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Yearly compliance checklist for Startups In India

Yearly compliance checklist for Startups In India

Do you intend to set up a startup but worried about several laws to follow? In case your answer is yes then we can help you with all the compliances regarding start up.

With regard to start up, money is precious and it won’t be a good idea to waste some currencies as penalties towards non-compliance. So, follow rules and regulations to bypass hurdles.

The various laws you must follow:

  • Goods and Services Act (GST)
  • Companies Act
  • Labor and mercantile laws
  • Income Tax Act

After getting your startup registered as an Indian company, it is essential to follow the provisions specified in the Companies Act, 2013.

List of major things one should not miss with regard to startup:

  • Accounts filing with ROC (Form AOC-04)
  • Board meetings
  • Statutory Audit
  • Annual General Meeting (AGM)
  • Annual Returns with ROC (Form MGT-07)

These happen to be some chief Startup compliances that individuals must follow but apart from these there are some more forms that differ. To give an example, if you have taken a bank loan, you must file the CHG-01 form with ROC to get your charge registered. There exists a penalty for the late filing of the statutory forms.

It is essential for every company to get the turnover audited by a certified CA every year. Even if there had been no transaction in a year.

Filing income tax is a must

In case the startup is formed as a limited liability partnership or a proprietor company, it is mandatory to file the income tax. If the taxable income happens to exceed the exemption limit, you must file within a certain time limit. A fee is levied for filing income tax late.

Startup Checklist to follow with GST

The ideal thing about GST is that you are no longer required to pay indirect taxes. Goods and Service tax is an easy and convenient tax regime. You should register under GST in case of a turnover of over Rs 20 Lakhs annually. If you happen to hail from any special states, you must get registered if the turnover exceeds Rs 10 Lakhs annually. In case you happen to be an online seller, GST compliance is mandatory.

In short, you must follow below-mentioned Startup compliances for GST:

Annual GST in case the annual turnover goes beyond Rs 2 Crores.

Registration if you go beyond exempted turnover of Rs. 20/10 lakhs

Monthly returns in case the turnover exceeds Rs 1.5 Crores or else quarterly returns

Annual returns

EWAY bill for transportation if the value of invoice crosses Rs 50 thousand for transportations of the goods.

Startup checklist to follow with labor laws

There are three chief laws applicable to a company on the basis of the number of employees working under you:

Provident fund

Provident fund applies to you if there are over 20 people working under you. You have to register under PF and file the returns. Each month, a part of employees’ salaries must be cut and paid to the government together with the share of the employer. Then, a return must be filed. Do not ignore PF as it is a critical law to be followed.

ESI

Employees’ State Insurance happens to be a health insurance and social security scheme meant for the workers in India. This fund is handled by the State Insurance Corporation for employees as per the ESI ACT 1948. The ESI law functions akin to the PF law.

Profession Tax

For certain states, it is essential to file the profession tax. For example, in states like Karnataka, in case you pay over Rs 15,000 salary then it is a must to subtract Rs 200 each month and pay the same to the government.

It is a must to follow these laws so that your company does not face any legal hurdles going forward. Hence, ignore this at your peril.

Who we are?

We are one of the leading business management consultants in India providing several services such as Proprietorship Firm Registration and Start up Compliance Package and Company Compliance Package. We also offer a host of services in tax administration and procedure expansion to efficiently manage GST compliance Process. You may contact biatconsultant.com now

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RBI Organises QR Code mechanism for digital payments

RBI Organises QR Code mechanism for digital payments

Digital payment mode has worked in a big way and for the same reason a lot of Payment System Operators (PSOs) are coming up on the web. The initial push for digital payment came into being with the demonetization policy of the Government in 2016.

Now with pandemic ruling the roost the digital payment has got a bigger fillip.

RBI’s course of action for Uniform QR based payments

In the current scenario, it is convenient to scan a QR code and make payment for various kinds of bills. This kind of receptive formula has become a backbone for the digital payment portals in India. Today, each PSO uses an independent proprietary QR code to accept the digital payments.

It is to be noted that the Reserve Bank of India (RBI) had put in place a Committee under the aegis of Prof Deepak Phatak to analyze the present QR Code mechanism in India and to come out with a process for more compatible Codes. RBI had intimated the report of this Committee with several recommendations.

After thorough analysis of those recommendations, the following decisions have now been taken by RBI:

Presently, the 2 compatible QR codes – the UPI QR and the Bharat QR – will operate as at present.

All the Payment System Operators (PSOs), presently using their independent QR codes must soon be directed to adapt to one or more uniform QR codes, once such uniform system comes into force.

The procedure to shift towards uniform QR codes will happen by 31st March 2022. From now onwards, no proprietary QR codes will be created or utilized by any PSO to receive the online payment.

Here, RBI will perform the consultative part for integration and improvisation of such interoperable QR codes. This is to install the major features suggested by the Phatak Committee.

As such, the PSOs may also take the lead in spreading knowledge about such interoperable QR codes among their customers.

Note: These steps have been suggested to institute a strong and comfortable payment acceptance infrastructure. This will improve the user experience as a result of compatibility and system efficiency.

The suggestions for the single QR mechanism impinge on 4 aspects:

Interoperability & Scalability

Innovation

Security

Customer Awareness

QR for starters

The QR Code happens to be a 2D barcode that includes black squares assorted in a square grid with white background. Scanning devices such as barcode readers or smartphone cameras are utilized for reading and interpreting the QR codes.

There are 2 types of QR codes:

Static

Dynamic

Static: QR code which remains unchanged and is chiefly printed on paper. It has details regarding the payee, and the consumer should enter the amount after scanning.

Dynamic: The dynamic QR codes are drafted with a software and this can comprise more fields like the price amount.

So, the RBI now strives to eliminate all problems such as the lack of interoperability or compatibility of the QR codes, by suggesting remedies for organizing the QR codes.

Key aspects of a uniform QR mechanism

Interoperability & Expandability

The Proprietary QR codes hinge on closed loop mechanisms. This can create obstacles for the open, compatible payments ecosystem. So, RBI suggests a simple blueprint to totally rescind the proprietary loop QR codes with the new open and interoperable ones.

A unified QR code pertaining to every payment portal entails a deeper concentration risk in comparison to the individual Proprietary QR codes. So, RBI needs to drive the numerous interoperable QR codes e.g. Bharat QR or UPI QR to facilitate swift on-boarding of all types of merchants on digital payment platforms.

With regard to costing, it is felt that paper-oriented (Sticker) does not need any maintenance.

Innovation

RBI will focus on standardizing the digital payment apps. It will even gauge the network for the usual QR branding so that a regular and convenient experience can be materialized.

This apart, the offline QR code might be utilized for minor payments such as travelling, ticketing etc. This manner the QR codes will turn multipurpose in nature.

QR apps will now have extra features such as

Save QR,

Invoice relay through Dynamic QR,

Setting up e-Mandate

There is no requirement to open a fresh bank account for QR code on-boarding. Existing accounts will be sufficient as a valid merchant KYC for quick merchant on boarding. The acquiring bank of the merchant (on the basis of the payment size) may be furnished. This can increase the potency of merchant KYC.

The Bharat QR will come with the P2PM (Merchant treated as person) feature, which will enable rapid and convenient on-boarding of micro enterprises through their current bank account.

Bharat QR-specific measure: Inclusion of NBFCs and FinTech worries.

UPI QR-specific measure: Multiple UPI IDs may be permitted for a single recipient. If any UPI IDs does not function, then a different UPI–ID may also be utilized by the payer. backend

Safety:

These steps may be taken to secure payments:

Sign-up needs of Bharat QR codes might be assessed. Payer presented offline QR will be a signed in for dynamic QR code.

Security check and audit of the Application utilized for QR Code oriented payment must preferably be held by 3rd party entities.

Resolution of the merchant’s name has to be at the acquirer bank’s system.

Rules drafted for revoking / rotating keys utilized to sign static QR codes.

Consumer familiarization:

Every stakeholders must conduct education and awareness campaigns for QR code adoption.Multi-currency and Multi-language assistance to be explored for maximum traction among customers across the countries.

The online payment apps should provide clarity over data safety.

Consumer awareness for secure Wi-Fi usage for digital deals.

Documents needed for the Merchant KYC

Given below are the documents required for KYC of the merchants and for the payment aggregators (PA):

Use image

Benefits of Uniform QR code

Interoperability of several payment alternatives through common QR will be beneficial for all stakeholders of the ecosystem. This can reduce expenses and facilitate systematic risk management.

The good thing is that the QR codes can be installed swiftly even in any parts of the country and accessible to every type of merchant. They function as a Do it yourself (DIY) solution. The merchant will be able to download any payment app and sign up with ease. He can then start receiving online payments from his customers.

These days several Mobile banking apps are unified with numerous features such as Mutual Funds, Demat accounts, Insurance, NEFT, RTGS, IMPS etc. Currently, all banks perform thorough assessment according to its internal compliance norms. Here, a QR Code can serve the purpose of a 2nd factor authentication for every future online transaction.

QR codes will come with the multi-currency and multi-language features for international transactions. Highlighting of payment particulars such as Merchant’s Name, Tip or Convenience Fee, Transaction Amount, Terminal ID, Location etc. in a local vernacular and native currency will increase the customer belief.

In the end

Regulatory assistance is a must for seamless progress of the Uniform QR code mechanism. Over here, RBI will in all probability implement these measures to enhance the uniform QR code system:

RBI may draft a transparent plan to totally eliminate proprietary QR codes for new open, compatible ones.

Accordingly, the RBI may issue relevant norms regarding refurbished KYC process for swifter merchant on boarding.

The Regulator may also draft fresh guidelines regarding common registry to facilitate digital payments Apps to check and verify the recipients.

This kind of mechanism could be executed by the Government by permitting a less controlled interchange instead of cutting down MDR charges on QR code to 0.

Government may even provide certain tax incentives to the merchants with the common QR code. This will enhance electronic transactions and give a good push to Digital India initiative.

RBI may permit the Offline QR codes for various kinds of modest payments such as transit or travel bills, ticketing etc. This will also increase the use of QR code.

This apart, a Security test and audit may be carried out of the Apps utilized for QR code-based payment service provider (PSP).

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What makes an ISO certification critical for a company?

What makes an ISO certification critical for a company?

ISO or the International Standards Organization happens to be an autonomous body which offers standards of the organisation. As for a standard, we can specify it as quality, safety and efficiency of the products or services offered by the businesses. ISO 9001 certification highlights the criticality of superior quality of goods and services. So, Register your company and be ISO certified as soon as possible. The ISO certificate assists in improving your business reliability and authority and the whole capacity of the business. If your organization is ISO certified, it entails several benefits.

The reason ISO certification is important

ISO certification happens to be the affirmation given by the MSME Government. The ISO certification in India comes with several benefits. Let us explore them one by one.

Superior faith


Worldwide acceptance is there for the International Organization for Standardization (ISO). It strengthens dependability and sincerity of your products or services in the mind of the public.

Gain huge traction


The brand recognition will scale new heights. This can maximize your professional outlook amongst other market researchers and the public as well.

Heightened Consistency


ISO 9001 assists you in maximizing the control of your business processes. As your control over your business goes up, the consistency also rises. More consistency means your customers are satisfied every time they are dealing with you.

Stamp of Govt accreditation


Your product can be marketed with ease. You can even tag your product with the ISO symbol while packaging and documenting. This type of government branding benefits you in several ways.

Retain customer significantly


One critical aspect that helps attract more customers is a government tag on your product. This helps you multiply customers significantly. And satisfy customers a lot.

Promote at will


ISO accords you and your products increased value. This can be used as a selling factor. You can endorse your products by securing global quality credit.

Trade between countries available


As ISO certification is accepted globally, the same facilitates trade between countries. Having a few limitations and documentation issues, your trading process gets legally accepted.

Strengthened employees


Apart from benefiting the company, the ISO label empowers the employees as well. This betters their performance and increases their commitment. Also, their profiles become value-added. Their familiarity with their work gets enriched being an ISO-based company.

Inculcating professional culture 


Professionalism goes up in the company premises. Having a global certification, the employees, authorities and the management have no choice but to inculcate a professional culture in the company.The same professionalism helps companies to gain more goodwill in the market.

All round satisfaction


ISO 9001 certification mandates the training and evolution of your staff and management. Also, it gives essential tools to them to carry out their jobs properly. Resultantly, your employees will gain knowledge galore about the tasks they have undertaken and as the training is imparted, their career prospects go up.

Bring down excess consumption

As you grow post getting the ISO, you become aware of what to use and what not to. You will learn and evolve considerably in a unique manner to improve your business in the market.

Assures safety of the products/services


If a company is ISO certified, the quality is something that gets attached to your business like a glue. This assures the safety of the products/service utilized by the general public

Operations become efficient


The procedures, jobs, methods, measures and dealings get simplified and shared equitably amongst the workers. Also, operations will become improved and more efficient. This manner you can operate a business without complaints and complexities. It is true that acquiring an ISO certification helps your business in several ways. But getting one is not an easy task. Document verification has to happen officially for the ISO license. Further, the documentation entails some cost as well. So, getting an ISO certification will cement your company’s presence in the global market.

Select the ideal ISO Certification type

Importantly, you must select the ISO certification standard in sync with your business.

Zero in on a dependable ISO Certification Body

It needs to be kept in mind that ISO does not give certificates to the applicants itself. The job of allotting ISO Certificates to the applicants is carried out by external bodies. It is very crucial for you to perform your research and select a dependable and authorized certification body to acquire the certification from.

Please factor in the following

Assess the past records of various ISO Certification agencies.

Gauge if they adhere to the CASCO standards. This is a committee established by the ISO to monitor issues associated with conformity assessment.

Assess whether they satisfy the condition of ISO Accreditation agencies.

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Methods of applying an ISP License

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The Indian government came out with a single license for every telecom related services and it is called Unified License. As for Unified License, the license holder must apply for ISP license for various areas. You have to get a Unified License in which you will obtain authorization for offering ISP services for a particular area. So, it has to be remembered that there is no different ISP license as such. One must rather acquire ISP Authorization under the Unified License.

As for Unified License only one can be held by a single company, however, one can apply for several ISP authorizations of diverse areas. But the validity of such authorizations will be similar to that of the Unified License.

The procedures for obtaining the ISP License in India

Suitability Aspects

To obtain an ISP license, you require a registered company under the Companies Act, 1956. In case you don’t have one then just visit the website of registrar of companies for the same.

Choose an apt ISP License category to apply under

After obtaining an ISP license, the person has to decide the category of license required – category A, B or C. In India, 3 separate types of licenses are needed to be an internet service provider. Also, it depends upon the City/State/Town/District/Village you want to launch your ISP business in.

The 3 categories of ISP licenses are:

  • Class A (National Area)
  • Class B (Telecom Circle/Metro Area)
  • Class C (Secondary Switching Area)
  • The Class A ISP license can be a costly affair, followed by Class B & C respectively.

Fiscal Criteria

In order to popularize internet access in smaller towns, cities & villages, the Government of India has brought in a cost-effective Class C license compared to a Class A or B.

So let us get into the financial nitty gritty of acquiring the various licenses.

ServiceMinimum EquityMinimum Net worthEntry Fee (Rs.)Performance BG (Rs.)Financial BG (Rs.)Application Processing Fee (Rs.)Total Capital Required (Rs.)
ISP “A” (National Area)NilNil30 Lakh2 Crores10 Lakh50 Thousand2,40,50,000
ISP “B” (Telecom circle/Metro Area)NilNil2 Lakh10 Lakh1 Lakh15 Thousand13,15,000
ISP “C” (SSA)NilNil20 Thousand50 Thousand10 Thousand10 Thousand90,000

The total capital needed for a Class C license is INR 90,000/. For Class A license the amount is INR 2.50 crores.

So, to be a Class C ISP license holder, you need something around Rs. 3-4 lakhs, subject to the lawyer / ISP consultant fees.

Upon choosing the category of the ISP license you require, it is pertinent to know the whole application process.

Application Method to begin with

Post choosing the ISP license category, you have to fill an application form. Along with the form, a non-refundable Processing Fee of INR 15,000/- should be given by the applicant via DD/Pay Order from a Schedule Bank payable at New Delhi issued in the name of Pay & Accounts Officer(Headquarter) DOT. You are also required to submit the requisite documents as well:

Company-specific documents

An attested copy of the Certificate of Incorporation of the company issued by the Registrar of Companies.

A certified copy of Memorandum of Association and Article of Association underlining the provisions, which includes Internet Services in the chief objects of the company.

Written permission of the company’s board related to the decision of the company to apply for a new ISP License and particulars of the authorized signatory including name and designation along with the specimen signature.This disclosure needs to be signed and stamped by a Company Secretary.

Certified copy of Form-18 and the copy of challan form i.e. GAR-7 case registered.(If office address is not given in Certificate of incorporation or the address shown in Certificate of incorporation varies from that of in the application form).

Document for Foreign Investment

A copy of FIPB Approval in the name of Applicant Company, certified by the Company Secretary is required if the cumulative FDI (direct and indirect equity) in the applicant company is in excess of 49%.

Document Assessment

After this, the Department of Telecom will scrutinize your application and contact you within 60 days. In the event of any problem regarding your application, there might be a hitch when it comes to issuing a response from the DOT.

If your application is satisfactory, then the DOT will issue a ‘Letter of Intent’ in your favor.
However, your application might be rejected or delayed due to dishonoring legal, security, hardware, commercial and contractual compliance, and human follies such as incomplete form submission.

Grant of Letter of Intent

In case there are no problems in your application form to acquire the ISP authorization under the Unified License, the DOT will issue a ‘Letter of Intent’ in your favor. Once the same is given you need to give the one-time entry fee along with the required bank guarantees. The total of both for Category A is 2.4 crores, for category B is 13 lakh & for category C is 80,000/-. Also, you need to give a signed license agreement with the DOT and any other documents needed, including the documents mentioned in the Letter of Intent.

The one-time entry fee is non-refundable. Further, once the Letter of Intent is issued, all the other formalities have to be performed within a specific period as prescribed in the Letter of Intent.

Confirmation

If all conditions are satisfied, you will be given an ISP authorization under the Unified License for a period of 20 years. The DOT will either contact you through mail or directly to intimate you about the status of your ISP License.

Last but not the…..

It has come to light by now that the methods regarding ISP licensing is technical and protracted for an ordinary person to fulfill. If these procedures are not adhered to then the application can be disapproved as well. So, it would be better on your part to get your documents & forms analyzed by a professional ISP consultant or lawyer to ensure you don’t face any objections or heartbreaks due to delay or rejection.

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The method to obtain liquor license in India

The method to obtain liquor license in India

If you want to sell alcohol in India then apply and obtain a license for it. Everyone, be it liquor vends or restaurants they must apply for a liquor license online or offline. Without the valid license engaging in selling liquor can you land you in legal soup. In this write up, let us go through the procedure in getting a liquor license in India, and the method of applying for it.


Why do you Need Liquor Liquor?

The license happens to be a consent given by a State’s Excise Department that permits people to manufacture, transport, and sell alcoholic beverages within the state. Hence, it regulates these activities within the state:

  • Businesses allowed to sell and market alcohol
  • Time and place to sell alcohol
  • Amount of alcohol to be sold at a time
  • The charge fixed for the purchase of alcohol
  • Kinds of liquor that may be sold
  • Who to give the liquor for money
  • Businesses permitted to manufacture, distribute and have alcohol

It is to be noted that the sale, distribution, and manufacture of liquor fall under the ambit of the State List according to the seventh schedule of the Constitution. Therefore, the state governments have jurisdiction over the rules and regulations framed within their jurisdiction. Resultantly, several states have diverse laws regarding the sale and manufacture of liquor. The chief laws controlling the sale and consumption of alcohol in India are as follows;

  • Article 47 of the Constitution
  • Licensing Act 2003
  • Delhi Excise Act, 2009 and Excise Rules, 2010
  • Punjab Excise Act, 1914
  • Uttar Pradesh Excise Act, 1910
  • Bengal Excise Act of 1909
  • Goa Excise Duty Act, 1964
  • Bombay Prohibition Act of 1949
  • Karnataka Excise Act, 1965
  • Tamil Nadu Liquor Rules, 1981

Kind of liquor licenses in India

Beer and Wine License – For entities who want to sell only light alcoholic beverages, such as beer and wine. Also these businesses are not allowed to deal with hard liquor.

Restaurant Liquor License –For restaurants wanting to provide alcohol and pertain to establishments earning less than 40% of their total income via liquor sales.

Tavern License – For entities whose liquor sale constitute over half of their profits

Brewpub License – For establishments who brew their own wine and beer.

Temporary License – To offer liquor at a party or event in a town with less than 20 lakh people.

FL-4 License – For those who seek to serve alcohol at private parties within a private resort or apartment.

L1 – Needed for the wholesale supply of Indian liquor

L3 – Allows hotels to offer foreign liquors to guests in hotel rooms, while the L5 permits hotels to offer liquor in bars or restaurants within the hotel premises.

L6 – For the retail vendors of Beers and Indian Liquors.

L19 – Permits clubs to offer foreign alcohol.

The ways to apply liquor license in India

  • As each state has their own liquor laws, it is imperative to consult an expert prior to making the first move to avoid legal hassles later. But, this is the usual process in getting a liquor license in India.
  • Go through the State Excise Department’s official website to familiarize with the process. You can even visit their office or the office of another licensing authority to get some insight into what is expected.
  • After getting an idea about the methods involved, decide about the kind of license you require.
  • Then, obtain the needed documents to initiate the application process.
  • Download the application form for your type of license from the State Excise Department’s website.
  • Fill the form with the requisite particulars and attach relevant documents wherever necessary.
  • Some of the details you must describe include your place of business, personal information, and the type of liquor you want to sell.
  • Furnish the filled form to the relevant authority and provide the requisite application fee. The authority will then evaluate all the particulars given. They can even visit your business premises to see whether things are as per laws or not. If they find any anomaly, they can seek additional documents, which has to be provided. 
  • After the verification process, a notice will be put up regarding your business on your premises. This is to inform the locals regarding your new business. In case they want to put any kind of objections, they can do so within a specified period, and you need to convince them why your business will not be an obstacle to them. If there are no further objections, the authority can provide you with a Liquor License, and you can start functioning.

Cost of liquor license in India

As the liquor regulations differ from state to state, the expense of getting a license also sways based on your location of business. Also, the expense of getting the license hinges on the type of license you desire and the size and nature of your business. But, given below is a run down on the average liquor license cost in India.

Temporary License – To offer liquor at a party or event in a town with less than 20 lakh people, you should pay either : 

  • INR 7,000 if you want to offer liquor to less than 100 people
  • INR 10,000 if you want to offer liquor to over 100 people
  • FL-4 License – INR 13,000.

Serving Liquor in Rooms – To provide alcohol in a restaurant, you must pay either;

  • INR 5,00,000 for serving only in rooms
  • INR 1,50,000 for serving in a beer shop or restaurant
  • State Liquor License – Anywhere between INR 5000 and INR 15,000

Documents needed for a liquor license application

  • Applicant’s Identity Proof and Address proof
  • Address proof of the business premises
  • NOC from the State fire department
  • NOC from the concerned municipal corporation
  • Duly filled Application form
  • MoA and AoA of companies, if applicable
  • Latest ITR copy
  • Applicant’s passport size photograph
  • Affidavit substantiating no criminal records in the applicant’s name
  • Affidavit declaring the applicant has no pending dues in their name

How can we Help?

The team of legal experts employed with us can offer you the assistance you need. We have the ability to guide you regarding the licenses and registrations procedures needed to begin such a venture. Our lawyers have the ability to help you with all required documentation. Also, we offer services regarding incorporation, permitting you to register your business swiftly and efficiently. Finally, our team will assist you get all other licenses and tax registrations you require to turn your business fully compliant.

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Several ways to wind up a company

Several ways to wind up a company

It is ideal to leave a sinking and an ill-fated ship than to go down with it. A business might require to be shut for several reasons: business failure or any other unavoidable situations. This write up will aid you in learning several ways to dissolve a company in India.

As per Companies Act 2013, a Company can be shut in two ways.

1. Winding Up

Winding up can be a bit cumbersome and is executed either voluntarily by scheduling a meeting of all stakeholders and passing a special resolution or on the order of Court or Tribunal. Strike Off mode was initiated by the MCA to help the defunct companies to get their names eliminated from the Register of Companies. On 27th December 2016, MCA informed new rules i.e. Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 standard norm for closing the private limited company as per companies act 2013. By releasing the form STK 2, the ministry of Corporate Affairs has brought the Section 248- 252 of 2013 act into force.

2. Fast track Exit

This is a process that was worth the wait and got enabled on 5th April 2017. This method was brought in the Section 248 of Companies Act 2013.
Fast Track exit happens in two ways:

Suo Moto by Registrar

The registrar would take down the name of Company on his own if:

Company is unable to start any business in a year of its incorporation

The company has not performed any business or Activity for the last 2 financial years and has not asked for the status of Dormant Company.

The Registrar provides a notice (STK-1) of his intent to take off the name and ask for the Company representation in 30 days.

To be noted: Liability on the part of Directors of the company will remain. ROC can activate penalty clauses anytime, and the penalty usually ranges from INR 50K to INR 5Lakhs per director.

Voluntary Elimination of Name with Form STK 2

The company can even file an application to the Registrar of Companies for taking down the name by filing form STK-2 together with a fee of Rs 5000/-. Once the form is filed, the Registrar has the authority to convince him that all outstanding amount of the company for the meeting and its liabilities and other obligations have been realized. ROC can also give a show cause notice if there is a default in filing returns or other obligations. Post above formalities, ROC gives a public notice and takes off the name of Company post its expiry.

Note: The form is in approval. So, relevant ROC can seek the completion of the fillings.



Details needed

  • Incorporation Certificate
  • Director Identification Number
  • Pending Litigation Proceedings if any

Documents needed

  • Application in form STK-2
  • Government filing fees: INR 5,000/-
  • Copy of Board resolution empowering the filing of this application;
  • A statement of accounts displaying the assets and liabilities of the Company created till a day, not more than thirty days prior to the date of application and authorized by a Chartered Accountant
  • The shareholder’s approval through Special Resolution
  • If a company governed by any other authority, consent of such authority shall also be needed.
  • Copy of concerned order for delisting, if any, from the relevant Stock Exchange;
  • Indemnity bond in Form No. STK-3;
  • Affidavit in Form No. STK-4

Note: This form has to have the signature of a practicing CA or CS



Companies that are not fit to file for voluntary strike-off:

A company lis not supposed to file the form STK 2 at any time in the last 3 months if the company has

Changed its name or moved its registered office from one State to another;

Created a disposal for property value or rights held by it, urgently

Before cesser of trade or otherwise performing business, for the sake of disposal for gain in the usual course of trading or otherwise conducting business;

Involved itself in any other activity other than the one which is essential or expedient for the sake of making an application according to that section, or deciding to do so or finishing the affairs of the company or adhering to any statutory requirement;

Filed an application with the Tribunal for the approval of a compromise or arrangement and the matter is still pending conclusion; or

Wound up under Chapter XX of Companies Act or under the Insolvency and Bankruptcy code, 2016

Companies that are forbidden from using Fast Track Exit option:

Companies Registered Under Section 8

Listed companies

Companies delisted as a result of non-compliance of listing regulations or listing agreement or any other statutory laws;

Vanishing companies;

Companies where inspection or probe is ordered and going on or actions on such order have not been taken up or were concluded but prosecutions as a result of such inspection or investigation are pending in the Court;

Companies where notices were served by the Registrar or Inspector (under Section 234 of the Companies Act, 1956 (old Act) or section 206 or section 207 of the Act)and reply thereto is pending;

Companies facing prosecution for an offense that is pending before any court;

Companies whose application pertaining to compounding is pending;

Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

Companies possessing charges which happen to be pending for satisfaction.

Once your company name is struck off from Register:Once the name of the company is taken off from Register, from the date specified in the notice under sub-section (5) of section 248, such an entity stops functioning as a company and the Certificate of Incorporation issued to it will be considered as cancelled from such date except for the sake of recouping the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.

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The Methods To Acquire Private Security Agency License

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Private security agencies happened to be the ones engaged in offering security services comprising training of security guards to any industrial or business undertaking or a company or any other person or property. The functions of a private security agency come under the jurisdiction of the “The Private Security Agencies (Regulation) Act, 2005. In this write up, we delve into the method for getting a Private Security Agency License in detail.

The Private Security Agencies (Regulation) Act, 2005

The Private Security Agencies Act, 2005 governs every aspect of the running of a private security agency business in India. The Act encompasses the entire India with the exception of the State of Jammu and Kashmir and is in vogue since June 2005.

Appointment of Governing Authority by State Government

The Act makes provision for every State Government to assign an officer, not lower than the rank of a Joint Secretary in the Home Department of the State or an equivalent officer to be the Controlling Authority for the State. The Controlling Authority for the State can issue private security agency license, renewal and controlling of function of private security agencies. Also, the Act gives powers to the State Government to create rules to execute the provisions of this Act. So, several States have implemented Private Security Agencies Rules to properly carry out the responsibilities of the State Government as per the Act.

Acquiring Private Security Agency License

According to the Act, nobody can begin or launch a private security agency business without having a private security agency license. Further, no private security agency can offer private security outside India devoid of acquiring permission of the Controlling Authority, which may consult the Central Government in advance as per such permission. Hence, any person wanting to launch a security agency business has to get a license in India.

Suitability Regarding Private Security Agency License

Indian Company, Firm or Association of Persons can apply for a security agency license. Also, if the agency happens to be a company, then the chief shareholder has to be an Indian. Apart from the above condition, the following obligations have to be met:

The person or company should not be convicted of an offence with regard to promotion, incorporation or management of a company (any deception or misfeasance on the part of him with regard to the company), including an undischarged collapse;

The person or company should not be sentenced by an authorized court for an offence, the given punishment for which is imprisonment of not less than two years;

The person or company should not have any connection with any organization or association that is barred from doing business under any law due to their activities posing a danger to national security or public order.

The person should not have been dismissed or sacked from Government service due to wrongdoing or moral turpitude.

Charges Pertaining to Private Security Agency License

The government fee for getting security agency license is:

  • Private security agency functioning in single district: Rs.5000/-
  • Private security agency working in one to five districts: Rs.10000/-
  • Private security agency running in the whole state: Rs.25000/-

After filing an application for obtaining a security agency license, the Controlling Authority has to scrutinize the application and grant/reject the license by sixty days from the date of receipt of the application. After the issuance, the security agency license will be active for five years and renewal is possible for next 5 years by paying the requisite fees.

Running Private Security Business

After getting the security agency license, the company or firm must begin functions within six months of acquiring the license. The security agency is liable for providing training and inculcating skill development to security guards. Apart from the security guards, the appropriate number of supervisors needs to be hired by the agency according to the Act.

These individuals can be security guards or security guard supervisors:

  • Indian Citizen or a citizen of other country as the Central Government might, through notification in the Official Gazette, clarify;
  • Individuals who have finished eighteen years of age, but yet to attain sixty-five years;
  • Persons who can convince the agency about his background and character.
  • Persons to finish the security training triumphantly;
  • Persons meeting some norms regarding physical standards;
  • Persons who have not been convicted by an authorized court or who has been dismissed or sacked due to misconduct or moral turpitude while serving in any of the armed forces of the Union, State Police Organisations, Central or State Governments or in any private security agency.

While choosing private security guards, all private security agencies must give preferences for individuals who have served as a member in one of the following forces:

  • Army
  • Navy
  • Air Force
  • Any other armed forces of the Union
  • Police, including armed constabularies of States
  • Home Guards

Want to apply for private security agency license ? Please contact BIATConsultant for the same .

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An overview on Company Fresh Start Scheme 2020

On 30th March 2020, The Ministry of Corporate Affairs issued a circular pertaining to Companies Fresh Start Scheme 2020. This happens to be another window for all defaulting companies to file every belated document as newly began documents devoid of any extra fees. Under the scheme, the companies get the breather to file their outstanding documents such as annual returns and financial statements sans paying any extra fee for the delay.

The Intent:

Giving exemption from extra fees: It happens to be a single-time prospect to assist stakeholders in filing their due compliances such as Annual Return and Financial statement and several other statements, documents and returns to be filed with the Ministry of Corporate Affairs (MCA),minus the additional fee due to the hold up.

Getting Immunity: To get protection from prosecution or proceeding or being made to pay a penalty due to the delay regarding filing of belated documents (and not any other consequential proceeding).

Opportunity to dormant companies: To grant an option to dormant companies to get their entities labelled as inactive company as per section 455 of the Companies Act, by filing a normal application at regular fees, which would assist these inactive companies to be on the register of the Companies with very few compliance obligations.

Period: The Companies Fresh Start Scheme would be active on the 1st of April 2020 till the 30th of September 2020.

NON-APPLICABILITY: The Fresh Start Scheme will not be applicable in these cases:

For entities against which action for last notice for deleting the name as per 248 of the Act has already been launched by the concerned authority.

In cases where any application has already been filed by the Companies for deleting the name of the Company from the registrar of Companies.

To Companies that have merged as per a scheme of arrangement or compromise under the Act.

In cases where applications have already been filed for keeping inactive status under section 455 of the Act prior to the scheme.

To varnishing Companies.

In cases where any spike in authorized capital (Form SH-7) and charge related documents (Form CH-1. CH-4, CH-8, CH-9) are in the fray.

The immunity will not be there with regard to any appeal pending before the court of law and if a management dispute arises regarding the Company and the same is pending before any court of law or tribunal.

The immunity is not applicable if any court has convicted in any matter or an order levying any penalty has been issued by an adjudicating authority under the Act.

Method:

The defaulting company can file their pending documents/returns/other statements and standard Annual Filing documents in relevant specified e-Forms by giving the regular statutory filing fee (minus any extra fee) within the immunity period.

The defaulting Companies has to file the Form CFSB-2020 after ending all defaults and every filings are put on record or authorized by the Designated authority accordingly. This form can even be filed post the end of the Scheme but not after six months have expired from the date of closure of the Scheme. There are no filing fees of Form CFSB-2020.

The Form CFSB-2020 is a form totally based on self-declaration. Post submitting Form CFSB-2020 and as per self-declaration made by the Director, the ROC will provide Immunity Certificate.

PLAN FOR INACTIVE COMPANIES: The defaulting welsh companies while filing the outstanding documents as per CFSS 2020, can side by side either:

Apply to get themselves certified as inactive Company under section 455 of the Companies Act 2013 by filing e-form MSC-1 at regular fee on said form or;

Apply for getting the name of the company deleted by filing e-form STK-2

The Companies Fresh Start Scheme is to boost the special measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 with regard to the COVID-19 outbreak, to give respite to the obedient Companies and Limited Liability Partnerships.

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Ways to avail working capital finance

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Small and Medium Enterprises (SME) and Micro, Small and Medium Enterprises (MSME) are very significant in India as they give employment and aiding the evolution and development of the country’s economy. All businesses need a good pouring of working capital for the fluid operations of its daily activities. Many companies require working capital loans at regular intervals. For example, the manufacturing industry is bereft of a regular income for the entire year; they are confronted with money paucity due to cyclical sales which hinge on the needs of the retailers. When sales are not up to the mark, manufacturers require working capital finance to meet the short-term functional expenditures. These costs could be rent and payroll to tax and debt payments.

Types Of Working Capital Loans

The 4 major working capital financing options are term loans, business credit cards, trade credit, and invoice financing.

Term Loan: Generally availed for one to ten years. This kind of loan is utilized to finance big investments, such as business expansion, acquiring equipment or tools etc.

Business Credit Cards: Commercial banks provide business credit cards with a whole set of features and benefits. This credit card makes working capital financing accessible. Companies are provided certain restrictions on spending on the cards and have to pay interest just on the amount spent.

Trade Credit: A convenient alternative of short-term working capital financing and the least costly one. It happens to be a business-to-business (B2B) agreement where the buyer get supplies from the supplier sans paying upfront; the supplier is paid back at a later date (ranging from 30 to 90 days) after the buyer has manufactured and sold the goods. Also, the buyer is supposed to pay interest for this kind of credit.

Invoice Financing: This kind of financing permits businesses to take money against customers’ unpaid invoices to bridge fiscal liquidity gaps when customers pay after a long time for goods and services. The lenders take a cut from the invoice as service fees.

Ways to Apply For Working Capital Finance?

Companies have to be in operations for a year at least to become suitable for working capital loans. Banks and non-banking financial institutions can verify the borrower’s credit history, credit rating, trading history, financial muscles, assets, liabilities, income, and profitability while going through the loan application. So, business owners should assess their loan suitability prior to applying for working capital finance.

Documents Needed to Get Working Capital Financing

  1. Identity, income, and address proofs
  2. PAN card
  3. Passport-size photographs
  4. Partnership deed
  5. Certificate of registration and certificate of incorporation
  6. Income statement and Income Tax Returns (ITR) of the last 3 years
  7. Financial audit reports of the last 2 years
  8. Memorandum of Association (MoA) and Articles of Association (AOA)
  9. Credit Monitoring Arrangement (CMA) report, if needed
  10. Last one year’s loan statement with sanction letters especially the ones from other credit institutions
  11. Company letterhead having names of all current directors

Merits and Demerits of Working Capital Loans

MeritsDemerits
Businessmen get convenient and fast access to working capital finance to meet their companies’ short-term activities financing requirements.At times linked to a business owner’s personal credit, so, if there is a delay in payments or missed payments, his or her personal credit score gets negatively impacted.
If it is an unsecured working capital loan, a company gets to secure the loan devoid of any collateral.Only companies having a high credit rating are suitable for unsecured business loans. The ones having an uncharitable credit rating must furnish asset(s) as collateral to avail working capital finance.
This permits business owners to have control over their companies even if they badly require funding.To offset credit risks, the borrowers are levied high-interest rates which can be a bit disadvantageous for business owners; as the debt burden swells, the prospects of defaulting on payments go up.

Last but not the least

Despite certain disadvantages, working capital loans are a viable alternative for businesses in financial distress. Companies having good credit rating need not furnish any collateral to avail working capital financing. Similarly, short-term loan borrowers need not be anxious regarding long-term EMIs. Companies into seasonal operations can meet their daily functional expenses during unstable phases with working capital finance. Also, working capital financing can be utilized not just for daily functional requirements, but also for parking money in future business operations. Though there aren’t any limits on funds utilization, it’s better to utilize the same simply for legal business requirements.

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Method of GST registration via MCA portal

Method of GST registration via MCA portal

Of late, A fresh feature has come into being with which the person can easily go for Goods and Services Tax (GST) registration while looking to incorporate the company through the MCA portal. The applicant wanting to acquire GST registration via MCA portal should apply in e-form AGILE (INC-35). This write up strives to provide clarity regarding GST registration application via MCA portal.

Rudimentary facilities pertaining to applying in e-form AGILE-

The expansion of AGILE comes to Application for Goods and Services Tax Identification Number (GSTIN), employee state Insurance corporation registration (ESIC) plus employee provident fund organization (EPFO). Hence, the applicant can get registration under three categories i.e., GSTIN, ESIC and EPFO by providing a sole e-form AGILE via MCA portal.

The person seeking to incorporate the entity by filing an application in e-form SPICe+ and possessing a registered office address has the right to apply to acquire GST registration by filing e-form AGILE via MCA portal.

It is to be noted that every company incorporated by filing e-form SPICe+ has to essentially file e-form AGILE. But, getting registration under GST, ESI or EPF is very much an option for people.

Type of taxpayer suitable for GST registration through e-form AGILE-

Taxpayer wanting to get GST registration in any of these category can apply through e-form AGILE-

Regular taxable person; or Composition scheme taxable person

Significantly, the taxpayer wishing to get registration in the following category should not apply for GST registration through e-form AGILE-

Input service distributor; or

Special Economic Zone developer/ unit; or

Irregular taxable person or

Tax deductor liable to reduce tax under section 51 of the Central Goods and Services Tax Act, 2017; or

Non-resident taxable person or

Tax collector responsible to collect tax under section 52 of the Central Goods and Services Tax Act, 2017; or

Non-resident online service provider; or

Unique Identification number

With regard to registration in any of the above categories, the applicant should apply via GST portal and not through MCA portal.

Method for getting GST registration via the filing of e-form AGILE-

The applicant wanting to get GST registration via MCA portal should follow afore-mentioned steps-

STEP 1 – The applicant must file a company incorporating application in form SPICe+.

STEP 2 – After filing the afore-mentioned application with an available link, e-form AGILE will be provided.

STEP 3 – In order to get GST registration, the applicant must give the following particulars-

  • State – Specify the state for which GST registration needs to be acquired.
  • District.
  • State and Centre jurisdiction.
  • Purpose of getting registration.
  • Particulars regarding the premises.
  • Alternative for composition scheme.
  • Kind of the business task performed at the afore-mentioned premises.
  • Particulars of goods supplied by the business (i.e., mention HSN code).
  • Particulars of services provided by the business (i.e., mention SAC code).
  • Particulars of directors.

STEP 4 – Attach the needed documents.

STEP 5 – Submit the e-form AGILE with the digital signature. It is to be kept in mind that the form has to be digitally signed only by the authorized signatory who happens to be a citizen and an Indian resident with PAN.

STEP 6 – The information so given will be dispatched to the GST network. Here, the information will be processed for GST application.

STEP 7 – GST network will verify the data. After successful validation, TRN (Temporary Reference Number) and ARN (Application Reference Number) is produced and showcased on the MCA portal.

Some critical points-

Particulars of proposed directors in form AGILE hinge on the class/ category or subcategory provided in SPICe+ form. The details given in form AGILE should be the same as the ones submitted in SPICe+. Number of directors shall be as under-

Number of directorsType of company incorporated
OneOne-person Company
TwoPrivate Company
ThreePublic Limited Company
FiveProducer Company

• The director signing the form AGILE will straight away become the major authorized signatory for GST registration.

The registered office given in form AGILE will directly be the Principal Place of Business for the sake of GST registration.

The applicant acquiring GST registration by filing form AGILE can get registration of just that State where the registered office of the company is located. Preferably, the applicant wishing to get registration in various states must acquire GST registration only via the GST portal.

The applicant who wants to get GST registration by filing AGILE can update information like extra place of business; designated representative; bank account particulars etc. by modifying the GST application with GST portal.

Summary

It is a known fact that prior to starting the business, the company has to be incorporated/ registered under several laws. Basic purpose of E-form AGILE is to simplify the company incorporation method. Despite certain hiccups, with e-form AGILE, the company can get registration under three laws namely GST, ESI and EPF. However, it is a must to meet the these conditions for getting GST registration through e-form AGILE-

The company has to be incorporated by filing e-form SPICe+.

The company must have a registered office address.

The company should acquire GST registration as a regular taxable person or composition scheme dealer.

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