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Business Formation
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In India, you can register a Non-profit organization in three ways:
  1. Trust Registration
  2. Society Registration
  3. Section 8 Company Registration(NGO)
The type of registration you will need depends on the purpose you want to achieve. So, you should choose a model that suits your specific purpose. Please note that? Society and Trust registration in India?are different from?business registration, the reason being societies, trusts, and NGOs have charitable objectives. On the other hand, a business works only for profit. Therefore, separate laws govern Society and Trust registration.

Section 8 company, which is governed by the Companies Act, 2013. These entities receive some special tax exemptions and benefits and these benefits are not available to commercial business set ups.
  1. Procedure for Registration of Trust
A trust is a form of interest created in a property. This interest is created by one person for the benefit of another person. The interest in the property relates to its ownership. For instance, a father wants his daughter to enjoy the benefits of his property. Now he can either become a trustee himself and can also appoint his friend as one. Now the trustee will manage the property and look after it. The daughter will be the beneficiary. She will receive all benefits arising from the property.

1.1 Trust Registration

Trust registration procedure in India depends upon the type of trust. There are two types of trust:
  • Public trust
  • Private trust
Both are governed by separate laws. Registration of Private Trusts takes place under the Indian Trusts Act, 1882. But, there is no separate act for public trusts and they are governed by their respective state laws. These state laws usually appoint a commissioner who administers and carries all trust activities in that state. One example of such state laws is Rajasthan Public Trusts Act, 1959, It appoints a Devasthan Commissioner for administering trust activities in Rajasthan.


1.2 Difference between a Public Trust and Private Trust
  • Public trust is formed to benefit the public at large. Private trust is created for the benefit of one or more specific persons.
  • Creating a public trust does not call for a formal deed or any other document in respect of immovable property. However, private trusts do require the same.
  • Public trusts accept donations from the general public, but private trusts do not.
  • Private trusts do not receive the tax benefits that public trusts receive.


1.3 Validity of a Trust


Before proceeding to trust registration, you should know whether your trust is a valid trust. The state public trust laws do not state any essential ingredients of a valid trust. However, the Indian Trusts Act, 1882 which governs private trust states that a valid trust must:
  • Have a lawful purpose.
  • Be for a beneficiary.
  • Contain a property as its subject-matter.
  • Such property must be transferable to the beneficiary.
  • Be the creation of a person who is competent to contract.
  • Have a written and signed document for immovable property.
  • Appoint at least two trustees.
  • Have one settler.
  • Be for an object (religious or charitable).
  • Have two witnesses.


1.4 Documents Required for Trust Registration

Following are the list of documents you need for trust registration:
  • Trust deed on a stamp paper. The value of stamp paper varies from one state to another.
  • Passport size photographs of the settler, the witnesses, and the trustees.
  • ID proofs of the settler, the witnesses, and the trustees.
  • Proof of registered office. A document such as electricity bill, water bill, or house tax receipt.


1.5 Fees for Trust Registration

Trust registration fee depends upon the value of the property which is the subject-matter of trust. It is 1 % percent of the value of the property. Please note that you need to pay stamp duty as well as the registration fee for registration of your trust. 1.6 Timeline for Trust Registration On an average, trust registration takes anywhere between 3-6 months.

  1. Procedure for Society Registration

Society registration in India?takes place under?The Societies Registration Act, 1860. A society is an entity that works for promoting any of the below-mentioned activities or purposes.
  • Science
  • Art
  • Literature
  • Education
  • Charity
  • Public museums
  • Libraries
  • Creating military orphan funds

2.1 Difference between Society and Trust

Societies work in a manner similar to trusts. That is why these two terms are often used interchangeably. However, both entities are different from each other. The Societies Registration Act, 1860 governs societies in India. On the other hand, private trusts come under the purview of Indian Trust Act, 1882. Apart from the governing acts, here are some more key differences between the two.
  • Society needs a minimum of seven members, trust needs two.
  • Trusts don’t need a separate all-India registration, societies do.
  • Voting system governs a society, but one person can control a trust.
  • Amendments are easy in case of trusts, not so in the case of societies.
  • Trust may be revoked with ease, but it is more difficult in the case of societies.
  • A trust can have general objectives, but a society cannot. It needs to have specific objectives.
  • It is possible to make a family member the trustee. But, it is usually not possible in case of societies.
  • A trust works as per the trust deed. A society works as per its MoA and regulations.
Moreover, the society may have any other purpose if the state law allows it.


2.3 Registering a Society

State governments manage society registration. Therefore, an application for society registration is sent to the appropriate state government. Appropriate state government means the government of the state where the registered office of the society is located. To register a society, you need to take the below steps.
  • First, agree on a name with the consent of founding members.
  • Then prepare a MoA and regulations of the society.
  • Next, obtain signatures of founding members on the MoA.
  • Finally, get the MoA witnessed by an officer such as an advocate, CA, or notary public.

2.4 Documents for Society Registration
  • To complete the registration process smoothly, keep the following documents ready.
  • A cover letter that requests society registration. All members must sign this letter.
  • MoA of the society. You need three copies of the MoA. One certified copy and two ordinary copies.
  • Two copies of Rules and Regulations of the society. Founding members must sign both copies.
  • An Affidavit by the president or secretary. It must state the relationship between subscribers.
  • Address proof for the registered office.
  • No objection certificate from the landlord.

2.5 Timeline for Society Registration

Society registration can take anywhere between 30-60 days.

  1. Procedure for Registration of Section 8 Company
A Section 8 company is a company with charitable objects and Section 8 of the Companies Act, 2013 governs its registration. This is why it is known as section 8 company. However, earlier section 25 of the Companies Act, 1956 governed the same. Therefore, it is still commonly known as Section 25 company.


3.1 Who Can Form a Section 8 Company Anyone who is either:
  • A person (including a partnership firm)
  • An association of persons
  • Any existing company
may form a section 8 company.


3.2 Conditions for a Section 8

A section 8 company should make sure that: Its aim is to promote a certain cause. This cause relates to:
  • commerce
  • art
  • science,
  • sports
  • education
  • research
  • social welfare
  • religion
  • charity
  • protection of the environment or
  • any other such object which is like above objects.
  • It uses profits and other incomes only for promoting the above cause.
  • Does not pay a dividend to its members.
If the company fulfills all these conditions, the Central government will issue it the license to carry business. Moreover, along with the license, it will also receive the benefit of not having to add?private limited?or?limited?after its name.


3.3 Features of a Section 8 Company
  • It gets all the benefits of a limited company.
  • But, all the limitations of a limited company also apply to it.
  • It cannot make changes to its MOA or AOA without taking government’s permission first.
  • It can convert into any other form of the company but only if it meets the necessary conditions.
  • The central government can cancel its license if it either does not fulfill its aims or fails to meet other necessary conditions.
  • It can merge with another company only if the other company has a similar object.
  • It does not need any minimum capital.
  • There must be at least two directors.
  • At least one director must be an Indian resident.

3.4 Documents for Registration of Section 8 Company

Before registering your company as a section 8/section 25 company, keep the below documents and details ready.
  • Memorandum of Association in Form INC 13.
  • Articles of Association.
  • Details of directors as well as promoters.
  • A declaration by a professional such as a Chartered Accountant in Form INC 14.
  • Declaration by subscribers in form INC 15.
  • Application form in Form INC 12.
  • A statement which lists the grounds for the application.
  • A statement of annual income and expenditure of the company for next 3 years, as well as the sources of income.
  • Digital Signature Certificate (DSC) of the director, manager, or the secretary.
  • Director Identification Number (DIN) of the directors.
  • Proof of address such as electricity bill or phone bill, NOC from the landlord, rent receipts etc.
  • A copy of PAN card.
  • Passport, in case any of the directors is a foreign national.
  • Proof of ownership. However, you will need this only if the director or promoter also owns the business premises.

Moreover, an existing company also needs some extra documents such as:
  • Board reports and auditor’s reports.
  • A true copy of the resolution approving its registration as a section 8/section 25 company.
  • A statement of its assets as well as liabilities.
  • A notice in Form INC 26.
  • Approval from the relevant authority.

3.5 Timeline for Registering a Section 8 Company

It usually takes around 20-30 days to register a section 8. But, this time period depends on the government processing time and therefore may vary further because of it. Wazzeerians have been helping organizations like yours to get in touch with best lawyers and Accountants for years now, we would be glad to help you, let us know.  🙂
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Contracts and Agreement, License, Uncategorized
  1. Music License: You can use a free public domain or CC 3.0 licensed music from the web, however, most of the time it’s tough to find good music suitable for your game there. You would also need to buy a license for the sound effects that have been copyrighted.
  2. Employee Contract: You will need this for hiring any full or part-time employees. Employee Contract can determine the pay schedule, when the employee will receive pay, any paid holidays, paid sick days or paid vacation days, and other various things. It helps you and your employee understand what you are offering him or her.
  3. General Contract: It is somewhat similar but can be used for contract hires and freelancers who work for you.
  4. Confidentiality Agreement: It is for anyone working with you on your game. This one is important as it states that anything created for the game is owned by your company, and not the creator. This protects your company from your employees or your contract hires from stealing your intellectual property and claiming it is their own.
  5. User Agreement: It is also known as a software license or end user license agreement?. Through this, the user agrees to the privilege of using or purchasing your software and promise to comply with all the restrictions stated in the user agreement.
  6. Privacy Policy: This is for the purpose of telling how you use any information that your users give to you, either on your website or your game/app. It also states that you will protect your users information and it publically states what information is required in order to use your service.
  7. All Rights Reserved: It tells that everything that is within your website or game/app is yours, you hold the right to use it, and unless otherwise stated people require your permission to use your stuff. It is for the purpose of protecting your stuff from theft and other claims on your stuff.
  8. Terms of Service: These are the rules you declare in order for someone to comment on your website, purchase a product from you or other services that you might offer. If someone were to break your rules, your Terms of Service would actually come into play and you can handle it accordingly.
  9. Unity License: You need to have any valid Unity license (either personal or pro) to submit your app. The license can be free one or a paid one, though pirated licenses will not work at all.
  10. Other Licenses: You also need to buy the license for the trademark stuff, like, if you want to use a specific car model in your car racing game you need to buy the license from the company, or if you want to buy a specific gun model it also requires a license.
  11. Adobe license: This one is important as you need Photoshop or Illustrator license. You can use Creative Cloud as one of the most potential solutions.
  12. Autodesk license: Autodesk license for 3D Max and/or Maya should also be taken in order to create 3D content. One can buy a monthly subscription instead of the perpetual license.
  13. Tax Registration: Indirect tax registration and Direct tax registration is something that is applicable to all businesses in India.
  14. IP protection: It’s the endearing competitive touch that you can give to your product.
  15. Funding Compliance: Raising funds involves multiple legal compliances that not just investor wants, but also you need to protect your relationship with investors.
We have been helping businesses like yours to get in touch with best lawyers and Accountants for years now, we would be glad to help you, let us know. Thanks!
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Board of Directors, Director Addition
Building a Company is at hands of the super team (we call it the Board of Directors) that your company forms, Director is the most important person required for the successful running of Company. Director is not only liable for success but also personally liable in case of any breach either of law or trust done by the company. This Board of Directors may require timely shuffle, as the business grows, Company may require new Directors to manage and coordinate their day to day affairs.

Who is a Director?

There is no exhaustive definition of the term ?director? as per The Companies Act, 2013. Section 2 (34) of the Act prescribed that ?director? means a director appointed to the Board of a company. A director is a person appointed to perform the duties and functions of the director of a company in accordance with the provisions of the Companies Act, 2013.

What are the different categories of Directors under Companies Act, 2013?

Companies Act 2013 provides for following types of Director how to add a director to your company   What is the required number of directors in a company?

Section 149(1) of the Companies Act, 2013 requires that every company shall have a minimum number of 3 directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company. A company can appoint maximum 15 fifteen directors. A company may appoint more than fifteen directors after passing a special resolution in general meeting.

What are the documents required to become a director?
  • DIN (Director Identification Number);
  • Income-tax PAN;
  • Personal Information
  • Details of Nationality;
  • Occupation;
  • Full Address with PIN Code (present and permanent)
  • Educational and professional qualifications;
  • Any legal proceedings initiated or pending against such person;
  • List of limited liability partnerships in which he is or was a designated partner along with Name of the LLP, Nature of Industry; and Duration- with dates;
  • List of companies in which he is or was director along with Name of the company; Nature of industry; Nature of directorship? Executive / Non-executive / Independent / Nominee Director; and Duration ? with dates.
What’s the procedure to appoint a new director?

Section 152 lays down the following procedure:
  • Every director is appointed by the company in general meeting.
  • Director Identification Number is compulsory for the appointment of a director of a company. A person who is intended to become a director must apply to the Registrar for obtaining a Director Identification Number (DIN) in Form No DIR-3.
  • Every person proposed to be appointed as a director shall furnish his Director Identification Number and a declaration that he is not disqualified from becoming a director under the Act.
  • A person appointed as a director shall on or before the appointment give his consent to hold the office of director in physical form DIR-2e. Consent to act as a director of a company.
  • Company shall file Form DIR-12 (particulars of appointment of directors and KMP along with the form DIR-2 as an attachment within 30 days of the appointment of a director, along with required fees.
  • In case Registrar is not informed of his appointment within the specified period, he is punishable by imprisonment for a period of six months or may have to a pay fine which may extend to fifty thousand rupees and if the noncompliance continues he might have to pay an additional fine of rupees five hundred per day of non-compliance.
When is the director disqualified?

Section 164 debars any such person to be appointed as a Director who
  • has not got the DIN.
  • is of unsound mind and stands so declared by a competent court;
  • is an undischarged insolvent;
  • has applied to be adjudicated as an insolvent and his application is pending;
  • has been convicted by a court of any offense and sentenced to imprisonment for a period not less than six months and a period of five years has not elapsed from the date of expiry of the sentence.
  • If a person has been convicted of any offense and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;
  • an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;
  • he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;
  • has been convicted of the offense dealing with related party transactions under section 188 at any time during the last preceding five years;
We have been helping businesses like yours to get in touch with best lawyers and Accountants for years now, we would be glad to help you, let us know. Thanks! 🙂
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Startup Funding Paperworks
Did you know that 90% of startups that have IP protection raised funding successfully? IP is any form of original creation that can be bought or sold. IP is protected by legal rights such as patents, trademarks, industrial designs and copyright. These are few simple and cost-effective ways of protecting your ideas and your business.

Presence of IP Assets (Patents, Trade Marks, trade secrets, domain names etc.) helps in
  • Adding value to improve the competitiveness;
  • Improving sustainability by ensuring freedom to operate, and keeping at bay unscrupulous competitors
  • Developing relationships with employees, consultants, suppliers, subcontractors, business partners and customers
  • Obtaining funds.
What Investors seek before committing capital?
  • Competitive: Patentable Subject matter in your idea
  • Right to Commercialize: Manage risks of infringement of Others IP (Freedom to Operate)
But, how does IP correlate with Funds Raised?
  • Improve Valuation to get funding or get acquired
  • Improve Contribution margin from early sales, thereby needing fewer investment funds
  • Even if business fails, the patents may have value for acquiring company
  • Defend itself against attacks for IP infringement by rivals
  • Negotiating Tool in Joint Development, Customer-Supplier Relationship, Avoid Price War (Commodity)
Most obviously, a startup with strong patent protection will have a higher exit value, i.e. the value when listed on a public market or sold in a trade sale. Loop with IP, Funds, and Startups
  1. The higher value is a premium paid for a startup with high gross margins that results from the degree of patent-enabled monopoly protection for its products and services.
  2. Based on patent-enabled monopoly rights, startups that have good patent portfolios accrues larger contribution margin from their early sales, and thus need to raise fewer investment funds in order to further promote their own growth by investment in R&D, marketing, and company enablement.
  3. For investors in start-ups, typically venture capitalists, patent portfolios also represent downside protection. Even if a startup happens to fail (runs out of cash or breaches debt covenants), the company’s patent portfolio can sometimes be sold, licensed or enforced, in order to recover some of the original investment.
  4. A Venture Capitalist only gets to share in the profits when the whole fund is profitable, hence it is very important to get capital back from the startups that fail since this helps the entire fund to move towards profitability. Thus for a startup, this means that seeking investment from professional investors usually means committing to creating a patent portfolio.
  5. A patent portfolio represents downside protection for founders and staff of a startup as well. This means that, even if the business fails, the startup may have value to an acquirer (say a competitor) because of the patent portfolio; this can afford founders and management (who have to negotiate such deals and be rewarded for doing so) some exit value.
In many cases, a startup does not only sticks to the original business plan. As a startup develops, it finds new opportunities, encounters different problems, and has to deal with a rapidly changing and competitive environment. Having a patent portfolio provides a startup with more strategic choices when a change of direction is required. IP Infringement is not new and not only a headache for Small Startups. From Edison losing the IP suit for Bulb to the dispute of Invention of Telphone between Elisha Grey and Graham Bell, From Bajaj & TVS to that of Apple and Nokia, one thread linking all is that one who filed for Patent first and able to commercialize the Idea won the race. If you are reading this, then you sure have a plan, let’s connect and figure out opportunities for you.
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Divorce
Sometimes it is the solution. Mutual Consent is the term used when both the parties agree to a peaceful separation. It is a simple way of coming out of the marriage and dissolving it legally. The important pre-requisite here is the mutual consent of the husband and wife. There are two things the husband and wife must come to a mutual agreement about: Maintenance or alimony. As per law, there are no maximum or minimum limits to alimony or maintenance. There may be a figure or there may not be one; The second issue is the custody of the children (if there are any). This, too, can be worked out efficiently between the parties. Child custody in mutual consent divorce can be shared, joint or exclusive depending on the understanding of the spouses.

When can such a divorce be filed?

Husband and Wife intending to dissolve the marriage are required to wait for at least 1 year from the date of marriage before they file for divorce. They have to show that they have been living separately for a period of one year or more before the presentation of the petition and during this period of separation, they have not been able to live as husband and wife.

Where to file the petition?

The petition for divorce can be filed in the Family Court of the city/district where the couple lived together for the last time, which was their matrimonial home.

Are there different laws of divorce for different religions in India?

Yes. There are different laws of divorce for different religions in India. Hindus (inclusive of Sikhs, Buddhists, and Jains) are governed under the Hindu Marriage Act, 1955. Christians are governed by the Indian Divorce Act, 1869 and the Indian Christian Marriage Act, 1872. Muslims are governed by Personal Laws of Divorce and also the Dissolution of Marriage Act, 1939 and The Muslim Women (Protection of Rights on Divorce) Act, 1986. Similarly, Zoroastrians are governed by The Parsi Marriage and Divorce Act, 1936. There is also a secular law called the Special Marriage Act, 1954.

What happens in court?

The divorce petition is in the form of an affidavit, which has to be submitted in the family court. After the filing of the petition and recording of statement of both husband and wife, the court will generally adjourn the matter for a period of 6 months. After this period of six months, the couple has to make another appearance in court for making a second motion confirming the mutual consent filed for earlier. It is only after this second motion that a decree of divorce is granted by the court.

Can one party withdraw the mutual consent petition after filing in the court? If so, what happens next and what can the other party do?

When the divorce matter is pending in the court for the period of six months, the partners are fully entitling to withdraw the petition (whether together or separately) by making an application to the court saying that he/she no longer wishes to seek divorce by mutual consent. Here, the court will not grant a decree of divorce. In the case where one party withdraws his/her petition, the other party has no option but to file a formal petition for divorce under the provisions of Section 13 of the Hindu Marriage Act, 1950. In such a situation, a divorce will only be granted on certain specified grounds such as: cruelty; desertion; voluntary sexual intercourse with another person; the other spouse being of unsound mind; conversion of religion by the other spouse; leprosy; venereal disease; a spouse having renounced the world or if he/she has been missing for a period of 7 years or more.

Can the spouse consent for remarriage without getting a divorce from the existing partner?

Remarriage without getting a divorce is an offense punishable under the law with a punishment amounting to 7 years of imprisonment.

If nothing from the spouses is heard for a long time, should the decree for divorce be granted?

If there is proof of the absence of spouse without any information to the other spouse about his/her whereabouts for a continuous period of 7 years, a petition may be filed in court in this regard.

When can the divorced persons remarry?

This depends on the nature of the decree. If, after a period of 3 months from the date of the decree, no notice of appeal has been received by the party remarrying someone else.

Before taking the biggest leap in your life, why not we connect you to our best lawyers in this field that can provide you consultation on this matter? Happy to help, let’s connect!
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GST, TAXATION
One nation, one tax! That is the concept of the new indirect tax passed by the Rajya Sabha. The Goods and Services Tax is one indirect tax for the whole nation, which will make India a unified and common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. It will be levied at every stage of the product distribution chain by giving the benefit of Input Tax Credit (ITC) of the tax remitted in the previous stages. Therefore, the final consumer will bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all previous stages. GST will replace all Central level taxes such as excise, service tax, customs duty as well as state level taxes like VAT, CST, entertainment tax among others. The impact on the food Processing Businesses:
  • With the latest information suggesting that the minimum GST rates will be 18% on all products.
  • Alcoholic beverages have been excluded from GST and they will be taxed separately.
  • Implementation of the GST is said to increase the prices of agricultural goods. However, the products will be able to reach the consumer faster due to state-level taxes such as Octroi and entry taxes which will significantly reduce the time and hassle of transporting goods across state borders.
  • GST will also favor the National Agricultural Market on merging all the different taxation on agricultural goods will improve the marketing and virtual market growth.
  • Because GST is a consumption tax, it will be levied only when food products are sold by the manufacturer and not when they are manufactured.
  • The Confederation of Indian Industries (CII) has also in its representation called for a zero rate tax on products which have a rate of up to Rs. 10/- and Rs. 20/-. It also demanded that all packaged material used as inputs by the food processing industry should have a zero-percent rate.

Impact on Restaurants and Food Joints:


Service tax liability with the credit of input VAT on goods consumed will get submerged into GST and irrespective of goods and services, the credit of input will be available for adjustment against the output liability. This will further optimize the working capital of these restaurants and consumers can expect the superior quality of goods and services.

You know how we Wazzeerians are particular about satisfying your business needs, be it Fortune 100 or upcoming Fortuner one thing that forms the pattern is your value for quality and transparency. We would love to hear from you, anytime. Let’s connect!
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Secretarial Compliance, Uncategorized, Winding up of Company
It is better to abandon a sinking and damaged ship than to sink with it. A business may need to be closed for many reasons that may be due to business failure or any other unavoidable circumstances.

Under Companies Act 2013, a Company can be closed in two ways.

    1. Winding Up
Winding up is a tedious process and can be done either voluntary by calling up a meeting of all stakeholders and passing a special resolution or can be done on the order of Court or Tribunal. Strike Off mode was introduced by the MCA to give the opportunity to the defunct companies to get their names struck off from the Register of Companies. On 27th December 2016, MCA has notified new rules i.e. Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 prescribing rule for winding up or closure of the private limited company under companies act 2013. By releasing the form STK 2, the ministry of Corporate Affairs has brought the Section 248- 252 of 2013 act into force.

    1. Fast track Exit
This is the most awaited procedure, that got active again on 5th April 2017. This procedure was introduced in Section 248 of Companies Act 2013.
Fast Track exit can be done in two ways:
    • Suo Moto by Registrar
The registrar may strike off the name of Company on its own if:
    • Company has failed to commence any business in a year of its incorporation
    • The company is not carrying out any business or Activity for preceding 2 financial years and has not sought the status of Dormant Company.
The Registrar sends a notice (STK-1) of his intention to remove the name and seeks the representation of Company in 30 days. Note: Liability on the Directors of the company still exists. ROC can invoke penalty clauses anytime, and the penalty may range from INR 50K to INR 5Lakhs per director.
    • Voluntary Removal of Name using Form STK 2
The company can also move an application to Registrar of Companies for striking off the name by filing form STK-2 along with a fee of Rs 5000/-. Once the form is filed, the Registrar has power and duty to satisfy him that all amount due by the company for the discharge of its liabilities and obligations has been realized. ROC can also issue a show cause notice in case of default in filing returns or other obligations. After above formalities, ROC issues a public notice and strike off the name of Company after its expiry. Note: The form is in approval route. Therefore, concerned ROC can ask for the completion of the fillings.

Details Required
:
    • Incorporation Certificate
    • Director Identification Number
    • Pending Litigation Proceedings if any
Documents Required:
    • Application in form STK-2
    • Government filing fees: INR 5,000/-
    • Copy of Board resolution ?authorizing the filing of this application;
    • A statement of accounts ?showing the assets and liabilities of the Company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant
    • The shareholder’s approval by way of Special Resolution
    • In the case of a company regulated by any other authority, approval of such authority shall also be required.
    • Copy of relevant order for delisting, if any, from the concerned Stock Exchange;
    • Indemnity bond in Form No. STK-3;
    • Affidavit in Form No. STK-4
Note: This form must be signed by a practicing CA or CS

Companies that cannot file for voluntary strike-off:

A company cannot fill the form STK 2 at any time in the previous 3 months if the company has
    1. Has changed its name or shifted its registered office from one State to another;
    2. Has made a disposal for value of property or rights held by it, immediately
    3. Before cesser of trade or otherwise carrying on of business, for the purpose of disposal for gain in the normal course of trading or otherwise carrying on of business;
    4. Has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company or complying with any statutory requirement;
    5. Has made an application to the Tribunal for the sanctioning of a compromise or arrangement and the matter has not been finally concluded; or
    6. Is being wound up under Chapter XX of Companies Act or under the Insolvency and Bankruptcy code, 2016

Companies that cannot use Fast Track Exit option:
    • Companies Registered Under Section 8
    • Listed companies
    • Companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;
    • Vanishing companies;
    • Companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation are pending in the Court;
    • Companies where notices have been issued by the Registrar or Inspector (under Section 234 of the Companies Act, 1956 (old Act) or section 206 or section 207 of the Act)and reply thereto is pending;
    • Companies against which any prosecution for an offense is pending in any court;
    • Companies whose application for compounding is pending;
    • Companies which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;
    • Companies having charges which are pending for satisfaction.

After you Strike off your company:

As soon as the name of the company is removed from Register, from the date mentioned in the notice under sub-section (5) of section 248 cease to operate as a company and the Certificate of Incorporation issued to it shall be deemed to have been canceled from such date except for the purpose of realizing the amount due to the company and for the payment or discharge of the liabilities or obligations of the company.
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GST, TAXATION
Infrastructure and Construction Sectors are no doubt the most important pillars of Developing Economy. In absence of it, no resources can be extracted, no goods and services can be transferred from one place to other as no business is made in open grounds.

What’s been happening so far?

When it comes to taxation, Infrastructure and Construction Sector, generally, face a lot of complexities. Tax is levied at every stage separately, by the Centre and the State, at varying rates i.e. 10.5% / 6% / 4.5% for service tax and different rates by different States, on the value of construction services.

What are the implications of GST on this sector?
  1. Overview
  • Under the GST system, the tax will be charged only on the value added at each stage by the sub-contractors, main contractors and developers or builders.
  • It is a single tax collected at multiple value additions with a full set-off for taxes paid earlier in the value chain by subcontractors and main contractors.
  • The inter-credit of different taxes paid in the current regime be a service tax, VAT, CST, etc. to Centre or States are not allowed and thus becomes a part of the cost on the suppliers. Thus, under GST the final buyer/client will bear only the GST charged by the last person i.e. developer or builder.
  • GST clearly defines WORKS CONTRACTS as service. Thus, there is:
    1. Simplified treatment of works contracts, since there would be no multiplicity of taxes.
    2. Ease in contract structuring as there will be no requirement to divide contracts into material and service portion, as the entire contract would be treated as service. This would be relevant for onshore services contracts entered with project owners undertaking supply of both goods and services.
  1. Effect on Raw Materials
Most of the Construction projects are carried out using following materials:
MaterialCurrent RegimeNew GST regime Probable Tax %
Excise %VAT %
Cement12.512.512-18
Coal6512
Steel12.5518
Bricks12.5518
Wires(all types)12.5518
tiles12.512.528
  Also, the input credit available to manufacturers of these products would increase, and if passed on to the end customers, is likely to result in lower prices. The benefit to other projects will be affected on the basis of ability to offset the input credit of these items with the output tax.
  1. Effect on basis of Construction Project:
Many real estate projects are developed in a way where the land owner gets a fixed amount of flats in lieu of the transfer of land development rights to the developer. It is known as Joint Development Agreement. barter exchanges are covered in the definition of supply, the law is still vague about the transfer of land rights. The other one is Work Contractor EPC Contracts.  

Joint Development Agreement ModelWork Contracts or EPC Contracts
Cost goes Up if land barter comes in the ambit of Supply.No credit can be taken on goods and services in the execution of Work Contract. Similar to the current tax regime.
Capital Lockup (long interval between transfer and ability to set off.Increases the cost since work contracts specifically defined as Supply
Input Credit on Material consumed, Lower cost of Materials (As mentioned in above table)Lower Input material Cost reduces the Overall price. Though Not a significant difference.
 
  1. Road, Rail and Airport Projects
  • Exemption from paying service tax yet liable to pay input tax and service tax to transporter as well as states.
  • No improvement in tax credit liability due to Section 17 (4) (c)
  • However, for power projects and operational power units that enjoy certain exemptions, will have a negative effect since electricity is outside the ambit of GST and input tax is a cost.
  1. Compliance Ease
Finally, the benefit of GST will be the ease of compliance that it would offer. Elimination of multiple taxes and tax laws is a certainty. However, “Engineering, Procurement, and Construction” (EPC) contracts spread across multiple states would require contractors to register in multiple states including their site offices due to ?place of supply? concept. Further, all the site offices will require technological upgradations since input credit would be available only after an online reconciliation of tax invoices is done.

You know how we Wazzeerians are particular about satisfying your business needs, be it Fortune 100 or upcoming Fortuner one thing that forms the pattern is your value for quality and transparency. We would love to hear from you, anytime. Let’s connect!
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