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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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Business Formation
Just to be clear, A Travel Agency (TA) is the one who makes arrangements in form of an offline/ online platform to buy tickets for travel by air, rail, ship, passport, visa, etc. It may also arrange accommodation, tours, entertainment and other tourism-related services. Precisely speaking, something on the line of Goibibo, MakeMyTrip. In this blog, we shall look into the compliance part that startups in Tourism and Travel industry must abide by.


  1. Register your Business: Ensuring that you have registered your business with any of the RoCs will let you operate as a credible and legit business in India
  2. Apply for recognition to Ministry of tourism,
  • Recognition is offered for 5 years
  • Procedure:
    • Meet the eligibility criteria
    • Documents gathering
    • Application filing
    • Attaching relevant documents with the application
    • Pay Fees
    • An inspection carried out by department officials within60 working days of application submission.
  • The TA is entitled to incentives and concessions as may be granted by the Government from time to time.
  • Approved TA to prominently display the Certificate of approval of recognition given by MOT in the office by pasting it on a board or in a picture frame so that it is visible to a potential tourist.
  1. Privacy Policy: The data that you acquire from your customers are vulnerable to the danger of data theft and as a company, it is very important that you have a proper privacy policy contract in place.
  2. Billing guideline: Example, the tickets that you provide must be dated and stamped.
  3. Abide by Frontier regulations: Must see to it that the customer compiles with frontier regulations, such as personal documents, passport, visas, customs declarations etc.
  4. Refund Policy: Recognize the traveler’s right to terminate the contract provided he pays the agency for all the expenses incurred and waive the deposits made in advance.
  5. Vendor Agreement: Managing the third party could be a huge task for businesses in this sector, contract bounding the parties involved by rules and duties will enable your company work glitch-free.
  6. Bookkeeping: Recording your day to day transactions, categorizing them in their heads and reconciliation of banks with your accounts. There are three methods you can use:
  • Do It Yourself (DIY) You can do it yourself by using Excel spreadsheet or Tally
  • Outsource the Accounts You have the option of using an outsourced or part-time accountant
  • Hire an in-house Accountant If your business is big enough, you can opt for an in-house accountant for your company who can do all your work under your roof.
  1. Keep A Track Of Your Taxes: You need to keep a track of any penalties or any government compliances you need to do. There are taxes that you need to take care of at certain point in your business such as service tax, Sales Tax, and so on. If not taken care of, you may end up paying high penalties and bear punishment from the government.
  2. Tax Filings: It is mandatory that any registered businesses should file annual returns with MCA every financial year. No problem if you got no returns made, you will have to just file ‘Nil Returns in such situation.
  3. Funding Compliance: Raising investment is a major milestone for startups, and for investor apart from investing in a good idea, securing the invested money via Funding compliance is more than a priority. This compliance can be done only in the presence of a qualified Lawyer in the party.
  4. ESOP: ESOPs refer to plans that give employees the right to purchase a certain number of the company’s shares instead of salary. This provides the employee with a virtual stake and helps to reduce the risk of the founder. This blog will help you understand the procedure to issue ESOP
Documents required for TA recognition:
  1. Application form duly filled in.
  2. Two attested photographs.
  3. Documentary proof (preferably registration certificates from Government) in support of beginning of operations of your firm.
  1. A signed copy of the Pledge of Commitment towards “Safe & Honourable Tourism”. The pledge is attached to English & Hindi as Annexure I & II, respectively.
  1. A copy of complete Audited Balance Sheet with the Director’s Report for the latest financial year.
  2. Income Tax Acknowledgement for the latest assessment year.
  3. Service Tax Registration number from the concerned authority.
  4. Certificate of Statutory Auditor of the firm stating Paid-up Capital not less than Rs. 3.00 Lakh. For Travel Agents from the North – Eastern region, remote and rural areas, the minimum Paid-up Capital (or Capital employed) should be at least Rs. 50,000/- duly supported by the Statutory Chartered Accountant’s certificate.
  1. A copy of IATA approval letter indicating Numerical Code Number and a copy of IATA Accreditation Certificate for the Current year.
  1. Reference letter from Bank on its original letterhead regarding firm’s bank account and address with telephone numbers.
  1. The details of staff employed giving names, designation, educational qualification & experience in tourism field and length of service in the organization (copies of certificates to be enclosed): a) There should be a minimum of four qualified staff out of which at least one should have Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE. The owner of the firm would be included as one of the qualified employees. b) The academic qualifications may be relaxed in case of the other two staff members who are exceptionally experienced personnel in Airlines, Shipping, Transport and PR agencies, Hotel and other Corporate Bodies and those who have worked for three years with IATA / UFTA agencies and also those who have two years experience with Ministry of Tourism approved Travel Agencies. c) For the agencies located in the North – Eastern region, remote and rural areas, there should be a minimum of two staff out of which one should be a qualified employee with a Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE. The owner of the firm would be included as one of the qualified employees. d) Names of focal points. List of Directors / Partners or name of the Proprietor. Details of office premises, whether located in a commercial or residential area, office space in sq. ft. (the minimum office space should be at least 150 sq. ft for rest of India and 100 sq. ft for hilly areas which are above 1000 meters from sea level) and accessibility to toilet and reception area.
  1. A Demand Draft for Rs. 3,000/- towards processing fees payable to Pay and Accounts Officer,
Ministry of Tourism, Government of India.
  1. Documents duly stamped & attested by the Managing Director / Managing Partner/ Proprietor of the firm.

 

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Business Formation

Taxis in India have always been popular but recently, with the increasing use of technology and companies releasing their app-based models, a new market altogether has emerged. Under this app base model, the companies have now started using the internet and satellite facilities to make the provision of taxis more convenient and user-friendly. Not only is it personally beneficial for all the users as it saves time and money for parking the vehicles, relives them of the responsibility to constantly care for it but is also very beneficial for the environment and reduces traffic when a shared model is used. In this blog, we will be looking into the Legal regulations to Start Bike Taxi Business in India.



The growing global market of bike taxis:

Even so, escaping the enormous amount of traffic is not always possible especially during the peak hours of the day. Well, in such a scenario, smaller cars always help but a two-wheeler simplifies the problem to a much greater extent. It allows one to pass through narrow spaces between the vehicles stuck in traffic jams, is much easier to cater to in terms of care and parking spaces in public places and relatively cheaper. Keeping in view all of the above, various companies and start-ups such as Uber, Rapido, Ola, HeyBob etc. have ventured out into this market and this move has also been well appreciated by the consumers. According to a recent report by World Moto Inc., which is a company engaged in the business of making motorcycle taxi meters estimated the bike market of the world to be worth approximately $500 billion.



Start-up’s market summary:

There are a couple of start-ups that are experimenting with this market and trying to compete with the big players such as Ola and Uber. For example, in Gurgaon, we have M-taxi, Bikxie, and Baxi fully functional with 25, 22 and 200 bikes respectively during the year 2016. With these many bikes, they had until that date catered to about a total of 200-250, 7500, and 2000 plus per day rides respectively.  N.O.W., another start-up has entered the Noida market with about 10 bikes and Hey Bob was running about 40 bikes in Bangalore at one point. While there are a couple of States that have eased their regulations for bike sharing and commercial use of bikes, the lack of them in most States has made it extremely difficult for them to function.



The Indian Legal Scenario:



The law on the subject:

In India, the basic law that regulates the transport means is Motor Vehicles Act, 1988. The Act provides for laws governing all aspects that relate to motor vehicles such as its applicability in case of personal vehicles, vehicles being used for commercial use, licenses and permits that need to be obtained, liability in cases of accidents, insurance claims etc. and also provides for setting up of the Motor Accidents Claims Tribunal for adjudication of claims under the Act.

Any vehicle, therefore, running for any commercial purpose such as a taxi or as for deliveries will be first required to obtain clearances from the Transport Offices of the States that they want to run in.



The regional regulation of bike taxis:

The regulatory aspects of this class of taxis have not been very clear in India. While there is gross uncertainty in the rules of the Regional Transport Office (“RTO”) of most of the states, some have attempted to clarify their stand on the issue. Goa was the first state in the country to allow commercial use of bikes. Haryana became the second state to relax their rules in this respect.


The situation is not so favorable to these start-ups in all states. A press statement in the form of clarification disallowing these services was specifically issued by the RTO in Maharashtra stating that these services are not allowed to be provided by the Motor Vehicles Act as applicable to Maharashtra. Time and again, registration of bikes as commercial vehicles has also been refused on account of the lack of a proper framework for the functioning of these cabs in India.


Similarly, in Bangalore also the RTO deemed this practice to be illegal as the Motor Vehicles Act, 1988 does not provide for a separate class of two-wheeler vehicles for the purpose of registration and without a proper Registration Certificate, no vehicle is allowed to run at all, whether privately or commercially. In fact, in a statement by Mr. H.G. Kumar, the Additional Transport Commissioner and Secretary of State Transport Authority, Bangalore expressly remarked that “Companies like Uber are not authorized to carry passengers on private bikes. Uber and Ola are the major culprits and nobody should operate without a proper license.” Additionally, he also stated that these companies in order to run their bikes have gotten their vehicles registered as private vehicles and therefore, are in violation of the law. Further, since they also do not carry proper registration certificates that justify their activities as a commercial taxi vehicle, no claims in relation to insurance shall be entertained in case of any accidents. Interestingly, a couple of days later, the Bangalore authorities once again changed their stand on the issue and indicated the department’s willingness to entertain such registrations as the time and the consumer demands it, which definitely is a welcome step.




Legal considerations before starting a bike-taxi business in India:

Following are some factors that must be kept in mind while starting a bike-taxi business in India from the legal point of view:


  • Does your State allow it? – The first and the foremost consideration is definitely to check with the RTO department of your State and ascertain whether it is legal to run such a business in your State.
  • Compliance with business regulations: if you are running the business as a sole proprietor, or in a partnership, registration is not mandatory. However, if you wish to start your venture as a public, private or a one-person company, or a limited liability partnership, registration is mandatory with the concerned authorities under the relevant laws.
  • Compliance with the motor vehicle laws: The Motor Vehicle Act, 1988 provides that the State Government shall constitute an authority that shall carry out all the functions given under the Act. The entity entering such a business will not only have to comply with the provisions of the Act by obtaining the necessary permissions and licenses but also have to consider the relevant state rules and regulations.
  • Compliance with information technology laws: If you are planning to launch a website or an android or apple mobile-based application, you’ll have to also consider the implications and applicability of the Information Technology Act, 2000 and all the rules made thereunder.
  • Other ancillary laws: You will have to take into consideration other laws that may be applicable keeping in mind the scale of your operations, kind of operations etc., environmental laws, labor and industrial laws, direct and indirect tax laws also.



Conclusively, as soon as the grey area in terms of legal regulators is clearer, no doubt the market for this will see a huge raise in no time.


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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Business Formation, Private Limited Company

Out of 4 startups born every day in India, 75% register their startup. This blog is intended to remind the importance of incorporating the startup. Yes, they say, on incorporation, a company acquires legal entity shape, but it’s not just that. In this blog, we will look into the Top 7 reasons to incorporate the startup as Private Limited Company.  As entrepreneurs, it is wise to utilize the right information at our disposal reason being most of the time we are on our own.

 

  1. Corporate Personality: The Company is a distinct legal or juristic person independent of its members (directors). From the date of incorporation mentioned in the certificate of incorporation, subscribers to the memorandum and all other persons will be capable of exercising all the functions of an incorporated company under the Act and having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name.
  2. Limited Liability: In the event of the company being wound-up, no member is bound to contribute anything more than the nominal value of the shares held by him which remains unpaid.
  3. Perpetual Succession: Irrespective any change in the board members, the company will be the same entity with the same privileges and immunities, estate and possessions. The death or insolvency of individual members does not affect the corporate entity, its existence or continuity. The company will continue to exist indefinitely till it is wound-up.
  4. Transferable Shares: Shares or other interest of any member of a company can be movable property, transferable in the manner provided by the articles of the company. This encourages investment of funds in the shares, so that the members may encash them at any time. Thus, it provides liquidity to the investors as shares could be sold on the open market and on the stock exchange. It also provides stability to the company.
  5. Separate Property: The property of the company is not the property of the shareholders, it is the property of the company. The company is the real person in which all the property is vested, and by which it is controlled, managed and disposed of. In the eyes of law, even a member holding majority of shares or a managing director of a company is held liable for criminal misappropriation of the funds or property of the company, if he unauthorized takes it away and uses it for his personal purposes.
  6. Capacity to Sue: A company can sue in its name and be sued by others. Neither the members of the board nor the team is liable for anything wrong.
  7. Flexibility and Autonomy: The Company has an autonomy and independence to form its own policies and implement them through Memorandum and Articles of Association.


As an end note, a quick comparison between available entities that a for-profit organization can choose to incorporate

Top 7 reasons to incorporate the startup as Private Limited Company

 

Relevant Blogs for your further reading:

 

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Partnership Firm

Indian Partnership Act, 1932 clearly states that there must be an agreement between the partners of a partnership firm by a contract, and the partnership agreement must comply with essentials of a valid contract, and the partners must be competent to contract and the object of partnership should not be forbidden. We at Wazzeer have received an ample number of questions on Counsel Application, where partners have shared some really critical issues faced by partners in their respective partnership firms, well I am going to add a snapshot of those conversations to the end of this blog. Coming to the essence of this blog, arm to help you Check if your Partnership Deed is Valid.


Partnership Deed may be oral but to avoid future disputes it is always advisable to have it in writing. Note, before the partnership is actually started Partnership Deed should be in place. Thus, the written document is a wise choice.


First and Foremost, the Partnership Deed must be properly drafted and stamped according to the provisions of the Indian Stamp Act. Each partner should be given a copy of the deed and if the firm is to be registered, a copy of the deed should be filed with the Registrar of Firms.


Entrepreneurs, in general, have little to no expertise to validate a contract (only document that would actually safeguard the dream venture and yourself). So, We at Wazzeer are providing you simple and easy tricks, just like correcting a 6th class going student test papers, you will now be able to validate the Partnership Agreement.


A typical partnership deed contains the following covenants, check if these are in place and order:


  1. The firm name and business to be carried on under that name.
  2. Names and addresses of partners.
  3. Nature and scope of business and address(s) of business place(s).
  4. Commencement and duration of the partnership.
  5. The capital and the contribution made by each partner.
  6. Provision for further capital and loans by partners to the firm.
  7. Partner’s drawings.
  8. Interest on capital, loans, drawings and current account.
  9. Salaries, commission, and remuneration to partners,
  10. Profit (or loss) sharing ratio of partners.
  11. The keeping of proper books of accounts, inspection, and audit, Bank Accounts, and their operation.
  12. The accounting period and the date on which that accounts are to be prepared.
  13. Rights, powers, and duties of the partners.
  14. Whether and in what circumstances, notice of retirement or dissolution can be given by a partner.
  15. Provision that death or retirement of a partner will not bring about dissolution of partnership,
  16. Valuation of goodwill on retirement, death, dissolution etc.
  17. The method of valuation of assets (and liabilities) on retirement or death of any partner.
  18. Provision for the expulsion of a partner.
  19. Provision regarding the allocation of business activities to be performed by individual partners
  20. The arbitration clause for the settlement of disputes. The terms contained in the partnership deed may be varied with the consent of all the parties, and such consent may be express or implied by a course of dealing. [Section 11(1)]



Actual queries regarding Partnership firm, Partnership Deed, and disputes between partners:

How to Check if your Partnership Deed is Valid?

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Business Formation

Whether it is laboratory services, clinical research or any other facet or practice that forms the part of the process of diagnosis of diseases, their treatment, observe and examine the response of the disease to the treatment prescribed, disease surveillance, clinical research, data management or statistical analysis in this field, it requires an exceptional amount of quality control in order to ensure absolute certainty of the results. In fact, clinical data management and statistical analysis are the keys to uncovering new diseases and finding treatments for them. In order to maintain high standards in terms of quality, a code called the Good Clinical Practices (“GCP”) regulates all aspects of this function from designing, collecting, recording, maintaining all the clinical data. This blogs talks about the authorizations and compliances should a clinical data management and Analytics Company is required to undertake.

Factors affecting the quality of data stored:

Various considerations and factors that immensely influence the quality of clinical data collected have been discussed below:

  • Case Report Form (CRF): The CRFs should be systematically and meticulously drawn in order to ensure that the data collected is complete in all aspects and also precise. Further, the CRF and the protocol drawn for a particular project should also be coherent and any inconsistencies between the two must be avoided.
  • Field monitoring guidelines: These guidelines should be carefully drafted so as to ensure that they completely fulfill their purpose as the quality of these guidelines and their effective implementation will directly affect the quality of the data that is presented to the clinical data management system.
  • Source Data Verification: This is a very key step in the process of validating the data to ascertain the authenticity of the data that has been presented in terms of its integrity and accuracy.
  • Data conventions: This factor is relatively more relevant to the multicentre clinical trials. Usually, in these centers, the conventions that are followed are not uniform and hence, their varied nature acts as a hindrance to entering the data in the database and thereafter also maintaining it.


Enforcement of the laws related to drugs and cosmetics in India:

The Drugs and Cosmetics Act, 1940 (“the Act”) was enacted by the Central Government under the flagship of the Ministry of Health and Family Welfare to regulate all matters pertaining to import, manufacture, distribution, and sale of drugs and cosmetics in India. The Act provides for standards of quality for all kinds of drugs being sold to the public- whether manufactured inside the country or imported, prohibition of drugs and cosmetics that may be adulterated or misbranded and also provides for the procedures that must be followed in obtaining registrations and compliances before circulating any kinds of drugs or cosmetics covered under the Act to the public.

More importantly, for the purpose of effective enforcement of the provisions of this law, the Act provides for setting up of the Drug Technical Advisory Board (“DTAB”). This body acts as an advisor to the Central Government and the State Governments on technical matters arising out of the administration of this Act and to carry out the other functions assigned to it by this Act. Being the highest technically constituted body under the Act, the DTAB recommended that the GCP guidelines must be followed for carrying out any activities related to clinical studies in India.

The Good Clinical Practices:

GCP is an ethical code on the level of quality that is to be maintained by the managers in these organizations. This code is one of the most integral and ancient codes that the practitioners of this field follow and was earlier called ‘the Hippocratic Oath’ based on the premise of causing no harm to the patient. Over time, with the development of medicine and need for induction of more modern and comparatively efficient methods, the antique code also required revisions in order to augment the efficiency of practitioners. Hence, the GCP. The Central Drugs Standard Control Organisation (“CDSCO”) of India, the national representative of the Government of India for all means and purposes regulates all matters related to drugs and cosmetics, set up to perform functions under the Drugs and Cosmetics Act, 1940 and the rules made thereunder. These guidelines were also formulated under the guidance of the CDSCO when this organization appointed an Expert Committee for this purpose.

This GCP is a set of guidelines for running tests, collecting the data and managing it with the fundamental objective of ensuring that the factors related to the research and the study undertaken related to the subject do not undermine the importance of human life being the subjects of these tests. Not only does this Code require that the study that is being done is scientifically sound but also ethically all-encompassing.

Compliance with international standards:

The GCP guidelines have been created and amended as and when required so as to keep then updated in line with the guidelines prescribed from time to time by World Health Organisation, International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, United States Food and Drug Administration, the European GCP guidelines, and the ethical guidelines for biomedical research on human subjects issued by the Indian Council of Medical Research.

A brief summary of the provisions of the GCP guidelines:

The Code provides for provisions related to the audit of the data to avoid any source contradictions, quality assurance and quality control at the time of planning, conducting, monitoring, evaluating, data handling and reporting. In order to implement the same, it also provides for a mechanism for effectual data handling and management. It is provided therein that “A statement should be clearly made in the protocol that- The investigator(s) / institution(s) will permit study related monitoring, audits, ethics committee review and regulatory inspection(s) providing direct access to source data/documents and a copy of the CRF should be included in the protocol.  

Besides, the following details should be given:

  1. Procedures for handling and processing records of effects and adverse events to the product(s) under study
  2. Procedures for the keeping of patient lists and patient records for each individual taking part in the study.  Records should facilitate easy identification of the individual subjects. 

Conclusively, the GCP guidelines prescribe the practices that help in upholding the two cardinal principles of protecting the interests of the human subjects of the clinical research as well as warranting the reliability of the data and must be followed at all stages of data management, colleting, handling, maintaining etc.


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Business Formation

Foreign direct investment up to 100% into a private limited company is under the automatic route, wherein no Central Government permission is required. Hence, incorporation of a private limited company as a wholly owned subsidiary of a foreign company or joint venture is allowed in India. This blog is pretty much written with an objective to bring in clarity on exactly what a foreign citizen planning to incorporate a Private Limited Company in India should know.

 

Foreign Direct Investment (FDI) into an Indian Private Limited Company:

 

FDI is allowed up to 100% in most sectors. Only a very few sectors require prior Central Government approval for investment by a foreign company or foreign national. The following sectors require Government Approval for investment by Foreign Company or Foreign National:

  1. Petroleum sector (except for private sector oil refining), Natural gas / LNG pipelines.
  2. Investing in companies in Infrastructure
  3. Defense and strategic industries
  4. Atomic minerals
  5. Print Media
  6. Broadcasting
  7. Postal Services
  8. Courier Services
  9. Establishment and operation of Satellite
  10. Development of Integrated Township
  11. Tea Sector
  12. Asset Reconstruction Companies

Incorporation of Private Limited Company by Foreign Nationals:

 

The following are the steps involved in the incorporation of an Indian Private Limited Company for foreign nationals:


Management and Shareholding Structure:


A private limited company must have a minimum of two Shareholders and two Directors. A shareholder can be a person or a corporate entity. Foreign nationals are allowed to become Directors of an Indian Private Limited Company.

The Board of Directors of the Indian Private Limited Company must have one Director who is both an Indian Citizen and Indian Resident. However, there is no requirement for the Indian Director to be a shareholder in the Company. Hence, most foreign companies or foreign nationals prefer to incorporate a company in India with three Directors – two Foreign National Directors and one Indian National Director.

The 100% shares of the Indian Company can be held by a combination of Foreign Companies and/or Foreign Nationals. Indian private limited companies require a minimum of two shareholders mandatorily. Hence, one corporate entity or person cannot hold all the shares of an Indian Private Limited Company.

 

Obtaining Digital Signature for Foreign National Directors:

 

A digital signature is required for filing the incorporation documents and continued compliance documents for a company. Hence, Digital Signatures must be obtained for one or more Director(s) of the company.

The following are the documents and information required for obtaining Digital Signature for a foreign national:

  1. Foreign nationals residing in India

The following documents should be certified by Individual’s Embassy:

  • Resident Permit certificate issued by Assistant Foreigner Regional Registration. Officer, an officer of Bureau of Immigration India.
  • Passport
  • Visa
  • Application form with Photo(attested)
  1. Foreign national

The following documents should be certified by the local embassy of the country to which the person belongs:

  • Passport
  • Visa
  • Application form with Photo(attested)

 

Obtaining Director Identification Number and Name Approval:

 

Once Digital Signature(s) is obtained from the Director(s) of the proposed company, Director Identification Number (DIN) must be obtained for all the Directors. As per the Companies Act, 2013, a Director Identification Number is required for every individual intending to become a Director or a Company in India. Once, the digital signature is obtained, DIN can be obtained from the Director(s) quickly and easily by filling form DIR-3 with Registrar of companies.

Once, two DIN numbers are available, name approval can be obtained from the proposed Company in form INC-1.   

 

Filing for Incorporation of a Private Limited Company:

 

Once name approval is obtained, incorporation documents can be filed with the Ministry of Corporate Affairs to incorporate the Company through SPICe form (INC-32).  The incorporation documents to be filed includes affidavits & declarations from Directors, Memorandum of Association Subscriber Sheet, Articles of Association Subscriber Sheet and Registered Office Address proof.

The affidavit and declarations from the Directors contain a certain declaration from the Directors. Affidavit and Declaration would have to be executed independently for each of the Director and notarized (For Indian Director & Foreign Director).

 

Subscribing to the Memorandum of Association (MOA) & Articles of Association (AOA):

 

By subscribing to the MOA & AOA, the shareholders (either foreign companies or foreign nationals or Indian companies or Indian national) show their intention for becoming a shareholder in the company to be incorporated.

  • In case a foreign national is signing the subscriber sheet of the MOA & AOA in India: Then the signature of the foreign Director must be verified by the public notary of that country or by the Officers of the Embassy. A copy of a valid business visa to India must be attached.
  • In case the person is living in some other country: Then the signature of the Director, identity proof, and address proof must be notarized by a Notary of the country and the certificate of the Notary must be authenticated by a Diplomatic or Consular Officer.

 

In case a Foreign Company is a subscriber to the MOA & AOA of the proposed Indian Company:

 

The following documents pertaining to the foreign entity subscribing to the shares of the Indian Company must be submitted:

  • Board resolution of the Foreign Entity authorizing investment in shares of the Indian Company.
  • Copy of the certificate of incorporation of the foreign entity.
  • Copy of address proof for the foreign company.

On submitting the above documents along with the application for incorporation of a company, the Registrar would issue a Certificate of Incorporation for the Indian Private Limited Company, if the documents submitted are acceptable.

After obtaining the incorporation certificate, the Indian Company can apply for a PAN Card, TAN number and take the necessary steps for opening a bank account for the company in India.

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