Wednesday, September 2, 2020

File Overdue MCA Returns & Avoid Penalty under Fresh Start 2020 scheme of Government of India for default Companies / LLPs


File Overdue MCA Returns & Avoid Penalty under Fresh Start 2020 scheme of Government of India for default Companies / LLPs

The MCA (Ministry of Corporate Affairs, Government of India) had announced the Fresh Start 2020 Scheme to provide prosecution immunity and penalty waiver for companies and LLPs that have failed to file any overdue returns. Under the scheme, companies and LLPs can file any overdue MCA return without payment of any penalty until 30th September 2020. Directors or Partners of the companies/LLPs availing the scheme will also be provided with prosecution immunity. 

We request you to contact us before 10th of September 2020 if you have any defaulting company or LLP. In case you would like us to do a free check of your company or LLP compliance, please contact us today 

WhatsApp 9866512479

Email: contact@bestlegalscribe.com 

www.bestlegalscribe.com

Tuesday, September 1, 2020

Annual Compliances of Section-8 Companies

Annual Compliances of Section-8 Companies
A Section 8 company is required to adhere to the compliance levied by Registrar of Companies (ROC) and Income tax authorities. Failure to  fulfil their compliance requirements results in paying heavy penalties, and chances are such organizations and their directors’ may even get disqualified for a period of time.

Appointment of An Auditor: Under section 139 of the Companies Act 2013, it is mandatory for companies to appoint an auditor. The books of accounts and annual returns of the company shall be audited by the statutory auditor who will be appointed for a period of 5 years.

Maintenance of Statutory Registers: The company is required to maintain a statutory register consisting of members, loans obtained, charges created, its directors, etc. as enumerated under section 8 of the companies act 2013.

Convening Meeting: Annual general body meeting is to be conducted once a year within 6 months of the end of financial year and other board meetings have to be conducted.
Boards’ Report: The Board of Directors of the company shall file their boards’ report in an appropriate manner, consisting of all the financial statements and other annexures. The board report is required to be filed in Form AOC-4.

Preparation of Financial Statement of The Company: The company will get the  balance sheet, profit and loss A/C, cash flow statement and other financial statements prepared by the statutory auditor which is to be filed with ROC.

Tax Returns: The ITR is required to be filed at the end of every assessment year before 30th September.

Filing of Financial Statements: The financial statement shall be filed in the appropriate form (E-FORM AOC-4), within 30 days from the date of annual general meeting.

Filing Annual Returns: The annual return containing all the information like management details, shareholders’ details will be filed in Form MGT-7 with Registrar of Companies (ROC), within 60 days of the annual general meeting.

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Monday, August 31, 2020

Limited Liability Partnership (LLP) Registration

Limited Liability Partnership (LLP) Registration

Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since its introduction in 2010, LLPs have been well received with over one lakh registrations in India. 

LLP is one of the easiest types of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLPs are preferred by Professionals, Micro and Small businesses that are family-owned or closely-held. Since LLPs are not capable of issuing equity shares, LLP should NOT be chosen for any business that has plans for raising equity funds from Angel Investors, Venture Capitalist or Private Equity Funds. 

Difference between LLP & Partnership

Cost: The cost for registration of LLP is normally higher than the cost for registration of a partnership firm.

Authority: LLPs are registered in India under the Ministry of Corporate Affairs, Central Government. Partnership firms are registered with the Registrar of Firms, controlled by the respective State Government in which the firm is registered. 

Limited Liability Protection: The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner's misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly. 

Number of Partners: LLPs and Partnership Firms must have a minimum of two partners to be registered. Post incorporation, an LLP can have unlimited partners. In case of a Partnership Firm, if the number of partners at any time reduces below the mandatory minimum of 2 due to death, incapacitation or resignation of a Partner, the partnership firm would stand dissolved. On the other hand, in case of an LLP, if the number of Partners reduces below 2, the sole Partner can still find a new Partner to fill the position without dissolution of the LLP. 

Difference between LLP & Company

Private limited company registration process and the LLP registration process are similar with some differences in the documents and forms filed for incorporation. 

Cost: The cost for the incorporation of a private limited company or an LLP is almost the same.

Features: Both LLP and Private Limited Company offer many of the same features. LLP and Private Limited Company are both separate legal entities and have assets and liabilities that are separate from that of the promoters. LLP and Private Limited Company are both transferable, though a Private Limited Company offers more flexibility when it comes to transferring or sharing of ownership. LLP and Private Limited Company both have perennial life, unless and otherwise closed by the promoters or competent authority. 

Fund-raising: A private limited company can raise funds from Angel Investors, Private Equity Funds, Venture Capitalists, banks and NBFCs. An LLP can raise funds from Partners, Banks and NBFCs. 

Non-Resident Indian (NRI) & Foreign Ownership of LLP

Post changes to FDI regulations on 10th, November 2015, 100% FDI in LLP is permitted under the automatic route. In most sectors, 100% FDI in LLP is allowed through the automatic route, and there are no FDI-linked performance conditions. In addition, LLPs will also be permitted to make downstream investment in another company or LLP in sectors in which 100% FDI is allowed under the automatic route. Therefore, FDI in LLP is now permitted, and NRIs or Foreign Nationals can start or invest in an LLP. 

Documents Required for LLP Incorporation 

The following are the documents required for registration of LLP in India:

 For the Partners

  • PAN Card or Passport for Foreigners.
  • Driver’s license or Aadhaar card, residence card or election identity card or any other identity proof issued by the Government.
  • Less than 1-month old bank statement or telephone bill. 

Registered Office Proof

The authorization from the Landlord (as per Landlord's Name mentioned in the Electricity Bill or Gas Bill or Water Bill or Property Tax Receipt or Sale Deed) to use the premises by the company as its registered office. This is usually referred to as NOC from Landlord; AND 

Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the owner or document, which is not older than one month. 

LLP Registration Process

The average time taken to complete an LLP registration is about 15 - 20 working days, subject to government processing time and client document submission. At the start of the engagement, your Engagement Manager will reach out to you for the collection of the necessary information or documents for registration of LLP. The data can be submitted online through WhatsApp or email. 

Once the information is received, it is verified by the Engagement Manager, the process for obtaining Digital Signatures for the Partners of the LLP would be initiated. On submission of the digital signature application, the applicant would have to complete OTP verification and a video KYC check. In parallel to the digital signature application process, we also file a request with the MCA for reserving the name of the LLP - you had selected. 

On obtaining the name approval and the digital signatures, we would draft all the incorporation documents for the registration of the LLP and sent it to the Partners for signature. All the Partners must sign the document and send a scanned copy of the signed document. 

The signed incorporation documents are submitted by us along with the application for the incorporation of LLP to the MCA. The approval from MCA can take anywhere between 3 to 6 working days. Once the approval is obtained, the LLP would be incorporated, and we begin the process of helping you obtain PAN for the LLP and opening of bank account in the name of the LLP. In parallel, we also draft the LLP Partnership Deed. All the partners of the LLP must sign the LLP Partnership Deed on stamp paper, and the signed copy must be uploaded within 15 days of incorporation. The signed LLP partnership deed is then verified and uploaded on the MCA portal within 20 days of incorporation to complete the LLP registration process. 

Post-Incorporation LLP Compliance

After incorporation you need to maintain the basic accounting and compliance for your LLP.

The following are compliance that a LLP must complete each year:

Income Tax Return: LLPs must file income tax return using Form ITR 5. Form ITR 5 can be filed online through the income tax website using the digital signature of the designated partner. 

MCA Annual Return: LLP Form 11 is due on or before 30th of May each year. Form 11 contains details of the number of designated partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners. 

In addition to LLP Form 11, Form 8 must be filed within 30 days from the end of 6 months of the financial year along with some prescribed fee. Hence, LLP Form 8 would be due on or before 30th October of each financial year. 

In addition to the above, GST registration, GST return filing and TDS return filing would be required for the LLP - based on the sales turnover and various other criteria. 

Contact Mobile 9866512479

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Sunday, August 23, 2020

One Person Company (OPC) Registration

One Person Company (OPC) Registration

The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own can start a venture by allowing them to create a single person economic entity. One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in an OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Like a Private Limited Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate. 

Though a One Person Company allows a lone Entrepreneur to operate a corporate entity with limited liability protection, an OPC does have a few limitations. For instance, every One Person Company (OPC) must nominate a nominee Director in the MOA and AOA of the Company, who will become the owner of the OPC in case the sole Director is disabled. Also, a One Person Company must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores and must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies. Therefore, it is essential for the Entrepreneur to carefully consider the features of a One Person Company before incorporation. 

OPC in India

The concept of One Person Company in India was introduced by Dr. Jamshed J. Irani in his Report on Company Law dated 31st May, 2005. As per the report, Dr. Irani recommended that with the increasing use of information technology and emergence of a strong service sector in India, it was time for the Government to empower entrepreneurs who on their own are capable of developing ideas and participating in the marketplace. He suggested that entrepreneurs who on their own are capable of starting a venture should not be made to do it through an association of persons, and should be able to create a single person economic entity in the form of ‘One Person Company’. Further, it was also suggested that such an entity may be provided with a simpler regime through exemptions so that the single entrepreneur is not compelled to fritter away his time, energy and resources on procedural matters. 

This led to the introduction of “One Person Company” in the Companies Bill 2013, which got its assent in the Lok Sabha on 18 December 2012 and in the Rajya Sabha on 08 August 2013. After obtaining the assent of the President of India on 29 August 2013, it has become the Companies Act, 2013. 

Benefits of One Person Company

Till the introduction of One Person Company in India, the Limited Liability and Continuous Existence feature was only available to an association of persons such as a Private Limited Company or Limited Liability Partnership or a Limited Company. With the introduction of One Person Company, the limited liability and continuous existence feature is now available for One Person Company also, which is an entity with just one member. As One Person Company has just one member, it is necessitated by the law for the single member of the Company to designate another person (as his/her nominee to continue the business activities of the OPC) in the Memorandum of Association, who on the event of subscriber’s death or incapacity shall become the person to contract. This mechanism provides an adequate safeguard to ensure continuous existence of the entity even in case of incapacitation of the single member. 

All companies in India are required to hold an annual general meeting each year, in addition to holding any other meetings and not more than fifteen months should elapse between the dates of subsequent annual general meetings. One Person Company is exempt from holding an annual general meeting or extraordinary general meetings. The resolution signed by the single Director and entered into the minutes book is sufficient, in lieu of a General / Extraordinary General Meeting. Every company in India is required to prepare and file financial statements that includes balance sheet, profit and loss account, cash flow statement, statement of changes in equity and explanatory notes. In case of One Person Company, cash flow statement is not required. 

OPC Registration Process

Before exploring the concept of a one person company, let us have a brief understanding of the various types of companies that can be formed. 

A company can be established for a lawful purpose by the following number of persons: 

  • Seven or more persons, in case of a public limited company.
  • Two or more persons, in case of a private limited company.
  • One person, in case of a one-person company.

 OPC Requirements

Unlike a private limited company, a one person company has certain restrictions associated with its incorporation. Hence, before starting an OPC registration, its essential to understand the constraints and ensure the promoter is eligible as per the Companies Act to register an OPC. 

  1. Only a natural person who is an Indian Citizen and resident in India can incorporate OPC.
  2. It means Legal entities like Company or LLP cannot incorporate a OPC.
  3. Resident in India means a person who had resided in India for a period not lesser than 182 days in the prior calendar year.
  4. The minimum authorised capital is Rs 1,00,000/-.
  5. A nominee must be appointed by the promoter during incorporation.
  6. A person can incorporate not more than one OPC.
  7. Businesses involved in financial activities cannot be incorporated as a OPC.
  8. OPC must be converted in to a private limited company when paid-up share capital exceeds Rs.50 lakhs or turnover crosses Rs.2 crores. 

Thus, a one-person company can be formed by an Indian citizen who has his/her presence in India for at least 182 days during the immediately preceding calendar year. Finally, an OPC is prohibited from having a minor as its member. 

Nominee in One Person Company

The rules for incorporation of one person company requires that the sole member of a One Person Company should include the name of a nominee in the Company's MOA, who will undertake the entity after the expiry or incapacity of the promoter. Moreover, the document must contain the written consent of the nominee, which must also be filed with the Registrar during incorporation along with the MOA and AOA. 

Withdrawal of Consent

The nominee is entitled to withdraw his/her consent, in which case the sole member is required to nominate another member as a legal heir within 15 days of the notice of withdrawal. The nomination of new person must be intimated to the Company through a written consent in Form INC-3. The Company, in turn, is required to file the notice of withdrawal of consent along with the intimation of the new nominee with the Registrar of Companies in Form INC-4. 

Change of Nominee

The sole member of a 'One Person Company' is empowered to change the nominee of the Company for any reason whatsoever, by providing notice in writing to the Company. Again, the new nominee must consent to the nomination in Form INC-3, and the Company must file the notice of change and consent of the nominee with the Registrar along with the applicable fee, within 30 days of receiving the intimation of change. 

New Nominee Appointment

If a nominee becomes in-charge of the one person company due to the cessation of the original member's term owing to the death or incapacity of the latter, the new member must appoint a nominee as a replacement. 

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Tuesday, August 11, 2020

Sole-Proprietorship

Sole-Proprietorship

The perception of doing business varies from person to person, as the choice of a business entity depends on its object, nature and scope. Before deciding on a business structure, several factors are critical viz.   

  • Business activity and its nature and scope
  • Working capital requirement
  • Proprietor’s dependence
  • Concern on taxes to be paid for doing the business

 However, to choose a particular type of business structure, there is no defined formula.

The factor that organizes the process to conduct business in an optimized manner is known as a business organization. It is essentially a structured approach of establishing and maintaining a relationship among men, material, and machinery to carry on the business efficiently for earning profits.

Most of the individuals who manage their business to earn their daily bread are sole-proprietors. The small business entities in India fall under the category of unorganized sector. 

To start and to operate a sole-proprietorship in India, there are no standard legal compliances. However, registration with the local authorities is necessary to secure a license for a business name. 

 At this backdrop, a question arises, who are eligible to start a sole-proprietorship: 

  • Any Indian born citizens with a valid PAN can start and operate a sole-proprietorship
  • No other compliance is required

 Who could be a sole-proprietor? 

  • Indian citizens by birth or by citizenship
  • Persons holding PAN & Aadhaar

Even though a business entity can be established and maintained in different forms, each of the businesses has its own merits and demerits:

Merits of sole-proprietorship: 

  • Very little compliance to adhere
  • Zero interference from Government
  • Minimal wastage of time for approvals
  • Working capital as per business need
  • Single PAN for self and business entity
  • Hassle-free opening of current account
  • Proprietorship registration
  • Single ITR-3 to present the profit or loss with the personal income
  • No need to distribute the profit

Demerits of sole-proprietorship: 

  • No separate legal entity from its proprietorship
  • Losses in business may impact the personal assets of the proprietor
  • Due to a single PAN, transferring the profits to someone to meet future needs is difficult.
  • In case of the death of a proprietor, the proprietorship also ceases. 
  • Difficult to secure investments
  • Difficult to earn and identify

Registration of sole-proprietorship 

Any individual desiring to start a sole-proprietorship has to obtain a business license or a tax license as presented below: 

  • Shops and Establishment license
  • GST Registration
  • Trademark / Brand Name / Logo Registration  (so that no one-else should use your similar / identical name, Logo)
  • MSME Udyam Registration (for availing collateral free Bank loans and government subsidies)
  • FSSAI Registration (for doing business on food and related articles)
  • Import and Export Code (for export-import business)
  • Copyright (for persons engaged in literary & artistic business) 

Documents for sole-proprietorship registration: 

  • Proprietor’s PAN Card & Aadhaar card
  • Proprietor’s name or the business name
  • Mobile number and email address
  • Rental agreement with NOC and a utility bill viz. electricity bill / water bill / property tax receipt / BSNL Telephone bill 

A first-time entrepreneur who wishes to taste the business out of a passion may put in the best efforts, after weighing the options available, to remain independent, rather than working for someone. Unlike a partnership firm or a corporate, sole-proprietorship is an easy way of registering for a business due to minimal government intervention, besides hassle-free conduct of business.  

Contact Mobile & WhatsApp 9866512479 

email contact@bestlegalscribe.com 

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Company Registration Process and Documents required

Company Registration Process and Documents required

Entrepreneurs in the process of beginning a Company registration are interested in knowing about the list of documents required for the process. In this article, we provide details and description of the documents required for company registration.

Directors: Indian Nationals

The following documents are mandatory for Indian Nationals for incorporation of a Company in India:

PAN Card: PAN Card copy of the proposed Directors of the Company will be required for Company Registration. PAN or Permanent Account Number is a unique identification number issued by the Department of Income Tax in India. It is mandatory for Directors who are Indian Nationals to submit PAN during the incorporation process.

Note: The name on the PAN Card will be used by the Ministry of Corporate Affairs for all matters pertaining to the company. Hence, in case of mistake in the name mentioned in the PAN Card or name change due to marriage or any other reason, the PAN Card must be first changed.

Address Proof: In addition to the PAN Card copy, the proposed Director must submit an address proof. The address proof submitted must have the name of the Director as mentioned in the PAN Card and the most current address of the proposed Director. Further, the document must also not be older than 2 months.

The following documents are acceptable Address proof for Indian Nationals.

  • Aadhaar Card
  • Passport
  • Voter Identity Card
  • Driving License
  • Electricity Bill
  • Telephone Bill

 Residential Proof: In addition to the address proof, a residential proof must be submitted during the incorporation of the Company to validate the current address of the proposed Director. As applicable for address proof, the residential proof must also contain the name of the Director as mentioned in the PAN Card and must not be older than two months.

The following documents are acceptable residential proof:

  • Bank Statement
  • Electricity Bill
  • Telephone Bill

 Director: Foreign Nationals

The following documents are mandatory for Foreign Nationals for incorporation of company in India:

Passport: In case of Foreign Nationals, Passport is a mandatorily required as a proof of identity. The Passport must also be Notarized or Apostilled in the country it was issued. In case the document is in foreign language, then it must be translated by an official translator to English and notarized or apostilled. Further, if the Passport does not contain date of birth of the holder, then an additional document indicating the date of birth of the Director must be provided, duly certified or attested or notarized or apostilled.

Address Proof: In addition to the Notarized or Apostilled Passport copy, the proposed Foreign Director must submit an address proof which is also notarized or apostilled. The address proof submitted must have the name of the Foreign Director as mentioned in the Passport and the most current address of the Director. Further, the document must also not be older than 1 year for foreign nationals.

The following documents are acceptable address proof for Foreign Nationals.

  • Driving License
  • Residence Card
  • Bank Statement
  • Government issued form of identity containing address.

In case the document is in a foreign language, then it must be translated by an official translator and notarized.

Residential Proof: In addition to the address proof, a residential proof must be submitted during the incorporation of the Company to validate the current address of the Foreign Director. As applicable for address proof, the residential proof must also contain the name of the Foreign Director as mentioned in the Passport and must not be older than one year.

The following documents are acceptable residential proof of Foreign Director:

  • Bank Statement
  • Electricity Bill
  • Telephone Bill

In case the document is in a foreign language, then it must be translated by an official translator and notarized.

Registered Office Proof:

In addition to providing identity, address and residential address for the Directors, proof must be provided to validate the registered office address of the Company.

The following documents must be submitted as proof of registered office during the company registration process.

The registered document of the title of the premises of the registered office in the name of the company; or The notarized copy of lease / rent agreement in the name of the company along with a copy of rent paid receipt not older than one month;

In addition to the above, the following must also be provided as proof of registered office:

The authorization from the Landlord (Name mentioned in the Electricity Bill or Gas Bill or Water Bill or Property Tax Receipt or Sale Deed) to use the premises by the company as its registered office. This is usually referred to as NOC from Landlord; and Proof of evidence of any utility service like telephone, gas, electricity, etc. depicting the address of the premises in the name of the owner or document, which is not older than two months.

Shareholder: Indian National or Foreign National

The identity and address proof as detailed in the article must be submitted for all the shareholders of the Company (i.e., subscribers to the Memorandum of Association (MOA) and Articles of Association (AOA).

Shareholder: Corporate Entity or Artificial Judicial Person

In case one of the shareholder or subscriber to the MOA and AOA is a Corporate Entity (Company, LLP, etc.,), then Certificate of Incorporation of the Body Corporate must be attached along with the resolution passed by the Body Corporate to subscribe to the shares of the company under incorporation.

In addition to the above proofs and documents, a number of documents like INC-9, MOA, AOA would be drafted by a Professional. These legal documents made specifically for the incorporation, must be signed and notarized by the promoters of the Company.

Contact Mobile & WhatsApp 9866512479

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Documents required - Trademark Application Registration

Trademark Application Registration - Documents required

The entire process is Online.

You may email Soft copies of the following documents and information:

  •  Aadhaar card
  • PAN card
  • Mobile number
  • Email ID
  • Name of the business
  • Business description
  • Business Logo
  • MSME Udyam Certificate
  • GST Regn. Certificate
  • Partnership Deed and Firm Registration Certificate (in case of Partnership Firm)
  • Certificate of Incorporation (in case of Pvt Ltd. Co.,)

 Any other existing Registration Certificates of the business.

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Monday, August 10, 2020

Non-Profit Organization - Society - Trust - Section 8 Company Registration

Non-Profit Organization – Society - Trust - Section 8 Company Registration

In India, a non-profit organisation can be registered as Trust by executing a Trust deed or as a Society under the Registrar of Societies, or as a non-profit company under Section 8 Company of the Companies Act, 2013. A Section 8 Company is the same as Section 25 company under the old Companies Act, 1956. Under the new Companies Act 2013, Section 25 (as per the old Act) has now become Section 8.

As per Section 8(1a, 1b, 1c) of the Companies Act, 2013, a Section 8 company can be established for the “promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object”. The Act further states that a Section 8 company can purse the above objects subject to the condition that it “intends to apply its profits, if any, or other income in promoting its objects” and “intends to prohibit the payment of any dividend to its members.”. In simple terms, a Section 8 company must promote a public cause and the proceeds generated by the entity must solely be used to support the stated public cause(s) only.

Section 8 Company Incorporation Process

Private limited company and Section 8 company registration procedure are very similar to each other. A minimum of two Directors are required to start a Section 8 company. One of the Director must be an Indian Citizen and Indian Resident, whereas one or more persons acting as Director can be an Indian National or Foreign National. In addition to the required number of persons, a registered office address within India would be required for incorporation of Section 8 Company.

Section 8 Company would be subject to the following conditions:

(1) has in its objectives the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object

(2) intends to apply its profits if any, or other income in promoting its objects; and

(3) intends to prohibit the payment of any dividend to its members, the Central Government may, by licence issued in such manner as may be prescribed, and on such conditions as it deems fit, allow that person or association of persons to be registered as a limited company under this section without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”, and thereupon the Registrar shall, on application, in the prescribed form, register such person or association of persons as a company under this section.

(4) the company registered under this section shall enjoy all the privileges and be subject to all the obligations of limited companies.

Digital Signature for Directors

A Trust in India is controlled by the Trustees mentioned in the Trust Deed. A Section 8 Company would be controlled by the Board of Directors, similar to a private limited company. During the incorporation process, the digital signature certificate is obtained for the proposed Directors. To obtain digital signature and DIN, the proposed Directors must submit a copy of their:

PAN Card or Aadhar Card / Driving License / Passport / Election ID / Other Government Issued ID

Once the documents are submitted, the applicants must complete an OTP and eKYC procedure through a smartphone to obtain a digital signature in their name.

Section 8 Company Name Approval

In parallel to the digital signature application processing, the name approval application can be initiated for the Section 8 Company to the MCA. The name of a Section 8 Company must end with the words prescribed for this purpose like foundation, forum, association, federation, chambers, confederation, council, electoral trust, etc. The name approval process can be completed in 24-72 hours.

Incorporation Certificate

Once the name approval and digital signatures are obtained, an Incorporation Expert would prepare the MOA, AOA and incorporation application for the Section 8 Company. All the Directors must sign the documents. Once the documents are signed and verified, the incorporation application is filed with the MCA.

On approval of the incorporation application, the Government would issue the incorporation certificate, PAN and TAN for the Section 8 Company. The entity can now use the details above to open a Current account in any Bank for conducting its day-to-operations.

80G Certificate for Section 8 Companies

80G is a certificate that exempts a person, making a donation to a Section 8 company from part or fully paying taxes on the donation amount. There is, however, a maximum allowable deduction criterion. The criterion is if the aggregate of the amount you donate exceeds 10% of the total gross income, then the excess amount will not qualify for tax benefit. 80G certificates made its way into law book in the year 1967-68, and it continues to be an important tax-saving mechanism for millions of taxpayers in India.

12A Registration for Section 8 Companies

12A registration is a one-time registration obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company, Trusts and NGOs having 12A registration enjoy exemption from paying income tax on the surplus income of the Trust or NGO. Income tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A of Income Tax Act and obtain the same, soon after incorporation of the Trust or NGO.

FCRA Registration for Section 8 Companies

Organizations seeking foreign contributions for definite cultural, social, economic, educational or religious programmes may obtain FCRA registration or receive foreign contribution through “prior permission” route. It is preferable for an FCRA applicant to be a Trust or Society or a Section 8 Company. The not-for-profit entity must have also been in existence for a minimum of three years while making the FCRA application. It should also not have received any foreign contribution prior to that without the Government’s approval. Additionally, the entity seeking registration should have spent at least Rs.10,00,000/- over the last three years on its aims and objects, excluding administrative expenditure. Statements of Income & Expenditure, duly audited by Chartered Accountant, for last three years are to be submitted to substantiate that it meets the financial parameter.

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Import Export Code or IE Code (10 digit number)

Import Export Code or IE Code (10 digit number)

Import Export Code or IE Code is required for undertaking import or export transactions and availing benefits under schemes like SEIS or MEIS.

Eligibility

All entities in India involved in the import or export of goods/services would be required to obtain IE Code from the Director General of Foreign Trade.

Requirements

To obtain IE Code from the DGFT, the applicant must submit copies of identity and address proof along with a proof of operational bank account in the name of the applicant.

Importer Exporter Code

Import Export (IE) Code is a registration required for persons importing or exporting goods and services from India. IE Code is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India. IE Code application must be made to the Directorate General of Foreign Trade along with the necessary supporting documents. Once, the application is submitted, DGFT will issue the IE Code for the entity in 15 - 20 working days or less.

Validity of IE Code

IE Code registration is a permanent registration which is valid for life time. Hence, there will be no hassles for updating, filing and renewal of IE Code registration. It is valid till the business exists or the registration is revoked or surrendered. Further, unlike tax registrations like GST registration or PF registration, the importer or exporter does not require to file any filings or follow any other compliance requirement like annual filing.

As IE code registration is one-time and require no additional compliance, it is recommended for all companies and LLPs to obtain IE code after incorporation.

IE Code Exemption

The following categories of persons are exempted from obtaining an IE Code:

  1. Importer and export by central government or agencies or undertakings for defense purpose or other specified list under Foreign Trade (exemption from application of rules in certain cases) Order, 1993.
  2. Import or Export of Goods for personal use.

RCMC Registration

Persons having Import Export code can apply for and obtain RCMC registration. Registration-Cum-Membership Certificate (RCMC) is a certificate that validates an exporter dealing with products registered with an agency / organization that are authorised by the Indian Government. The certificate is issued for five years by the Export Promotional Councils or commodity board in India. An exporter desiring to obtain an RCMC has to declare his mainstream business in the application. This application would be submitted to the Export Promotion Council / Commodity Board relating to that line of business.

IE Code Application

More and more SMEs are becoming global in terms of doing business due to the growth in e-commerce platforms, cloud computing technology and strong logistics network. Today, a business in the India is easily able to sell its goods to a customer in USA through e-commerce platforms like Amazon or Alibaba. In this scenario, having an import export code (IE Code) becomes critical in terms of doing business. Any business in India that imports or exports goods and/or services would require an IE code. In this article, we look at the procedure for making an IE Code application in detail.

Import Export Code (IE Code) and GST registration

Before initiating an import of goods into India, an importer must ensure that the importing entity has GST registration and IE code – both of which are required to clear customs.

If an importer does not have both IE code and GST Registration, the goods will be stuck at the port and will start incurring demurrage charges or could be destroyed.

Validity of IE Code

IE Code registration is permanent registration which is valid for life time. Hence, there will be no hassles for updating, filing and renewal the IEC registration. It is valid till the business exists or the registration is not revoked or surrendered. Further, unlike tax registrations like GST registration or PF registration, the importer or exporter does not require to file any filings or follow any other compliance requirement like annual filing.

As IE code registration is one-time and require no additional compliance, it is recommended for all companies and LLPs to obtain IE code after incorporation.

Documents Required for IE Code Application

The following are the documents required for making an IE Code application in India.

Proprietorship      

  • Digital Photograph (3x3cms) of the Proprietor.
  • Copy of PAN card of the Proprietor.
  • Copy of Passport (first & last page) / Voter’s I-Card / Driving Licence / UID (Aadhar card) (any one of these).
  • Sale deed in case business premise is self-owned; or Rental / Lease Agreement, in case office is rented / leased; or latest electricity / telephone bill.
  • Bank Certificate as per ANF 2A(I) / Cancelled Cheque bearing preprinted name of applicant and A/C No.

Partnership firm   

  • Digital Photograph (3x3cms) of the Managing Partner.
  • Copy of PAN card of the applicant entity.
  • Copy of Passport (first & last page) / Voter’s I-Card / UID (Aadhar Card) / Driving Licence / PAN (any one of these) of the Managing Partner signing the application.
  • Copy of Partnership Deed.
  • Sale deed in case business premise is self-owned; or Rental/Lease Agreement, in case office is rented / leased; or latest electricity / telephone bill.
  • Bank Certificate as per ANF 2A (I) / Cancelled Cheque bearing preprinted name of the applicant entity and A/C No.

LLP or Private Limited Company or Section 8 Company

  • Digital Photograph (3x3cms) of the Designated Partner / Director of the Company signing the application.
  • Copy of PAN card of the applicant entity.
  • Copy of Passport (first & last page) / Voter’s I-Card / UID (Aadhaar Card) / Driving Licence / PAN (any one of these) of the Managing Partner / Director signing the application.
  • Certificate of incorporation as issued by the RoC
  • Sale deed in case business premise is self-owned; or Rental / Lease Agreement, in case office is rented / leased; or latest electricity or telephone bill.
  • Bank Certificate as per ANF 2 A(I) / Cancelled Cheque bearing preprinted name of the company and A/C Number.

Society or Trust   

Digital Photograph (3x3cms) of the signatory applicant / Secretary or Chief Executive.

Copy of PAN card of the applicant entity.

Copy of Passport (first & last page) / Voter’s I-Card /UID (Aadhar Card) / Driving Licence / PAN (any one of these) of the Secretary or Chief Executive / Managing Trustee signing the application.

Sale deed in case business premise is self-owned; or Rental / Lease Agreement, in case office is rented/ leased; or latest electricity /telephone bill.

Registration Certificate of the Society / Copy of the Trust Deed

Bank Certificate as per ANF 2A(I) / Cancelled Cheque bearing preprinted name of the Registered Society or Trust and A/C No.

HUF (Hindu Undivided Family) 

  • Digital Photograph (3x3cms) of the Karta.
  • Copy of PAN card of the Karta.
  • Copy of Passport (first & last page) / Voter’s I-Card / UID (Aadhar card) / Driving Licence (any one of these) of the Karta.
  • Sale deed in case business premise is self-owned or Rental / Lease Agreement, in case office is rented / leased or latest electricity /telephone bill.
  • Bank Certificate as per ANF 2A(I) / Cancelled Cheque bearing preprinted name of applicant and A/C No.

In case the applicant cannot provide cancelled Cheque copy with pre-printed names, the following bank letter format would have to be obtained from the Banker:

IE Code Bank Letter Format (will be sent through email, if you need it)

IE Code Application Procedure

Once, all the above documents are available, the applicant can initiate the IE code application process on the DGFT website:

  • Step 1: Enter your PAN on login page and mention your valid Email and Mobile number.
  • Step 2: Complete the application and upload the documents required.
  • Step 3: Proceed for online payment and attach digital signature.
  • A sample IE code application is reproduced below with details that would be required to make an IE code application:

IE Code Application (will be sent through email)

On submission of application, IE code is usually issued with 5-7 working days, if no discrepancy is found in the IE code application.

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Sunday, August 9, 2020

Reasons for Trademark Application Rejection

Reasons for Trademark Application Rejection

A registered trademark can help the trademark owner prevent unauthorized use of the mark and create a valuable intangible asset for the company. However, the trademark registration process is long typically taking anywhere between 12-18 months to know the final status of a filed trademark application. Since, the trademark application process takes such a long time, many businesses begin building a brand around a mark while the trademark application is still pending. If the trademark application is finally approved and the mark is registered, then the efforts-spent on brand building is protected. However, if for some reason the mark is not registered, then there is a likelihood for the brand to be under threat. Hence, we look at some of the top reasons for trademark application rejection, so these mistakes can be avoided while choosing a business name or trade name.

Generic Terms

Commonly used words or terms that are usually found in dictionaries cannot be trademarked. For example, a company cannot trademark the word “CHAIR” to sell chairs. Since, chair is a generic term for the product, one company cannot be given the right to use the generic term exclusively.

Descriptive Terms

Words that are commonly used to describe a product can also not be trademarked as it would be considered a descriptive term. For example, the mark COLD is likely to be rejected for marketing beverages as being descriptive. If a company is given the exclusively right to market its beverages using the term COLD, it would be unfair. Hence, such descriptive terms for products or services cannot be trademarked.

Also, qualitative or praise terms such as RAPID, BEST, CLASSIC or INNOVATIVE cannot be trademark unless it is part of an otherwise distinctive mark.

Deceptive Trademarks

Deceptive trademarks are marks that may deceive or mislead consumers as to the nature, quality or geographical origin of the product. For instance, a trademark that resonates with cotton for a polyester product would be rejected as a deceptive trademark.

Offensive Terms

Trademarks that contain offensive terms or words that are contrary to public order or morality cannot be registered. Also, words and marks that are considered to be offensive or violate commonly-accepted norms of morality are generally not allowed to be registered as trademarks.

Marks Similar to an Existing Trademark

Many trademark applications are rejected because they could be in conflict with an existing registered trademark. Having two identical trademarks is contrary to the intellectual property rules and would cause confusion among consumers. Hence, any trademark that is similar or could potential be confused with an existing trademark would not be registered.

Official Marks

Trademarks that contain official names, flags, armorial bearings, official hallmarks and emblems of states and international organizations cannot be trademarked as they contain elements that are protected under National Regulations.

Choosing a Business Name

To improve the chances of choosing a business name that can be trademarked, follow the checklist below:

  1. Ensure that the mark does not fall under any of the categories listed above.
  2. Perform a trademark search to ensure there are no similar trademarks.
  3. Perform a domain name search to ensure that the domain is available for the mark – to avoid any cyber-squatting in the future.

Get consultation from a trademark expert, if in doubt. 

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Saturday, August 8, 2020

Registering a Trademark / Brand Name / Logo

Trademark:

A trademark is a unique identity that differentiates your product / service in the market. It can be a unique word, name, logo, numeral or any other identifier. It is essentially a representation of the owner's company, name / brand. A registered trademark is an invaluable asset to your company as it is used to protect your company's brand. Registration ensures protection of your unique logo / brand by restricting usage by other competitors as identical/ similar marks cannot be registered.

Trademark owners have the right to use their mark exclusively for a period of 10 years from the date of registration.

The following are the advantages of registering a Trademark:

Legal Protection:

The main advantage of registering trademarks is that your goods and services would have a unique identity and a brand name. The owners would have exclusive rights over the mark and would be able to take action or sue for damages in the case of unauthorized usage.

Asset Creation:

Registered trademarks may be bought, sold or leased just like any other asset attached to an individual / company. It becomes part of the intellectual property that is owned by an individual / company.

Brand Popularization:

A registered trademark will make it easier for customers to find your products in the market. It builds the reputation of your product and creates an identity which is unique from that of existing products in the market and thereby, acts as an effective commercial tool. The logo can represent the vision and individual characterization of your company and products.

Goodwill:

Registered trademarks help in customer recognition and the extra earnings that follow because customers want to acquire your product due to increased recognition of your brand and name.

Customers relate the quality of a product with its brand name, and this will help in attracting new customers as they will be able to differentiate the quality of a product by your logo or brand name.

Protection for 10 years:

Protection for 10 years: Every registered trademark is valid for 10 years and may be renewed for another 10 years with ease by merely filing a trademark renewal application. It is cost-efficient and helps your company create and maintain a unique image.

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Monday, August 3, 2020

Copyright Registration

Copyright Registration

There is a surge in the amount of intellectual property being registered in India due to an increase in awareness among people about intellectual property laws and the advancement of technology, allowing for online registration of many of the type of intellectual property being created. Copyright registration is one of the key types of intellectual property protection and allows for the protection of literary, dramatic, musical and artistic works.

Copyright Basics

Copyright is a right to ownership and enjoyment given by the law to creators of literary, dramatic, musical, artistic works and producers of cinematograph films and sound recordings. It is a bundle of rights comprising of rights to reproduction, communication to the public, adaptation and translation of the work. Copyright ensures certain minimum safeguards of the rights of ownership and enjoyment of the authors over their creations, thereby protecting and rewarding creativity.

Eligibility

Any work namely literary, dramatic, musical, artistic work, cinematograph film, or sound recording, can be copyrighted. Copyrights are given in India in mainly three classes of work, and each class has its own distinctive rights under the Copyright Act. Original literary, dramatic, musical and artistic works are one class of work that comprise of copyrights for books, music, painting, a sculpture, etc., Cinematograph films are another class of copyright which consists of any work of visual recording on any medium. Finally, sound recordings are a distinctive class under the copyright act consisting of a recording of sounds, regardless of the medium on which such recording is made or the method by which the sounds are produced.

Copyright Registration

A limited amount of copyright protection comes into existence as soon as a work is created, and no formality is required to be completed for acquiring copyright. However, to prove ownership over copyright and to serve as prima-facie evidence in the court of law, works can be registered in the Register of Copyrights maintained in the Copyright Office of the Department of Education. To copyright registration application is to be made on Form IV in a requisite manner along with the applicable fee. Both published and unpublished works can be copyrighted. In the case of published work, three copies of the published work have to be presented along with the application. In case of unpublished work, a copy of the manuscript has to be sent along with the application for affixing the stamp of the Copyright Office in proof of the work having been registered.

Copyright protection typically lasts for 60 years. In the case of original literary, dramatic, musical and artistic works, the 60-year period is counted from the year following the death of the author. In the case of cinematograph films, sound recordings, photographs, posthumous publications, anonymous and pseudonymous publications, works of government and works of international organizations, the 60 year period is counted from the date of publication.

Process for Copyright Registration

Copyright registration can be obtained for both published and unpublished works. Copyright registration can be obtained by applying to the Copyright Office for registration of work under copyright laws in the prescribed form along with the necessary fee. Application for copyright registration must be made on “Form IV” along with the “Statement of Particulars and Statement of Further Particulars”. Along with the application, three copies of published work should be sent. If the work to be registered is unpublished, a copy of the manuscript has to be sent along with the application for affixing the stamp of the Copyright Office in proof of the work having been registered. In case two copies of the manuscript are sent, one copy of the same duly stamped will be returned, while the other will be retained, as far as possible, in the Copyright Office for record and will be kept confidential.

Copyright application can be signed and submitted by the applicant or an Advocate in whose favour a Vakalatnama or Power of Attorney has been executed by the Applicant. In case of application by an Advocate, the Power of Attorney signed by the applicant and accepted by the advocate should be enclosed with the application.

In case of registration of multiple works, separate applications should be made for registration of each work along with the requisite fee.

Benefits of Copyright Registration

The following are some of the important benefits of registering your work and availing copyright protection:

Copyright protection creates a public record of the ownership by the copyright holder.

Copyright protection enables the holder of the copyright to take legal action against infringers in a court.

If the legal action is taken before or within a certain period from the date of publication, it enables adequate evidence in court relating to the validity of the copyright and the facts that are stated in the certificate of copyright.

If registration is made within a short span of time the person’s work or at any time prior to the infringement of the copyrighted work, the copyright owner is permitted to claim statutory damages in a high court. Without the process registration, only an award related to actual damages and profits will be made available, and these can be quite complicated to prove in a court of law.

Permits the copyright owner to record the registration with Indian Customs to help in protection against the importation of infringing copies into India.

Copyright protection provides a very important motivation for the creation of several intellectual works. Devoid of copyright protection, it would be simple for others to take advantage of these works without paying any royalties or remuneration to the title-holder of the work. Copyright, therefore, encourages enterprise and enables an encouraging climate to motivate economic activity.

Copyright protection renders benefits in the form of economic rights which entitles the creators to exercise control over the use of their literary and artistic material in various ways such as producing copies, performing in public, broadcasting, use online/on the internet, etc. and to avail an appropriate economic reward.

Copyright protection enables creators to be rewarded for their originality and venture consequently.

Copyright also enables moral rights to be identified as the creator or the author of definite kinds of material (known as the paternity right), and raise an objection to the distortion and mutilation of the right. An author’s right to object to the adaptation or derogatory action in relation to his or her work is referred to as an integrity right.

Registration and entitlement to copyright will display the validity of your copyright if it is registered within a period of five years of publication. This can help avert future challenges to your works related rights.

One can use, re-use and reproduce the copies and can sell the copies of the work that is copyrighted.

One can deal in the imports or exports of whole or part of the work with copyright protection.

One is liberated to create any derivative work from the copyrighted work.

One can openly exhibit his work with copyright protection.

One can sell or pass on the rights of the work to the other person with copyright protection.

One can deal in transmitting or the display of work by radio or video with copyright protection.

Copyright Protection Validity

Generally, copyright protection is valid for 60 years. In the case of original literary, dramatic, musical and artistic works, the 60-year period is counted from the year following the death of the author. In the case of cinematograph films, sound recordings, photographs, posthumous publications, anonymous and pseudonymous publications, works of government and works of international organizations, the 60-year period is counted from the date of publication.

Remedy for Copyright Infringement

Copyright infringement of any work is a criminal offence punishable under Section 63 of the Copyright Act. The minimum punishment for an infringement of copyright is imprisonment for six months with a minimum fine of Rs.50,000/-. Also, in case a copyright infringement has happened or happening or likely to happen, any police officer, not below the rank of a sub-inspector, may, if he is satisfied, seize without a warrant, all copies of the work and all plates used for the purpose of making infringing copies of the work.

Lawful Use of Copyrighted Work Without Permission

The law under certain conditions allows the use of a registered work without the permission of the owner for research, study, criticism, review and news reporting, as well as the use of works in library and schools and in the legislatures. In order to protect the interests of users, some exemptions have been prescribed in respect of specific uses of works enjoying copyright. Some of the exemptions are the uses of the work, for research or private study, ii) for criticism or review, for reporting current events, in connection with judicial proceeding, for performance by an amateur club or society if the performance for a non-paying audience and the making of sound recordings of literary, dramatic or musical works under certain conditions.

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