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Tax Department Unveils Draft Rules For Registration Under GST

The government has put out the draft rules for the goods and services tax for discussion ahead of the September 30 meeting of the centre and states to discuss the regulations. In view of the right deadline, the finance ministry has asked for feedback by September 28. Rules relate to registration, invoice and payments, laying down procedures, guidelines and documentation.

The GST council will discuss the rules on September 30, The government has prescribed a largely online process for registration and laid down strict timelines for completing the process. We intend to have these rules approved by GST council in its meeting on 30th September so that business systems can be modified by all revenue.

It’s encouraging to see that the rules largely envisage electronic interactions between the tax authorities and industry with only need-based physical intervention like verification of premises on the application filed for Private company Formation in Gurgaon Indirect tax. Further all the PAN details are to be verified online with CBDT database which is expected to bring larger part of the business in the mainstream.

Your desired name must be included, typically with a corporate identifier, such as Corporation, Incorporated, Company, or an abbreviation, such as Inc. You may want to conduct a preliminarily name available search before submitting the Incorporation documents. If you incorporate online, the company incorporation in gurgaon service you purchase will typically include this. Remembers that the state holds final approval rights to ensure that a name is not already in use or in deceptive similar to one in use.

Much of this had already been explained through the FAQs issued by the finance industry earlier giving industry an advance peak into the details. Rules provide for complete electronic payment of tax and adjustment of credit and a unique ID number will be generated by the common portal for GST transactions for every debit or credit transaction.

 

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Procedure of company formation in India

These days, most people want to start business in India. From foreign nationals to NRIs to Indian residents, many people are looking at investing their money in India. There are two reasons behind this trend. One is because the Indian economy is growing at a fast pace and in the near future it has potential to grow more. The other reason is because India is a diversified country and hence it is the most favoured location for doing business. Being a diversified country, India offers different routes of investment to its people.
The most suitable for of entity for carrying out business in India would be to form a private limited company. The formation of a private limited company takes approximately 12-15 working days after receipt of the necessary documents.
In this article, we will discuss the procedure of forming a private limited company in India.
The minimum requirement to start a private limited company:
• Identify the directors of the company (minimum of 2 directors should be present and maximum of 8 is allowed).
• Minimum 2 shareholders
• Minimum capital of the company should be INR 1,00,000/-
• DIN (Directors Identification Number) for both directors. If you do not have one, you can apply for it online
• Digital signature of all directors
• Reservation of the name of the company (You can submit 5-6 names in the order of which you prefer. Based on availability, you get your company name)
• Apply for incorporation of company
• Consent from subscriber to director
• Preparation of documents such as Memorandum of Association.
• Filling documents with authorities
• Liaison with the authorities and correction
• Proof of registered address
• NOC from the owner of the premises
• Getting final certificate of incorporation
The procedure:
• The most important step in forming a private limited company is applying for DIN. Only directors that do not have this need to apply. They need to submit the form to the central government with a fee of rupees1500 per director.
• Obtaining digital signatures is the next step. The director has to apply for the digital signature certificate. This is necessary to file company registration documents.
• Submit 5-6 preferred names for your company in order of the most preferred. Check for name availability.
• Apply for name availability to the concerned ROC.
• Once the name has been approved, you need to apply for incorporation of the company. For this, you will have to prepare a Memorandum of Association that details company operation and list of directors.
• Once it is approved, make at least 10 copies of Certificate of Incorporation and Memorandum of Association and have it in a booklet form.
• You will then have to fill various forms in the ROC.
• You will have to submit proof of registered address (pan card, voters id)
• Filling fees for final documents
• Other government expenses
• If the registrar is satisfied with all the requirements that have been compiled by the company, they will issue certificate of incorporation. The date mentioned on the certificate is the date of incorporation of the company.
• Lastly, you can open a current bank account in any leading bank to carry out your operations.
Therefore, formation of a private limited company is not that difficult as it seems. If you lack the expertise to do it on your own, you can always take the advice and assistance of professionals. Roughly, formation cost of a company should be INR 25,000.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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Company register & its importance

Popularly called a commercial register, a company register is an official set of documents that it needed by every company to be complaint with the Corporations Act 2001. The set of documents needs to be up to date as the company goes through any kind of changes. The company register is required to be kept at either a registered office or principal place of business.

Every company register comprises of the following statutory registers:
• Register of applications and allotments: This show the composition of shares and shareholders within the company.
• Register of transfers: This records any share transfer that may have taken place between the shareholders.
• Register of members: This is a list of all the names and addresses of the shareholders of the company.
• Register of directors and secretaries: This document contains complete information with regard to the directors and secretaries of the company. It also contains information about the previous directors (within the last seven years). This register details the name, date of birth, nationality and addresses of the directors and secretaries involved within the company.
The minutes of every general meeting a company conducts must be recorded. Every company should offer its members minute books for review.

At registration, the minimum documentation required to satisfy the corporations act, 2001 is:
• Certificate of Incorporation
• Memorandum and Articles of Association
• Register of Applications and Allotments
• Register of Transfers
• Register of Members
• Register of Directors and Secretaries
• Minutes
• Share Certificates
• Register of Charges
• Documents Lodged with Registrar of Companies

As changes are made within the company, you are requested to update the above documents.
Every company is required to have an electronic company of the company register and hard copy. The hard copy maintains the company’s record for organisational purpose. The company register usually comes handy during company’s general meetings, for a professional corporate image and for the purpose of inspection by particular organisations who may request to view the company register of your company.
The company register is like a business register. At all times, the register must be present with the company. It contains information pertaining to incorporation, amendments, cessation and trading. It provides a complete picture of the legal status of the company and is a key archive for drawing up indicators of economic and business development in each area to which it belongs. If a company fails to present its register when asked for, it can be asked to wind up immediately.

 

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Start business in India

Role of the registrar of companies

In India, registering a company is not as easy as it may seem to be. The registrar of companies (ROC) plays a pivotal role in facilitating and promoting a business. It is impossible for a company to conduct business if it has not been issued a certificate from the registrar of companies. No company, under the companies act, 1956, can come into existence without the approval of the ROC. The registrar provides a certificate which acts as a lifelong proof of existence of the company. The ROC office contains data on more than 6 lakh companies that operate in India.

To obtain a certificate, the company has to produce various documents to the ROC. Some of the documents include memorandum of association, articles of association, pre-incorporation agreement for appointment of individuals as directors/managing directors and a declaration by an authorised person such as a high court lawyer or chartered accountant.

After the completion of statutory formalities and verification of documents, the registrar of companies, issues a certificate of incorporation. The ROC also issues a certificate of commencement of business. It is mandatory for all public limited companies to obtain this certificate before starting a business.

During certain times, the ROC can also refuse to register a company on certain grounds. If the documents provided are forged, the ROC can immediately refuse to register the company. No company with an objectionable name can be registered. The ROC can also refuse to register a company with unlawful objectives.

When you start a company, you will constantly need the support of the registrar of companies. In the long run, if you wish to change the name of your company, you will again have to go through the entire process.

According to the Companies Act, 1956, a company has to file all its resolutions with the ROC. The ROC is required to record the resolution. A company will basically have to inform the ROC about all its activities which includes appointment of directors, managing directors, resolutions concerning voluntary winding up etc.

Many people wonder as to why the ROC has to keep such information? The registrar of companies is responsible for what a company does. A company cannot undertake activities if it has not been authorised by the objects clause.

When a person wishes to start a company, he/she must know all the legal formalities. Any person can seek information about a company after paying the ROC the prescribed fee.

In case the ROC is not happy with the given documents, the ROC has the right to ask for additional documents. Lastly, the registrar of companies also has the right to file a petition seeking winding up of a company.

 

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