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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!”

 

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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 https://www.linkedin.com/pulse/wazzeer-why-we-do-what-chandan-kumar/ 


“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.

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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!”
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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!

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Business Formation

Recently, there has been a series of amendments made to the Companies Act, 2013. The sole objective of these changes was to encourage startups to formally register their startups with ease. With due consideration to the changes the new rules, we will look into Top 3 things that new ventures should be aware of before incorporating.


  1. Incorporation of Company at Zero Fees

  • The Ministry of Corporate Affairs (MCA) has announced that there will be no fees for incorporation of a company for Simplified Proforma for Incorporating Company Electronically (SPICe) forms, e-Memorandum of Association (e-MoA) and e-Articles of Association (e-AoA).
  • The company will have to pay only the necessary Stamp Duty, which is applicable at a rate depending on the state of incorporation.

 

  1. Reserve Unique Name (RUN) Form

  • The Ministry has also introduced Reserve Unique Name (RUN) forms to simplify the name reservation process of a company.
  • The rules earlier required a company to reserve a name either in advance through the Name Reservation — INC-1 form or directly through the incorporation application (SPICe Form).
  • Now, the RUN form has replaced the INC-1 form.
  • Other features include:
    • RUN form gives the option for only one name for the company, unlike INC-1 which had a provision of six options for the company’s name.
    • RUN form doesn’t require any Director Identification Number (DIN) or a Digital Signature Certificate (DSC)
    • The fees for RUN form is $15.7 (INR 1000), irrespective of whether the name is approved or not
    • The approved name is valid for up to 20 days and 60 days from the date of approval for a new company and an existing company, respectively.
    • The proposed companies can apply for the reservation of name using the RUN form and they will be intimated of the approval by the MCA through email. However, it has been suggested that RUN form be used when there is an ambiguity about the name because of its similarity to existing companies or Limited Liability Partnerships (LLPs).
    • If the name is unique, a company can apply for the name directly with the SPICe form. This would save time and money for the applying company.

 

  1. Director Identification Number (DIN)

  • The new rules of MCA specify that a new company can apply for DIN only through SPICe forms.
  • For an existing company, MCA specifies the use of form DIR-3 to add a new director. This form has a provision for furnishing the CIN of the company and a declaration of the addition of a director.

 

In conclusion, these reform by the Indian government towards enhancing ease of doing business is a huge step. On the same note, in case you are planning to start up your business in 2018, with the help sector expertise that brings to the table, I am sure Wazzeer can deliver this service seamlessly from any remote location. Do let us know if you need a hand -> “Get Started”

 

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License, Licenses

Ever thought of starting a Homestay business and placing it for rent on Airbnb? If yes, then this is a blog is for you. Homestays are gaining popularity among the businesses in unorganized sector all credits goes to the unique experiences which come along with it. In the top 50 emerging tourism destinations of India, homestays form 13 percent of the total accommodation. Building a hotel involves frequent investments; homestays, on the other hand, are created out of rooms which already exist within a property or an entire property in itself, hence involving nominal or no expenditure. Since travelers nowadays are on the lookout for an offbeat approach to learning more about a place or a destination, this concept seems both, lucrative and appealing at the same time. 


The Ministry of Tourism classified fully operational terms of Bed and Breakfast/ Homestay facilities as ‘Incredible India Bed and Breakfast/Homestay Establishments’. The idea behind this is to provide a clean and affordable place for foreigners and domestic tourists including an opportunity for foreign tourist to stay with an Indian family so as to experience Indian customs and traditions.


Incredible India Scheme of Bread and Breakfast regularizing Homestay License:

  1. Speaking of classification, Homestay Establishments is grouped as :
  • Gold
  • Silver

     While the government of Rajasthan only considers Gold and Silver, Kerala, for instance, has a Diamond category added to the homestay too. 

  1. Facilities and services provided will be checked by the Regional Classification Committee. 
  2. Once approved by Ministry of Tourism, will be duly publicized. A directory of such establishments shall be prepared. Short-term training courses in hospitality sector will also be patronized
  3. It is important to get a license that the owner of the homestay (along with family) shall reside in the same establishment
  4. Homestay Establishment is expected to maintain the required standard. Any serious faults will be reported to the Department of Tourism and the Department is free to take any action including cancellation of the classification.
  5. The Committee may recommend a category either higher or lower than the one which you are applied for. In case of category higher than the one you are applied, you will have to deposit the required fee for the recommended category. However, in case of a lower category, there will be no refund of the extra fee.
  6. Any changes in the facilities of the unit should be reported to the Ministry of Tourism, Government of India within 30 days.
  7. After this, a recognition certification will be given to the owner.



Who can apply for  Homestay License?

  1. Individuals or families who own a house of good quality in the state and can spare at least 2 rooms for tourist accommodation.
  2. The classification will be given only in those cases where the owner/promoter of the unit along with his/her family is physically residing in the same unit.
  3. A maximum number of rooms for offering to the tourists shall be limited to 5.
  4. At least one of the family members should be able to communicate in English.
  5. The houses in areas of tourism importance will get priority.

 


Application Form:

Application must be collected from the State Tourism Department Head office or from other concerned district offices. The application for Homestay License must be sent along with the requisite fee to the State Ministry of Tourism. Applications can even be sent to the district level. This makes easier for the establishment in small towns and rural areas. 

 


Mandatory requirements at the time of submitting application form:

Along with the duly filled form, you would require:

  1. Proof of ownership/lease of the building.
  2. Location plan showing access to the building from the major roads.
  3. Plan and elevation of the existing building.
  4. One hard copy and one soft copy of the photographs of the building including the interiors.
  5. Police Clearance Certificate from the Local Station House Officer

After submission of application form, the representatives of the district government come in for a surprise inspection, following which a homestay is recognized and rated as per facility available. The process of acquiring an electrical connection is the same as that of a home, so it varies from state to state. The whole process might take a couple of years. 

 


Application format for an establishment of homestay:

  1. Name of the Homestay Establishment.
  2. Category applied for
  3. Name and address of the promoters/owners with a note on their background
  4. Complete postal address of the Homestay Establishment
  5. Details of the Homestay Establishment.
  6. Photographs of the building including interiors showing types of facilities available, bathroom, living room, bedroom, parking etc.
  7. Details of payment of application fee
  8. Checklist details as per Annexure II
  9. Consent of acceptance of the regulatory conditions (please enclose a copy of the prescribed undertaking as per Annexure III duly signed by the owner of the establishment)

 

Conclusion:

Still, in its nascent stage in India, homestays are gradually increasing their presence to meet the existing demand. To list a homestay establishment on any directory, offline or online, procuring Homestay License would be necessary.

We at Wazzeer are budding entrepreneurs just like you with a bigger vision to transform the industry. Wazzeer simplifies things for you. If you have a business plan and wish to take a leap come on board with us. Get to know about the nuances related to incorporation and starting your business in a hassle-free way.

 

Our experts are right here to align your ideas with reality, to kick-start the procedure to acquire  Homestay License, Let’s Connect -> “Get your Wazzeer”

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Business Formation, NGO Registration

On an average, the time consumed to register societies is around 30 days’, which is not an affordable thing for entrepreneurs. With the given regulatory environment, in this blog, we will unleash strategies you can utilize to speed up the registration to kick-start early.

 

Step 1: Get clarity if your Idea qualifies to be charitable

 

Definition of Charitable purposes – Business ideas with an objective of either:

  • Relief of poverty,
  • Education,
  • Advancement of religion and
  • other purposes beneficial to the community not coming under any of the preceding heads.

 

Step 2: Meet the team size criteria

 

The founding team should consist a minimum of 7 members. Also, ensure that the members have following documents in place:

  • Valid IP Proofs
  • Valid Address Proofs

 

Step 3: Name the society such that it can be approved by registrar

 

Before you get fixated on a name, we advise you to check is the name can be approved by the registrar. Wondering how? Well, these are the criteria for society name selection:

  • The name should be unique and not similar to already registered Societies.
  • The name must not suggest patronage of the government of India.

 

Step 4: Keep Office Address related documents in place

There have been cases were registration process got delayed by weeks, because of property related documents. We advise you to have these documents in place:

 

  • Electricity or Water bill
  • In case you own the place, then keep property papers intact
  • Landlord NOC

 

Step 5: Get Memorandum of Association (MoA) drafted by experienced professionals

 

MoA is a legal document that constitutes details of:

  • The name of the society
  • The objective of the society
  • Details of governors, council, directors, committee, or other governing bodies.

MoA is a document that will be submitted for many business-related registrations in future. Also, this document can be accessed by the public. For MoA to meet the quality benchmark, getting the same drafted by a qualified professional is advised.

 

Step 6: Draft Rules and Regulations governing society compatible with MoA

 

This document will address:

  • Details of membership and subscription
  • Planning for meetings
  • Criteria for governing bodies appointment
  • Planning auditor appointment
  • Dispute resolution strategy
  • Dissolution strategy

Note, Along with MoA, submit a copy of rules and regulations of the society certified by at least three governing bodies. If you miss on this, you might have to face a delay.

 

Step 7: Keep required documents in tact

 

List of documents apart from MoA, Rules & Regulation, office address details and member details,  there are a few documents that will be required for registration:

  • Request letter signed by founding members addressing Registrar requesting registration.
  • Proceedings of the first meeting (general body meeting conducted to set the rules and regulations)
  • Declaration by the president of the society
  • A sworn affidavit from the President or Secretary, declaring the relationship between the subscribers.

 

Step 8: Be available to pay fees on time.

 

Once you submit all the documents as discussed in above steps, you will have to pay a fee of INR 50 or such smaller fees from time to time.

Follow the steps listed above diligently, and if the registrar is satisfied he or she would approve the registration of your society.

 

As a closing note, a Couple of questions that founders of societies generally tend to ask:

 

Q1. Is it mandatory to register a society?

 

No, but the advantages of registration is –

  • NGO is recognized only after registration
  • Low risk
  • Limited liability for members
  • Society can be vested upon,
  • Society and members can sue anyone,
  • Society can purchase property in its name,
  • Exemption from income tax,
  • Considered as separate entity from members,

 

Q2. How can a society be dissolved?

 

A Society can be dissolved by:

  • its members,
  • the Registrar,
  • the Court or
  • by the Government.

 

Q3. Under what circumstances can a registrar dissolve a society?

 

 The registrar of societies (as per the respective state acts) can dissolve a society. These circumstances may be:

  • The society has done unlawful activities
  • According to the memorandum of association governing the society:
  • Society’s object clause has not been fulfilled
  • Office of the society has ceased to be in state of registration
  • Members of the society are below the required number of seven
  • Society has ceased to function for a particular period of time
  • Society has been declared insolvent(not able to pay its liabilities).
  • Society’s activities are against the Governmental or the state policy
  • Society has become insolvent
  • Society has contravened any law or the provisions of the Societies Registration Act 1860

 

Q4. Is it necessary that the society maintains its books?

 

Yes, it is necessary that proper books of account with respect to:

  • All sums of money received and expended by the society and the matters 
  • Respect of which the receipt and expenditure takes place;
  • All sales and purchases of goods by the society; and
  • The assets and liabilities of the society

 

The charitable organization can maintain books of accounts from the following three methods of accounting:         

  • Cash Basis of Accounting
  • Accrual Basis of accounting
  • Hybrid/Mixed basis of Accounting

 

Q5. Should Balance sheet and annual list of governing body be filed with registrar?

 

Yes, Balance sheet and annual list of governing body after dedicated auditing have to be filed with the registrar by 14th day succeeding the day on which the annual general meeting of a society is held.

 

Q6. How can Wazzeer help in this matter?

 

We at Wazzeer are young entrepreneurs just like you with a bigger vision to transform the industry, precisely speaking we things simple.

You would get access to a pool of professionals who have worked in this field that have a minimum of 5 years’ experience.

We provide a clear quotation, no hidden charges. As we kick start, you see the updates real time. The ball is on your court all the time. So, let’s connect -> “Get your Wazzeer”

 

 

 

 

 

 

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Business Formation, LLP

What you know is right, to incorporate an LLP you need two or more persons with a view to becoming only subscribers of profit that the business would make. But, before you become  partner in LLP things you should consider knowing is covered in this blog. Remember, to register an LLP you would need a professional, and having a qualified professional on your side while incorporating is the best you could do, we at Wazzeer are experts in this matter.


Who can become a partner in an LLP?

Any individual or corporate body can become a partner of LLP, provided:

  1. Individual with sound mind as per the Court of competent jurisdiction
  2. Individual is not adjunct under any grounds


How many partners can an LLP consist of?


Minimum of 2 partners and maximum could be any number. If at any time the number of partners of an LLP is reduced below two, yet the LLP continues to carry out business for than 6 months, the partner who runs business during that period is liable for all LLP activities.

 

If you think this is so simple, the true game changer is coming up: Designated Partner Vs Partner

 

Every LLP should consist of at least two designated partners who are individuals and at least one of them should be Indian resident. Other partners are more like shareholders.

 

The Designated partners:

  • Are like directors of the firm
  • Are responsible for the LLP being fully compliant
  • Are liable to all penalties imposed on LLP
  • Are the authority who executes, manages, and decides for the LLP

 

To be a Designated Partner: This would be carried out in accordance with LLP Agreement

  • As a partner, you should give prior consent to LLP
  • File with the registrar the particulars of every individual within 30 days of appointment
  • Obtain Designated Partner Identification Number (DPIN) now called dIn from the central government.
  • If the Body corporate wishes to be a Body corporate it has to appoint a nominee to act as a Designated Partner on behalf of the Body corporate.

 

Note: In case Foreign Body Corporate or Foreigner is involved in an LLP, the funds transferred by this foreign source are allowed in only those sectors where 100% FDI is allowed.

Remember, the LLP Agreement is the rulebook and the game has to be played in accordance with this holy rule book.

Wazzeer has helped over hundreds of LLPs starting from incorporation till fundraising compliance, we would be very happy to serve you. Let’s connect to build a success story.

 

 

 

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Business Formation, Secretarial Compliance

OPC an entity dedicated to single entrepreneurs with an objective to facilitate a viable ecosystem such that single entrepreneurs can start their own business having a separate legal entity. OPC is chosen when: entrepreneur does not find the right co-founder; entrepreneur decides to own the business wholly; entrepreneur decides to incorporate this company form for a short period – the early stage of startup journey. As the company scales up, plans of expansion come into play, and fundraising plans come into the picture, especially external investors come into play, the general scenario is the investor would want himself or his connect to be a member of the board of directors, all for the vision of the startup. That is when entrepreneurs decide to convert the OPC into other favorable entity options.  On the same note, this blog intends to answer – How to convert OPC into other entity forms?


Convert OPC to Private Limited Company:

Automatic
– OPC is automatically converted if:

  • Paid up capital exceeds INR 50L, or
  • Turnover for 3 previous years is > INR 2C


Manual
– OPC can be converted if:

  • Age of company is more at least 2 years


Procedure to convert:

  • Obtain ‘No Objection’ in writing from creditors
  • Pass a resolution
  • Affidavit Sign
  • File Copy of resolution with RoC within 30 days
  • File Form No.INC.6

 
Documents required:

  • MOA and AOA
  • Copy of latest audited balance sheet
  • Copy of board resolution
  • Copy of no objection letter


Convert OPC to LLP:

OPC cannot be converted into LLP, but you can incorporate Private Limited Company and then convert the Private Limited Company into LLP. When you decide to so, the shareholders will become the partners of the LLP.


Procedure to convert:

  • Board meeting
  • Apply for name availability
  • LLP Agreement
  • Filing of Forms
  • Apply for incorporation
  • Obtain certificate of incorporation of LLP
  • Filing Form No.14 to intimate RoC


Documents required:

  • DSC and DIN of directors
  • Incorporation certificate of Private Limited entity


Convert OPC to Sole Proprietorship:

As such there are no legal formalities. You need to wind up the OPC and start a new venture as a Sole proprietorship. But the sole proprietorship can be in the name of OPC. Generally, entrepreneurs do not prefer this entity type, the reason being the defeats the main objective of enjoying limited liability.


Wazzeer Professional Network is built on a strong foundation of expertise, we would be very happy to assist you. Let’s connect! 🙂

 

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Subsidiary Company

Foreign companies setting up branch offices and liaison offices require prior approval of the Reserve Bank. In India, branch offices must be registered with the RoC of the respective Indian state. No approval of the Reserve Bank is required for foreign companies to establish branch offices/ units in SEZs to undertake manufacturing and service activities, subject to satisfaction of certain conditions.

A branch office may enter into contracts on behalf of the non-resident parent company and may generate income. However, the activities of a branch office is restricted to representing the parent company, exporting/ importing goods, rendering professional or  Guide on Doing Business in India.

Following works can be carried by the branch office or Liaison office:

  • Consultancy services,
  • Carrying on research work in which the parent company is engaged,
  • Promoting technical or financial collaborations between Indian companies and the parent or overseas group company,
  • Representing the parent company in India and acting as buying/ selling agent in India,
  • Rendering services in information technology and development of software in India,
  • Rendering technical support to the products supplied by parent/group companies and foreign airlines/ shipping companies.

 

Following works cannot be carried by a branch office:

  • Retail trading activities of any nature,
  • Manufacturing or processing activities in India, whether directly or indirectly.
  • The scope of the activities may be further curtailed by conditions in the approval granted by the Reserve Bank.

Following works can be carried out by a liaison office:

  • Restricted to representing the parent company/group companies,
  • Promoting export from/to India,
  • Promoting technical/financial collaborations between parent/group companies and companies in India,
  • Gathering information for the parent company and acting as a
  • Communication-channel between the parent company and Indian companies.

 

The expenses of liaison offices are to be met entirely through inward remittances from the Head Office outside India. A project office is usually set up for execution of large projects such as major construction, civil engineering, and infrastructure projects.

 

 

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