Company is a legal entity made up of association of people. Companies can be natural, legal, or mixture. These are the organizations which can be commercial as well as industrial. Members of the company share a common goal and focus upon by uniting themselves. Company’s goal is an agenda for the employees of the company which is achieved by the talent, effort, and skills in them.
Statutory register is a form of register in which company’s data is maintained. Every company needs to have a statutory register which is kept in registered office or in Company’s house. Mostly these are the single bound book or loose-leaf binder which can be kept in any form, such as a computer record.
According to Section 94, private companies may opt to keep certain information on the Central Companies House register instead of on their own statutory registers. In most of the companies, it is important to keep statutory registers. Since it is not only is it requirement of the Companies Act. But, also they should be kept up to date. Most probably the register of members, in particular, is the primary authority.
There are different types of Statutory Register
Register of members
In every company record of the members (shareholders) is kept. This includes the names, addresses, numbers, Class of shares of the members. It also includes the date at which the person was registered or ceased as a member, the amount paid, or agreed to be considered as paid, on the shares.
Inspection of the Register
In Companies Act, 2006 there is an amendment about the inspection of the register. It remains open to any member of the company without payment. It can be with anyone else on payment of the prescribed fee.
Request for inspection or copies must contain the following information
Register of directors
Register of Secretaries
Register of charges
In every limited company, there is a requirement to keep its registered office a register of charges and enter in it all charges specifically affecting property of the company and all floating charges.
Persons with significant control (PSC) register is the new register of people with significant control underemployment act 2015 .
Register of Debenture holders- Every company should keep this register .This is the register for holders and Register of any other security holders in accordance with Section 88(1) of the Companies Act, 2013. This register is allotted in every company used to maintain a separate register of debenture holders or security holders
Other registers are the registers, such as a register of allotments, register of transfers, These are not statutory registers and there is no obligation.
Start-up India is the plan launched by honorable P.M. Shri Narendra Modi. This plan enables to create an ecosystem to promote and nourish entrepreneurship. The scheme is based on an action plan aiming at the promotion of financial bank for start-up ventures and to boost entrepreneurs.
Start-up is an entity registered in India. Start-up is the company which is not older than 5 years and its annual turnover should not exceed 25 Crore. It works towards innovation, development, deployment or commercialization of new products driven by technology or intellectual property. Such an entity is not formed by splitting up, or reconstruction, of a business already in existence.
Start-up's aim is to develop and commercialize which creates or add value for customers or workflow. Here are some features which have benefitted to entrepreneur
Features in Start-up India
Income tax provisions in Start-up India
This exemption is available for first three years. Start-up will be eligible for tax benefits only if the certificate has been obtained a certificate from the Inter-Ministerial Board.
Start-up is allowed to self-certify the compliances with labor and environmental laws.In labor law, no inspections will be conducted for a period of 3 years. Inspection can be on receipt of a credible and verifiable complaint of violation. In environmental laws, will follow white category.
Start-up India Intellectual Property Protection scheme(SIPP)
This scheme provides fast-tracking of patent applications. A panel of facilitators to assist in the filing of IP applications. The government will bear the cost of such facilitation and rebate on the filing of patents.
Mobile application and web support
The scheme also provides on-the-go accessibility for Start-up's registration, tracking the status of registration, filing for compliances, Start-up collaboration with various Start-up ecosystem partners and for applying for various schemes under the Action Plan.
How tax benefits can be availed in Start-ups
Addition in value: Value added in the product and customer.
Solution to the problem: Start should be available to solve certain problems of the society. Points should be clearly mentioned.
Working with Business Model: Start-up should be according to the particular business model about Business model otherwise, incubators may be rejected.
Recommendation letter –This application is needed from certain authorities. Authorities can any incubators established the post-graduate college in India, incubator which is funded from Central or state government.
Step to get Recommendation letter
Start-up is the fast-growing business that aims to meet a marketplace need by developing an innovative product or service. Start-up India has given an opportunity to many young youths to bring their business idea into the application. This scheme is a success and has given many benefits to entrepreneur and other people.
One of the first steps before starting a business is choosing the right business entity. Among other things, it makes sure that the entrepreneur is able to reduce the level of taxes, works on checking liability exposure and can be self-sustainable as far as financing in the later stage is concerned. A right business entity also ensures that the owners have a mechanism wherein the business continues to flourish in case of death of one or more owners.
While finalizing a business, one should keep the following factors in mind:
The degree at which the personal assets of the owners are at risk from liabilities arising from the business.
The best ways ensure tax advantages and avoid multi-layered taxation
The ability to lure investors
Cost of operating the business, which should be minimal
Also the ability to ensure, if the need arises, that the ownership interests are easily transferred to key employees
Apart from keeping these essential factors in mind, one must also note that whatever choices are made regarding the entity are going to fluctuate during the due course of time. The nature of business remains the same but there are various factors like the market and government policies which impact the business in the longer run.
The number of owners defines the entity type of the business. While a single owner can operate as a sole proprietor, a corporation, or a limited liability company but the moment there are more than one owner involved, in legal terms, it cannot be called sole proprietorship. However, it can be a corporation, limited liability company, general partnership, limited partnership. In certain situations it can even be a limited liability partnership.
Lets’ now discuss in detail the entities
If a business owned by a single individual it is termed as sole. It does not require any legal distinction from the owner, and also, in most cases does not need any governmental filing except a fictitious business name statement, if the owner is doing business in any name other than a personal name. It is the most common form of business as it is simple to start and is free from huge operating expenses that are needed when a person thinks of starting other legal entities such as corporations and limited liability companies. Since there is no legal distinction between the owner and the business, a sole proprietor is always liable for all the debts and obligations of the business. Also upon the death of the owner, the business ceases to exist. The physical assets of the business such as equipment, accounts receivable, and real property remain intact but even those, apart from the business, become tough to sale. One of the major boosts for a sole proprietorship business is that it does not have to go through multiple layers of taxation. As mentioned already, there is no distinction between the owner and the business so all the income of the business can be only taxed once – in the category of personal tax return.
When it comes to corporations, it is always treated as a separate entity from its owners for all legal and taxation purposes. Normally it comprises of shareholders, directors and officers. It is the prerogative of the shareholders to elect the board of the directors, who then are responsible for setting the agenda and taking major decisions for the company. The board of directors also appoint officers who oversee the day to day affairs of the company. Also it is obvious that the corporation is a separate entity hence all the debts and obligations of the business are not directly related to the owners. Apart from these, there are various other benefits of a corporation.
A limited liability company, or LLC as it is popularly known as, is formed by one or more owners, called members. A LLP company ensures limited liability protection to its members.In LLP, limited protection of the personal assets of the members is ensured much like shareholders incorporation.
Partnership in business
When the business has more than one owner, there are basically two types of entities possible - a general partnership or a limited partnership.
General partnership in simple terms is an association of two or more persons carrying on a business venture as co-owners for profit. After a sole proprietorship, general partnership is thought to be the easiest entity. Under most state laws, a formal written partnership agreement is not needed in case of general partnership for the partnership but it is expected that the partners keep the rights and duties ready before they embark upon the business journey. If they partners do not have a written agreement, it will be a little difficult to do the business and share the profit and losses of the business.
In a general partnership, each partner has a personal liability and the business is pretty much limited when it comes to luring the investors, also it is difficult to resale such businesses. The biggest advantage of a general partnership is that there is no provision of taxing it. In fact, the losses and profits are shared by the partners according the written document which was formed at the beginning of the forging of the partnership. Since there are less no of partners in most cases and no shareholders or board of directors, the team can always sit together and finalise or change a plan on how to make profit or take the company forward.
When it comes to limited partnership, it requires a written partnership agreement. Also a certificate of limited partnership needs to be filed in the state where the partnership is formed. Hence a limited generally costs more than a general partnership. Under normal circumstances, only licensed professionals are allowed to form limited liability partnership and it is the prerogative of the state to decide on licensing.
So how do you decide on which is the best form of partnership. Before deciding on the business, here are the questions you need to answer.
Who are going to own the business
What are the plans on distributing the profit among the owners?
Is the business expected to generate profit at the start or will it incur losses?
In those cases where the owner is a single individual and is not willing to add ownership interest, then he should not be concerned about the management structure and he can opt for any business entity. Hence the decision will be taken on the basis on the kind of taxation the owner wants to have for his company.
When it comes to the knowhow of licences needed by start-ups, the process in India is not much friendly and hence a lot of young entrepreneurs often tend to function in a clumsy manner. This leads to a situation where the start-ups operate without these licenses. But there are many new business start-ups which are always willing to operate in a legit manner with all the licences. So here are the licences which are mandatory for start-ups
This is a must for all businesses, irrespective of whether it is registered in the name of a proprietor or entity. The Permanent Account Number is to be for all sorts of payments. PAN is needed while starting a bank account or during the, payment of any sort or service tax.
All business houses those pay salary, commission or interest to its employees are required to have a TAN. TAN is quoted on tax deducted at source. TAN, which stands for Tax Deduction and Collection Account Number, is a 10-digit alphanumeric code. Another point to be noted here is that TAN gets approved only when the company has a PAN to its name.
It is an indirect tax government imposes on services provided by a company. This system of taxing came into being under the Finance Act, 1994. Any organisation that provides taxable service of more than 9 lakhs has to abide by this act. However, the company can only collect service tax from the customers once its revenue has crossed a turnover of 10 lakhs. The service provider pays the tax to the government at the rate of 14.5 percent. Thus service providing companies need to file return twice a year. After the introduction of the GST, which is expected to do away with a lot of indirect taxing measures, it might not be a practice. But that is something which is futuristic, as of now the service providing companies in India have to collect and deposit service taxes
Value Added Tax is commonly referred to as Sales Tax. Much like the service tax, this too is an indirect way of tax collection; it is levied at various stages of production of services and goods. The VAT is applied on imported goods as well but it does not exceed the limit that is applied on the local products. To understand it simply at every stage where some sort of value is added to the product, there is an addition of tax. It is the consumer who has to bear it all at the final stage. This form of taxation requires a lot of transparency. Any company having revenue of more than 5 lakhs is liable to pay VAT and register for it.
It is far easier to understand Central Sales Tax (CST). This is levied on goods when they cross one state and enter another. It is not much different from taxes levied by government across the globe. It helps generate a large chunk of tax revenue for the government. Even this tax is computed on imported goods and those which are manufactured within the confines of the Indian state. VAT and CST are collected and submitted on a monthly basis and return too is filed monthly.
Within 30 days of employing an individual, every company must endeavour to obtain a registration for collection professional tax. The owner of the business must deduct professional tax from the income of the employee as specified by the state the company operates in. This tax goes to the state authorities or the municipal corporation. In this case also the return must be filed every month.
Shops & Establishments Act
Having discussed in detail about the taxation and other licenses a start-up requires, it is time now to delve into another important aspect which is the right of the employees in the newly formed company. The act sees for the conditions of work, lists and rights of the employees among other things. It also outlines the obligation for the employers. It is a central act and applies on every shop, company, business houses etc across the country. A start-up is register for this within 30 days of it commemoration whether or not it has hired employees by then.
However the type and size of business, it is valued by its owner(s) and as the business grows, the bigger the value gets and hence higher the protection needed. The owner must understand the vulnerability that comes along with the success of a business, such as with success comes competition, risks, legal obligations, reputation sustenance, vigilant, etc.
An owner must be prepared to face the difficulties that come in building a successful business. There are no strict rules to be followed, however, certain aspects of protecting ones business remain constant in all cases.
Protection against legal threats
Organize your Finances
Protection against technological threats
Protection against reputation threats
Protecting a business can be a task but the efforts will make the success of a business only smoother. If the above major aspects are taken care of, the business is well protected and any hassle on its way of progress can be dealt with ease.
Having a job is not good enough in today’s world. Making a name, a brand and of course making lots of money is far more evidently important. It is not just become a way of life but a competition amongst the capable and the ones striving.
Branding self through a product or a service is the most common idea these days. Ultimately making this idea a “company” is become a trend of sorts.
Rising of such companies has formed a new sector in the market, very famously known as the startup sector. Lot of ideas has given life to a lot of companies. However, similar ideas across cities/states/regions have given rise to a lot of competition amongst the same lateral companies.
In the beauty domain, amongst the many others, there are 7 startups that top the list of on demand beauty services such as Vanity Cube, Belita, StayGlad, MyGlamm, etc. In the FMCG domain, startups such as BigBasket, GreenCart, Local Banya, Grofers, etc. are in tight competition to achieve a position over the other. There are hundreds of companies like these that leave no stone unturned to merely gain the attention of the investors to survive such stiff competition.
The moneymaking method is riskier but more straightforward than a regular job. You are the boss, the founder and hence your decisions account for your success or failure. You, the customers and the investors play the protagonists in this setting. However, the way of making money in such a situation is solely based on your decisions and actions.
There is a way you can assert making money. They are:
Now, if making money were as simple as this, each one of us would be rich. So before you bank on this method alone, make sure your product or service has a USP that no other product or service does and in case of any unexpected market results, you are prepared with a back up plan to get back and get better.
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