How to register for VAT in India

In this blog, we will tell you about VAT (Value Added Tax)and how to register for it.

What is VAT?

Introduced to replace the Sales Tax, VAT is a multi-point levy on each of the entities in the supply chain with the provision to allow ‘Input tax credit (ITC)’ on tax at an earlier stage, which can be appropriated against the VAT liability on subsequent sale.

Who is liable to register for VAT?

Any trading or manufacturing business, whether a sole proprietorship or a partnership firm or a private limited company, that sells its products is liable to be registered for VAT.

What is the procedure of VAT registration?

1. Submit an application for VAT in Form 1 along with the following documents to the local VAT office:

• Central Sales Tax registration certificate(Form A)

• Professional tax registration certificate(Form 2)

• Copy of important documents such as the address proof, ID proof of the Proprietor/Partner/Director

• Four PP size photographs of the Proprietor/Partner/Director

• PAN No. & Bank Account No of the Proprietor/Partner/Director

• Copy of the rental agreement of the business place

• Details of business activities

• Partnership deed (in case of a partnership firm)

• Memorandum of Association and Articles of Association (in case of a Private Limited company)

2. The authorities from the local VAT office will inspect the premises of where you conduct business within a prescribed time

3. Once the inspection is over, you will have to pay a specified fee to the local office for your VAT registration

4. On payment of the fee, a TIN number will be allotted to you for your business and you will also be given the VAT registration Certificate.

For more information on Startup / Company registration in India and approval of company name and trademark registration send query to us visit this link Company Incorporation in India.

Company Formation is Easy Now - Just One Step Away

How to Start a Startup / Small business

Starting a Business

This guide is dedicated for those beginners who want to become entrepreneurs. Before you learn the steps for becoming an entrepreneur, you first need to understand who is an entrepreneur. The person who identifies a need, takes risks, is creative, innovative and ultimately produces solutions to address the chosen need is called an entrepreneur. All of us want to become entrepreneurs but few are able to achieve this feat. So what are the steps required to become an entrepreneur or how to start a startup? Everything is explained as follows:

How to Start a Startup / Business Idea

1.         Finding an idea: Every business starts from idea. A good idea is one that will make a difference and can actually be done. Listening and learning provide the basis to generate good business ideas. Keenly observing the situations which matter to you and to the people in those situations will help you to come up with great business ideas.

2.         Evaluating your idea: Once you come up with an idea, it is time to screen it. Screening means to check its chances of success or failure. Analyse the idea for strengths, weaknesses, opportunities and threats(SWOT). When you are done with SWOT, consider the market environment, resources required and the possibility of future success.

3.         Capturing business idea: In this step, you will have to address what are your customers buying?, who is going to buy your product?, how many potential customers are in your target market? who are your competitors? In the next 3, 6, 12 months, what are the milestones to accomplish? what will your business look like after 1, 2 years? what is the cost to make your product or deliver service? How much will you charge to earn a reasonable profit?

4.         Writing a Business Plan: A business plan is an essential tool for all entrepreneurs. It provides a blueprint and manual on translating your idea into a profitable product or service. It also serves as a powerful diagnostic tool in case things go wrong. Your business plan should attract investors in order to secure finance for your startup.

5.         Finding a Team: Once you complete your business plan, develop a team with right skills and competencies in order to implement your idea. Clarify your vision and proposed product or service to them. Discuss roles and responsibilities to each employee in the team. Offer them contracts in which you need to include employment period, salary, working hours, leave etc.

6.         Registering your Business: Choose a name for your company or firm and choose a form of organisational structure such as sole proprietorship, partnership, LLP, private limited company, co-operative etc. Now create a corporate identity such as logo, business cards, letter head, baseline etc. You will also have to consider legal aspects such as tax, copyrights, trademarks, patents etc.

7.         Choosing a Location: The place where it will be located and operated on is called as business location. It should be suitable for your business type, accessible to customers, meets your layout requirements, connected to transport network, availability of basic amenities, parking space, meets government regulations etc.

8.         Accessing to Finance: Estimate the total amount of capital required for renting, salaries, machinery, tools, building, utilities etc. Once you have determined the budget, identify source of finance. Whether to secure funds from banks or angel investors or to utilize your own personal savings. Read how to finance your business to understand which method of obtaining funds is better for a startup business.

For more information on Startup / Company registration in India and approval of company name and trademark registration send query to us visit this link Company Incorporation in India.

Procedure for Limited Company Name Change

The name of a private limited company may have to be changed for a number of reasons including change of objective of the business, change of management, rebranding, etc., The name of a private limited company can be changed at anytime with the approval of the shareholders and Ministry of Corporate Affairs (MCA). In this article, we look at the procedure for private limited company name change.

Private Limited Company Name Change

The name adopted by a private limited company during incorporation can be changed later. To change the name of a private limited company, the consent of the shareholders through a special resolution and MCA approval are required. The change of name of a private limited company has no impact on its legal entity or its existence as a corporate entity. The change of name of a company will not create a new company or new entity. Therefore, the change of company name shall NOT:

1.      Affect any rights or obligations of the company

2.      Render defective any legal proceedings by or against the company

3.      Not affect any legal proceedings by or against the company and pending in the old name; they may continue in the old name.

Step 1: Board Resolution

A Board meeting must be convened to pass a resolution for change of name of the company and to authorize a Director or Company Secretary to make an application to the MCA for ascertaining availability of proposed name. At the same Board meeting, a resolution to convene an extraordinary general meeting for changing the name of the company, and altering the Memorandum of Association and Articles of Association can also be passed.

 

Step 2: Check Company Name Availability

Once a resolution is passed ascertaining availability of proposed company name, the authorized person can make a name application to the MCA. The procedure for name application is similar to that of the name application procedure followed during CompanyIncorporation in India. Therefore, the name must be as per the Companies Act 2013 Naming Guidelines.

 

Step 3: Pass Special Resolution for Company Name Change

Once a name is approved by the MCA, the Company must conduct an extraordinary general meeting and pass a special resolution for change of company name, and consequential changes to the Memorandum of Association and Articles of Association.

Step 4: Application for approval of Company Name Change

Once the special resolution for change of company name is passed, the special resolution and application for approval of company name change must be filed with the Registrar of Companies. An application for company name change must be made in Form 1B along with the requisite fee.

Step 5: Issuance of New Certificate of Incorporation

If the Registrar of Companies is satisfied with the company name change application, the Registrar would issue a new certificate of incorporation. It is important to note that the company name change is said to be complete and effective on issuance of new incorporation certificate by the Registrar of Companies.

Step 6: Make Changes to MOA and AOA

Subsequent to the issuance of the new incorporation certificate, steps must be taken to incorporate the new company name in all the copies of Memorandum of Association, Articles of Association and Certificate of Incorporation issued by the Registrar.

THE COMPANIES (AMENDMENT) ACT, 2015 – HIGHLIGHTS

THE COMPANIES (AMENDMENT) ACT, 2015

After implementation of New Companies Act 2014, the Government has made changes in provisions of the New Companies Act 2014 and published “Companies Amendment Act 2015” on 25.05.2015.  This Act came into force on 26.05.2015. The amendment has been made in the requirement of paid up capital, common seal, filing e-form INC-21 with the Registrar for commencement of business,  passing of special resolutions in certain cases and many more requirements which shall not apply henceforth.

Following is the list of comparison between the changed provisions.

Sr. No.	Amendment to Sections	The Companies Act, 2013	The Companies Amendment Act 2015
1	Section 2 Clause 68	Definition of Private Limited Private limited company means company “having minimum paid up share capital of one lakh rupees” or such higher paid up share capital	(i) in clause (68), the words “of one lakh rupees or such higher paid-up share  capital” shall be omitted
2.	Section 2Clause 71	Definition of Public company Private limited company means company which  (a) is not a private limited (b) has a minimum paid up share capital of five lakh rupees or such higher paid up share capital	(ii) in clause (71), in sub-clause (b), the words “of five lakh rupees or such higher paid-up capital,” shall be omitted.
3.	Section  9	Effect of registration	the words “and a common seal” shall be omitted.
4.	Section 11	Commencement of business The company shall be required to file e-form 21 before commencement of business or exercising its borrowing powers.	Section 11 of the principal Act, shall be omitted Filing of e-form 21 with Registrar of company before the commencement of business or exercising its borrowing powersis not required.
5.	Section 12	Registered office of company clause 3(b)“have its name engraved in legible characters on its seal”	In section 12 of the principal Act, in sub-section (3), for clause (b), the followingclause shall be substituted, namely:—“(b) have its name engraved in legible characters on its seal, if any;”.
6.	Section 22	Execution of bills of exchange Refer sub-section (2) of Companies Act 2014 which reads as follows : (2) A company may, by writing under its common seal,authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India;3) A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the effect as if it were made under its common seal.	In section 22 of the principal Act,—(i) in sub-section (2),—(a) for the words “under its common seal”, the words “under its common seal, if any,” shall be substituted;(b) the following proviso shall be inserted, namely:—“Provided that in case a company does not have a common seal, the authorisation under this sub-section shall be made by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.”(ii) in sub-section (3), the words ‘‘and have the effect as if it were made under its common seal” shall be omitted.
7.	Section 46	Certificate of shares Clause (1) of Section 46 read as follows(1) A certificate, issued under the common seal of the company, specifying the shares held by any person, shall be prima facie evidence of the title of the person to suchshares.	In section 46 of the principal Act, in sub-section (1), for the words “issued under the common seal of the company”, the words “issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company  Secretary” shall be substituted.
8.	Section 76	Acceptance of deposits from public by certain companies Earlier Section 76A section was not implemented.	Section 76A after Section 76 is inserted Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the manner or the conditions prescribed under section 73 or section 76 or rules made thereunder or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made thereunder or such further time as may be allowed by the Tribunal under section 73,—(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees; and(b) every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both:Provided that if it is proved that the officer of the company who is in default, has contravened such provisions knowingly or wilfully with the intention to deceivethe company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.”.
9.	117	Resolutions and agreements to be filedSub section (3) (g) the resolutions passed in pursuance of sec section (3) of Section 179 and	In section 117 of the principal Act, in sub-section (3),—(i) in clause (g), the word ‘‘and’’ occuring at the end shall be omitted;(ii) after clause (g), the following proviso shall be inserted, namely:—“Provided that no person shall be entitled under section 399 to inspect orobtain copies of such resolutions; and”.
10.	123	Declaration of Dividend There were only three proviso.	In section 123 of the principal Act, in sub-section (1), after the third proviso, the following proviso shall be inserted, namely:—“Provided also that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.”