Wednesday 31 October 2018

Why should you start a private limited company?


There are various elements a business person ought to consider before picking the kind of business one intends to enlist. The size and nature of business, gathering pledges, scale and so on ought to be considered before picking the sort of business element. Here are a portion of the reasons why you should enlist your business as a private restricted organization.

Constrained Liability
One of the principle favorable circumstances of beginning a private constrained organization is restricted risk. Constrained obligation implies restricted introduction to monetary hazard by financial specialists of an organization. Restricted obligation implies the investors risk in the organization is constrained to the capital sum put resources into the organization. For instance, if Sam contributed Rs 100,000 to begin a private constrained organization. The risk is his speculation of Rs 100,000. At the end of the day, his can potential misfortune can't be past Rs 100,000. He won't be subject for any obligation past this underlying Rs 100,000.

Business Continuity
Privately owned businesses appreciate ceaseless progression. What does never-ending progression mean? Investors may travel every which way, yet the organization still keeps on being in presence. The organization is unaffected by the demise of any of its investors or the exchange of its offers to someone else. For instance, in an organization firm, an adjustment in the participation prompts disintegration of the current association while in a private constrained organization, one investor may exchange his offers to another, however the organization still keeps on working.

Raising money
Money related establishments, for example, banks, investment reserves, private value reserves loan their assets all the more readily to private constrained organizations that to different types of business associations. Banks will probably loan to constrained organizations since they can utilize the advantages of the organization as security for the credit. Funding firms put resources into a private restricted organization in return of value shares; this can't be accomplished in an association firm.

Exchange and Exits
Restricted organizations are simpler to offer when contrasted with association firms. Possession is spoken to by value or inclination shares and these can be effortlessly sold without influencing the exercises of the organization.

Compensations to chiefs
There is no greatest point of confinement on the pay being paid to chiefs; while there is a roof restrain on the pay paid to accomplices of an organization firm according to Income Tax Act, 1961.


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Wednesday 24 October 2018

MCA eases process for incorporation of LLPs


Ministry of Corporate Affairs (MCA) has notified amendment to the Limited Liability Partnership Rules, 2009 wherein process of incorporation of LLPs and reservation of their name have been amended in order to ease of doing business. Under revised norms, a new web based form ‘RUN-LLP’ has been introduced through which names of a LLP can be reserved without digital signature and Designated Partner Identification Number (DPIN). This form is very much similar to RUN web service reservation of name in case of companies. In this form, only two name can be proposed at single point of time and one resubmission is also allowed for reservation of name. In total, 4 names can be proposed.

On the other hand, to make the incorporation process form LLPs easier, a new form named ‘Form for Incorporation of Limited Liability Partnership (FiLLiP)’ has been introduced through which LLPs can be incorporated with up to 2 individuals as designated partners who do not have DIN. This new improvised process for applying for DPIN is similar to spice form for Company Incorporation.

Sebi allows NRIs, resident Indians to take FPI route
The Securities and Exchange Board of India (Sebi) on Friday diluted its controversial circular issued on April 10, which laid down the know-your-client (KYC) and ownership norms for foreign portfolio investors (FPIs).

In a reversal of stance, the market regulator has allowed both resident and non-resident Indians (NRIs), along with overseas citizens of India (OCIs), to invest in Indian markets through the FPI route, subject to certain conditions. The earlier circular virtually barred individuals with India connection from investing or managing a foreign fund.
The regulator, however, reiterated that the KYC requirements for FPIs would have to be in line with the rules under the Prevention of Money Laundering Act (PMLA).

Revised KYC norms for Foreign Portfolio Investors: SEBI
The Securities and Exchange Board of India has issued the revised guidelines for know your client (KYC) requirement for foreign portfolio investors wherein provision related to KYC documentations, Exempted documents, data security, timelines for compliance have been discussed.

Govt. constitutes high level committee on Corporate Social Responsibility
A high level committee has been constituted under MCA to review the existing framework and guide and formulate the roadmap for a coherent policy on CSR. The Committee is expected to review the existing CSR framework as per Act, Rules and Circulars issued from time to time and recommend guidelines for better enforcement of CSR provisions. It will analyse outcomes of CSR activities/programmes/projects and suggest measures for effective monitoring and evaluation of CSR by companies.

Ordinance Likely to Fast-Track Dispute Resolution
The government is mulling an ordinance which provides for time-bound settlement of commercial disputes and make arbitrators accountable, a senior government functionary has said. The ordinance is based on a bill cleared by Lok Sabha during the monsoon session. The bill is pending in Rajya Sabha and may get cleared only in November or December. The government feels an early measure to settle commercial disputes at a faster pace will help improve India’s ranking on ease of doing business index, the functionary explained.The bill seeks to help India become a hub for domestic and global arbitration for settling commercial disputes. The draft law provides for a timebound settlement of disputes as well as accountability of the arbitrator. The government feels that there is a need for robust mechanism to deal with institutional disputes.

Ecommerce Cos may Not Need Office in Each State
Amazon, Flipkart and a host of other ecommerce service providers may not require offices in each state to comply with the withholding tax provision under the goods and services tax (GST). They are required to collect this tax when they make payments to suppliers from October 1.
Ecommerce platforms have represented to the government that the provision be deferred. They said it would create compliance issues for them because they would need presence in every state. The vendors will face working capital issues, they added.

State and central government officials, who met a day before the GST Council meeting, have backed implementation of the provision in wake of revenue concerns but agreed for relief on presence in every state

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Friday 5 October 2018

Registering a wholly owned subsidiary company in India


MNC's who choose to operate in more than single country can operate its business through a wholly owned subsidiary. Wholly owned subsidiaries can be called as those companies in which Parent Company owns all the shares of the subsidiary which gives access to the parent company to select a board of directors of the subsidiary or control the subsidiary.Wholly owned subsidiaries can also be a part of a different industry.

The subsidiary company is a company which can be incorporated by accessing the most of shares of the company (more than half) or either by way of controlling the composition of a board of India.
These type of companies can be called as a private limited company in India. They are recognised as Indian companies under the Income Tax Act, and they are also eligible for the deduction and exemption benefits like other Indian companies.

Following requirements to set up Wholly Owned Indian Subsidiary registration:
1. There must be minimum 2 shareholders.
2. There must be 2 directors, one must be an Indian resident.
3. All the directors must have DIN (Director Identification Number).
4. All the directors must have DSC (Digital Signature Certificate).
5. Less than a month of the incorporation , it is necessary to introduce a minimum paid-up share capital of rupees one lakh.


Advantages of Incorporating Wholly Owned Subsidiary or Indian Subsidiary
Brand Name
It provides the benefits to both parent company and as well as to the subsidiary company.

Control
Benefit to a parent company who can execute strategic control over its subsidiary company.

Common financial system
It provides a benefit of cost synergies by using a common financial system, sharing the administrative cost and other expenses between parent & subsidiaries.

Limited Liability
There is a limited liability for both the companies.

Global Stratergy
It provides protection and security to the company’s trade secrets, expertise and technical knowledge along with the control over the operations.

A foreign company can incorporate a wholly owned subsidiary in India after considering all the benefits tied with it.

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