Tuesday 15 December 2020

Difference between Preference Shares and Equity Shares

 

If anyone wishes to take a position their money in shares then they need to gain complete knowledge about the stock exchange before initiating any investment. Otherwise, there are huge chances that you simply might suffer unbearable losses. during this article, we discuss all the possible difference between preferred stock and equity shares.

The Definition
Equity shares and preferred stock are quite similar, yet different within the way they function and provide you with returns. once you own equity shares of a corporation , the dividends are subject to how the corporate is performing. And sometimes , you would possibly not even receive any dividends.

This is one major difference between equity shares and preferred stock . With preferred stock , the corporate is sure to pay you dividends, since the quantity is fixed but not with equity shares.

Preference Shares
Preferred Stocks also referred to as preferred stock are those shares which are given preference as regards to payment of dividend and repayment of capital. The term “preferred share” refers to the very fact that its holders receive preferential treatment over common stockholders within the event of liquidation and when dividends are paid but don’t enjoy normal voting rights. Therefore, preference in terms of dividend they need been named as preferred stock . also as, within the case of completing of the corporate or when the corporate went bankrupt, then payment of liabilities (like banks) are done first, then those with preferred stock & lastly equity shares. There are several points which create Difference between preferred stock and Equity shares. Therefore, the preferred stock get precedence over equity shares on all the matters.

Equity Shares
When you hear the word shares, people nearly always ask equity shares or common stock . With equity shares, a corporation offers you partial ownership and thus, involves tons of business risk. The members, who own equity shares, also acquire the proper to vote for critical decisions within the company. These decisions may include electing a replacement leader, acquisition, merger, etc. and that they play an important role in raising capital for the corporate . Equity capital forms the essential foundation of the corporate and its creditworthiness.

The dividends or payouts to equity shareholders predominantly depend upon the earnings of the corporate . Once the corporate has settled all other claims and expenses, it’ll pay its equity shareholders.

What Is The Difference Between Equity Share And Preference Share?
Both represent ownership capital and entitles you to possess a claim on the company’s profit within the sort of a dividend, announced by the company . When profit share is announced, preference shareholders have the primary claim. They receive their bonus at a hard and fast rate but don’t enjoy voting rights within the majority of companies like equity shareholders do.

When we mention investing in stocks, we usually ask equity shares, which also are called general shares. With this, a corporation offers you partial ownership within the company and thus , it involves high risk. Profit on equity shares depends on the company’s performance. And so, your dividend percentage also will fluctuate, which suggests you would possibly not receive any dividend sometimes . But with preferred stock , the corporate is sure to pay the dividend.

Secondly, risks of an equity shareholder are an equivalent as what the corporate experience. As compared to them, risk exposure of preference shareholders is nominal. So, they even have a preferential claim on receiving their capital back before the corporate settles its general shareholders.

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Source: Difference between Preference shares and Equity shares

Friday 4 December 2020

Income Tax Assessment

 


Every assessee, who earns income beyond the essential exemption limit during a fiscal year (FY), must file a press release containing details of his income, deductions, and other related information. this is often called the tax Return (ITR). Once you as a taxpayer file the income returns, the tax Department will process it. There are occasions where, supported set parameters by the Central Board of Direct Taxes (CBDT), the return of an assessee gets picked for an assessment.

The various sorts of assessment are as follows:

Self-Assessment
This type of assessment is mentioned in section 140A of tax Act,1961. In this, the assessee himself determines the tax payable. The tax department has made available various forms for filing tax return. The assessee consolidates his income from various sources and adjusts an equivalent against losses or deductions or various exemptions if any, available to him during the year. the entire income of the assessee is then received . The assessee reduces the TDS and Advance Tax from that quantity to work out the tax payable on such income. Tax, if still payable by him, is named self-assessment tax and must be paid by him before he files his return of income. This process is understood as Self-Assessment.

Summary Assessment
It is a kind of assessment administered with none human intervention. during this sort of assessment, the knowledge submitted by the assessee in his return of income is cross-checked against the knowledge that the tax department has access to. within the process, the reasonableness and correctness of the return are verified by the department. The return gets processed online, and adjustment for arithmetical errors, incorrect claims, and disallowances are automatically done. Example, credit for TDS claimed by the taxpayer is found to be above what’s available against his PAN as per department records. Making an adjustment during this regard can increase the liabilities of the taxpayer.

After making the aforementioned adjustments, if the assessee is required to pay tax, he are going to be sent an intimation under Section 143(1). The assessee must answer this intimation accordingly.

Regular/Scrutiny Assessment
This type of assessment is mentioned in section 143(3) of tax Act,1961. The tax department authorizes the Assessing Officer or tax authority, not below the rank of an tax officer, to conduct this assessment. the aim is to make sure that the assessee has neither understated his income or overstated any expense or loss or underpaid any tax.

The CBDT has set certain parameters supported which a taxpayer’s case gets picked for a scrutiny assessment.
1. If an assessee is subject to a scrutiny assessment, the Department will send a notice well beforehand . However, such notice can’t be served after the expiry of 6 months from the top of the fiscal year , during which return is filed.
2.The assessee are going to be asked to supply the books of accounts, and other evidence to validate the income he has stated in his return. After verifying all the small print available, the assessing officer passes an order either confirming the return of income filed or makes additions. This raises an tax demand, which the assessee must answer accordingly. An tax notice under Section 143(2) is issued if the tax officer wasn’t satisfied with the documents and knowledge that was submitted by the taxpayer. Taxpayers who receive notice under Section 142(2) are selected for an in depth scrutiny by the tax department and can need to submit additional information.

Best Judgement Assessment
This assessment mentioned in section 144 of tax Act,1961 gets invoked within the following scenarios:
1. If the assessee fails to reply to a notice issued by the department instructs him to supply certain information or books of accounts
2. If he/she fails to suits a Special Audit ordered by the tax authorities
3. The assessee fails to file the return within maturity or such extended deadline as allowed by the CBDT
4. The assessee fails to suits the terms as contained within the notice issued under Summary Assessment

After providing a chance to listen to the assessee’s argument, the assessing officer passes an order supported all the relevant materials and evidence available to him. this is often referred to as Best Judgement Assessment. The notice sent during this sort of assessment is Show Cause Notice, under section 144 only.

Income Escaping Assessment
This type of assessment is mentioned in section 147 of tax Act,1961. When the assessing officer has sufficient reasons to believe that any taxable income has escaped assessment, he has the authority to assess or reassess the assessee’s income. Some scenarios where reassessment gets triggered are given below.
1. The assessee has taxable income but has not yet filed his return.
2. The assessee, after filing the tax return, is found to possess either understated his income or claimed excess allowances or deductions.
3. The assessee has did not furnish reports on international transactions, where he’s required to try to to so.

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Source: Income Tax Assessment

Thursday 29 October 2020

Difference between Trade License and Shops and Establishment License

 

Winding Up of Companies

Trade License – this is often a license that's issued by the Municipal Corporation which provides permission to hold out a specific trade a specific address.

Shop Establishment License – Shops & establishment registration is mandatory for all business entities. It not only includes shops and commercial establishments but also, work from home jobs. Once you register your shop or establishment you'll get a store and establishment certificate.

Read through a couple of points that highlight the difference between Trade license and Shop and establishment licence1. The commencement of any business that falls under the shops and establishment Act will got to get the business registered with the government and trade licence may be a permission given to an individual to hold out a specific trade.
2. Shops and Establishment licence are often obtained for a store or establishment even in residential premises. A trade licence are often obtained just for commercial premises.
3. Trade license is formed mandatory to form sure that unethical business practices aren't administered . A trade licence also ensures that each one rules and safety guidelines issued by the govt are being followed. Shop and Establishment is required by the tiny trader and shop owner who is doing any business activity .
4. Establishments like hotels, restaurants, food stalls, cyber cafes etc require a trade license. Shops and establishment licence is required by any commercial establishment or shop that's providing any quite service.
5. The fee for obtaining a Shops and establishment license and trade license may vary from state.

Conclusion
The shop act license and trade license has got to be obtained within 30 days of commencement of the business. If the conditions of the licenses are violated, then the license are going to be revoked or cancelled. The Shops and Establishment Act governs the working conditions and therefore the rights of workers including wage payments, leaves, work hours etc.

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Thursday 22 October 2020

How to Get Food Liscence in India

 

In India, a person or an entity proposing to start with a food business must obtain a food license or a registration from the Food Safety and Standard Authority of India (FSSAI). Approximately 90% of food products have a prescribed specification by FSSAI. Only the ocean products and therefore the production involving fishermen and farmers are out of the scope of FSSAI. It generally takes two months to get the FSSAI License and approximately six months for the launch of product approval within the market.

IMPORTANCE:
1. Consumer confidence is that the primary and therefore the largest asset for gaining the purpose for the food authorities. A product’s packaging speaks volumes about the merchandise quality and during a way informs the consumers about the food safety standards.

2. the first focus may be a public health

TYPES OF LICENSES:
1. BASIC REGISTRATION
2. STATE LICENSE
3. CENTRAL LICENSE

For Basic FSSAI Registration:
The petty and small-sized food business operators like manufacturers, transporters, storage units, distributer, marketers, retailers, etc. are required to accumulate a Basic FSSAI Registration which is issued by the government for a minimum period of 1 year and a maximum of 5 years. it’s mostly for the units having an annual turnover of but 12 lakh. the remainder depends on the eligibility, the FBO can thus fall into either the State FSSAI License or the essential Registration.

Documents required for Basic FSSAI — Food License:

  • Photo of Food Business Operator
  • Document for Identity Proof like card , Voter ID Card, PAN Card, driver’s license , Passport, Aadhar Card, oldster Card, Department Issued ID
  • Supporting Documents (if any):- NOC by Municipality/Panchayat, Health NOC

Registration Procedure 1. FSSAI registration is initiated by submitting Form A (application) to food and safety department.
2. This application are often accepted or it’s going to be rejected by the Department within 7 days from the appliance date and therefore the fact has got to be intimated to the applicant in writing
3. If the appliance is accepted, then the department will grant a registration certificate with the license number and therefore the photo of the applicant.
4. FBO should prominently display the certificate of registration at the place of business during the business hours.

FEES STRUCTURE:
1. new registration certificate — 100/year
2. renewal of registration certificate — 100/year
3. duplicate of registration certificate — 10% of the applicable certificate fee

Suspension and Cancellation of Food License
Under the below-mentioned circumstances, the food license can either be cancelled or suspended:

  • gastrointestinal disorder outbreaks that are related to the spread of the disease.
  • Serious food complaints in cases where the consumer’s safety is affected.
  • Food Business Operator’s non-compliant premises.
  • Serious violations of the FSSAI rules and compliances.
  • A violation just in case there’s a history of non-compliance of FSSAI safety rules and requirements.
  • Non- compliance with an improvement or other legal notice without reasonable excuse.
  • Interrupting a politician.

For State FSSAI License
The authority has guided the food business operators, having an annual turnover of quite 12 lakh, like small to medium-sized manufacturers, storage units, transporters, marketers, retailers, distributors, etc to get the State FSSAI License. it’s issued by the respective government having a minimum validity of 1 year and a maximum of 5 yrs.

Eligibility for State FSSAI License
The State FSSAI License are often taken by the subsequent food business operators:
1. Meat Processing Units
2. Proprietary Foods
3. Slaughtering Units
4. Restaurants
5. Hotels
6. Food Processing Units including retailers and repackers
7. Dairy Units, including Milk Chilling Units that are equipped to handle and process.
8. oil Processing Units and therefore the Units that produce oil through the method of solvent extraction and refineries, including Oil Expeller Unit.

Documents for FSSAI State License
The required documents for obtaining State FSSAI license are as follows:

  • Form-B duly completed and signed by the Proprietor.
  • Blueprint or layout of the world location.
  • Proof of possession of premises.
  • Partnership affidavit of Proprietorship.
  • Contact details of the administrators .
  • List and details of the kinds of kit and machinery.
  • Proprietor’s photo ID and Address Proof issued by the govt of India. just in case of a corporation , the administrators photo ID and address proof.
  • List of food category that has got to be manufactured.
  • Authority letter with name and address of the responsible person.
  • NOC and replica of License from the manufacturer.
  • Food Safety Management System Plan or Certificate.

Registration Procedure
Procedure for State License Application
1. Before applying for a State FSSAI License it’s important to see the eligibility criteria as mentioned by the Food Safety and Standards Authority of India.
2. After successfully checking the eligibility criteria subsequent step is to furnish the appliance form for obtaining the State FSSAI License. Every data provided to the department must be correct and appropriate.
3. Remember that the generic names must be mentioned for the products and not the brand names.
4. All the products as mentioned within the license must be approved as per the FSS Act, 2006.
5. At last, you’ll be asked for a way a few years you would like to use . you’ve got to settle on the acceptable period of your time that you would like to require the license.
6. Post-filing the shape , the prescribed fees need to pay either through a web portal or by submitting the demand draft at the FSSAI state office.

For Central FSSAI License
Food business operators who have a turnover greater than 20 crores like large manufacturers, 100% export oriented units, importers, operators within the Central Government agencies, airports, seaports, etc are enforced to get a Central Food License issued by the Central Government. Also, the FBO’s are directed to get the Central License for his or her head office and if they operate in additional than one state. The minimum tenure of this license is one year and therefore the maximum is 5 years.

Eligibility for Central FSSAI License
The Central FSSAI License are often taken by the subsequent food business operators:
1. Dairy Units, including Milk Chilling Units that are equipped to handle and process.
2. Slaughtering Units
3. Proprietary Foods
4. Food Processing Units that include retailers and repackers.
5. oil Processing Units and therefore the Units that produce oil through the method of solvent extraction and refineries, including Oil Expeller Unit.

Documents Required for FSSAI Central License
The required documents for obtaining Central FSSAI license are as follows:

  • Form-B duly completed and signed by the proprietor or owner.
  • Blueprint or layout of the world location.
  • Contact details of the administrators .
  • List and details of the kinds of kit and machinery.
  • Proprietor’s photo ID and address proof issued by the govt of India. within the case of a corporation , the administrators photo ID and address proof.
  • Analysis of water report from a recognized/public health laboratory.
  • Proof of possession of premises.
  • Pesticide residues report of water just in case of units manufacturing mineral or soda water from recognized/public health.
  • NOC and replica of the license from the manufacturer.
  • Food Safety Management System plan or certificate.
  • NOC/PA issued by FSSAI
  • IE Code issued by DGFT for importers.
  • FSSAI Declaration Form.
  • Source of milk, if applicable.
  • Supporting proof of turnover, if applicable.
  • Source of meat and meat processing units, if applicable.
  • NOC from the municipality and native body, if applicable.
  • MCA Incorporation Certificate, if applicable.
  • Certificate provided by Ministry of Tourism, if applicable.
  • Supporting proof of turnover for vehicles, if applicable.

Procedure for Central License Application
1. If consistent with the eligibility criteria, one is directed to urge a Central FSSAI License then they need to fill out the appliance form consistent with the rules as prescribed by FSSAI. It must be taken care that each data provided must be correct, appropriate and authentic.
2. Remeber that the generic names must be mentioned for the products and not the brand names.
3. All the products as mentioned within the license must be approved as per the FSS Act, 2006.
4. At last, you’ll be asked for a way a few years you would like to use . you’ve got to settle on the acceptable period of your time that you would like to require the license.
5. Post-filing the shape , the prescribed fees need to pay either through a web portal or by submitting the demand draft at the FSSAI state office.

For more information Click here

Source: http://companyformationindia.com/blog/food-license-in-india.html

Saturday 10 October 2020

Minimum Alternate Tax (MAT)

 

What is MAT?

MAT is an indirect tax levied under the Income Tax Act of India, 1961. As per section 115JB, every foreign and domestic company is required to pay MAT, a rule set up to prevent highly profitable businesses from dodging their tax liabilities.

A large number of companies in India try to evade taxes. For instance, many “zero tax companies” generate substantial revenues but end up paying a nil tax by applying deductions, exemptions and other kinds of loopholes in the system. So, MAT was created so that no company is able to completely evade their tax liability.

MAT Applicability

Minimum Alternate Tax is only applicable to companies and not to individuals, HUFs, partnership firms, LLPs, societies, etc. Rules pertaining to Sec 115JA is applicable on the foreign companies that generate profits through their running business activities in India.

How to calculate the MAT?

Minimum Alternate Tax is equal to 18.5% (15% from AY 2020-21) of Book profits (Plus Surcharge and cess as applicable). Book profit means the net profit as shown in the profit & loss account for the year as addition and deletion by the following items:

Book Profit

The manner of computation of Book Profit is explained under section 115JB of the Act which specifies additions and deductions of specified items from the net profit of the company computed in accordance with the provisions of the Companies Act, 2013. Here is a list of the items which are allowed to be added and deducted from the net profit of the company:

Additions:

  • a) Income Tax paid or payable (including provision) thereof;
  • b) Amounts transferred to any reserve;
  • c) Provisions made for meeting liabilities (other than ascertained liabilities);
  • d) Provision for losses of subsidiary companies;
  • e) Dividend paid or proposed;
  • f) Expenditure relating to incomes exempt under section 10 other than section 10(38);
  • g) Deferred tax;
  • h) Expenditure relating to income by way of royalty of patent taxable under section 115BBF

Deductions:

    i) Amount withdrawn from reserves/provisions where such amount is credited to the profit and loss account; j) Income under section 10 other than section 10(38) where such amount is credited to statement of profit and loss; k) Brought forward loss or unabsorbed depreciation, whichever is less as per books of account; l) Profit of sick industrial company; m) Income as a share in the income of AOP/BOI; n) Income by way of royalty in respect of patent chargeable to tax under section 115BBF

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Friday 11 September 2020

Minimum Alternate Tax (MAT)

 

What is MAT?

MAT is an indirect tax levied under the Income Tax Act of India, 1961. As per section 115JB, every foreign and domestic company is required to pay MAT, a rule set up to prevent highly profitable businesses from dodging their tax liabilities.

A large number of companies in India try to evade taxes. For instance, many “zero tax companies” generate substantial revenues but end up paying a nil tax by applying deductions, exemptions and other kinds of loopholes in the system. So, MAT was created so that no company is able to completely evade their tax liability.

MAT Applicability

Minimum Alternate Tax is only applicable to companies and not to individuals, HUFs, partnership firms, LLPs, societies, etc. Rules pertaining to Sec 115JA is applicable on the foreign companies that generate profits through their running business activities in India.

How to calculate the MAT?

Minimum Alternate Tax is equal to 18.5% (15% from AY 2020–21) of Book profits (Plus Surcharge and cess as applicable). Book profit means the net profit as shown in the profit & loss account for the year as addition and deletion by the following items:

Book Profit

The manner of computation of Book Profit is explained under section 115JB of the Act which specifies additions and deductions of specified items from the net profit of the company computed in accordance with the provisions of the Companies Act, 2013. Here is a list of the items which are allowed to be added and deducted from the net profit of the company:

Additions:

  • a) Income Tax paid or payable (including provision) thereof;
  • b) Amounts transferred to any reserve;
  • c) Provisions made for meeting liabilities (other than ascertained liabilities);
  • d) Provision for losses of subsidiary companies;
  • e) Dividend paid or proposed;
  • f) Expenditure relating to incomes exempt under section 10 other than section 10(38);
  • g) Deferred tax;
  • h) Expenditure relating to income by way of royalty of patent taxable under section 115BBF

Deductions:

For more information Contact us

 

Source: Minimum Alternate Tax (MAT)



Saturday 29 August 2020

Personal Finance Tips for the Long-Term

 

While total financial independence isn’t a simple goal to succeed in , most of the people wish to a minimum of to spend their lives without struggling for creating their ends meet. Financial planning could assist you in meeting your long-term goal, however, you would like to place the plan into effective action.

Here during this personal finance blog, we’ll discuss ten such money moves which could help your finances within the future . These aren’t just investment tips, but also steps which might assist you in optimizing the returns.

1. Inculcate a habit of saving and investing — you want to get inculcate a habit of saving and investing even just alittle amount of cash hebdomadally . It’s not only about the cash that you simply save; it’s more about the habit which you’re inculcating. for creating things easy, there are several apps which could assist you in saving and even investing small funds. Take the advantage of such apps and obtain into a habit of saving a minimum of 10 percent of your income.

2. Reduce your core expenses — regardless of whatever you are doing , attempt to reduce your fixed expenses. Reduction in your month on monthly expenses could assist you to realize your long-term commitments. Doing this effectively can assist you reach your financial freedom much easier and earlier.

3. Workable Household Budget — Developing and sticking to your spending plan is that the best thanks to meet your financial goals. you ought to make sure that your budget isn’t only realistic but also sufficient for your needs. Usually people slash the spending allowances much below the maintainable levels then they provide abreast of entire budget when this doesn’t work for them.

4. Track your Accounts, Bills, and Debts — Good credit score is a crucial facet of an individual’s financial fitness, even just in case you don’t take debts often. Your credit score could affect the insurance premiums and mortgage rate of interest . Low debt-to-credit ratio and timely payments are crucial factors for an honest credit rating. you’ll use personal finance apps for keeping track of your limits, due dates, and balances.

5. Emergency Fund — One thing got to “> you want to calculate is that you simply might need to buy an unforeseen expense. An emergency fund could help in defraying the impact of such unexpected expenses on your budget. you ought to attempt to keep aside a minimum of 6 months of living expenses, however, just in case it seems overwhelming, you’ll start with a lesser amount. Remember that your emergency fund is merely for emergencies; just in case necessary, attempt to make it difficult to access your emergency funds in order that you don’t get tempted to use it just in case of non-emergencies.

6. life assurance Policy — just in case you’ve got a spouse, kids or parents who are hooked in to your income, it’s vital to possess an policy with an appropriate cover. The last item that your dependents would wish is to stress about how they might set about paying the bills while they’re handling your loss.

7. Contingency healthcare plan — Most of the people don’t wish to believe this, however, at some point, you’ll find it unable to form their own healthcare decisions. it’s advisable to deal with this contingency long before such a situation actually occurs.

8. Debt-Free Lifestyle — once you are starting out initially, a number of the debts are inevitable. Educational loans and mortgages are a necessity, and most of the households carry debt which comes from credit cards. As and once you have funded the retirement plans and therefore the emergency fund, work on your debts and pay off your loan and therefore the mastercard bills before the schedule.

9. PPF and EPF investment options — they supply better returns than most of the opposite debt investments. Banks and other financial institutions have reduced the deposits rates drastically after the large inflow of funds post demonetization. Public Provident Fund and Employees’ Provident Fund still provide attractive rates.

10. Advice from experts — The last tip to the readers is to hunt advice from the professional financial planners. Some might ask why you ought to pay INR 10,000–20,000 once a year for his or her financial advice. Advice from expert financial planners would cost you some bucks but would really be fruitful within the long-term.

For more information Click here
Source:
Personal Finance Tips for the Long-Term

Tuesday 7 July 2020

Choosing the Right Type of Company for Your Business in India


One of the primary decisions that need to be taken when starting a corporation in India refers to the legal entity under which the respective business will operate the local market. India provides a group of business forms, almost like those available in other jurisdictions. the choice regarding the legal structure of an Indian company should be taken in accordance with the capital the investors have, the obligations and liabilities they need to assume or the dimensions of the business they need to work here. Our team of consultants in company formation in India offers legal assistance for selecting a legal entity suitable for a selected business registered here.
Registering an Indian sole trader
The Indian sole trader represents the only sort of doing business during this country. At an equivalent time, if the business fails, the completing procedure is far simpler than within the case of other business forms.
The procedure on the way to form a corporation in India for a sole proprietorship stipulates that this business form are often found out by one investor, who is performing business activities in his or her own name. Our team of representatives in company formation in India can advise on the benefits of a sole trader.
The company will got to be represented by a company checking account , a requirement imposed to other business structures available here, also on register for value added tax, but only within the situation during which the corporate reaches a particular income threshold. This business form is typically the simplest option within the case of small businesses.
Register a partnership in India
Another business form that’s usually employed in India is that the partnership. Its succcess is given by the straightforward registration procedure. India provides two sorts of partnerships, as follows:
1 partnership registered under the Partnership Act 1932;
2 indebtedness partnership, registered under the indebtedness Partnership Act 2008.
A partnership in India is usually found out by an Indian citizen residing in India, but foreign investors can also found out this business form, after having received permission from the local institutions.
Businessmen are invited to contact our team of specialists in company registration in India for in-depth assistance on the way to choose an appropriate legal entity.
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Saturday 20 June 2020

Company registration consultant





Company registration consultant should be selected very carefully once you are registering a corporation . Transparent pricing, thorough knowledge of Companies Act 2013, in-house company secretary team and knowledge within the field should be checked when selecting a consultant for company registration. Business setup is that the top consultant for company registration in Mumbai, Bangalore, Pune and Hyderabad.

What are the foremost important factors when deciding the consultant?
The most details to think about is:
1. The consultant should be locally present.
2. The consultant shouldn’t be aggregator
3. A in-house team of company secretaries should be present
4. Should be experienced in company registration

What is the approximate cost to register a corporation in Mumbai or Bangalore or Pune?
Generally the value for a corporation registration including 2 directors is Rs 6500- Rs 10000. BusinessSetup.in which is locally present in Mumbai, Pune and Bangalore offers free company registration and charges only the govt fees of Rs 4273.

What are the documents you ought to get after the corporate is registered?
It is vital that you simply get the subsequent documents from your consultant after the corporate is registered:
1. Digital signature for all the director and shareholders
2. MOA
3. AOA
4. Certificate of Incorporation
5. PAN and TAN
6. Share Certificates
7. Company Incorporation form that’s SPICE
8. First board resolution for checking account opening and auditor appointment
For more information Click here



Friday 29 May 2020

Branch Office in India

What activities can a branch office perform in India?
The branch office are often opened by any foreign company. The activities it can undertake are mentioned below:
  • 1 Export/Import of products
  • 2 Rendering consultancy services
  • 3 Carrying out research work, during which the foreign parent company is engaged.
  • 4 Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
  • 5 Representing the parent company in India and acting as buying/selling agents in India.
  • 6 Rendering services in Information Technology and development of software in India.
  • 7 Rendering technical support to the products supplied by the parent/ group companies.
  • 8 A branch office cannot perform manufacturing activities on its own but can subcontract these to any manufacturer based in India. Branch Offices can remit the profits to its parent company after paying taxes on an equivalent (RBI).
Who is that the approving authority for branch office?
Reserve bank of India is that the nodal authority to urge the permission to start out a branch office in India

How much time does it fancy setup a branch office in India?
The Branch office could also be registered in 45–60 days

What are the pre requisites to start out a branch office in India?
  • 1 The name of Indian Branch office should be same as that of a parent company.
  • 2 The Branch is simply extension of the exiting company within the foreign country.
  • 3 All the expenses of the BRANCH office are met by the top office, if it doesn’t have the revenue from Indian operations.
  • 4 The foreign parent company getting to setup a Branch office should have a profitable diary during immediately preceding 5 years.
  • 5 The Net worth of the foreign company should be quite or adequate to USD 100,000. The networth certificate should be
  • 6 A branch office is is suitable for foreign companies looking to setup a short lived office in India and not interested or not getting to have future plans for the Indian operations; except banking, shipping and airlines etc. mentioned above.
Documents required for forming a Branch Office in India
The application for forming a branch office is to tend to the bank in India. The bank then submits the appliance to RBI for approval.

The following documents are required to open a branch office in India:
  • A Indian resident who are going to be liable for branch operations and can be susceptible to make the tax payments and regular compliances Form FNC 1 (Three copies)
  • 1 Letter from the principal officer of the Parent company to RBI.
  • 2 Letter of authority from the parent company in favor of Local Representative.
  • 3 Letter of authority/ Resolution from parent company for fixing BRANCH office in India.
  • 4 Comfort letter from the parent company meaning to support the operation in India.
  • 5 Two copies of English version of the Certificate of Incorporation, Memorandum & Articles of association (Charter Document) of the parent company duly attested by the Indian embassy or notary within the country of registration.
  • 6 Certification of Incorporation — Translated & Duly Notarized and properly authenticated.
  • 7 The Latest audited record and annual accounts of parent company duly Translated notarized for past Three years and properly authenticated
  • 8 Name, Address, email ID and phone number of the authorized person in Home Country.
  • 9 Details of Bankers of the Organization the Country of Origin along side the checking account number
  • 10 Commitment from the Organization to the effect that it’ll be hospitable report / opinion sought from its banker by the govt of India / Federal Reserve Bank of India
  • 11 Expected funding level for operations in India.
  • 12 Details concerning address of the proposed local office, number of persons likely to be used , number of Foreigners among such employees and address of the top of the Local office, if decided
  • 13 Details of Activity administered in Home Country by the applicant organization in short about the merchandise and services of company in short .
  • 14 Bankers Certificate from the bank of the parent company about the small print of parent company and duration of banking with parent company
  • 15 Latest Proof of identity of all the administrators — Properly Certified by Banker in Home Country and duly authenticated
  • 16 Latest Proof of address all of Directors — Properly Certified by Banker in Home Country and duly authenticated
  • 17 Details of the Individuals / Company holding more 10% of Equity
  • 18 Structure of the Organization and its Shareholding pattern
  • 19 Complete KYC of Shareholders holding quite 10% Equity within the Applicant Company
  • 20 Resolution for Opening up checking account with the Banker
  • 21 Duly Signed checking account Opening Form for Indian Bank
  • 22 The application for BRANCH office Licenses is approved by the RBI, but as per the recent changes the applications for BRANCH office are routed through the Authorized Dealers (AD). thanks to this the timeline for fixing the BRANCH office has increased tremendously. Further the documentation required for an equivalent has also increased to an excellent extent.
Post Incorporation Procedural Requirements
After Incorporation, the subsequent registrations also are necessary for a branch office:
  • 1 Permanent account number — PAN
  • 2 Tax deduction number — tan number Shop & establishment
  • 3 Registration GST Registration if providing services to Indian Customers
  • 4 What are the compliances after the Branch Office is made in India?
Every year a branch office is required to undertake the subsequent activities:
  • 1 Book Keeping
  • 2 Audit
  • 3 Annual activity Certificate with RBI
  • 4 Filling of financials with Registrar of Companies
For more information Click here

Saturday 14 March 2020

How To Change A Company Name?



Changing the name of a corporation cannot continue without complying with the wants of selecting a corporation name set by the Registrar of Companies.

Changing a corporation Name
Getting a corporation ’s name changed by the Registrar of Companies (RoC) is not any small matter! Executing a company name search will assist you select an appropriate name. an equivalent rules and laws apply to vary a person’s name, as well. The procedure to vary the corporate name is well-defined and is to be followed strictly. Hence, it's essential to follow all the wants of the registrar of companies in India.

Benefits To Changing name
1. once you Can’t Get A Copyright: Acquiring copyright and trademark is important to the success of a business because it forms a part of its branding and marketing strategy. However, if the present name of the corporate cannot get copyright it'll affect revenue streams and future earning potential. for brand spanking new names, check name availability, before you opt to vary the corporate name.

2. Memorable Business Name: From a marketing and a business standpoint, memorability is everything when it involves the name of the corporate . So when registering the name of the corporate with the registrar of companies, confirm you select a reputation that's easy to recollect , and also the one that's available as per a corporation name check.

3. Repositioning: To change name or a brand’s name, especially when your business is prepared to maneuver into a replacement market helps with the concept of repositioning. this is often done to specialise in one particular product or niche that's doing better than others, or when entering a replacement market.

4. Specific product or service: This occurs when a business gains popularity for one particular product or service. For that reason, a business or a brand are often renamed to maximize their popularity and generate more demand, or sales.

5. Location Friendly Name: When it involves choosing the way to change name , one effortless thanks to move forward is to think about the situation . If your business is moving to a location then it might be prudent to rename your business to something that's more friendly and acceptable with the situation of the business.

6. Change Of Ownership: When a business passes ownership, it's only natural for the new owner to see name availability, and alter name . For this purpose, the owner will approach the registrar of companies India to vary his/her name .

Checklist For Updating name , After name Change
1. Updating your social media accounts
2. Update Email footers
3. Name change on stationery – letterheads, business cards, etc.
4. Website changes
5. Informing customers and suppliers
6. Voicemails, messages on answering machines
7. Company registers and Articles of Association
8. Update your computer systems
9. Employment Contracts
10. Update business licenses or permits
11. Supplier Contracts

How To Execute a corporation Name Search
One of the foremost important steps before registering a corporation name with the registrar of companies is to make sure to see name availability.
It is advised to shortlist four to 5 business names before checking availability, within the event a number of those names are already taken or in use. When registering your company with the registrar of companies, the Ministry of Corporate Affairs will authorize the name to be used supported existing rules and regulations.
In the event, a brand has already been trademarked, you'll need a NOC certificate from the owner of the name .

Documents Required For name Change When a corporation decides to vary its name, a resolution is passed among the board of directors/members of the corporate . After which, the subsequent two documents are filed with the registrar of companies;
MGT-14:
This e-form is filed with the registrar of companies on the Ministry of Corporate Affairs portal, thirty days after filing the resolution to vary the corporate name. along side the MGT-14 form, the subsequent forms need to be attached also .
1. Notice of Extraordinary general meeting (EGM).
2. Copy of special resolution passed within the EGM.
3. Copy of altered Memorandum of Association and Article of Association, with the new name .

INC-24
After the MGT-14 is approved, the INC-24 e-form is filed within a period of 30 days with the registrar of companies on the Ministry of Corporate Affairs portal. along side the INC-24 form, the subsequent forms need to be attached also .
1. Extract of the Minutes of the Extraordinary general meeting of the corporate
2. Notice of EGM
3. Copy of resolution agreement
4. Copy of altered MOA and AOA, with the new name .

Saturday 8 February 2020

Difference between Bookkeeping and Accounting?




When most small business owners consider the terms bookkeeping and accounting, they often use them interchangeably. While it’s true both bookkeeping and accounting are important within the management of your company’s finances, some key differences between the 2 functions do exist. Therefore, business owners got to understand the roles of every and the way they work together to make sure your company’s success.

Yes, bookkeeping and accounting both need to do with money and therefore the financial picture of your business, but there are key differences. Here’s your chance to know them.When running your business, your ability to grow and succeed is usually hooked in to how organized your financial records are. But managing your business finances is quite just recording your financial transactions and balancing your checkbook. For your business to flourish, you want to be ready to access and use your company’s financial reports to develop a workable business strategy. While both bookkeepers and accountants handle your business’s financial information, they perform different tasks within your company’s financial cycle.

The Function of Bookkeeping
Bookkeeping is comprised of the tasks required during the primary a part of the accounting process. It involves the consistent, timely, and accurate recording of a business’s financial transactions in chronological order. A bookkeeper’s duties include:
Maintaining an entire and arranged set of books, comprised of the overall ledger and every one subledgers (i.e., fixed assets, inventories, assets , accounts payable, cash, tax, costs, and sales) during which to post financial transactions.

Creating and issuing customer invoices.
Recording suppliers’ invoices.
Paying suppliers.
Logging cash receipts from customers.
Documenting inventory changes.
Processing employee payroll.
Managing fund transactions.
Preserving all supporting documents for all business transactions.
A bookkeeper follows a selected set of procedures to perform these duties on a repetitive basis. The complexity of a company’s bookkeeping system depends on the dimensions of the business and the way many transactions are completed on a daily, weekly, and monthly basis. Typically, an accountant or the tiny business owner oversees the bookkeeper’s work.

The Function of Accounting
Accounting involves the method of analyzing, interpreting, reporting, and summarizing the financial data recorded by the bookkeeper or the business owner. a number of an accountant’s responsibilities include:

Preparing adjusted entries (i.e., earned revenue or incurred expenses that haven’t yet been recorded during the bookkeeping process).
Preparing financial statements on the condition and performance of the corporate .
Creating management reports to deal with specific issues.
Analyzing operations costs.
Creating a corporation budget.
Compiling tax returns from the financial data.
Helping the business owner understand the company’s financial data and therefore the impact of his/her financial decisions.

Basically, the accounting process helps you understand where your business stands financially at any point in time by measuring your company’s progress within the terms of growth and financial success. Additionally, the financial data generated helps you to form informed business decisions, so you’ll plan for your company’s future.

Tuesday 21 January 2020

Benefits of Filing Income Tax Return (ITR)


Income Tax Return is a document an individual is required to file with the Income Tax Department on a yearly basis. However, it is not mandatory for everyone to file the Return. If your income in the previous year is above the basic exemption limit of INR 2,50,000 (Rupees Two Lakh Fifty Thousand only), then you are required to file the Income Tax Return compulsorily.
Even though it is not mandatory for some persons to file the Income Tax Return, one should file it every year as there are many benefits of filing it.

Here are some of the major benefits of filing Income Tax Return:

Loans and credits:
 In order to urge a loan, one should have the tax Returns for the last three years. All banks and lending institutions invite a minimum of three years of tax Returns to grant a loan to a private . At the time of processing application , banks and lending institutions check the declared income and source to verify the repaying capacity of the individual seeking a loan. They use tax Returns to verify an equivalent .
In case you’re seeking a private loan, a home equity credit , or a automobile loan , it’s essential for you to file tax Return. If you often file tax Return, you’ll get a loan from any bank or financial institution very easily. Even the banks prefer allotting credit cards to perons who file regular tax Returns.

Easy to claim your TDS:
 TDS means Tax Deducted at Source. it’s a Tax deducted from your income by the person paying the salary or making the other payment on which TDS is applicable. The deductor while making the payment deducts the tax amount and pays it to the tax department directly on your behalf.
You may get the tax amount so deducted by filing tax Return. If there’s no tax amount payable at the time of filing the tax Return, the entire TDS amount are going to be refunded.
If you’re working as an employee during a company and earning but Rs 2.5 lakh a year, you’ll claim your TDS from the Tax department. just in case you’re a businessman and need your TDS to urge back in your account, it’s mandatory to file an ITR per annum .

For going out of country
 In order to use for a VISA to go to any country, you would like to possess tax Returns. While giving VISA, embassies officials check the income proofs and address proofs of a private . Thus, tax Returns are checked by the officials to verify the income and address. Therefore, if you’re getting to go abroad, you want to get your tax Return filed immediately.
From the fiscal year 2017–18, tax Return of a previous year are often filed within the same assessment year only. After the top of the assessment year, the tax Return of the previous year can’t be filed.

Required for giant insurance cover:
 If you would like to use for an insurance cover of over INR 50,00,000 (Rupees Fifty lakh only), the insurance companies invite tax Return. The annual income and tax returns help insurers to work out the precise premium amount and security amount. Most of the days , tax Return may be a necessary document for purchasing an insurance cover.

Helps in executing financial transactions:
 Income Tax Return is required just in case of executing some financial transactions. Transactions or payments for house, car, mutual funds etc require tax Returns. Some payments for giant investments also need tax Returns.

Address proof:
 Income Tax Return works as an address proof in many government organisations and agencies. you’ll use it as an Address proof in situ of unavailability of other documents.