Welcome to AJSH & Co.

Blog Banner
llp registration in Delhi India

A hybrid corporate entity-Limited Lability Partnership

Limited Liability Partnership (LLP) is a new corporate structure introduced in India in April 2009, through the LLP Act of 2008. Aimed at small and medium sized businesses; a LLP is hybrid form
which integrates many of the benefits of limited corporations and the traditional partnership firms. In other words, it is an alternative corporate business vehicle that provides the benefits of limited liability of a company, and also allows its members the flexibility of organizing their internal management on the basis of a mutually arrived agreement, as a partnership firm. Low registration fee and easy maintenance make LLP a preferred category of entity for many of the small and medium businesses in India.

Features
Most enticing features of a LLP are:

  • Simplicity and ease of formation and registration
  • No prescribed minimum capital requirement for each partner
  • Liability of each partner is limited to the contribution mention in agreement
  • Cost of formation is limited
  • Least regulatory compliances
  • Separate legal entity

The minimum number of partners required to incorporate an LLP is two. There is no constraint on the maximum number of partners in LLP in India. Among the partners, there should be minimum two designated partners with proper Designated Partner Identification Numbers (DPINs), and at least one of them should be resident in India. The rights and duties of designated partners are governed by the LLP agreement.

Documents Required
To register a LLP in India, the following documents are required:

  • PAN of the partners
  • Address proof of the partners
  • Utility bill of the proposed registered office of the LLP
  • No-Objection certificate from the landlord
  • A copy of rent agreement between the LLP and the landlord

PAN of the partners and their address proof are required to start the LLP formation procedure. The documents pertaining to the registered office of the LLP can be submitted after obtaining name approval for the LLP from the Registrar of Companies (ROC).

Following is step wise registration process for incorporation of Limited Liability Partnership (LLP):
Director Identification Number (DIN): Every individual intending to be appointed as designated partner of proposed limited liability partnership has to apply for allotment of DIN. Earlier partners had to apply for DPIN. Ministry of Corporate Affairs (MCA) has vide its notification amended the limited liability partnership rules, 2009. Now instead of DPIN, every partner who will be appointed as a designated partner has to apply for DIN. The application for allotment of DIN has to be made in Form DIR- 3. You have to attach the scanned copy of documents (usually Aadhaar and PAN) to the form. The form must be signed by a Chartered Accountant, Company Secretary, Cost Accountant or Advocate.

Digital Signature Certificate (DSC): Designated partner of proposed LLP, whose signatures are to be affixed on the e-forms has to obtain Digital Signature Certificate (DSC) from any authorized certifying agency. Also, they should obtain either class 2 or class 3 category of DSC. This is because all the documents for LLP are filed online and are required to be digitally signed.

You can click here & let our expert help you procure DIN.

Reservation of Name: Once two DINs are available, fill Form 1 for the reservation of name of proposed LLP. But before quoting the name in the form, it is recommended that you use the free name search facility available on MCA portal. The system will provide the list of closely resembling names of existing companies/LLPs based on the search criteria filled up. This will help you in choosing names not similar to already existing names. You need to provide six names in the order of preference in Form 1.

Once, the application for reservation of name is submitted to the MCA, it will be processed by the ROC in the State of Incorporation. The registrar will approve the name only if the name is not undesirable in the opinion of the Central Government and does not resemble any existing partnership firm or an LLP or a body corporate or a trademark.

Incorporation of LLP: Once the name approval application is accepted by the MCA and name approval letter is issued to the proposed Partners you have to apply for incorporation of the LLP through Form-2. All the details in the form must be filled correctly like – total number of partners and designated partners, amount of partner’s contribution, etc. You have to pay the prescribed registration fee based on the contribution of partners in the proposed LLP.

The form must be digitally signed by a person named in the incorporation document as a designated partner having DIN. Also, it has to be digitally signed by an advocate / Company Secretary / Chartered Accountant / Cost Accountant in practice. On the submission of the form, if the registrar is satisfied, they will register the proposed LLP. It takes 15-20 days for the registration of LLP subject to government processing time and submission of necessary documents.

File Limited Liability Partnership Agreement: LLP agreement governs the mutual rights and duties amongst the partners and also between the LLP and its partners. It has to be carefully drafted as per the rules and provisions given in the Indian LLP Act of 2008. LLP agreement must be filed in form 3 online on MCA Portal. Agreement may be conveniently submitted online to the MCA, within thirty days from the date of registration of the proposed LLP. The LLP Agreement has to be printed on stamp paper. The value of stamp paper is different for every state.

To get your business registered as a Limited Liability Partnership, please get in touch with us. Also, for assistance in setting up business in India, company formation in India, income tax return filling, bookkeeping, accounting, GST and auditing. Click here.

know-about-malaysia-company-formation

Section 8 Company Formation

In India, a non-profit organization can be registered as a Trust, by making a Trust deed or as a Section 8 Company, under the Companies Act, 2013. According Indian Companies Act, 2013, a section-8 company can be established for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object, provided the profits, if any, or other income is applied for promoting only the objectives of the company and no dividend is paid to its members.

Procedure for formation of section 8 company is listed below:
1. Digital Signature Certificate (DSC) & Directors Identification Number (DIN): The only secure and authentic way that a document can be submitted electronically is DSC. All filings of e-forms on MCA Portal are required to be filed with the use of DSC of the authorized signatory. Further, DIN for all the proposed Directors of the Company must be obtained. For obtaining DIN an application in Form No. DIR – 3 should be filed on MCA Portal with documents attested by a practicing professional.

2. Name approval: By submitting an application in Form – INC 1, applicant can obtain approval for selected names from the Registrar of Companies (RoC). The Applicant can give maximum six names in order of preference. The name once approved by the authority is valid for sixty days. The name once approved by the authority is valid for 3 months. Name approval generally takes 1-2 business days.

3. Main instrument: After obtaining name approval, constitutional documents i.e. Memorandum of Association (MOA) and Articles of Association (AOA) is to be drafted and subsequently filed with the RoC along with the forms and other necessary documents stated below:

  • Affidavits
  • Consent Letters
  • Certificate of Compliance from a practicing professionals
  • Subscription pages of MOA & AOA– Both documents shall be signed by each subscriber who shall mention his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation, if any. The witness shall be a practicing professional
  1. Issuance of license with registration fee: For Section 8 company license, promoter has to file E-Form INC 12 accompanied by:
  • MOA and AOA
  • A declaration confirming the application by a practicing Company Secretary
  • Names, addresses, occupation and descriptions of the promoters as well as Board Members
  • A statement showing details of assets & liabilities as on date with the application
  • Estimated future annual income and expenditure, specifying the source of income and object of expenditure
  • A statement giving brief description of work, if any, already done by the association
  • A statement specifying briefly the grounds on which the application is made
  • A declaration in prescribed form on non – judicial stamp paper by each person making an application
  • A letter of authority with payment of prescribed fee
  1. Other requirement: Following forms are to be filed with the RoC after issuance of license:
  • Form INC – 7 for declaration of compliance with the requirements of the Act on application for registration of a company;
  • Form INC – 22 for notice of situation of registered office;
  • Form DIR – 12 for appointment of directors of the company; and
  • Subscribers and proposed directors may delegate their authority to a person(s) to carry out appropriate change(s) as suggested by the RoC in any of the incorporation papers that have been filed.

6. Clarifications / additional Information required by ROC: Documents submitted for the purpose of incorporation are thoroughly reviewed by the RoC. RoC may require certain clarifications, if required. The person authorized shall present clarifications with Roc as needed.

7. Certificate of Incorporation: After providing clarifications, the Certificate of Incorporation is issued by the RoC along with a unique Company Identification Number (CIN) and the Company is deemed to be incorporated from the date of certificate issued. Consecutively, company may apply for other tax and regulatory registration as may be required to run the business smoothly like PAN, TAN, Bank account, etc.

8. Subscription money: A new bank account solely at the name of the company newly incorporated shall be opened by the Board of Directors and the Subscribers. Further to that, they shall deposit their subscription money in bank account to help the company raise initial capital to start its business.

Minimum Requirements for Section 8 Company:
1. At least 2 shareholder and 2 Director (both can be the same person)
2. At least one Director shall be resident in India
3. No Minimum capital required
4. PAN is a mandatory requirement in case of Indian nationals
5. Identity Proof (Voter ID/Aadhar Card/Driving License/Passport); Passport is mandatory requirement for proof of identity in case of foreign nationals
6. Proof of Residence
7. Registered utility proof that is any office address proof
8. Any documents establishing the ownership such as sale deed / house tax receipt along with no objection certificate, in case the premises are owned by a Director and Promoters

We, a Chartered Accountant firm, serve a number of clients who need assistance for various regulatory compliances including setting up business in India, company formation in India, income tax return filling, bookkeeping, accounting, GST and auditing. If you require any guidance for the any professional service, please contact AJSH & Co LLP.

For further queries, click here!

OPC-Registration-Procedure

Guide for incorporation of One Person Company

Here is step-by-step guide for starting your company individually — the understanding of an OPC, the benefits of incorporating it and the legal formalities in its formation.

As per the Companies Act,1956, a Public Ltd Company requires at least 7 members or shareholders wherein a Pvt Ltd Co requires to have at least 2 members. Hence, a One Person Company was never allowed to be formed in our country earlier. However, under the provisions of the Companies Act 2013, Sec 2(62), One Person Company (OPC) is being allowed to form.

One Person Company means a company which has only one member. It is important to note that Section 3 classifies OPC as a Private Company for all the legal purposes with only one member. All the provisions related to the private company are applicable to an OPC, unless otherwise expressly excluded. In case of OPC, though it is true that the One Person appears to be like sole proprietor his liability to the debtors of the Company is limited to the shareholding of the company and his personal assets are never attached for payment of the company’s liability, which in case of Proprietorship never happens.

Things you should keep in mind before forming an OPC:
Only a natural person who was a resident of India in the previous year (i.e. he has stayed in India for more than 182 days in that year) shall be eligible to form an OPC. This means that any association of persons or body of individuals or company or any other entity cannot form OPC. A minor is also not eligible to be a member or nominee in an OPC.
You cannot incorporate more than one OPC at a time.
An OPC can either be a company limited by share or limited by guarantee or an unlimited company.
Once an OPC is formed, you will still have to follow the minimum requirement i.e. the company must have an average annual turnover of Rs. 2 crore in the immediately preceding three financial years, failing which the company will lose its status.
An OPC cannot carry out Non- Banking Financial Investment activities including investment in securities of any body corporate.

Steps to be followed to Incorporate One Person Company (OPC)

  • The director is firstly required to obtain a Digital Signature Certificate [DSC] for the proposed Director(s).
  • He is then required to obtain a Director Identification Number [DIN] for the proposed director(s).
  • Thirdly, they are supposed to select a suitable Company Name and then make an application to the Ministry of Corporate Office for the availability of name.
  • The fourth step is to Draft a Memorandum of Association and the Articles of Association [MOA & AOA].
  • The fifth requirement is to sign and file various documents of the OPC including MOA & AOA with the Registrar of Companies electronically.
  • The director is required to pay the Requisite fee to Ministry of Corporate Affairs and also as Stamp Duty.
    The seventh step is to scrutinize the documents at Registrar of Companies [ROC].
  • Lastly, he is required to obtain the receipt of Certificate of Registration/Incorporation from ROC.

If you have any query regarding this Click Here

Company formation in India

Case study: Company formation in India

Background
The client is a London based company with presence in over 80 countries across six continents. The company helps its clients to successfully deliver projects around the world by sourcing and supplying top professionals in fields such as IT, Telecom, Project Management, Cyber & IT Security, Presales, Sales & After Sales, Compliance and Security. With offices in Europe, Middle East & Africa, Asia and America, the Company is striving to be at the top in delivering the best possible services and support to organizations that need complex services on a global basis. 

Case Overview

The Company is helping many of the worlds’ leading companies to achieve their business goals by providing them a world class outsourcing, staffing and contingent workforce services by aligning their hiring processes to each client’s distinct requirements. Support for achieving that, comes from the staff specializing in the following departments of the business:

  •  Recruitment & Outsourcing
  • Legal
  • Accounting
  • Accommodation
  • Travel
  • Visa & Immigration
  • In-Country support services
  • Health and safety support

 The client wishes to expand its operations and provide its discrete services in India. 

Challenges

The primary objective of the client was to provide their services in other countries. For this purpose they needed to set up their company at a location where they could set up a robust and reliable distribution network. Apart from this, they had various other requirements with respect to their business and location as well. Some of their requirements were:

  • Setting up of the business in a location in India where companies from the same industry were located;
  • Secure a specific name pattern for the Indian Company similar to its other entities around the world;
  • Appointment of a Director who is ordinarily resident and citizen of India to satisfy the Indian Companies Act requirement; and
  • The Indian Company would provide support in project specific needs of their clients tailored to meet their objectives along with local operational support in the territories where its client does not operate. 

 Business Solution

The client approached us for assistance in incorporation / formation of an Indian Company. After having a detailed discussion with the client and understanding their requirements, our team listed down their preferences keeping in mind their requirement to set up business in India at minimum cost. We assisted the client in identifying the desired location, apply for the name in the desired pattern, appoint a nominee Indian director and complied with other applicable statutory requirements of shareholding, directorship etc. Thus, we successfully incorporated an Indian Company for the client as specified.

Current Status

The Company has expanded its operations to India with an endeavor to expand even more. Their customers are highly satisfied with their delivery times generating a goodwill for them. They were able to increase their business by more than twice as planned. The client recently shared with us their requirements to expand further into many more countries with our assistance. Thus, we extended our services happily to them.

We have served a number of clients for their company incorporations who have benefitted from our professional services. For a more detailed discussion on company incorporations in India, or to obtain further assistance in setting up business in India, company registration in India, company formation in India, post-registration compliances, accounting and bookkeeping, tax compliances, please contact AJSH & Co LLP. If you have any query regarding this Click Here.

Financial investment solutions for NRIs

Over the years the opportunities to invest for Non Resident Indians (NRIs) in safe investment options has increased tremendously.
There was a time when NRIs found it safe to invest in real estate. But banks today also offer great number of financial solutions. If you are an NRI, it is suggested to invest in financial assets rather than real estate. Real estate is a popular option but comes with its own set of challenges which NRIs and even locals routinely underestimate, only to repent later.
Financial assets are much easier to handle from abroad and are free from legal issues, possession and maintenance issues, require lower time and effort from you, and of course, don’t require you to handle “black” money. Also, most transactions can be done online from wherever you are, giving you significant control. NRIs can also consider fixed deposits or mutual fund schemes. Mutual funds tend to be slightly risky investment as compared to some of the other instruments. Fixed deposits can be considered the best plan for financial investment in India.
It is important to remember for NRIs that some additional documentation maybe required. These include a passport photocopy with valid visa, overseas employment letter, PAN Card and a local address proof.
The length of your financial investment in Indiadepends upon you and your assets. However, these are the few commonly available options:
• Very short term – A few days/weeks/months:Bank Fixed deposits, Liquid/Ultra Short Term Funds
• Short Term – 1 to 3 years:Short Term Debt Funds
• Medium term – 4 to 7 Years:Combination of Debt and Equity Funds with Debt portion being higher
• Long Term – 8 to 14 Years:Combination of Debt and Equity Funds with Equity portion being higher
• Very Long Term – 15 years or more:Equity Funds
Always consider the taxation policy before investing in India. It should never be taken for granted that the tax policy of one country is same as the other. If you are new to the entire investment scenario, it is advised to seek professional help. Professional services will help you chalk out your entire investment plan. You can also learn about new methods of investment.
If you’re considering investing a significant portion of your hard earned money in India, do look for customised, honest and professional advice by engaging a qualified, fee-based financial planner/advisor in India.

If you have any query regarding this Click Here

Investment solutions for NRIs

The Indian government provides great solutions for investment in India to lakhs of NRIs.
Despite the ongoing slowdown, India continues to offer numerous investment opportunities for foreign investors, who do not enjoy such high rates in their country of work. The current volatility has created attractive entry points for NRIs across a range of asset classes. If you are looking to invest in India, what are the options you should consider?

If you wish to invest in India, the first step is to open a savings bank account. There are three basic types of bank accounts for NRIs.

Go for a non-resident external (NRE) rupee account if you are looking to remit overseas earnings to India and hold them in rupees, as also transfer the proceeds of your investments back to your home country without any restrictions. An NRE account is completely tax-free and no tax is payable on the interest earned on the balance.
But you cannot put income from rent, salary and dividends in the NRE account. For that you need a non-resident ordinary (NRO) account. However, the interest earned on the NRO account is taxed at the marginal rate of 30% plus surcharge and cess. The balance in the account is also subject to wealth tax.

The advantage is that NRO accounts can be jointly opened with a resident Indian. If you do not wish to be exposed to exchange rate risk, you can instead open a foreign currency non-resident (FCNR) account with a local bank, where your funds are held in the foreign currency, and not converted to rupees.

In order to open an account, you can either visit the nearest branch of the Indian bank in your home country, if any, or send the completed application form (you can get it online) along with the documents to any of the branches in India (see box). Today, there are also multiple service providers who help you do investment in India. They not only handle the entire process but also offer viable solutions that ensure highest return on investments.

Before investing in India, it is necessary to be aware of the tax implications. Although there is not much difference between tax rates for residents and NRIs, it is important to know that for NRIs, the tax is deducted at the source.

For most NRIs, property is the primary choice of investment. The bulk of their money is directed towards real estate investments. However, some experts feel this is not the ideal route for all NRIs.

If you have any query regarding this Click Here

Investment ideas suitable for Indian business

It is a very common belief that starting a business in India requires huge amount of investment. But not all businesses require too much investment. India is a land of opportunities and one can start a business with low investment or even no investment. You can start a business in India with a nominal amount of investment and grow your business. India has a rapidly growing economy and has a massive population. In this article we will discuss some ideas for business start-up in India.
• Home canteen: Running a home canteen requires low investment in business. Off late, the business of food supply has gained a lot of popularity. It is a profitable small-scale business. You can start a business in India with a nominal amount of investment and grow your business.
• Dance instructor:You can work as a dance instructor and this does not require a whole lot of money. You can open your own school or work as a freelance dance instructor. Since dance forms an integral part of Indian culture, many parents like their kids to learn dance from a very early age. Therefore, there are plenty of opportunities for a dance instructor to earn both fame and money.
• Fashion designing:If you are good at art and like fashion, then fashion designing is the best choice. In order to make the most sought-after outfits you will have to undergo training in this field.
• Data entry jobs:This job does not require huge investment. If you have a computer at home and internet connection, you can start a data entry company. Filling up forms online is a popular example of data entry jobs on the Internet.
• Homemade chocolates:Making chocolates in your home is a moneymaking business. You just have to get the ingredients that are essential to make chocolates at home. After preparing the chocolates, pack them with fancy wrappers to add creativity and make them more attractive.
• Event management:It is a cost-effective business for people who are interested in organising different types of events and functions.
• Wedding consultant: In India, weddings are big events and take a lot of time. You can work as a wedding consultant to make things simpler and manage them for people who just don’t have the time to do it for themselves.
Apart from this there are many small-scale businesses that require low investment. Business opportunities in India are tremendous.

If you have any query regarding this Click Here

Investment opportunities for foreign nationals in India

The business sector in India is growing and expanding both in size and in terms of the level of investment. There has been a steady growth in the number of start-ups and SMEs (Small and Medium Enterprises). In the last five years, India’s GDP has grown at an average of 8.5 percent.
According to the World Survey, India was ranked as the fourth best place in the world for entrepreneurs to start a new venture. Also, according to the International Monetary Fund; India is set to become the third largest economy in the world by 2030.
The government of India is looking at creating a strong entrepreneurial culture and vibrant economy by easing the regulations for expats, NRIs or foreign nationals to start businesses in India. Investment in India is not an easy task. There are many clearances and permissions to be obtained from various boards. The time taken to incorporate business in India depends upon the nature of the business and a myriad of factors. Roughly it takes about 3 to 5 months for expats to setup a business in India.
Foreigners and expats can invest their capital in many different ways. We’ll take a look at three of the most popular ways foreign investment can happen in the Indian market.
• ADRs: ADRs (American Depositary Receipts) are the traditional way of investing in foreign companies. ADRs represent individual stocks and are traded on the New York Stock Exchange (NYSE), American Stock Exchange (AMEX) or the Nasdaq. There are three different types if ADRs.
• Exchange trade funds and mutual funds:Foreign Institutional Investors (FII), have had access to the Indian market for 10 years or more. There are several ETFs and mutual funds available, which cover a number of different sectors within the Indian economy.
• Qualified foreign investor:QFI status allows you to invest directly in Indian companies via the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE). You can also invest in Indian based mutual funds and corporate bonds.
There is no doubt that India offers exciting investment opportunities. But there are certain pitfalls. India is a developing country and therefore requires a huge amount of investment in infrastructure, before it can truly compete on the world stage. If this investment fails to take place, long term growth could be stagnated.
Apart from the above methods, foreign nationals can set up investment in India as a public limited company, project office, liaison office, branch office and joint venture. The routes for foreign investment are not limited.

If you have any query regarding this Click Here

Company registration number

When a company registers itself with the registrar of companies, it gets a unique company registration number (CRN). The number is used to identify a company and verify its legal existence as an incorporated entity. The number is a unique combination of 8 numbers or 2 letters followed by 6 numbers. A company is issued with a company registration number (CRN) soon after company formation. The number will be printed on the certificate of incorporation and all the other official documents received from the ROC.
The number describes the type of company and its nature of business. The company registration number is also called CIN number which means the identification number that is used to identify the company in respect to its type, year of incorporation, type of industry, state of registration, registration numbers and many more. The company registration number is an amalgamation of several different attributes of the company.

The company registration number format is as follows:
• 1st digit: The first digit is L or U which means listed or unlisted company.
• Next 5 digits: The next 5 digits show the industry to which the company belongs to.
• Next 2 digits: The next 2 digits depict the state to which the company has been registered to. The state code tags with the company after it has been registered. For example, DH for Delhi, MH for Maharashtra and so on.
• Next 4 digits: The next 4 digits depict the year when the company has been registered or incorporated. It is the year of incorporation when it has been formed under the New Companies Act 2013.
• Next 3 digits: From these 3 digits, one can easily know if it is a public limited company or private limited company. The branch office of a foreign company is depicted by FTC.
• Last 6 digits:These 6 digits are an ROC number issued by the ROC during registration of the company.

It is important for a company to display their company registration number on all stationery including letterheads, faxes, emails, compliment slips, invoices, receipts, order forms, websites and other online material. There are many instances when you are required to use your CRN. You are required to provide your CRN when your register for corporation tax, VAT and PAYE. Just in case you cannot find your CRN, you cannot log on to the ROC website, insert your company details and find it.

If you have any query regarding this Click Here

Rules for picking a company name

When you decide to start your own company, the first step it to get it registered with the registrar of companies. To do this, you need to get various documents together. You also have to think of a unique company name. In the company incorporation form, you need to at least pen down 5-10 company names that are unique and suit your business. Based on the availability the registrar approves of one name.
Before deciding on a name, you can also conduct a company name search online. There are various websites that offer services where you can check if a particular name is available or not. However, the registrar of companies across India expect an applicant to follow a few naming guidelines. Sometimes, the approval of the name can be subjective. The approval depends on the officer handling your application. It is advised to follow the below guidelines to better your chances of approval:

• Unique component: Every company name should have a unique component. For example, in Flipkart Internet Private Limited, Flipkart is the unique component. Since the name has been taken, it will not be given to any other business that exists over the internet or even related categories such as e-commerce and online solutions. But in this too, there is some subjectivity. Some ROCs may not even approve the name Flipkart Chemicals saying that a well-known internet brand Flipkart already exists. Similar sounding names will also be rejected by the ROC.
• Blacklist: The ROC will immediately reject abbreviations, adjectives and generic words. If a company uses the words bank, exchange and stock exchange, it can be rejected unless it has been approved by the RBI or SEBI.
• No common trademark: Make sure to check that there is no registered trademark by the same name on the IP India website. If it does exist, it can only be approved if you get a no-objection certificate from the owner who authorises to use it.
• Descriptive component: The company name should not describe what you do. For example, if your company is into research, you cannot include the word research in the name.
• Avoid unusual spellings: When creating a name, stay with words that can easily be spelled by customers. Also, check the spelling two-three times before submitting the documents to the ROC. A wrong spelling can cost you a lot.

Thus, keep the above points in mind during company name search.

If you have any query regarding this Click Here