Private Limited Company

Private limited Company details for startup entrepreneurs

Company registered in accordance with Companies Act 2013, is one of the most credible form of business. A company has its own identity different from its Directors, Shareholders, and Managers. The liability of the shareholders of a company is limited upto the amount unpaid towards the shares taken by its shareholders. A company falls under the purview of Perpetual Succession i.e. “Member may come member may go but company remains into existence “. Also as per the act every company registered under the act or any earlier act shall have to appoint an auditor, maintain books of accounts, convene annual general meeting and also file its annual returns on annually basis.

Rules of Private Limited Company

  • Any company having minimum paid up capital of Rs. 1 Lakh and is not a subsidiary of any Public Limited Company.
  • Two Directors and Two or more members can form a Private Limited Company.
  • Such companies do not have to comply with various provisions as that in a public limited company.
  • Such companies can have a maximum of 200 members and also cannot accept public deposits nor can invite public to subscribe its shares or debentures.

One Person Company

What is One Person Company (OPC)?

The concept of One Person Company [OPC] is a new vehicle/form of business, introduced by The Companies Act, 2013 [No.18 of 2013], thereby enabling Entrepreneur(s) carrying on the business in the Sole-Proprietor form of business to enter into a Corporate Framework. One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

Terms and Restrictions of OPC

  • A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
  • Minor cannot shall become member or nominee of the One Person Company or can hold share with beneficial interest.
  • An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for Profit].
  • SAn OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
  • An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e., if the Paid-up capital of the Company crosses Rs.50 Lakhs or the average annual turnover during the relevant period exceeds Rs.2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private or Public Company, with in a period of Six Months on breaching the above threshold limits.

limited liability partnership

A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations.[1] In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence. This is an important difference from the traditional unlimited partnership under the Partnership Act 1890 (for the UK), in which each partner has joint and several liability. In an LLP, some partners have a form of limited liability similar to that of the shareholders of a corporation.[2] In some countries, an LLP must also have at least one thing called as a "general partner" with unlimited liability. Unlike corporate shareholders, the partners have the right to manage the business directly. In contrast, corporate shareholders have to elect a board of directors under the laws of various state charters. The board organizes itself (also under the laws of the various state charters) and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. A LLP also contains a different level of tax liability from that of a corporation.

Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management.

There is considerable confusion between LLPs as constituted in the U.S. and those introduced in the UK in 2001 and adopted elsewhere (see below) as the UK LLP is, despite its name, specifically legislated as a corporate body rather than as a partnership. In Nigeria, limited liability partnerships have legal personality. However, one must register a partnership first before it can gain the status of limited liability partnership.

Section 8 Company

Section 8 Company is named Section 8 of the Companies Act, 2013, which pertains to a established 'for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object', provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members. Therefore, Section 8 Company or Section 25 Company is a company registered under the Companies Act, 2013 for charitable or not-for-profit purposes.

A Section 8 Company is similar to a Trust or Society; expect, a section 8 Company is registered under the Central Government's Ministry of Corporate Affairs. Trusts and Societies are registered under State Government regulations. A section 8 company has various advantages when compared to Trust or Society like improved recognition and better legal standing. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.

Service Tax Registration

Service Tax Registration is a tax registration required for businesses providing services in India. Service tax registration is an indirect tax wherein the service provider pays the tax and recovers the same from the recipient of the taxable service. At present, Service Tax is levied at 12.3% on the value of the taxable service. This includes Education Cess @ 2% on the service tax amount, and Secondary and Higher Education Cess @ 1% on the service tax amount.

Service Tax registration is mandatory for every person or business in India that has provided a taxable service of value exceeding Rs.9 lakhs, in the previous financial year. Service Tax Registration is required for identification of the assesse, deposit service tax, file service tax returns and undertake various processes required under the Finance Act, 1994. Failure to obtain service tax registration would attract penalty in terms of section 77 of the Finance Act, 1994.

Partnership Registration

The procedure for Registration of Partnership Firms in India is fairly simple. An application and the prescribed fees are required to be submitted to the Registrar of Firms of the State in which the firm is situated. The following documents are also required to be submitted along with the application:-

  • Application for Registration of Partnership in Form No. 1
  • Duly filled specimen of Affidavit
  • Certified True Copy of the Partnership Deed
  • Ownership proof of the principal place of business or rental/lease agreement thereof.

The application or statement must be signed by all the partners, or by their agents especially authorised in this behalf. When the registrar is satisfied with the points stated in the partnership deed, he shall record an entry of the statement in a register called the Register of Firms and issue a Certificate of Registration.

The Register of Firms maintained at the office of the Registrar contains complete and up-to-date information about each registered firm. This Register of Firms is open to inspection by any person on payment of the prescribed fees.

Any person interested in viewing the details of any firm can request the Registrar of Firms for the same and on payment of the prescribed fees, a copy of all details of with Firm registered with the Registrar would be given to the applicant.

It should however be noted that registration with the Registrar of Firms is different from Registration with the Income Tax Deptt. It is mandatory for all firms to apply for Registration with the Income Tax Department and have a PAN Card.

After obtaining a PAN Card, the Partnership Firm would be required to open a Current Account in the name of the Partnership Firm and operate all its operations through this Bank Account.

Public Limited Company

A limited company grants limited liability to its owners and management. Being a public company allows a firm to sell shares to investors this is benificial in raising capital. A minimum of three Directors are required for establishing a Public Limited Company and it has more stringent regulatory requirements compared to a Private Limited Company.

Public Limited Companies are those types of companies where minimum number of members is seven and there is no cap on the maximum number of members. A public limited company has most of the characteristics of a private limited company. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Identifying marks of a public limited company are name, number of members, shares, formation, management, directors and meetings, etc.

Process Of Public Limited Company

    1.
   Public Limited Company Incorporation :

IndiaFilings.com can incorporate a Public Limited Company in 14 to 20 days, subject to ROC processing time.

    2.
   Obtaining DSC & DIN :

Digital Signature Certificate(DSC) and Director Identification Number(DIN) is required for the proposed Directors of the Public Limited Company. DIN and DSC can be obtained for the proposed Directors within 5 to 7 days.

    3.
   Name Approval :

A minimum of one and a maximum of six proposed names must be submitted to the MCA. Subject to availability, naming guidelines and MCA processing time, Name Approval can be obtained in 5 to 7 working days.

    4.
   Company Incorporation :

Incorporation documents can be submitted to the MCA along with an application for incorporation. MCA will usually approve the application for incorporation in 5 to 7 days, subject to their processing time.

Producer Company

A Producer Company is formed by 10 or more individuals or two or more institutions dealing in agricultural produces or post-harvest processing activities. Thus, a producer company is a legally recognized cluster of agriculturists/farmers which aims to improve their incomes, statuses of their available support and profitability, and the standard of their living.

Producer Company Registration in India

The sections below offer separate information about some exclusive advantages provided by a producer company, and the entire procedure for producer company registration anywhere in India. Here, it may be noted that, in a country like India, where about 85% farmers have small land-holdings, these producer companies are certainly of immense utility and great benefit to the member agriculturists and farmers. So far, our hugely popular law firm of India has helped numerous in their producer company registrations in places all across India.

Procedure for Producer Company Registration

This section offers concise information regarding how to register a producer company anywhere in entire India. Broadly, the procedure for producer company registration and the documents required, are almost the same as in the cases of the majority of companies. The Integrated Form INC-29 may also be used for registration of a producer company.

For incorporation of a producer company in India, there are needed a minimum of Five Directors and Ten Shareholders/Members; there is no limit kept for the maximum permissible number of members. The following processes are involved in the procedure for its incorporation in India:

  • Name Approval and Reservation (Form INC-1)
  • Making DSCs and DINs for Directors
  • Filing the Incorporation Form INC-7 with the relevant ROC
  • Filing Forms like INC-22, DIR-12, etc.
  • And, Submission of other necessary documents.

Nidhi Company

Nidhi” means a company which has been incorporated as a Nidhi with the object of Cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and Which complies with rules of Chapter XXVI of Companies Rules, 2014.

Nidhi in the Indian context / language means “TREASURE”. However, in the Indian financial sector it refers to anymutual benefit society notified by the Central / Union Government as a Nidhi Company. They are created mainly for cultivating the habit of thrift and savings amongst its members.

The companies doing Nidhi business, viz. borrowing from members and lending to members only, are known under different names such as Nidhi, Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company.

Nidhi’s are more popular in South India and are highly localized single office institutions. They are mutual benefit societies, because their dealings are restricted only to the members; and membership is limited to individuals. The principal source of funds is the contribution from the members. The loans are given to the members at relatively reasonable rates for purposes such as house construction or repairs and are generally secured. The deposits mobilized by Nidhi’s are not much when compared to the organized banking sector.

Since Nidhi’s come under one class of NBFCs, RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities. However, in recognition of the fact that these Nidhi’s deal with their shareholder-members only, RBI has exempted the notified Nidhi’s from the core provisions of the RBI Act and other directions applicable to NBFCs. As on date (February 2013) RBI does not have any specified regulatory framework for Nidhi’s.

Applicability

The Central Government made ‘Nidhi Rules, 2014’ for the purpose of carrying out the objectives of ‘Nidhi’ companies. These rules shall be applicable to :

  • Every company which had been declared as a Nidhi or Mutual Benefits under Section 620A(1)of Companies Act, 1956;
  • Every company functioning on the lines of a Nidhi company or Mutual benefit society but has either not applied for or has applied for and is awaiting notification to be a Nidhi or Mutual Benefit Society under Section 620A(1)of Companies Act, 1956;
  • Every company incorporated as a Nidhi pursuant to the provisions of Section 406of the Companies Act, 2013.

Vat, Sales Tax & CST Registration

When you sell any goods in India, then a tax is charged on selling of those goods. This tax is called as Value Added Tax (VAT). VAT is also called as a multi-stage tax because VAT is charged only on value addition part of the goods at a different stage of production.

Therefore, VAT registration is mandatory if you are selling goods within a state of India and your turnover in a current financial year exceeds Rs. 20 lakh in India or 10 lakh in other states as per rules of the respective state because VAT rules are different for different states.

CST (Central Sales Tax) is similar to the VAT but the only difference is that CST is imposed on those goods which are sold outside the states.

Unlike VAT registration, CST registration is not dependent on turnover criteria. If you are selling your goods outside the state then you have to obtain CST registration in India.

Documents required for VAT/CST registration:

  • Self attested PAN card copy.
  • Two Photographs.
  • Self attested copy of any one of the Identity Proof like, Passport, Voter ID & Aadhar Card
  • Self attested copy of any one of the Address Proof like Bank Pass Book/Bank Statement, Telephone Landline Bill Mobile Bill & Electricity Bill
  • Premises Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill, AND Rent Agreement (If Rented) AND NOC for doing Business & for taking Registration
  • A copy of Cancelled cheque
  • Name of the proposed unit
  • Objects of business for which registration is required
  • Board Resolution for authorization of Service Tax Registration in case of comapny
  • Private limited companies must also submit the Memorandum and Articles of Association, Form 7, Form DIR 12, Form INC 22 and Certificate of Incorporation,
  • While Partnerships must submit the Partnership Agreement.
  • In addition, security deposit or surety or reference maybe required to obtain VAT Registration based on the State in which the business operates

BENEFITS OF VAT/ SALES TAX & CST REGISTRATION

SAVE PENALTIES

As VAT Registration is a mandatory step, non-compliance of this crucial step may result in the imposition of hefty penalties.

REDUCING CHEATING

The primary purpose of introducing VAT is to reduce the cases of smuggling and TAX cheating, which were the outcomes of high sales tax and tariffs.

REDUCE CASCADING EFFECT

VAT is known to make an impact on reducing cascading effect of various taxes for end consumers. As this tax is based on added value, it doesn’t tend to result in an increase in price.

GST Registration

The Prime Minister approved “The constitution amendment bill for Goods and Service Tax”(GST) in the Parliament Session (Rajya Sabha on 3 August 2016 and Lok Sabha on 8 August 2016) along with the ratification by 50 percent of state legislatures. Thus the current indirect taxes levied by state and centre are all set to be replaced with proposed implementation of GST by April 2017. This would be the biggest tax reform since independence and a boon to the economy as it will eradicate the shortcomings of the current tax structure and provide a single tax on supply of all goods and services.

Benefits of GST :

  • Eliminating cascading effect of taxes.
  • Tax rates will be comparatively lower as the tax base will widen.
  • Seamless flow of Input tax credit.
  • Prices of the goods and services will fall.
  • Efficient supply change management.
  • Promote shit from unorganised sector to organised sector.

GST Registration Process

You can use LegalRaasta services for GST registration or you can do the registration via the GST portal portal yourself. To register for GST via LegalRaasta, you just need to make online payment and we will take care of the rest. To register yourself, you can follow the following steps:

  • Log in to the online GST Portal (www.gst.gov.in).
  • Fill Part-A of Form GST Registration form 1
  • You will receive an application reference number on your mobile and via E-mail.
  • You will then need to fill the second part of the form and upload the required documents according to the business type
  • Finally a certificate of registration is issued to you by the department
  • In case of errors and questions, you may need to visit the department
  • Produce the documents within 7 working days along with GST REG-04.
  • The office may also reject your application, if he finds any errors. You will be informed in form GST REG-05 of GST registration regarding the same.

Startup Registration

What is a Start-up?

A Startup is an opportunity which gives you the platform to start with small business,a partnership or an organisation designed for rapid development of a scalable business model. Startup Company is an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet needs of market by developing innovative ideas, product, process or services.

How We Help You to Start your Business/Let’s get start

Funds Khanhelps you to start your business with an ease.

Types of Companies in which you can start in India :

    1.
  One Person Company

One Person Company (OPC) is a new form of business, introduced by the Companies Act, 2013, which enables Entrepreneurs to carry on the business in the Sole-Proprietor form of business to enter into a Corporate Framework. Start OPC right now.

    2.
  Private Limited Company

Private Limited Company is a form of commercial organisation which is a small business entity and has Limited liability, Restricted Trade of Shares & Continued Existence. Start Pvt Ltd Company right now.

    3.
  Limited Liability Partnership

Limited Liability Partnership (LLP) is an alternative business form that gives the benefits of limited liability and the flexibility of a general partnership. Startups should decide based on their long-term objectives, in the initial stage, the size of operation could be small. Agenda for business where they can see their development for Five Years. Start LLP right now.

PROCESS

  • DIN & DSC 1 to 2 Days
  • Drafting MOA and AOA 2 to 4 days
  • Submission of Form 4 to 5 Days
  • Certificate Of Incorporation 6 to 10 Days