FORMATION OF COMPANIES/LLP's/PARTNERSHIP FIRMS/TRUST/SOCIETIES.
We lend our expertise for formation and registration of companies, formation and registration of partnership firms, formation and registration of Limited liability partnerships, formation of trusts and societies under societies registration Act, 1860. We undertake DSC applications, obtaining DIN and filling of SPICe+ forms etc.
The formation of companies in India is an aspiration for many entrepreneurs and NRIs. Many people are looking at investing their money in India. There are two reasons behind this trend. One is because the Indian economy is one of the fast growing economies in the world. The other reason is because India is a diversified country and hence it is the most favoured destinations 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 15-20 working days after receipt of the necessary documents.
The minimum requirement to start a private limited company:
- Identify the directors of the company (minimum of 2 directors should be present in a Private Ltd.Company and maximum of 15 is allowed). A private company can have foreign directors but it is mandatory that one of the directors hold Indian Citizenship.
- Minimum 2 shareholders and a maximum of 200.
- The minimum authorised capital is INR 100000
- DIN (Directors Identification Number) for both directors. If you do not have one, an application needs to be submitted.
- Digital signature of 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 etc
- Filling documents with authorities
- 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.
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.
Submit proof of registered address
Filing fees for final documents
Other government expenses
If the registrar is satisfied with all the requirements that have been compiled by the company, a certificate of incorporation will be issued. The date mentioned on the certificate is the date of incorporation of the company.
Opening a current bank account in any scheduled bank to carry company operations.
Formation of Trusts and Societies
A trust can be registered under Indian Trust Act, 1882 and a society can be formed under the provisions of Societies Registration Act.
At least two trustees are required to register a public charitable trust. However, a minimum of seven members are required for formation of a society.
There is no requirement for annual filing in case of Trusts. However, societies must file annual returns with the Registrar of societies.
Both Trusts and societies are eligible for tax exemption provided the exemption criteria of the Income Tax Act are complied with.
Registration of Partnership Firm
Persons who have entered into a partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm-name".
To commence a partnership firm, atleast two persons are required. The firm doesn’t have a separate legal entity like a company. The firm is a collective name given to individual partners.
The partnership firm is registered under Registrar of Firms, situated in the respective jurisdiction. The agreement is executed as per the provisions of The Partnership Act,1932.
Formation of Proprietary concern
Starting a proprietary concern or proprietary firm is a simple process. There is no formal registration to be done. An Individual / sole trader (or one person firm) intending to do business or profession, can register the concern under Goods and Service Tax Act (GST), Profession Tax Act or Shops and Establishment act or Udyog Aadhar (MSME). The business can be operated in the Individual’s name or a formal name can be given to perform the business.
Limited Liability Partnership Registration or LLP Registration
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
The LLP is a separate legal entity, is liable to the full extent of its assets but the liability of the partners is limited to their agreed contribution in the LLP. Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct . A minimum of two partners will be required for formation of an LLP. There will not be any limit to the maximum number of partners. .A company can be a partner in LLP
Every LLP shall be required to have at least two Designated Partners who shall be individuals and at least one of the Designated Partner shall be a resident of India. In case of an LLP in which all the partners are body corporates or in which one or more partners are individuals and body corporates, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
LLPs shall be registered with the Registrar of Companies (ROC) on compliance of provisions of LLP Act, 2008.
The LLP Act, 2008 allows Foreign Nationals including Foreign Companies & LLPs to incorporate a LLP in India provided at least one designated partner is resident of India. However, the LLP/Partners would have to comply with all relevant Foreign Exchange Laws/ Rules/ Regulations/ Guideline
Section 8 Company
Charitable Trusts can be set up in three different forms, namely
- register a trust under Indian Trust Act (register the trust at Sub-Registrar’s Office)
- Register it as a society under State Co-operative Societies Act or
- incorporate a company under Companies Act, 2013
The registration of a company under Companies Act, 2013 is popularly known as ‘Section 8’ company
Who can set up a Section 8 company?
- The companies with the objective of promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other objective;
- Intends to apply its profits, if any, or other income in promoting its objectives; and
- Intends to prohibit the payment of any dividend to its members; can be registered as Section 8 Company.
Registrations required under Income Tax Act.
Charitable Trusts including Section 8 companies are eligible for tax exemption u/s 11, 12, 12A, 12AA, 13 and 80G of the Income Tax Act. The expression “charitable purpose” has been defined under
Section 2(15) of the Act to include:(a) relief of the poor,(b) education,(c) medical relief, and (d) advancement of any other object of general public utility.
Can Section 8 company merge with another company?
Yes, Section 8 companies can amalgamate only with other section 8 company and having similar objectives
Association of Persons (AOP)
Association of Persons (AOP) is an entity formed by two or more persons, for a common purpose with an objective of producing Income or profits.
An association of persons (AOP) or a body of individuals (BOI), whether incorporated or not, is treated as a ‘person’ under section 2(31) of the Income-tax Act, 1961. Hence, AOP or BOI is treated as a separate entity for the purpose of assessment under the Income-tax Act.
- Registration
- Taxation
- Auditing and reporting
- Filing Income Tax returns
The type of activities generally done through an AOP.
We have come across situations where a group of individuals join together for conducting a one-time event such as seminar, conference, etc., forms an AOP.
Mandatory filing of returns.
Every AOP/BOI whether incorporated or not has to file the return of income if his total income exceeds exceeds the basic tax exemption limit.