with your CA Before filing)
c. Select Assessment Year from drop-down list (Make sure you know the difference between Financial Year and Assessment year)
d. Click on Submit.

5. Click OK Button.

On successful completion of task. You will receive a Green tick with confirmation message. If anything is error there will be a red mark with mentioned instructions to do so.

If you are facing any difficulty, feel free to get in touch with our team or can search the knowledge base by entering your question in our chat session.

Signs Your Business Model Needs To Change

Sat, 11 Jul 2020 13:54:08 +0530

Four Signs that your Current Business Model needs a change to Sustain in Market

Even businesses that succeed wildly in the past may fail quickly if money stops coming in even for a few months or when the consumer expectations change. The Coronavirus Economic Crisis has already proved that beyond a doubt.

Business is all about staying on your toes all the time and if you don’t have awareness to be able to spot the tale signs of a flawed business model, then any amount of time you spend on it could be pretty much worthless.

So let’s get to the main points that indicate that your current business model is failing and you need to do a serious rethink on it.

1. You are no longer passionate about it.

Steve Jobs rated passion as one of the biggest predictors of success. The reason he said that passion is so important was because that doing something on your own in life can be so excruciatingly hard that if you are not extremely passionate about it, you are going to give up.

When you pick something you are passionate about, chances are that you are going to get it even when the going gets tough. However, that being said sometimes things are so hard that you simply start losing passion for what you are doing. Or maybe things are not that bad but you still no longer feel internally driven to work on your business.

Just because you are losing passion for what you do, doesn’t mean it is time to throw in the towel. See if you can do things differently or take up new challenges in your business that make working on it exciting again. And obviously if it’s making you money, don’t quit! Try to see if you can somehow automate the processes so that your personal presence is not required as much but don’t quit a business making you money unless there is a far greater proven opportunity available to you.

However, if you don’t have passion and you are slogging away for a considerable period of time, over two years with absolutely no glimmer of a hope that things are going to get better, it’s one of the signs that your business is in trouble.

2. There are no Customers or very few of them

One of the greatest yardstick for whether or not your business has a decent chance of succeeding is simply having customers. It is not the only yardstick as I will explain later, but if you don’t have any customers even after a year in business, there is something seriously wrong.

How do you know whether the product or service you are selling is viable business wise? You may love what you create but if others are not loving it, you are not going to make much money out of it. You may think you are putting your heart and soul into your business. But that is not enough. People need to find value in what you do. Great marketing and sales skills only work when what you are providing to people actually solves their problems.

That’s why brutally honest feedback is very valuable in business. Go seek out customers or your target audience. Try to sell to them. If they don’t buy, ASK for feedback. Ask them what’s wrong. Is the price too high, is the product/service not suited for their needs? What is their need exactly? What is it they will be willing to pay for?

Many people may not answer, but some people love giving feedback! It maybe harsh but you can learn a lot from criticism. Go and implement what they say, especially if a few people share the same concerns over and over again. If the same issue is being mentioned over and over again, go and fix it and come out with a new version of your service or change the price. If the people’s feedback was genuine, this time some of them will buy.

If people still don’t care to buy your product/service despite repeated improvements after feedbacks, this is another sign your business is in serious trouble.

3. The market is contracting.

This simply means the industry you are in is shrinking. Even if you are making a lot of money today, if you continue doing what you are doing, over a period of time, the profits you make will continue to decrease because customers no longer care about your products or services OR similar services as much. It has nothing to do with you personally, it just means that your product or service has become obsolete because of newer services that are more in demand.

This has happened throughout history. Whenever an innovation happens, it pretty much kills a major chunk of a previously thriving industry. The candle making industry was huge up until the 1800’s but the invention of the light bulb and access of electricity wiped out a major chunk of it. The horse carriage industry was huge until the Automobile industry took its place.

Closer to present times. Mobile phones eliminated the need for pagers. Whatsapp and Skype severely impacted the market of SMS and Long Distance Phone Calls! So the point is things are going to keep changing as innovation happens. Just because you are earning a lot now in your business does not mean it is going to happen forever. Keep your eyes on the trends and be prepared for the change.

You also need to understand that there is no such thing as customer loyalty. The only thing that matters is value. If your customers get better value elsewhere, they will switch very soon. So if there is a new innovation in your industry that provides better value at a cheaper price (or for free) they are going to switch!

The only thing you can do in this case is to look out for the trends and be in a position to make the appropriate decision as quickly as possible.

Ask yourself. Is this industry realistically going to thrive for the next ten, twenty or thirty year? If not, then what’s your plan when things do change? There are three things you can realistically do,

1. You can choose to stay in the industry right now because it is still making you money and in the meanwhile set up totally unrelated businesses well that will earn you money when this one shuts.

2. You can stay in the industry but always be ahead of the curve and be on the lookout of new business models so that when innovation happens you can embrace it quickly and can continue making money in this industry or a related industry.

3. You can choose to go for an industry that has stood the test of time. For example there will always be a demand for Food supplies, hospitals, legal firms, teaching institutions, alternative medicine (that works) etc. However, do not expect to see much growth unless a major consumer mindset shift happens.

4. Expenses greater than income, no signs of improvement visible.

This is one of the surest signs that your business is in trouble. When it comes to running a successful business, No amount of Facebook Likes or You-tube Views or Website Hits are more important than hard cash. You can’t tell investors that they should invest money in your business because even though it has no chance of making money, it has a big social media following. You can’t feed your family with these metrics. You can’t pay for your grocery bills with Facebook likes.

No matter what changes take place over the years in the nature of how business is conducted, at its core, a business by definition is something you do for profit. The profit need not come immediately but it has to depend on a solid strategy that if you invest money today, there should be a good chance that the money will come back in the future. The amount of uncertainty you are willing to accept depends on you and your cushion of money.

Venture Capitalists funding high growth/high risk startups can take on a huge amount of risk because they have an even huger amount of money. Small business depending upon their own savings or loans from friends and family cannot afford to take that risk. Thus any business, but especially small business with limited cash need to keep an eye on the amount of money that is going out as expenses versus the amount of money that is coming in as a revenue.

If the amount of money that goes out is consistently higher than the amount of money coming in, sooner or later you will run out of cash. Once you run out of cash, your business shuts down, plain and simple, unless of course someone else puts some money into it to bail you out for the time being. But even then, if your business model doesn’t change and money keeps burning without enough coming back in, others can bail you out only for so long. If the model doesn’t change, it is still a failing business that will eventually shut down.

So be smart and monitor your expenses, especially if you are self-financing your business or taking loans. Be very very smart about where you put in your money. If you don’t have much personal savings or have loans to repay to others, it is better you re-evaluate your business strategy and move on to a new business model while you still have time.

Why do we need a Company Secretary ?

Tue, 12 May 2020 22:53:23 +0530

Why do we need a Company Secretary ?

Most notably, the Companies Act 2014 retained the need for a company secretary in both private and public companies. The responsibilities of the modern day company secretary have evolved from that of a “note taker” at board meetings or “administrative servant of the Board” to one which encompasses a much broader role of acting as “Board advisor” and having responsibility for the organisation’s corporate governance.

The Board, particularly the chairman, relies on the company secretary to advise them not only on directors’ statutory duties under the law, disclosure obligations and listing rule requirements but also in respect of corporate governance requirements and practices and effective board processes. This specialised role of the modern company secretary has emerged to position them as one of the key governance professionals within the organisation.

A company secretary’s role in a company is very important. Apart from acting as a link between the board of the organization and the various stakeholders, government and other regulatory authorities, he/she also carry out all the duties like maintaining records, endorsing legal requirements, responding to board correspondences, communicating with various officials and much more. It is no denying the fact that, a company secretary performs a complex, multifaceted and essential roles in any organization.

Apart from being the mediator between the board and the shareholders, a company secretary also communicates with the outside world on the company’s behalf. The company secretary makes sure that everyone is informed about the meetings and where they take place, keeping all the records for future reference. In addition to that, the company secretary takes care of notifying event of changes in shareholding patterns, directorship etc. He/she handles all the important correspondence that happens between the board and its members.

Many organizations also have confusion between choosing a part time company secretary or an external secretary. Before you choose to be hired as an employee or work independently, you must understand the pros and cons. As a company secretary, you’ll get a chance to rub shoulders with the company’s top management. You’ll get a lot of exposure to various external agencies and regulatory authorities. A company secretary gets a broader view of taxation, general management and finance. Not forgetting the compensation part, company secretaries get fantastic salaries, providing the fact that you do a good job for your company. However, you should not forget that this can be a very demanding job, the company secretary has a lot of things to do apart from just formulating and implementing strategies and adhering to various practice.

An organization looking for a good company secretary need not go far to find one. Secretarial firms have started taking advantage of the internet in promoting their professional services. Company Secretarial services can now be found online providing an array of services. They provide their details on their websites which can give you an idea of their level of professionalism and past records with other clients.

A company secretary is one among the most important professionals in an organization. Before choosing a company secretary, an organization should look into all details of how can he/she can be a valuable addition to the firm/company.

Statutory responsibilities

The Companies Act 2014, commenced on 1 June 2015 and retains the requirement for a company secretary unlike the UK legislation which eliminated this requirement for private companies in 2006. The retention of this requirement demonstrates the importance of the role of the company secretary in the eyes of the legislature and in fact the proposals go a step further by placing the responsibility on the Board of directors to ensure that the secretary has the requisite knowledge and experience to discharge the functions of secretary of the company and to maintain the records as required by the Act. Furthermore, the company secretary will be required to sign a declaration acknowledging the existence of the secretary’s duties on appointment.

If one were to examine the role and duties of the company secretary as currently outlined in Irish legislation it would appear to be quite restrictive and mainly administrative in nature. Principally, the company secretary ensures the company complies with company law, maintains certain statutory registers and makes the necessary filings with the Registrar of Companies such as annual returns, financial statements and certain forms with respect to changes to share capital, etc

Corporate governance

In practice, the role of the company secretary has developed into much more than the basic statutory requirements outlined above. Most notably, the responsibility for developing and implementing processes to promote and sustain good corporate governance has fallen largely within the remit of the company secretary. This is recognised in both the UK Code of Corporate Governance (which has been adopted by the Irish Stock Exchange through the Irish Annex) and the FRC Guidance on Board Effectiveness. Both have served to focus companies on Board effectiveness and in turn how they can be assisted by the company secretary. Although this guidance applies to listed companies, it is seen as best practice and these standards of corporate governance should be adopted by other companies in so far as they are considered appropriate to the nature and scale of the organisation.

The dynamics of the boardroom are changing and chairmen and directors are realising that they need specialist skills and technical knowledge in this area and they are looking to company secretaries to provide this expertise. There are a number of responsibilities, some of which have been explicitly referenced to in the above guidance, where the company secretary can assist and add value:

Organisational governance
It is important that robust governance arrangements are in place, are clearly documented and communicated to the organisation. The position of the company secretary enables them to have a holistic view of the governance framework and as a result they are generally tasked with the responsibility of ensuring that this framework and any supporting policies and procedures are clearly documented. This should include ensuring that the formal documentation required under the UK Code of Corporate Governance, such as schedule of matters reserved for the Board, is in place.

Supporting the chairman
The company secretary has a duty to advise the Board, through the chairman, on all governance matters. Together they should periodically review whether the Board and the company’s other governance processes are fit for purpose, and consider any improvements or initiatives that could strengthen the governance of the company. The relationship between the company secretary and the chairman is central to creating an efficient Board.

Board and committee processes
The company secretary plays a leading role in good governance by helping the Board and its committees function effectively and in accordance with their terms of reference and best practice. Providing support goes beyond scheduling meetings to proactively managing the agenda and ensuring the presentation of high quality up-to-date information in advance of meetings. This should enable directors to contribute fully in board discussions and debate and to enhance the capability of the Board for good decision making. Following meetings the company secretary should pursue and manage follow up actions and report on matters arising.

Board development
All directors should have access to the advice and services of the company secretary. The company secretary should build effective working relationships with all board members, offering impartial advice and acting in the best interests of the company. In promoting board development the company secretary should assist the chairman with all development processes including board evaluation, induction and training. This should involve implementing a rigorous annual Board, committee and individual director assessment and ensuring actions arising from the reviews are completed. Further, the company secretary should take the lead in developing tailored induction plans for new directors and devising a training plan for individual directors and the Board. Although these tasks are ultimately the responsibility of the chairman, the company secretary can add value by fulfilling, or procuring the fulfilment of, these best practice governance requirements on behalf of the chairman.

Communication with stakeholders
The company secretary is a unique interface between the Board and management and as such they act as an important link between the Board and the business. Through effective communication they can coach management to understanding the expectations of, and value brought by the Board. The company secretary also has an important role in communicating with external stakeholders, such as investors, and is often the first point of contact for queries. The company secretary should work closely with the chairman and the Board to ensure that effective shareholder relations are maintained.

Disclosure and reporting
In recent years there has been increased emphasis in the quality of corporate governance reporting and calls for increased transparency. The company secretary usually has responsibility for drafting the governance section of the company’s annual report and ensuring that all reports are made available to shareholders according to the relevant regulatory or listing requirements.

Increased burden of regulation

In the light of economic developments in recent years stakeholders of companies, particularly in the financial services sector, are increasingly concerned with the conduct of the affairs of the company and therefore it is essential that best practice is adhered to at all times and evidence is available to demonstrate same. The requirement for higher standards in this sector can be further evidenced by the introduction by the Central Bank of a series of corporate governance codes including fitness and probity standards for certain pre-approval controlled functions or persons who perform controlled functions. Controlled functions include “ensuring, controlling or monitoring compliance by a regulated financial service provider with its relevant obligations”.

While the monitoring of compliance in the financial services sector has traditionally been outsourced with the introduction of these new standards there is more caution in the provision of such services which are more likely in the future to be laid at the feet of the company secretary. It is true to say that the role of the company secretary also includes keeping the Board informed of new legislation and how it applies to them. With this increased focus on corporate governance, the role of the company secretary has been extended such that the secretary is now seen as the guardian of the company’s compliance with legislative requirements and best practice.

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