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.

Company Incorporation in india

How to Register a Company / Business / Firm Name in India

Registering a startup or a new business in India first and foremost one has to go by, there are some official procedures a startup or a company has to follow in order to register them in Indian official records, MCA (ministry of Corporate Affairs) has to made registration process online few years back, please find below on how to go about these process when you want to register your company.

One don’t need to visit corporate office, you can apply for registration just sitting at home. We will help you to get a legal license for your business. The registration includes some must follow rules and some registration like Digital Signature Certificate(DSC), Director Identity Number(DIN) and filing for an eform.

These are four major steps:

•           Acquiring Digital Signature Certificate(DSC)

•           Acquiring Director Identification Number(DIN)

•           Filing an eForm or New user registration

•           Incorporate the company

It’s necessary to get registered yourself to run your business without any legal problem. India is a land of opportunity, no matter in which field your business is operating the chances of getting success is very high, so it just needs a start. starting an entrepreneurship in India would fetch you great success. fallow this post sincerely till you incorporate your final claim for your company. We assure one will end up in getting their business registered after following this procedure.

Know the basics first: What is mean by company, the private company and public company?

In India, there are about 7 lacks registered companies and every month thousands of firms apply for registration. company is a legal entity; According to Section 3 of companies act company means a legal entity formed and registered under Companies Act 1956. Under the ministry of corporate affairs, every company is to be registered by the registrar of companies for the state. This act maintains two types of companies called private and public companies. The ‘Limited’ is the most commonly used corporate form at the end of the company name. First you need to know what these public and private companies are and decide how you want your company to get registered.

When it comes to company registration in India, Every firm will have following two options:

1.         Private company:

2.         Public company:

Let’s start the registration procedure: 4 Steps

Step 1: Acquire Director Identification Number(DIN)

This is the first process in registration that each director of the company should obtain their identification number. As per the amendment act 2006, acquiring a DIN  is compulsory for every director i.e. as such every existing and intending directors have to obtain their DIN. To get DIN one need to file a eForm DIN-1. The DIN-1 form is available on Official site of the ministry of corporate affairs the link is DIN-1 Form.

•           Register yourself on MCA Website first and have a login id. After filling DIN-1 Form, one should upload the filled form by clicking to eForm upload button on MCA website and should pay applicable fees.

•           After getting generated DIN one should intimate their company about DIN. The director can intimate their company about DIN  by using DIN-2 Form.

•           Then company should intimate the Registrar of Corporates(ROC) about all director’s DIN through DIN-3 Form.

•           If there is any change in DIN or need for any updation  like change of address, personal details etc, then director should intimate this change by submitting the eForm DIN-4 Form.

 

Step 2: Acquire Digital Signature Certificate(DSC):

In order to ensure the security or authenticity of documents filed electronically the information act 2000 demands a valid digital signature on the documents submitted electronically. This is the only and safest way that one can submit their documents electronically. The digital signature certificate should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA). One should not use DSC given by any other agency which is not approved and it’s illegal to use others DSC as yours or the false one.

If you already have a digital signature then you can use the same, no need to apply for another. But do check for your digital signature validity, agencies issue DSC’s with one or two year validity after expiry you have to renew it.

One can acquire his/her Digital Signature certificates  from these government listed agencies like TCS, IDBRT, MTNL, SAFESCRYPT, NIC, nCODE Solutions etc. to check out their price details of these Govt approved agencies, Go to this link.

Step 3: Create a account on MCA Portal – New user registration

This is about having a registered user account on MCA Portal for filing a eForm, for online fee payment, for different transactions as registered and business user. Creating an account is totally free of cost. To register yourself on the MCA portal, click on the register link.

Step 4: Apply for the company to be registered.

This is the final major step in a registration of your company which includes incorporating company name, Registering the office address or notice of situation of office and notice for appointment of company directors, manager and secretary. And also regarding the take and pay for their qualification shares.

After submitting these forms, once the application has been approved by MCA, you will receive a confirmation email regarding the application for incorporation of a new company, and the status of the form will get changed to Approved.

Check these documents before submission of a company:

1.         DIN of all those directors of a proposed company.

2.         DSC – Digital Signature Certificate

3.        Original copy the of formal letter issued by ROC regarding availability of Company name.

4.         Form-1 for incorporation of a company.

5.         Form-18 for situation or address of the proposed company.

6.         Form-32 for particulars of proposed directors, managers and secretary.

Formalities to be followed while company Incorporation in India:

1.         Obtain a TAN card

2.         Obtain a Permanent account number (PAN) from income tax dept. India

3.         If required: Documents obeying shop and establishment acts.

4.       If required: For foreign trade, Registration documents of import export code from Director General of foreign trade.

5.         If required: Registration documents of Software technologies Parks of India (STPI).

6.         If required: RBI approval for foreign companies investing in India and FIPB approval.

7.        Both Indian and foreign directors need to have valid Digital Signature Certificates from authorized agencies.

       

Procedure of Opening / Setup Subsidiary Company in India

In recent past Government of India has opened its doors for international companies to open their subsidiary company in India or branch in India. This move was highly welcomed by international business community and hence many international brand have started their subsidiary companies or branches in India. 

Companies / Business having operations in countries other than India can set up wholly-owned subsidiary in India under those sectors where in 100% foreign direct investment is permitted under the Foreign Direct Investment Policy issued by Government of India. 

A foreign company or business can start their wholly-owned subsidiary in India may be either of the following business / company types like : Private Limited Company, Public Limited Company, Unlimited Company and under Sole Proprietorship. International business groups / companies can also set up their operations in India through the business entities: Liaison Office/Representative Office, Project Office, Branch Office. These companies have to register their subsidiary companies with Registrar of Companies which can undertake any permitted business activities.

It is vital to choose the right kind of business consultant who have expertise in starting a subsidiary company in india which best suits its purposes and takes care of liability issues and tax planning issues. We Signs and Marks having years of professional experience in providing assistace to Foreign Direct Investors can help you to starting or setting up your subsidiary company in India.

Foreign direct investors who are planning in setting up a subsidiary company or office in India are required to seek approvals from Government of India before investing in India. Our expert team can help in getting those approvals and perform those much need liasions and paper work in limited period of time.

Holding company Vs.  Subsidiary company

With regard to Foreign Direct Investment in India we can provide professional assistance in How to form Subsidiary in India, Opening Branch in India, How to Incorporate in India, Forming Company in India, Incorporating in India, Forming Subsidiary in India, Starting Business in India, Types of Companies in India, Business Entities in India, Procedure for Formation of Company India, Forming Corporation in India, Forming Private Limited Company 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.

Legal Advice on Company Registration and Firm Registration

The Companies Act 1956 lays down the guidelines for the formation and registration of a Company in India. This Act applies to the whole of India and to all types of Company’s thus making it an important legislative body governing all registrations and closures.

The start of a company means a lot of work. It’s like giving birth to a child. It’s an exciting phase with a lot of anxiety and hope. Every new business requires company registration by law of the land. One should follow the state law as well when registering a Company.

The offices of the registry of the records have all the information regarding all the companies registered in India and the Registrar of Companies has all the authority and responsibility of registering a company in various states and union territories. It is to be noted that all the companies registered have to comply with all the statutory compliances falling under this Company Act.

Some points should be kept in mind when getting registering for the new business is done.

Legal advice:

The first and foremost important step is to ensure that the legal angle is taken care of. One should get the Director Identification Number for the business. Then is the chance of Company registration and then submitting the necessary documents to the government. Some basic documents are mandatory for company registration like, address proof, PAN card, photographs.

One should remember to select at least four suitable names for the new company. It should not be a copied one and should not violate the copyrights and patents.

Once the name is approved by the Registrar of companies, one can move ahead for company registration.

The Memorandum of Association and Articles of Association are legal documents which should be drafted by legal experts, different opinions sought and finally printed.

The application for registering a company has to be forwarded to the Registrar of Companies and should be accompanied with names, Memorandum of Association and Articles of Association besides other requisite documents.This has to be filed with theRegistrar of companies of the state where the company is being set up.

Under the Companies Act 1956, one can form two types of Companies, Private Company or a public company and get them registered as per the procedures laid down in the statute of the Companies Act.

Once the company is registered, one can patent a product or get a copyright to protect your company.

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.”