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License

Ayurveda or the revolutionary remarks by Patanjali and growing demand for organically developed cosmetic products is catching up blazing demand, and with many startups focusing on developing products that are Homemade or 100% Natural this sector is catching eyes of investors globally. The manufacturing, distribution, and selling of cosmetic products are governed by The Drugs and Cosmetics Act, 1940 and The Cosmetics and drugs rules 1945.

 

Cosmetics are products that are intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance and includes any article intended for use as a component of cosmetic. For manufacturing, distribution and selling of cosmetic products license are mandatory. Manufacturing license is valid for is valid for 5 years.



Major Categories under which cosmetics have been divided as:

 

  • Powders like Face powder, cake makeup, compacts, face packs, masks, and rouges, etc.
  • Creams, lotions, emulsions, pastes, cleansing milk, shampoos, pomade, brilliantine, shaving creams and hair oils etc.
  • Nail Polishes and Nail Lacquers.
  • Lipsticks and Lip-gloss, etc.
  • Depilatories
  • Preparations used for Eyes
  • Aerosol
  • Alcoholic Fragrance Solutions.
  • Hair Dyes
  • Tooth powders and toothpaste, etc.:
  • Toilet Soaps
  • Sanitary pads

 

Procedure to acquire the manufacturing license:

 

  1. Fill Form 31with a license fee of Rs.2500 and an inspection fee of rupees 1000 for every inspection.
  2. Application to manufacture additional items of cosmetics shall be accompanied by a fee of Rs 100 for each item subject to a maximum of Rs. 3000 for each application.
  3. The Inspector or Inspectors from Licensing Authority will conduct on the premise and generate a report.
  4. Once the authority is satisfied that your premise abides by the standards, it will provide you the license.
  5. If cosmetics are to be manufactured at more than one place, a separate application for each premise need to be made and separate license needs to be obtained for each premise.

 

Documents to be furnished along with Application to acquire license:

 

  1. Affidavit of Applicant
  2. List of machines installed for manufacturing
  3. List of laboratory equipment
  4. Valid NOC from Pollution Control Board
  5. Rent/Lease Agreement in case premises is taken on rent or lease.
  6. Plan layout of the premises.

 

Conditions for the grant of Manufacturing Licence:

 

  1. Technical Staff consisting of at least one person who is a whole-time employee and who holds a Diploma in Pharmacy approved by the Pharmacy Council of India or registered under the Pharmacy Act, or has passed the Intermediate Examination with Chemistry as one of the subjects or an examination recognized by the Licensing Authority as equivalent to it.
  2. The factory premises shall comply with the requirements and conditions specified in Schedule M-II
  3. The Applicant must decide for Licensing Authority to conduct such tests.

 

In case you need any assistance in legal or accounting or secretarial services, things can be consulted and delivered seamlessly on Wazzeer platform -> “Get your Wazzeer”

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Trademark, Uncategorized
The Government on March 6, 2017 notified a new set of trademark rules which have replaced the old rules constituted way back in the year 2002. The main idea behind the change is to help expedite the approval process and increase filings, both of which have shown positive trends over the past few months. While the examination time for an application has been brought down from 13 months to just 1 month in January 2017, official figures suggest that filings have jumped 35 per cent in 2015-16 against the previous year. Here are a few important things you should know that have changed in the Trademark rule:
  1. Ease of doing business: One of the most important things is that the total number of forms that an applicant had to fill out has been reduced from a monumental 74 to a quite reasonable 8.

  1. Slashing of cost: The new rules have hiked fee for Trademark application to Rs. 9,000 but application fee for individuals, start-ups and small enterprises has been kept to Rs. 4,500 only (Government fee)

  1. Clarity in the approval process: To make a business doing easier, the method to determinate well-known trademarks has been clarified for the very first time. Provisions relating to the expedited processing of an application for registration of trademark have been extended up to the registration stage. Until now, they were only till the examination stage.

  1. Quick disposal: Concept of video conferencing has been introduced in the new rule and the number of adjournments in opposition proceedings has been limited to two by each party, these measures are surely going to help in disposal of cases on time.

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂
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The Government on March 6, 2017 notified a new set of trademark rules which have replaced the old rules constituted way back in the year 2002. The main idea behind the change is to help expedite the approval process and increase filings, both of which have shown positive trends over the past few months. While the examination time for an application has been brought down from 13 months to just 1 month in January 2017, official figures suggest that filings have jumped 35 per cent in 2015-16 against the previous year. Listing the top 4 changes in the new rule that you should know:
  1. Ease of doing business: One of the most important things is that the total number of forms that an applicant had to fill out has been reduced from a monumental 74 to a quite reasonable 8.

  1. Slashing of cost: The new rules have hiked fee for Trademark application to Rs. 9,000 but application fee for individuals, start-ups and small enterprises has been kept to Rs. 4,500 only (Government fee)

  1. Clarity in the approval process: To make a business doing easier, the method to determinate well-known trademarks has been clarified for the very first time. Provisions relating to the expedited processing of an application for registration of trademark have been extended up to the registration stage. Until now, they were only till the examination stage.

  1. Quick disposal: Concept of video conferencing has been introduced in the new rule and the number of adjournments in opposition proceedings has been limited to two by each party, these measures are surely going to help in disposal of cases on time.


Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂
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Business Registration, Sole Proprietorship
Sole proprietorship is the easiest form of business which some small businesses and startups choose to start with. By doing any one of the registrations that is Service tax registration/VAT or Small Scale Industry registration sole proprietorship is good to kick off. This has some drawbacks like unlimited liability of the proprietor, yet businesses take this as another part of the risk in their entrepreneurship journey.


  As a business, it becomes difficult to manage and control all the business activities individually and sole proprietor chooses to convert it into another form of business structure. This blog is dedicated our beloved fans that have been requesting us to shoot a blog on this topic.  
  1. Partnership firm:Sole proprietorship business can be converted into partnership. The Indian Partnership Act 1932, governs partnerships and it is optional whether to register or not with the registrar of Companies. The Registered firm enjoys additional benefits like protects its partners’ rights. With 2 partners, you should be good to register.
  Documents Required:
  • Duly filled Specimen of Affidavit
  • Certified copy of the Partnership deed
  • Proof of ownership of the place of business or the rental/lease agreement
  • Based on the Partnership deed, to open current bank account PAN card can be obtained based on Partnership deed.
 
  1. One person Company:The sole proprietor can convert his business to One Person Company as there is no need to induct any partner to incorporate One Person Company, it also empowers one person to manage and control all his business and on the other hand gives qualities of a company, like a separate legal entity. The individual will enjoy benefits like access to credits, bank loans, limited liability, legal protection for business, access to the market. One person company enjoys additional benefit like exemption from holding the annual general meeting, the annual return can be signed by director also and limited liability protection to directors and shareholder.
  Documents Required:
  • Digital Signature Certificate [DSC] for the proposed Director
  • Director Identification Number [DIN] for the proposed director.
  • Written consent of nominee which need to be filed with the Registrar of Companies (RoC) during Incorporation.
  • Memorandum of Association and Articles of Association [MOA & AOA]
  • After incorporation of one person company, all assets, liabilities, and goodwill of the Sole proprietorship can be transferred through a transfer agreement to One Person Company.
 
  1. LLP: The sole proprietor can also choose to convert his business into Limited liability partnership. LLP has many features like private limited company. Further, LLP enjoys tax benefits and less annual compliance. This all the assets, liabilities, goodwill and losses will be transferred as it is to limited liability partnership.
 Documents Required:
  • PAN Card of proposed partners
  • Digital Signature of Partners
  • Designated Partner Identification Number(DPIN)
  • Address proof of partners
  • LLP Partnership deed
 
  1. Private limited Company: More like Pvt Ltd company is acquiring the Sole proprietorship firm. Sole proprietorship can be acquired by the private limited company by simply signing an agreement between the sole proprietor and the private limited company (after its incorporation) mentioning that all assets, goodwill, liabilities are transferred to the private limited company.
  Documents Required:
  • DSC of Directors
  • Pan Card and address proof of Directors
  • Director Identification Number of Directors
  • Memorandum of Association (MOA) and Article of Association (AOA)




Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂
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FSSAI, Uncategorized
FSSAI license is mandatory to carry any business activity which deals with production, manufacture, processing, distribution, selling, import, export, the stock of any food article or beverage and it includes Dairy Business, Meat processing, Hotels.  

Benefits of FSSAI license
FSSAI license certifies that food is tested and the hygiene, sanitary and safety requirements as set by government of India have been followed by the business entity.

Punishment for carrying on business without FSSAI license
The Food Safety and Standards Act, 2006 strictly prohibits any person or food business operator to engage into manufacturing, selling, distribution or imports of any food product without FSSAI license, punishment with imprisonment for 6 months and also with a fine upto Rs. 5,00,000.

Who does not require FSSAI?
Any small food business operator who manufactures or sells any food item himself or a petty retailer, hawker, itinerant vendor or temporary stall holder or distributes foods including in any religious or social gathering except a caterer are exempted from FSSAI license, but it is mandatory for them to register with Food Authority. The annual turnover of these Food Business Operator is less than Rs. 12 lakhs. Once these Petty food business operators register with Food Authority, Certificate of Registration and a photo identity card.

Categories of FSSAI license: 2 types, Central and State, depending upon the turnover /output or storage capacity of Food business operator. 

1. State Fsssai license is mandatory for food Business operator(FBO) if:
  • Its Annual turnover of FBO is above 12 lakhs, or
  • It is 3 star hotels and above, or
  • If Transporter having 100 vehicles or turn over up to 30 crore
2. Central FSSAI license is mandatory for food Business operator (FBO) if:
  • Its annual turnover is above Rs. 20 crores, or
  • Its business operations in more than one state, or
  • Any FBO is engaged in import or export of food products, or
  • It is Five-star Hotels and above
Note: Eligibility for state and Central FSSAI license varies from business to business.


Documents Required for FSSAI State and Central License:
  1. Blueprint or layout plan of the processing unit
  2. List of Directors or partners with full address and contact details
  3. Photo ID and address proof issued by Government authority of Proprietor or Partner or Director(s)
  4. Name and List of Equipment and Machinery along with their number, installed capacity
  5. List of food category desired to be manufactured. (In case of manufacturers).
  6. Authority letter with name and address of responsible person nominated by the manufacturer along with alternative responsible person indicating the powers vested with them viz assisting the officers in inspections, a collection of samples, packing & dispatch. (Mandatory for manufacturing and processors).
  7. Analysis report (Chemical & Bacteriological) of water to be used as an ingredient in food from a recognized or public health laboratory to confirm the portability (mandatory only for manufacturing and processing units only).
  8. A Copy of sale deed or Rent agreement or electricity bill
  9. A copy of Partnership Deed or Affidavit or AOA & MOA towards the constitution of the firm.
  10. A copy of certificate obtained under Co-Op Act 1861/Multi State Co-Op Act 2002 for Co-Operatives. (if applicable).
  11. Food Safety Management System plan or certificate (if any).
  12. Source of raw material for meat and meat processing plants. (if applicable).
  13. Pesticide residues report of water (for packaged drinking water business),
  14. NOCs from Municipality or local body. (optional)
  15. Supporting document proof for turnover
  16. Import Export?Code document issued by DGFT(dealing with import and export of food products)
Start-up process entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk  🙂
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Legal notice

What is shaking up the startup community is the Legal Notice that the Ministry of Corporate Affairs (MCA) is sending.

There are 2000+ startups in Bangalore alone that have not filed annual returns as required under the applicable laws, and this act is backfiring on them. The startup status of your company could be an active startup or a dormant startup, but if you haven?t filed your returns, things are going to work as per MCA?s rule books and that would hurt.

Why is MCA sending a Legal notice?

Ideally, the Financial Statement should have been filed with Registrar of Companies (RoC) within the time as specified u/s 137(1) or (2) of the Companies Act, 2013 (?Act?). Companies that have not filed its Annual Returns in respect of financial year ending 2014 or before in terms of section 129 of the Companies Act, 2013 are receiving a legal notice from MCA.

What does the Legal Notice say?

Co-founders via a Legal Notice are called upon to give an explanation/ show cause as to why action should not be taken by launching a prosecution under Sections 129 and 137 for contravention of sections 129 and 137 read with section 403 of the Act respectively.

What is the duration of when the Company should act?

Companies that have received this Legal Notice must provide an explanation within 15 days from the date of issue of the Legal Notice and file the Annual Returns for the pending financial years with the RoC.

What is the penalty if a Company does not respond?

If the company does not provide any explanation within 15 days?from the date of issue of the Legal Notice, the necessary prosecution against the Company may be instituted by the RoC. The penalty for non-compliance is no small amount but will run into a few lakhs of rupees.

What are the factors on which the penalty is dependent on?

The penalty is dependent on the number of years the returns have not been filed and the duration of the delay. Ignoring this Legal Notice and not complying with the above-mentioned provisions of the Act is a risky proposition.

Wazzeer has been helping entrepreneurs in handling such cases, we would be grateful to help you?Let’s talk!

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Business Formation, Uncategorized
Research says the bigger the firm the less likely it is to be headed by a woman. The ILO estimates that while 22 per cent of men’s productive potential is underutilized, women’s is as high as 50 per cent. This blog will help you identify the different sectors where women entrepreneurs traditionally have ventured in, also the pain points in running the shebusiness. This blog will talk about Strategies that Women Entrepreneurs should consider following like “Starting from Now”

Categories of Women Entrepreneurs:
  • Women in organized & unorganized sector
  • Women in traditional & modern industries
  • Women in urban & rural areas
  • Women in large scale and small scale industries.
  • Single women and joint venture.
Many small retailers consisting of the local kirana shops, owner-manned general stores, chemists, footwear shops, apparel shops, paan and beedi (local betel leaf and tobacco) shops, hand-cart hawkers, pavement vendors, etc. which are few examples of unorganized sectors. Unorganized retailers normally do not pay taxes and most of them are not even registered for sales tax, VAT, or income tax. Demonetization was a big blow for people or labours belonging to this sector. Organized sector has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized stores. Many semirural areas have also witnessed entry of such organized retail outlets. It is called organized for the players in this sector have the necessary compliance done. Top 10 strategies to do business in organized sector:
  1. Business Incorporation: This must be done according to the Companies Act, 1956 and Companies Act, 2013 (collectively the Companies Act) and the regulations laid down by the Securities and Exchanges Board of India (SEBI) for listed companies in India. Entity options: LLP, Pvt Ltd, OPC, Sole proprietorship, Partnership
  2. Taxation Laws: This compliance will be done based on Income Tax Act, 1961, indirect tax laws including laws relating to value added tax, service tax, customs, excise etc. Also, International Taxes
  3. Investing in India by non-residents: Requires conformity with India’s foreign exchange regulations, specifically, the regulations governing FDI
  4. Foreign company to do business in India: You can do business via offices, the options are as follows: Liaison office, Project office, Branch office, Partnership, Trust
  5. Post Incorporation: The company must apply for its PAN and Tax Deduction Account Number (TAN); Shop and establishment registration; Register with employment law authorities; open bank account; Board meetings; Contracts and Agreements.
  6. Auditing and Accounting: The first auditor should be appointed by the Board within 30 days from the date of its incorporation. It is a good practice to maintain the books so that financial statements are updated.
  7. Issuing securities: Indian companies may issue numerous types of securities. However, companies are required to comply with the Companies (Share Capital and Debentures) Rules, 2014. Options that you have: Equity shares, Preference shares, Debentures.
  8. Fundraising Compliance: Compliance like share transfer and increasing authorized share capital that comes following raising funds.
  9. Tax Returns Filing: Like VAT refund is an integral component of a modern VAT system.
  10. Employee Stock Options: Giving employees the right to purchase a certain number of the company’s shares instead of salary.
The 15 Pain points that women entrepreneurs face:
  1. Differences in endowments, preferences and barriers to entry and exit
  2. Overrepresentation in traditional sectors that have low start-up costs and limited barriers to entry
  3. Female entrepreneurs, especially those in unorganized enterprises, operate home-based businesses
  4. Lack or limited access to technology due to affordability, lack of knowledge, and/or social norms
  5. Women more likely to start enterprise in sectors with low effective demand leading to lower profits
  6. Less favourable profile with investors since women own small businesses and do not have adequate collateral
  7. Financial institutions may require higher collateral from female entrepreneurs. Some banks may also require women to have a male co-signer to open accounts
  8. Low financial market participation
  9. Preference for own savings to finance enterprises instead of credit from financial institutions
  10. Informality and home-based enterprises are mainly the result of a need to combine work and family responsibilities
  11. Limited vocational and technical skills may be caused by women’s lower educational attainment or social norms that limit their physical mobility
  12. Limited knowledge of government legislation and less experience on starting a business than men and compliance thus discouraged.
  13. Denial or limited ability to own assets and inheritance due to laws
  14. Lack of awareness of different financing programs by government
  15. Lack of awareness of IP protection
Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk.
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IP
Wait! Did you know? Not all innovations are ‘inventions’ Defining a Patent as per patent Act, a new product or process involving an inventive step and capable of industrial application.


Note: The patent application must be filed prior to any publication or public use. However, there is a 12-month grace period permitted in India when a person has made an application for a patent in a convention country and if that person or his legal representative (or his assignee) makes an application with respect to the same invention in India.

Situations when you cannot patent:

  • If the invention was known or used by any other person in India and/or outside India.
  • Public use or publication of the invention
  • Any earlier patent, earlier publication, document published in any country,
  • Earlier product disclosing the same invention, or earlier disclosure or use by the inventor

Inventions that are not Inventions:

  • A method of agriculture or horticulture;
  • A process for the medicinal or other treatment of human beings and animals; (iii)
  • A mere discovery of any new property, or new use for a known substance.
  • A mere use of a known process, machine, or apparatus
  • An invention which claims anything obviously contrary to well established natural laws.
  • Business Methods

Inventions that are patentable:

  • Computer Programme in combination with hardware
  • plants and animals in whole or any part including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals
  • Mathematical or business method or a computer program per se or algorithms;
  • Literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions;
  • Method of performing mental act or method of playing game
  • Presentation of information;
  • Topography of integrated circuits
  • Product patents for pharmaceutical substances
To know about the process, checkout: http://blog.wazzeer.com/patent-filing-process/ Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk. 🙂
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Contracts and Agreement, Contracts and Agreements, Contracts and Agreements, Start up Lessons
Basically, vendor is someone who provides you with a service or goods. For instance, a person providing house cleaning services is a vendor, a person supplying raw material for renovating your office is a vendor. The Vendor Agreement is therefore an agreement between you and a vendor that you have selected for the services that such vendor has to provide to you or goods that such vendor has to supply to you.

An SLA, i.e. service level agreement is a contract between a vendor and the end user that defines the standard level or quality of service expected from such a vendor. An SLA or Service Level Agreement will define the service levels that have to be achieved by a vendor and may also provide for remedies and penalties in the event of non-fulfilment of such service levels. Let me explain a bit more with a day to day example. For instance, an EduTech startup (say XYZ), that is outsourcing the textbooks production to a service provider, gets an vendor agreement with SLA included in it, then the SLA ( Service Level Agreement) related clauses would involve the following:
  • Delivery timelines
  • Minimum quantity of delivery within a mentioned duration of time
  • Critical delivery items (as in threshold meeting)
  • Meet the Standard of packaging
  • Monitoring and measurement of timelines and delivery thresholds.
  • Penalties and remedies for default items is mentioned
  • Termination right of XYZ for a continued breach/default of SLAs
With the above example, now you would be in a better position to decide whether or not you require SLAs (Service Level Agreement) to be included in your Vendor Agreement or Service Agreement.

Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.

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Business Registration, GST, GST, TAXATION

Did you know, VAT or the famous Value Added Tax was originally called as Sales Tax? This is an indirect applicable whenever there is goods and services sold by the company. This Tax is paid by the customer via producer to the state government. Business owner earning an annual turnover of more than Rs.5 lacs by supplying goods and services are liable for VAT registration.

VAT is levied both on local as well as imported goods. Similar goods and services are taxed equally and VAT is applicable at different stages of production. VAT made the game much fairer because now you will be taxed based on the type of goods and service rather than uniform rates. With VAT Registration, you will be saving on revenue which with previous sales tax regulations you possibly wouldn’t have.

Hey, but why should consumer pay for VAT?

VAT is a tax on consumption which is borne by consumers. It is applicable on 554 goods. VAT protects consumer from the cascading effect of the turnover tax which is tax on each sale with no credit for the tax paid at earlier stages.

Will I be taxed on capital input that I invest in my firm?

Look basically you have three tax variants:

1. Consumption variant-(not the capital that you invest is taxed, but the use of capital goods which produce consumer goods is taxed);

2. Income variant (depreciation on the goods is excluded);

3. Gross Product Variant (no exclusion, only goods that are used up currently are subtracted from the firm’s sale) And hence VAT payable = VAT on output (total value of sales) – VAT on input (purchases any paid by firm to produce)

Does the VAT in India differ from one state to another?

  • 0% VAT Rate:
For essential commodities like some of the goods like salt, Sugar etc.,
  • 1% VAT Rate:
For items, which tend to be highly expensive, like Gold, silver precious jewellery fall under this category of goods. Most Indian states have fixed VAT for these items at 1% of the amount.
  • 4-5% VAT Rate:
Most of the FMCG goods come under this category of VAT, like oil, coffee, medicines etc. is around 4-5% for most states in India.
  • General VAT Rate:
General VAT rates apply to goods which cannot be segregated and put under any of the above listed VAT categories. For goods like liquor, cigarettes etc. many governments charge high VAT rates of 12.5% or 14-15%.

When to file VAT Returns?

VAT Returns are filed every month or every quarter depending on the amount of VAT you pay. The normal rule is that if you pay less than Rs 15,000 for VAT every month, a VAT Return is to be filed every quarter. If your Input Tax is greater than your Output Tax you can carry over the difference as a credit to your next VAT Return. In certain circumstances, the VAT Commissioner may pay you any excess if he is satisfied that excess is a regular feature of your business.

What kind of proof do I have to show to the commissioner?

Haven’t you seen situations where, a small notice at billing counter at pizza hut stating that take food for free if no bill given?
Yep! That’s the best example, the seller should always have a copy of the bills to claim. For starting entrepreneurs, a Simplified Tax Invoice would be good enough that must include the following information:
  • Your name, address and TIN
  • Serial number of the invoice
  • Date of the invoice
  • Brief description of the goods and services supplied.
  • Total amount charged to the customer including VAT and
  • A clear statement that the price includes VAT.
To Read about the Process of VAT registration click here

To know the documents required for VAT registration click here

Startup entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.

For any Legal and Accounting support, Happy to help you, let us talk at Wazzeer.

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