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January 14, 2021January 14, 2021

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.

Service	Minimum Equity	Minimum Net worth	Entry Fee (Rs.)	Performance BG (Rs.)	Financial BG (Rs.)	Application Processing Fee (Rs.)	Total Capital Required (Rs.)
ISP “A” (National Area)	Nil	Nil	30 Lakh	2 Crores	10 Lakh	50 Thousand	2,40,50,000
ISP “B” (Telecom circle/Metro Area)	Nil	Nil	2 Lakh	10 Lakh	1 Lakh	15 Thousand	13,15,000
ISP “C” (SSA)	Nil	Nil	20 Thousand	50 Thousand	10 Thousand	10 Thousand	90,000

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.

January 8, 2021January 8, 2021

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.

January 4, 2021January 4, 2021

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 5^th 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.

December 23, 2020December 23, 2020

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 .

December 18, 2020December 18, 2020

An overview on Company Fresh Start Scheme 2020

On 30^th 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 1^st of April 2020 till the 30^th 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.

December 9, 2020December 9, 2020

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

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

Merits and Demerits of Working Capital Loans

Merits	Demerits
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.

December 3, 2020December 3, 2020

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 directors	Type of company incorporated
One	One-person Company
Two	Private Company
Three	Public Limited Company
Five	Producer 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.

December 1, 2020December 1, 2020

Why is statutory auditing essential to your company?

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These are essential measures to assess the nerves of a company’s money. A statutory audit permits the government to ascertain if a company is providing the financial details in a genuine manner. Companies have for a long time indulged in malpractices, however with such an auditing system, a company’s credibility comes to the fore.

What do you mean by Statutory Audit?

This happens to be a mandatory auditing of the monetary matters of a business entity. Over here, the company’s financial body and deals are evaluated to ascertain if the company is giving genuine details regarding its finances to its shareholders and the government. It comprises detailed checking of all the statements, fiscal statements, bank balance and books of accounts. Consider this check as a means to ascertain if you are providing genuine monetary information to the customers.

How to perform a Statutory Audit?

Being a company director, you are not supposed to audit on your own. You need to appoint an auditor within 30 days of registering your company. The process of statutory audit in India is akin to the same in western countries. Only exception being, according to the Companies (Amendment) Act, 2017, an Annual General Meeting conducted to select an auditor for 5 fiscal years. That’s appropriate. You are not supposed to have the same auditor every year. He needs to be fair and independent.

Who can’t perform your company’s audit?

The Companies Act 2013 contains some clear cut rules that specify the suitability of who can and who cannot be the auditor. Following can’t do the auditing for you:

Any corporate body that ain’t the Limited Liability partnership

An officer and employee of the company.

An individual who happens to be the partner with a worker of the company or the employee of the company’s employee

The person who owes the company an amount bigger than 1000 rupees or a person who has assured the debt of that person.

A person who has held any securities in the company within 1 year after the start of business of that company.

Any individual convicted by the court for an offence and the gap has been less than 10 years since that conviction.

The above bodies/professionals cannot audit your company. Their financial and ethical bearing reflects that they are not infallible and for genuine assessment people with integrity are needed.

Who has to go through a Statutory Audit?

Inside the Statutory Audit Applicability Section, it’s clearly specified that any company whose yearly revenue happens to be over 40 Lakh rupees or the capital contribution is over 25 Lakh rupees must go through statutory audit.

Particulars regarding the Audit report

An audit report happens to be a potent document mentioning all the financial details of a company. They have to be correct and verifiable by the auditors. This kind of report is produced in the Company’s Auditor’s Report Order (CARO), and it has the following information:

Inventories: The items being accounted for?

Fixed Assets: What about the fixed assets of the company?

Internal audit Standards: Specify the standards under which the audit is undertaken.

Statutory dues: The compliances that the company has not filed yet.

Once prepared, the audit report is given to the Ministry of Corporate Affairs for assessment, along with the directors and shareholders of the company.

What if you don’t file the statutory audit?

A statutory audit is a legal requirement that displays your ethical practices. Non-compliance can lead to attracting the unwanted attention of law enforcement agencies. Having said that, in case you have not filed the statutory audit within the due date, you can be levied a fine of 20,000 rupees. Also, every officer guilty of such deference will be imprisoned for a year.

Concluding Thoughts

Statutory Audit happens to be a critical aspect of business. It portrays your responsibility, truthfulness and very ideal for the future of your company. In case you want statutory auditors following the government obligations to give you prompt services, you can get in touch with our business registration experts. We have a dedicated and talented bunch of CAs, CSs and other financial professionals, willing to look into your needs and deliver on time.

December 1, 2020December 1, 2020

Benefits of turning No Profit Entity into Section 8 Company

Beginning a non-profit organization and assisting people is a magnanimous gesture, however, devoid of an organized form, such benevolence will not last too long. So, the ministry of corporate affairs’ decision to give a “company-like” infrastructure to manage non profit ideals was a step in the right direction. Called Section 8 Company, it has facilitated the entry of various good samaritans to continue with their good deeds.

However, the question remains, why should you choose Section 8 Company? What are the benefits? Before getting into these things let us understand this Section 8 Company.

What do you mean by a Section 8 Company?

A Section 8 Company happens to be a kind of business entity in India whose sole aim is to popularize the arenas such as science, arts, commerce, religion, environment conversation, social welfare and other charitable matters. The profits gained by such a company cannot be meant to be distributed among the members/directors, but utilized to promote the above-mentioned domains.

Reasons to turn Non-Profit Organization into a Section 8 Company

A Section 8 Company apart from providing a proper form to a generous initiative, also provides the advantages you require to aid the number of people.

Benefits of Section 8 Company registration:

Tax benefits: The government gives various tax sops to a Section 8 Company. These are certain sections under which the company avails those:

Section 80G: As per this section, the donors pertaining to a section 8 company seek rebate of up to 50% of the donations given.

Section 11: Under this section, Section 8 Companies can gain deductions of expenses from income.

No least capital needed: In case you are not having any money (apart from the registration fees), you can establish your Section 8 Company comfortably.

A Different Person: Upon incorporation, a Section 8 Company turns an entity which is distinct from its directors.

Reliable: In case your organization has a legal standing of a Section 8 Company, it automatically turns very reliable in the eyes of people.

No Stamp duty for registration: You are not required to incur the cost of stamp duty of Section 8 Company registration.

To give a simple explanation of this legal jargon: Making a non-profit organization into a Section 8 Company turns it better and trustworthy.

The method of Registering a Section 8 Company

The Section 8 Company registration procedure is very convenient. With the procedure being largely online, majority of business registration personnel will be able to assist you in setting up your company within a week or 10 days at most:

Think about the name of your Section 8 Company: Select a different name that would strike a chord among people.

Provide the documents needed:

ID proof, address proof and photo IDs of the directors/members

Address proof of the registered office space. In case you are not having a conventional office to begin your non-profit organization, you can select your own home as the office.

Digital Signature Certificate

Director Identification Number

Draft MOA and AOA: MOA or Memorandum of Association mentions the goals of your Section 8 Company. The AOA or Article of Association explains the rules and regulations of your Section 8 Company.

File the application of Section 8 Company Registration: After providing the documents and drafting the legal articles, you must consult a business professional. They can assist you file and provide your application online at the MCA website.

Certificate of Incorporation: Once the Registrar gets your application, they will evaluate the same for perfection. In case of any issue in your application, you’ll be intimated and have to repeat the entire procedure. In case they accept your application, you’ll get a certificate of incorporation, a document substantiating that your Section 8 Company is set up.

Count on us

In case you are again having queries regarding Section 8 Company and are pondering over starting such a company our team can help you out. Trust our expertise and experience to turn your dream into reality.

November 27, 2020November 27, 2020

Things to remember while filing reply to copyright objection

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Introduction

Copyright happens to be the sole right of ownership of the creator for their piece of work. In order to legalize copyright, registration is a must. While registering, if there are any objections in the claim of ownership or in the event of any discrepancies in the application, the applicant will be duly informed. To the same, the applicant needs to respond to the objection pertaining to copyright. This write up helps you in replying to such a notice.

Method of Registration

The Copyright Act, 1957 and the Copyright Rules, 2013 guide the Copyright Registration procedure in India. Any real or authentic or original artistic endeavor, be it cinematographic film or music composition or literary/dramatic work or sound recording or software, can be sought protection from violation through copyright, however, the work must be the result of your organic creation. The necessary fee has to be part of the application meant for registration. Also, the application should have the essential signatures and Power(s) of Attorney.

As for objections, 30 days waiting period applies, post filing. In case of no objections, the authority will forward the application to a scrutinizer. The registration process comes to an end with the scrutinizer not finding any hiccups in the application.

The whole process can take 8-9 months, depending on objections and discrepancies.

Objections and Inconsistencies

A copyright objection comes up if a third-party files an application saying the work resembles an old or already existing idea belonging to them. Both the parties then want a reply to copyright objection to clarify the issues raised, and get the outcomes in letters. In some cases, the Registrar may call for a hearing where the registration could either be accepted or rejected. The applicant then waits for 30 days of submission for any objection(s) regarding the work.

A copyright discrepancy occurs when the copyright department finds causes to put a query on the application in the form of letters to the applicant in exchange for an explanation during the course of the examination. An objection could be hoisted for a lot of reasons such as no uniqueness or any wrong particulars being identified by the copyright evaluator.

Replying to an Objection/Discrepancy is a must

After a detailed scrutiny, the Registrar tells the applicant about the presence of objection(s), if any, and seeks documents to confront the same. Also, it is mandated by law to file a query to the copyright objection letter. In case of no response, the Registrar could annul the copyright application and term it ‘rejected’. In order to bypass such rejections and get the legal rights to one’s work, a swift response is very essential.

The Response

The feedback to a copyright opposition or discrepancy letter happens to be a legal document. Writing the same needs fundamental legal knowledge and drafting skills. But, there are two manners, to respond – by the creator himself if requisite knowledge and skills needed to provide an explanation regarding their work are there or by getting the services of a legal team to do the same.

We suggest seeking professional help, as the response to an objection/discrepancy notice is a legal document and the ownership is at stake.

However, there is no basic structure with regard to drafting a response to a copyright objection letter, there are some things you should possess:

Attach documents with the reply
Copyright Registration Application Copy
Affidavit for the reply, if needed
Documents substantiating reply
Power of Attorney by the Applicant
Copy of discrepancy letter issued by the Registrar

Depending on whether or not the Registrar is happy with the supporting documents of the response letter, a hearing could be scheduled.

The reply warrants professionalism to the core as the result of the copyright objection can have severe consequences on your personal life. The reply given to copyright objection is only a formality and does not assure the registration of one’s copyright.

Also, while drafting the response, the creator has to check with the relevant department at the Registry to ensure that process is completed quickly. If an objection is filed, it takes up one month more to ascertain whether the copyright can be registered or not. Additionally, as getting copyright is critical to legally prove ownership, utmost caution is needed to ensure good outcome with the Copyright Application. Hence, do not hesitate to avail legal aid whenever required.