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Secretarial Compliance

The Insolvency and Bankruptcy Code (IBC), based upon the recommendations of the Bankruptcy Law Reform Committee, provides for a single Code to resolve insolvency for all companies, limited liability partnerships, partnership firms and individuals. Initially, India had enacted numerous statutes to punish the defaulters like the Indian Contract Act, the Recovery of debts due to Banks and Financial Institution Act 1993, the Securitizations and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), etc. However, a need was felt for new laws which would take care of the existing defaulters in a time-bound manner.

A good insolvency and bankruptcy code balances three interests:

  • It effectively rehabilitates the company and help promote its interest;
  • It protect the interests of the creditors;
  • It invites future creditors to participate in the business.

To quote the Finance Minister Mr. Arun Jaitley “This code will provide a specialized resolution mechanism to deal with bankruptcy situations in banks, insurance firms and financial sector entities. This code will provide a comprehensive resolution mechanism for our economy.”

This article focuses on the procedure prescribed under the IBC for Corporate Insolvency Resolution Process & Liquidation. When a corporate enters into an insolvency proceeding, there are two possible outcomes – the continuation or sale of the existing business as a going concern (known as insolvency resolution) or the winding up and liquidation of the company. The IBC is a single consolidated law that provides for both insolvency resolution and, in the case where a business cannot be saved, their winding up and liquidation.

Insolvency Resolution Process (IRP): A step by step guide:


  • Who can initiate the process?In case of default, any financial creditor, operational creditor or the corporate debtor itself may file an application for insolvency resolution under the IBC.


  • What constitutes default?Default means failure or non-payment of a debt by the corporate. To initiate the process, this default must be of an amount of not less than Rs. 1, 00,000 (One Lakh).


  • How to initiate the process?

Filing of Application by Financial Creditors: A financial creditor either by itself or jointly with other financial creditors may file an application (Form 1) for initiating IRP with the National Company Law Tribunal. The application must be accompanied by evidence proving default and the name of a person who will act as the Interim Resolution Professional.


Filing of Application by Operational Creditors: An operational creditor has to first deliver a Demand Notice (Form 3) to the corporate debtor. If the debtor fails to either pay the unpaid dues or prove the existence of a dispute in relation to the payment of said debt within 10 days of the demand notice, the operational creditor may file an application (Form 5) for IRP with the National Company Law Tribunal. The application must include the Demand Notice & Invoices against which payments are pending. The Operational Creditor will also require a certificate from the Financial Institution maintaining its accounts confirming that there is no payment of unpaid operational debt by the corporate debtor.


Filing of Application by Corporate Debtor: The corporate debtor can itself initiate IRP by filing an application (Form 6) with the National Company Law Tribunal (NCLT). The application will include the books of account of the company and the name of a person who will act as the Interim Resolution Professional.


NCLT shall have 14 days to either admit or reject the application made to it.


  • Declaration of Moratorium After the application is admitted by NCLT, a 180-day moratorium comes into effect. During this period, all pending suits against the debtor stay and no new actions can be initiated. Furthermore, the debtor is prevented from transferring, encumbering or disposing of its assets. The idea behind this moratorium is to provide a calm period for the debtor and creditors to discuss their future course of action.


  • Public Announcement After the admission of the application, NCLT will also make a Public Announcement of the initiation of corporate insolvency resolution process and call for the submission of claims by the creditors.


  • Insolvency Resolution Professional It is the responsibility of the Resolution Professional to administer the resolution process. He is in charge of the management of the affairs of the corporate debtor and runs the company as a going concern with all the employees and other stakeholders reporting to him. Powers of the Board of Directors all vest in him. Plus, he shall also prepare the information Memorandum of the corporate debtor.


  • Formation of the Committee of CreditorsThe committee of creditors (COC) shall be constituted by the Interim Resolution Professional, who will either confirm him as the Resolution Professional or replace him. COC will consist of financial creditors only and their first meeting shall take place within a period of 7 days of its constitution. Any decision made by the COC will have to have 75% majority of the total voting share.


  • Resolution Plan A Resolution Plan can be proposed by any person and shall be submitted to the resolution professional. For this purpose, the person submitting the plan shall be called “Resolution Applicant”. The plan must not be against any provisions of the law for the time being in force & must necessarily provide for the following:
  • Payment of insolvency resolution process costs
  • Repayment of the debts of operational creditors
  • Management of the affairs of the Corporate debtor
  • Implementation and supervision of the resolution plan

The Resolution Professional shall present all the resolution plans before the COC for their approval/confirmation with a 75% vote. The approved plan will then be sent to NCLT.


  • Timeframe for completion of IRP The corporate resolution process shall be completed within 180 days from the date on which the application is admitted. However, on request by the COC, this period can be extended, but not for more than 90 days and no other extension can be granted thereafter.


  • How does the IRP end? IBC is a time bound process. Therefore, it needs to end within 180 days, subject to a one time 90-day extension in exceptional cases. The process comes to an end on the approval and acceptance of the Resolution Plan by the COC and the NCLT. Thereafter, it becomes binding on the corporate debtor, creditors, employees and all other stakeholders. If the Resolution Plan is not accepted and approved then an Order of Liquidation is passed against the corporate debtor.


The liquidation proceedings may be commenced under the following circumstances:

  • If no insolvency resolution plan is submitted to the NCLT/DRT within the prescribed period;
  • If the insolvency resolution plan is rejected by the NCLT/DRT;
  • Upon an application by the party affected in case of contravention of the insolvency resolution plan approved by the NCLT/DRT by the debtor; or
  • If the committee of creditors resolves to liquidate the debtor.

On passing of an order for liquidation by NCLT, the resolution professional will automatically start performing the duties of the liquidator, if not replaced. The liquidator shall form the Liquidation estate, take control of the assets of the company, collect and consolidate the creditors’ claims and to the extent required, carry out the business of the company for the benefit of the liquidation.

Distribution of Assets upon Liquidation: Priority of Claims

The priority of distribution (in order of precedence) amongst different classes of creditors is as follows:

  1. Insolvency Resolution Process Cost
  2. Secured creditors and workmen dues for upto 24 months
  3. Other employee dues for upto 12 months
  4. Unsecured creditors
  5. Government dues & unpaid secured creditors
  6. Remaining dues (including those against operational creditors)
  7. Preference shareholders
  8. Equity shareholders


Wazzeer has produced articles on –  What Copyright is; How Copyright can be filed; What the top 10 questions people tend to ask about Copyright; What if someone infringes the Copyright. This time we have decided to take the discussion on this subject to the next level.  In order to bring clarity amongst young startups community, in this blog, we will look into actions that are not considered Copyright Infringement in India.

  1. Using literary, dramatic, musical or artistic work for private research
  2. Making of copies or adaptation of a computer programme by the lawful processor
  3. Utilization of computer programme for the purpose for which it was supplied.
  4. Reproduction of the work for the purpose of a judicial proceeding
  5. Playing the recording in an enclosed room for the public to hear.
  6. Making no more than 3 copies of the copyrighted book under the direction of the Copyright owner
  7. The film works with all particulars are displayed in the video film.
  8. Any artistic work permanently situated in a public place.
  9. Reproduction of the content in any Indian Language
  10. The observation, study or test of functioning of a computer programmer for which the computer programme was supplied.

These are the top 10 actions that are generally carried out by individuals and businesses for various purposes. The above actions do not come under copyright infringement.

We at Wazzeer have helped businesses in various sectors start smoothly without hassle. We would be very excited to help you kick your business and thereafter too. So let’s connect “Get Started!”





Business Formation

The year welcomed the implementation of 15 major amendments in Companies Act, called as the ‘Companies (Amendment) Bill, 2016’ which was passed by the Lok Sabha on 27th July 2017 and by the Rajya Sabha on 19th December 2017. The major objective behind the proposed amendments was to address areas of disclosures, accountability investor protection, corporate governance. Today we will be looking into the proposed changes one by one.

The Companies (Amendment) Act, 2017 received the President’s assent on 3rd January 2018, proposing a slew of changes to strengthen corporate governance and make doing business in India easy. Some of the key changes introduced by the Amendment Act are as follows:

  1. Amendment in the Definitions: The Amendment Act has modified the definitions of terms like ‘Significant influence’, ‘Joint Venture’, ‘Holding Company’, ‘Subsidiary’, ‘Key Managerial Personnel’, and ‘Related Party’, etc.


  1. Relaxation in Incorporation: Members of a company can now be held severally liable for payment of debt in cases where the number of members falls below the required limit and the company continues to carry on the business for more than six months. The Amendment Act, 2017 has also extended the time limit given to a company to establish a registered office, after its incorporation, from 15 days to 30 days. Further, according to the Amendment Act, a duly authorized employee of the company can now sign any document/proceeding/contract requiring authentication by the company or on behalf of the company.


  1. Issuance of Shares: Issue of shares at a discount, which was earlier prohibited, is now allowed provided it is carried out in accordance with any guidelines/directions/regulations specified by the RBI. Further, the restriction over sweat equity shares not be issued within one year of commencement of business of the company has also been done away with.


  1. Private Placement Process: The process of issuance of shares through a private placement has been made simpler and multiple private placements have also been made possible.


  1. Declaration and Payment of Dividends: According to the Amendment Act, while calculating the profits of a company for declaration and payment of dividend, any amount representing unrealized gains, notional gains or revaluation of assets shall now be excluded.


  1. Harmonization with Regulatory Bodies such as SEBI & RBI: The Amendment Act has now empowered SEBI to prescribe the information required to be stated in the prospectus by a company. Additionally, the provisions which dealt with ‘insider trading’ and ‘forward dealing’ have been omitted as pre-existing SEBI regulations on the subjects are wide enough to cover all such instances.


  1. Corporate Social Responsibility (CSR): The words ‘any financial year’ have been replaced by the words ‘immediately preceding financial year’ for determining if a company had specified net worth/net turnover/net profit to constitute a CSR committee. The Ministry of Corporate Affairs has been empowered to prescribe any exclusion from the calculation of net profit of the company. Furthermore, now companies have been given freedom to spend the CSR amount in areas other than their local area of business.


  1. Changes Impacting Directors and Key Managerial Personnel (KMP): The Amendment Act has modified various provisions relating to Directors and KMP including, but not limited to, the definition of KMP, the residency requirement of a Director, etc. Vacation of office by a Director is no longer required in case of default by a company in filing financial statements or annual returns.


  1. Independent Director: An independent director is now permitted to have limited pecuniary relationships with the company without compromising his independence. He can now receive remuneration and make transactions with the company not exceeding 10% of his total income. In addition to this, the restriction on being appointed as an independent director in case he/she or his/her relative is a KMP or an employee of the company or its holding, subsidiary or associate company during any of the preceding three financial years will no longer apply.


  1. Loan Advanced to Director: The Amendment Act has also made possible for companies to advance a loan or give guarantee/security to entities in which a Director is interested subject to prior approval of the company by a special resolution; and utilization of the loan by the borrowing entity for its principal business activity.


  1. Loan and Investment by Companies: The Amendment Act, 2017 has clarified that a company is now allowed to give loan to its employees in excess of the specified limits without passing a special resolution, which was earlier mandatory.


  1. Conducting Business and Compliances: The Amendment Act has clarified that a company is not required to state its indebtedness in the annual return filed by it, which was earlier necessary. Every company is also required to place a copy of the annual return on its website. The Amendment also facilitates flexibility in convening Annual and Extraordinary General Meetings. The requirement relating to ratification of auditors by the members of the company at every AGM has been removed by the Amendment Act, 2017. Further, Government approval will no longer be required for payment of the managerial remuneration in excess of the specified limits.


  1. Audit Committee & Nomination and Remuneration Committee (NRC): The Amendment Act has stated that instead of listed companies only listed ‘public’ companies should be required constitute an Audit Committee and NRC. In addition, prescribed class of companies will also be required to constitute these committees. This means that a listed ‘private’ company will no longer be required to constitute the NRC.


  1. Relaxation on Default in Repayment of Deposit: Under the 2013 Act, a lifelong ban was imposed on a company from accepting deposits from its members for a default made in the past, even for reasons that were beyond the company’s control. The Amendment Act relaxes this stricture by introducing a cooling-off period of 5 years from the date of remedying the default.


  1. Punishment of Fraud: The quantum of punishment will now be imposed taking into account the size of the company, the nature of its business, public interest, nature and gravity of default, recurrence of default, etc. After the Amendment, the penalty for fraud, which involves an amount of Rs. ten Lakh or 1% of the turnover of the company, is imprisonment for a minimum term of 6 months which may be extended up to 10 years and a fine equal to the amount involved in the fraud, but which may extend to 3 times the said amount. On the other hand, frauds below the new threshold have a reduced punishment. Penal provisions for small companies and one person companies have also been reduced.


These amendments made by the Amendment Act, 2017 will come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Therefore, it is suggested that the companies should take note of these changes made to the 2013 Act so that they can effectively reap the benefits of the same.

We at Wazzeer have helped businesses in various sectors start smoothly without hassle. We would be very excited to help you kick your business and thereafter too. So let’s connect -> “Get Started!”



Business Formation
With loads of memory piled up, this is the very first time that our CEO Mr. Chandan Kumar who is also the Cofounder of Wazzeer opens up to a public platform to pen down the story behind Wazzeer – #WazzeerKaStory
Please note: The following article was originally published on 

“Why LegalTech?” is something we are often asked. After all, with a background in management and technology, this is not a field that comes naturally to you.

The truth is, we were fed up with the problems we were facing ourselves taking care of the legal, accounting and compliance matters for our venture – Castling Consulting. Things seemed far from organized and transparent, and a new surprise would come out of nowhere. This seemed to be the case with a number of entrepreneurs we knew.

Diving deeper, we realized that this was more of a problem with the way information flowed rather than the quality of professionals (at least in our case). In the absence of ‘best practices’ and a defined information sharing mechanism, the industry has been running far from its optimized efficiency.

We decided to solve this!

A different approach

Technology has been at the core of our vision for Wazzeer. However, we took a very different approach to build what we believe to be essentially a technology company. We decided not to focus on technology for some time and instead channelize our energy and resources to build capabilities and processes.

The legal, accounting and compliance industry, if we look at it, is made of people who are extremely smart and well educated. The way law works, more often than not, there is no defined process to do anything. Every professional has a different approach to every work that exists. This probably is the largest white-collared but largely unorganized sector (at least in the Indian context). The nature of laws and its interpretation offers a wide range of ways to do that work. Best-practices are rare in the industry.

We were very clear that we want Wazzeer to stand for the quality of service that we would want for ourselves. Envisioning was easy; delivering showed a whole new world of challenges J. Positive from this was, if we solved this, we would be building something we could be proud of.

We decided to focus on three strategic things:

  • Getting the right professionals (Lawyers/ CAs/ CS)

Often online ventures are measured in terms of the number of brands, vendors or professionals they have on their platform. It was tempting for us to focus on getting every Lawyer, CA or CS onboard. However, stepping into the clients’ shoes made us realize that the number of professionals was nothing more than a hygiene factor. What mattered was the quality.

We focused on building a network of handpicked partners (yeah, we consider them as our partners). We have developed a selection and onboarding process, which boils down to whether we would trust the professional with our own work or not?

  • Coming up with the ‘best-practices’

For the last two years, we have been focusing on defining the best way to deliver every process. Working with a wide site of work types and professionals from across the country, we have seen a range of processes first hand. We have been busy observing, asking questions and taking notes to come up with the detailed process and information needed to get every type of work done in an efficient way (and virtually, in most cases).

It has been a challenging but rewarding effort. We have observed the customer satisfaction level improving and positively impacting the repeat work from them.

  • Technology and automation to enhance efficiency

With the processes defined and the best professionals doing it, our efforts have been to get the technology to support them. We have been observing every step and figuring out what is the best way to automate things without adding to the complexity.

A lot of work has been going in the background for a year now and we very recently launched a part of our platform. We are moving fast on this and adding features every week. The objective is to leverage tech automation to reduce the possibility of errors and enhance convenience.

Not to limit to just scratching the surface

Our efforts are already showing positive results for us. One of the key objectives we identified was not to limit ourselves to just the business incorporation and registrations like most of the other online players.

Leveraging our network, we have delivered work like legal support for M&A deals, funding compliances, drafting and implementing ESOP policies, FDI related compliances, legal advisory on crypto-currencies and ICOs, accounting for companies with all types of business models, RBI compliances, etc.

The journey, however, has just started. An extremely dedicated, efficient and determined team at Wazzeer is striving to change the way the industry works.

And in all this, we are guided by something we have adopted as our way of working: We do not just deliver services. We build relationships.


Gift Deed

There are various ways through which you can transfer a property that you own. It could be by way of sale, a Will or a gift. A commonly used method, especially when transferring to a family member or friend, is executing a gift deed in favor of the recipient. Although no monetary transaction is involved, it is still necessary to register the gift deed to make the transfer valid. This article will help you to know more about gift deed act and how it scores above the Will creation.

Why did the concept of Gift Deed come into existence?

A very basic foundation of a gift lies behind the intention. A promise to make a gift in the future is unenforceable and legally meaningless; even if the promise is accompanied by a present transfer of the physical property in question.

Consider this: A man gives a woman a ring and tells her that it is for her next birthday and to hold on to it until then. The man has not made a gift, and could legally demand the ring back at any time before the woman’s birthday. Now, in contrast to this, suppose a man gives a woman a deed and tells her it will be in her best interest if the deed stays in his safe-deposit box. In this way, he has made a gift and would be unable to legally reclaim it 🙂

Rolling back to a few years, in India, previously there was Gift Tax Act under which donor had to pay the gift tax on the amount of gift. However, this very Act has been abolished and from Financial Year 2004-05, a new provision was inserted in the Income Tax Act, 1961. According to this, if the gift is received by

  • an individual or
  • from any relatives/ blood relatives or
  • at the time of marriage or an inheritance
  • or in contemplation of death, it will not be taxable

In all other cases, if the aggregate of gifts received exceeds Rs 50,000 in a year, the gift will be taxable as income from another source.

What according to Law can be Gifted? Any important conditions?

Some points about the gift which you might plan to present are :

  1. It must be transferable.
  2. It should be movable or immovable property.
  3. It should be tangible property.
  4. It should be with respect to present time and not to be a future property.
  5. The gift should be made voluntarily without any force or coercion by you or any other person.
  6. The said property should be There has to be some legal proof about it. You can’t gift a castle in the air sadly!
  7. The donor and donee should be alive at the time of the gift. Example: the transfer of a house to an unborn child is not valid.

One can gift jewelry, cash, paintings or antique collection too. But typically these need not be registered they can be handed over to the receiver directly. But if you as a donor want to register it, you can go ahead at your own discretion.


How to ensure the ‘gift’ is valid?

Whenever the gift involves an immovable property, it should always be transferred by a way of registered deed. The document transferring the property by way of gift should be registered with registrar office or engaging a lawyer. By registering the gift deed the transfer becomes legal. Irrespective of the value of the property, the gift deed needs to be registered.

Registering a gift deed with the sub-registrar is mandatory as per section 17 of the Registration Act, 1908, and as per section 123 of the Transfer of Property Act. In case you don’t go for it, the transfer will be invalid.


Is there a gifting “process”?

Yes. And it can be subdivided into these :

  1. Drafting the Gift Deed – A gift deed is drafted with the help of a lawyer and it describes what is being transferred and to whom. A declaration can be in written form or can be orally depending on the situation. However, under Muslim Law, it is not mandatory to give in writing for transferring the gift.
  2. Acceptance – Acceptance of the gift after its execution is a must. The receiver must accept the gift during the lifetime of the donor. In case he/she fails to accept the gift, it is considered invalid. The acceptance may be validated by acts such as taking possession of the property. For example, a baby who is in the mother’s womb is also a valid recipient if he/she is born within six months after declaring gift in his/her favor.
  3. Registration – Mandatorily, as per the Transfer of Property Act, a gift of immovable property cannot pass any title to the receiver unless it is registered.

It is posted registration only, that the title transfer is possible.


How to register a Gift Deed?

Registration of gift deed is done according to the provisions of the Indian Law. The steps involved in the registration process are:

  1. Valuation of the property being gifted by an approved valuation expert is very important.
  2. Payment of Stamp duty and transfer duty – Stamp duty varies for women and men (slightly lower for women). The stamp duty also varies from state to state and for latest rates one should visit official state government website. Certain state governments even offer some concession if the property is being gifted to blood relatives. For instance, for Delhi, the stamp duty in case of property transfer by way of sale or gift deed is the same—4% of men and 6% for women. In case of a gift deed, the rate is the same if the property is being gifted to a non-family member. If the recipient is a family member, then only 0.5% of the market value of the property has to be paid as stamp duty.


Legal Formalities for Gift Deed Registration: 

The documents required for gift deed like PAN card, Aadhar card, driver’s license, passport, etc. need to be submitted to the Registrar’s office.

Things to be kept in mind for the gift deed are as follows:

  1. The gift deed should essentially mention the details of the property that is being gifted
  2. Details of the recipient are very important.
  3. It must be signed by the donor who is gifting the property.
  4. Both the donor and receiver must be present in the office of Registrar.
  5. It must be attested by at least 2 witnesses.
  6. The deed needs to be stamped with an appropriate nonjudicial stamp which depends upon the value of the property. 


When is the ‘gift’ considered invalid?

If the donor dies before registering the gift deed then the gift is not valid. The person receiving also has to accept the gift during the lifetime of the donor.

There is no prescribed method of accepting the gift. Let’s say Mr. Verma wants to gift a property to his daughter. She may start residing in the property or has taken possession of the property. Her name being entered in the mutation records also amounts to acceptance of the gift. If Mr. Verma dies even before her accepting the gift, the gift becomes invalid.


Gift Deed in case of Minor: Minors are not eligible for the contract; therefore they cannot transfer property as a gift. A gift deed in case of the donor being a minor is legally not valid. But if the receiver is a minor, a natural guardian can accept a gift on his behalf. One can say that the guardian acts as a manager of the gifted property. Once the minor is an adult, he/she must either accept the burden or return the gift.

The Guardians who can receive the gift on behalf of the minor or insane are:

  • Father
  • Father’s executor
  • Paternal grandfather
  • Paternal grandfather’s executor.

Gift deed over a Will

Even though there is an extra cost in the form of Stamp Duty and the deed is irrevocable after execution, it has many positives over a Will.

  1. It is executed during the lifetime of donor and transfer happens immediately whereas the “Will” is applicable after death.
  2. Gift deed needs to be registered; only then it is effective. Registration renders it less liable to litigation. “Will” on the other hand is prone to litigation.
  3. Transfer using gift deeds are tax-free in the hands of donor and receiver.


How to Cancel a Gift Deed?

The deed can be revoked under following conditions:

  • There is a mutual agreement between the presenter and the recipient
  • Property transfer was simply based on the Will of the transferor but the recipient was not agreeing to accept the asset.



A gift which is not based on forgery or fraud can be revoked. Once a gift deed is prepared, one cannot revoke it until the required clause it added to it. The main feature of the gift deed is that it can be transferred to some other person without any consideration. However, it is necessary to consult a legal expert to help you through this process.

Thinking about your gifting a big asset to your wife this anniversary? Get it registered with Wazzeer! We will be happy to help you.


Business Formation, LLP

Entrepreneurs, in general like flexibility or rather I should say a mix of that and a mix of this, and while choosing an entity type to register their business expectations is no different. Today we will be looking into one such thing, choosing LLP as an entity for registering one’s business.  The gist of this blog will be around the 3 aspects of LLP an entrepreneur should consider keeping in mind before registering one.

LLP is, again, a mix and match of two entity types – Company and Partnership. To talk about the major distinguishing features or to put it classy manner ‘The USPs of LLP’ – all partners have a form of limited liability for each individual’s protection within the partnership; partners have the right to manage the business directly; limits the personal liability of a partner for the errors, omissions, incompetence, or negligence of the LLP’s employees or other agents.

Aspect #1 – Characteristics of LLP

  • LLP has perpetual succession separate from its partners
  • Duties and rights of partners strictly governed by the LLP Deed Agreement.
  • In absence of LLP Deed Agreement, the duties and rights will be governed by the LLP Act.
  • Liability of the partners limited to their agreed contribution in the LLP
  • No partner would be liable for actions of other partners.
  • If LLP and the partners are found to have acted with an intent to defraud creditors, both wil be facing unlimited for all debts or other liabilities.
  • No limits to the number of partners of an LLP

Aspect #2 – Advantages of LLP

  • Separate legal entity
  • Easy to establish
  • Minimal legal and procedural requirements
  • Perpetual existence of LLP
  • No minimum capital limit
  • No maximum number of partners limit
  • LLP and partners are separate from each other
  • Easy to wind up
  • No requirement to maintain statutory records except Books of Accounts

Aspect #3 –Disadvantages of LLP

  • LLP cannot raise funds from public
  • No separation of management from owners
  • RoC returns filing penalty is higher

Difference between LLP and other entities

We at Wazzeer have helped businesses in various sectors start smoothly without hassle. We would be very excited to help you kick your business and thereafter too. So let’s connect -> “Get Started!”

FCGPR, Funding Compliance

Welcome to this series on Foreign Direct Investments brought to you by Wazzeer. Heard stories of different kinds of FDI’s made in India, this is based on one such story. Ajay who always knew that he would start a healthcare business in India decided to pursue MBA from Wharton School of Business. During his journey in Wharton, Ajay made some new friends, and of them, there were quite a number of foreign friends too. Ajay after graduation, came back to India to set up his business in India. On his way to raise an initial round of funds, reached out to his foreign friends regarding the same.  Ajay, though he had some idea on how FDI works, to be on the safer side, he reached out to Wazzeer. Describing a part of Ajay’s requirement, let’s dive into Episode 1 – Transfer of shares from resident’s to Nonresident’s.

There are basically two options to transfer shares from resident to Non-Resident:

A. Transfer by way of sale:

  1. A person resident in India may transfer to a person resident outside India any share/convertible debenture of an Indian Company whose activities fall under the Automatic Route for FDI subject to the Sectorial Limits, by way of sale subject to complying with pricing guidelines, documentation and reporting requirements for such transfers, as may be specified by the Reserve Bank of India, from time to time.
  2. Which is not possible if, Indian Company is in financial service sectors like banking and nonbanking companies regulated by the Reserve Bank, insurance companies regulated by Insurance Regulatory and Development Authority (IRDA) and other companies regulated by any other financial regulator, as the case may be).
  3. Which is not possible if, the transfer falls within the provisions of SEBI Regulations, 1997.

B. Transfer by way of gift:

  1. A person resident in India who proposes to transfer to a person resident outside India [other than erstwhile OCBs] any security, by way of gift, shall make an application to the Central Office of the Foreign Exchange Department, Reserve Bank of India furnishing the following information, namely:
    1. Name and address of the transferor and the proposed transferee
    2. Relationship between the transferor and the proposed transferee
    3. Reasons for making the gift


In case the transfer does not fit into any of the above, either the transferor (resident) or the transferee (non-resident) can make an application for the Reserve Bank’s permission for the transfer. The application has to be accompanied with the following documents:

  1. A copy of FIPB approval (if required).
  2. Consent letter from transferor and transferee clearly indicating the number of shares, the name of the investee Company and the price at which the transfer is proposed to be affected.
  3. The present/post transfer shareholding pattern of the Indian investee company showing the equity participation by residents and non-residents category-wise.
  4. Copies of the Reserve Bank of India’s approvals/acknowledged copies of FCGPR evidencing the existing holdings of the non-residents.
  5. If the sellers/transferors are NRIs / OCBs, the copies of the Reserve Bank of India’s approvals evidencing the shares held by them on repatriation / non-repatriation basis.
  6. Open Offer document filed with SEBI if the acquisition of shares by a nonresident is under SEBI Takeover Regulations.
  7. Fair Valuation Certificate from Chartered Accountant indicating the value of shares as per the following guideline.
  8. In the case of unlisted shares, the fair value is worked out as per the erstwhile Controller of Capital Issue/s.
  9. For listed shares, the price worked out is not less than the higher of average weekly high and low quotations for 6 months and an average of daily high and low quotation or two weeks preceding 30 days prior to the date of making application to FIPB.


We at Wazzeer have helped businesses in various sectors to get an end to end legal, accounting, and secretarial works delivered smoothly without hassle. We would be very excited to help you kick your business and thereafter too. So let’s connect -> “Get your Wazzeer”





Business Formation

If you are reading this, then you are on the right track to get that dream HR Consultancy business kick off. The industry could be a fight, but with some domain knowledge, you could go to places. Starting your thought process from a compliance point of view. If you are first time entrepreneur, then spending reasonable time planning for these is considered a must. We will be looking into the Top 10 Compliance to plan for before starting a Recruitment Agency.

Required Compliance work

1. Register your Business:

There are various entity options for registering your consultancy as a business:
  • Sole Proprietorship
  • Partnership Firm
  • One Person Company
  • Limited Liability Partnership
  • Private Limited Company

Details on this one can be found here.

2. Registering for Goods and Services Tax:

It is a must for your business to be registered for Goods & Services Tax. The current GST rate for manpower recruitment services is 18% (not covered under RCM under GST) and if the business turnover is more than 20 lakhs one has to register GST.  The good part is, it can be done by business owners online and the process is simple.

3. Registering with the Ministry of Overseas Indian Affairs:

Definitely required if your business is helping Indian individuals for overseas employment. The application of becoming a Recruiting Agent must be submitted to the concerned office of the Ministry of Overseas Indian Affairs in the prescribed format along with supporting documents. Specifically, the agents which have been registered with the above can recruit Indian Citizens for employment abroad as per The Emigration Act, 1983. The application for registration is accompanied by a fee of Rs. 25,000 and a guarantee deposit worth Rs. 50 lakhs in a bank.

4. Business banking Account:

To carry out any transactions you would be requiring a business bank account. Based on the entity type you choose to register your business, different documents will be required to submit as proof. This account will be essentially a one-stop financial reference for your business operations and as well for the government.

5. ESI & EPF Registrations:

As your consultancy will be involved with hiring candidates and helping the employers getting the suitable pick, Employee Provident Fund and Employees’ State Insurance registration is mandatory. ESI provides medical insurance and security for the person insured as well as for the members of his family. If your company has at least 10 employees at the time of registration, this shouldn’t be missed at any cost for the well being of your employees. All you would be needing is quick registrations for obtaining EPF and ESIC Code No for the establishment of your recruitment agency.

6. Maintenance of employee registers:

The placement agencies shall maintain the records of all the domestic workers and other workers or employees being contracted by them for purposes of employment The record shall consist of the following

  • Name and address of the employer under whom such domestic worker or employee is working.
  • The period of employment
  • The rate of wages and the mode of payment of the wages.
  • Displacement allowance payable.
  • Passport size photograph of the employer and the worker.
  • Nature of work and the working hours.
  • Copy of contract

7. Payroll Processing :

  • Endeavor to ensure proper reception of the emigrant by the employer in the country of employment.
  • Should maintain proper books of accounts, Memorandum of association, Rules, Bye-Laws as the case may be and the details of the office bearers of the organization and details of persons employed by agency
  • Payroll processing and Quarterly Vendor Audits of the Contractors
  • Preparation & submission of quarterly, half yearly, annual returns, and accounts.

8. Taking care of work ethics and Labour Laws:

  • Necessary and timely inspections to be done with the Assistant Inspector of Labour
  • Making sure whether the work-seeker is or will be employed by the employment business under a contract of service or apprenticeship, or a contract for services, and in either case, the terms and conditions of employment of the work-seeker which apply, or will apply;
  •  Proper contracts stating the length of notice of termination which the work-seeker will be required to give, and which he will be entitled to receive from in respect of particular assignments with hirers
  • Paying special attention to offer letters, having mentioned the rate of remuneration payable to the job-aspirant; details of the intervals at which remuneration will be paid and other amenities
  • If an agency knowingly sends, directs or takes any girl or woman to any place for immoral purposes or to a place where she is likely to be morally corrupted, legal actions will be taken in that case.

9. Paying attention to ITR fillings:

  • Punishment of imprisonment for not less than six months and which may extend up to a period of seven years or fine up to 50000 rupees or both shall be given to any licensee who:
  • Charges or receives himself or through another person, for his services, any sum greater than the prescribed fee
  • Fail to maintain records and accounts of the workers placed by the agency

10. Agreements and Contracts:

There are various instances where the business is put to deal with the third parties. To give you an instance, say you have developed the platform to carry out the business on when you plan to license the same for client usage, Software license agreement would be required.  On a similar note, there are a couple of other agreements that will be required, to list a few:

  • Vendor Agreement
  • Cofounder’s Agreement
  • Trademark License Agreement
  • Terms of service
  • Privacy Policy

Getting a helping hand before taking a jump into the legal formalities will not only save your time but will also ensure mental peace. Wazzeer helps professionals like you to start a business smoothly -> Get Started!



Let me start by telling you a story, a few days back, an entrepreneur reached out to us on Counsel, seeking advice on Trademark registration. His question was – I know the importance of Trademark to my business, but with the given circumstances, I might not be able to register it anytime before a month from now. My question here is, is there any other way I can portray to my competitors and customers that my Trademarking is in the process? Our discussion with this entrepreneur moved from the counsel conversation to the work kick off, but we thought Wazzeer audience should get a clear picture whether to choose R or TM for Trademark Registration.


 A Registered Trademark :


  • Gives its registered owner certain exclusive rights and is required for safeguarding the commercial goodwill and originality of goods and services.
  • According to the Section 27 of The Trademarks Act, 1999 actions will be taken against the infringers for a registered trademark while it does not happen for an unregistered one.
  • The Act lets the registered owner to approach the judiciary for infringement and can claim damages from the person who is using his trademark without his consent or approval.
  • It delivers protection to the consumers from purchasing the imitation product or the second rate quality product


On the contrary,


An Unregistered Trademark :


  • Doesn’t safeguard against any infringement as it is not registered under the Trade Marks Act 1999
  • Doesn’t have the right to stop a third party from using the same mark/logo/symbol
  • Though no action can be taken for infringement of an unregistered trademark a third party can be sued for passing off by The Trademarks Act 1999



The War of symbols: These symbols along with giving legal grounds for claiming damages in trademark litigation also arises certain confusions. Let’s clear the air now!


TM : The trademark designation notifies others that the product’s name and design are the company’s property. This symbol comes with no restrictions but conveys that you have initiated the process of registering the trademark. When used, it means that the trademark has not been registered; you are yet to claim the trademark. It specifies that the product, its name, and other things are exclusive to that individual and the company. But this does not have any legal binding. Remember that this trademark symbol does not protect the company from another company that produces a similar product or uses a similar name.

R :  This symbol is a representation of a registered trademark. It shows that the country authority has approved the registration. It is a punishable offense in India to use this symbol if the trademark has not been registered. Once a trademark is registered successfully without any objection and the certificate is issued, the proprietor can use the R logo along with the TM logo. The important thing to keep in mind is that you cannot use R symbol for an unregistered trademark. Any future companies wishing to register its own name or logo has to check beforehand to be sure that it is not like any registered trademarks.


In a nutshell, when a company or an individual uses the™ symbol, it means that the service or brand belongs to them; but no legal binding prevails. On the other hand, if the trademark is verified and registered, it is legally bound.


After few background verification of your company’s brand, you can file for online trademark application and upload your documents. Fortunately, you will be receiving the Provisional Trademark Certificate in a day or two. As soon as your trademark registration is verified you can start using ® symbol next to your company/brand name.


Applying for an Online Trademark Registration is way easier than the complex offline procedures. Wazzeer’s handpicked professionals help you to get through this without any hassle. Solution to any legal issue,  at the click of a button, is what we can vouch for.

Our experts are right here to align your ideas into reality. Let’s Connect ->  “Get your Wazzeer”



What does the CA say?


Establishing Accounting Policies when your company grows in size of more than 10 employees.


Is Accounting Policies really important?


Accounting policies are the specific principles, bases, conventions, rules, and practices applied by an entity in preparing and presenting financial statements.  The view presented in the financial statements of an enterprise can be significantly affected by the accounting policies followed in the preparation and presentation of the financial statements.


The accounting policies followed vary from enterprise to enterprise. Disclosure of significant accounting policies followed is necessary if the view presented is to be properly appreciated. The disclosure of accounting policies followed in the preparation and presentation of the financial statements is required by law in some cases.


How do Accounting Policies benefit the firm?


Accounting policies, as described already, brings in standards of accounting. These accounting policies answer some major questions like:


  • How the business recognizes revenue
  • How the business recognizes depreciation
  • How research and developments costs are capitalized and which are expensed
  • How the business would plan petty cash usage.
  • How the business recognizes depletion and amortization
  • How the business recognizes conversion or translation of foreign currency items
  • How the business recognizes valuation of inventories
  • How the business evaluates investments
  • How the business treats retirement benefits
  • How the business recognize profit on long-term contracts
  • How the business valuation fixed assets
  • How the business treats contingent liabilities.


How are Accounting Policies drafted?


Accounting Policies can be drafted by your CA or pretty much by the founders too. When drafting, one should consider necessary laws and policies for the business based on size, geography, and other relevant factors.


Factors to be taken into consideration while drafting:


  • Accounting policies should represent a true and fair view of the state of affairs of the enterprise.
  • Transactions and events should be governed by their substance and not merely by the legal form.
  • Financial statements should disclose all “material” elements.
  • Disclosure of accounting statements should form part of the financial statements
  • Any change in an accounting policy which has a material effect should be disclosed.


Wazzeer Professional Network is built on qualified CAs, CSs, and Lawyers who have been working with startups and SMEs in understanding and delivering various compliance works seamlessly. We would be happy to work with you, let’s connect -> “Get your Wazzeer”