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14
Dec
17
Importance of MoA and AoA in Company Registration

Memorandum of Association and Article of Association are very crucial documents for any company as they are fundamental documents for company formations.

 

The memorandum of association and the article of association together form the constitution of the company. A company cannot be registered and work even for a single day without drafting the memorandum of association and article of association.

 Memorandum of Association

The memorandum of association of any company consists of significant information about the company including the name of the company, its registered address, its scope of activities, criteria governing the relationship of the company with its shareholders and the provision for distribution of shares among the specified shareholders etc.

Memorandum of Association of any company is very important as it offers to the public all the fundamental information about the company and forms the basis for the relationship of the company with its shareholders and outside the world. A company is not empowered undertake any Act which is not specified in its memorandum of Association and even the AOA is bound to comply with the memorandum of association of the company. Thus memorandum of association of any company is a very crucial document. According to section 4 of the Companies Act 2013 the following clauses are required to be specified in the memorandum of association of companies-

  1. Name Clause – It contains the unique and approved name of the company.
  2. Situation Clause- It contains the registered address of the office of the company.
  3. Objective Clause- This clause defines the mains as well as ordinary objectives of the company.
  4. Association and Subscription Clause- It contains the complete details about the subscribers of the shares of the company and the number of shares allotted to them.
  5. Capital Clause- It gives information about the total share capital of the company, assets of the company, the minimum paid-up share capital etc.
  6. Liability Clause- This clause outlines the liabilities of each shareholder/member of the company.

Article of Association

The article of Association is a very crucial document defining and describing the powers, duties and responsibilities of all the people involved and the professionals. It basically states the bye-laws which define the relationship of the company with outsiders. Following are the contents of Article of Association-

  • Share capital including sub-division, rights of various shareholders, the relationship of these rights, payment of commission, share certificates.
  • Lien of shares
  • Calls on shares
  • Transfer of shares
  • Transmission of shares
  • Forfeiture of shares
  • Surrender of shares
  • Conversion of shares in stock
  • Share warrant
  • Alteration of capital
  • General meetings and proceedings
  • Voting rights of members, voting by poll, proxies
  • Directors, their appointment, remuneration, qualifications, powers and proceedings of the boards of directors meetings.
  • Dividends and reserves
  • Accounts and Audits
  • Borrowing powers
  • Winding up

For more information about company registration call +91-8882-580-580

05
Dec
17
Preference Shares in a Private Limited Company

Preference share capital is the form of capital that provides preference rights to the holder at the time of payment of dividend and at the time of winding up.

Preference shareholders are the holders of shares who get the preferential rights of dividend and at the time of winding up company over the equity shareholders. Any company can issue preference shares only if its articles of association authorize the company to do so. Every company is required to redeem its preference share within a time period of 20 years. Further, according to companies Act 2013 no company can issue preference shares which are irredeemable.

Conditions to be satisfied for issuing preference share capital-

Any form of company can issue preference share capital only by fulfilling certain conditions.  These conditions which every company is required to fulfil are as follows-

  1. The article of association of company authorizes the issue of preference shares.
  2. The issuing of the preference shares by the concerned company has to be authorised by passing a resolution at a general meeting of the company.
  3. The concerned company while in the time of issuing preference shares should not have defaulted in the redemption of the preference shares being issued either before or after the commencement or in payment of dividend due on the preference shares.

Various kinds of preference shares that can be issued by the company are as follows-

  1. Redeemable Preference Shares- All the preference shares issued by the company are the redeemable preference shares. Thus every company except the infrastructure company is required to redeem these shares within 20 years from the date of issue.
  2. Irredeemable Preference Shares-The irredeemable preference shares are those shares which would not be redeemed by a company. However, the Companies in India are not allowed to issue irredeemable preference shares.
  3. Cumulative preference share- The holders of cumulative preference shareholders are entitled to obtain the dividend in the years in which they incurred profits for the year in which they were unable to receive dividend due to insufficient profits.
  4. Non-Cumulative Preference Shares- The non- cumulative preference shares are just the reverse of cumulative preference shares. The shareholders of non-cumulative shares are not entitled to receive the dividend for a year where the dividends could not be paid in the subsequent years. Thus, in case of the non-cumulative preference share, the rights to the dividend for a year cannot be carried over in the following year.
  5. Participating Preference Shares- The participating shareholders are holders that are entitled to receive some surplus profit or dividends in the company, in addition to being entitled to some fixed dividends as well.
  6. Non-participating Preference Shares- The non-participating shareholders are eligible to to get the fixed amount of dividend only and they are not supposed to participate in the surplus profits of the company.
  7. Convertible Preference Shares –Preference shares that can be converted into equity shares are known as convertible preference shares. The terms and conditions for such issue id=s distinctly stated at the time of issue of such shares.
  8. Non-convertible Preference Shares-The non-convertible preference shares are not convertible into equity shares of the company, but they retain their preferential value to the payment of capital when in case of winding up of the concerned company.
02
Dec
17
Kinds of Trademark Filing Forms

While making an application for registration of trademark and in the process of obtaining the trademark registration the applicant is required to file number of Trademark Forms as specified in Trademark Act 1999.

 A trademark is a unique and recognizable symbol, design or expression that uniquely identifies the source of a product distinguishes it from the other products. It is very important to obtain the registration of the trademark or the service mark as it helps to protect the mark, symbol, slogan, design etc from being exploited by the competitors. As soon an application for trademark registration is filed TM symbol can be attached to it and once it gets registered then the owner can affix the symbol of R along with the trademark. These symbols provide a great value and protection to the brand. 

The applicant is required to make trademark application on the proper trademark application form to avoid objection by an Examiner. Based on the nature of trademark filing following forms shall be filed-

It is very crucial to file a proper trademark form in every specific case so as to prevent the examiner from raising an objection to it. Thus, an application shall be filed in the appropriate form and with the specified amount of fees.

 

30
Nov
17
Procedure of Acquiring a TAN Number for a Company

Every company who is responsible for Deducting Tax at Source is required to obtain a Tax Deduction and Collection Account Number (TAN).

TAN or Tax Deduction and Collection Account Number is a unique 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting the tax. Section 203A of the Income Tax Act, 1961, mandates quoting of TAN allotted by the Income Tax Department (ITD) on all TDS returns.

In case any person fails to apply for TAN number or quote the TAN or quotes incorrect TAN a penalty of Rs. 10,000 shall be levied.

Structure of the TAN

The correct structure of TAN is as mentioned below:

TAN structure is as follows: ABBBB89899C

  1. The first three characters represent the city or state where the TAN was issued.
  2. The fourth character of the TAN is the initial letter of the tax deductor. Which Means name of the Tax Deductor starts with this letter.
  3. Next five characters are system generated numeric Numbers.
  4. The last character is Alphabetic Number which is also known as check digit which is also system generated.

Procedure for Obtaining a Valid TAN number

Broadly there are two modes of acquiring a valid TAN -

  1. Offline Mode- An application for allotment of TAN shall be made in duplicate in Form No. 49B at any TIN Facilitation Centers (TIN-FC). However, in the case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of Tax Deduction Account Number may be made in Form No INC-7.
  2. Online mode- The application for TIN allotment can be made through online mode by filing form-49B on the official website NSDL. After filing the form the applicant is required to pay the fees of Rs 62 for filing the TAN application. The payment can be made by cash, cheque, demand draft or net banking. As soon as the successful payment is made, a 14 digit acknowledgment number will get generated. The applicant shall submit the duly signed acknowledgment along with the required documents to the NSDL within 15 days from the date of the online application. After the documents and application are verified by NSDL, the TAN number will be communicated to the applicant.

To apply TAN Number for a Company visit Registrationwala.com

 

 

29
Nov
17
Producer Company Registration Process in India

A producer company is a company which is formed by the association of any 10 or more individuals or any two or more producer institutions or the combination of both. The objectives of the producer company must be in line with the objects specified in section 581-B.

The Producer Company is the company formed by the association of 10 or more individuals, or the any two or more producer institutions or both of them. The main objective of the producer company must be related to production, harvesting, procurement, grading, pooling, handling, marketing, selling, exporting of the primary product of members or import of goods or services for their benefit. Processing includes preserving, drying, distilling, brewing, venting, canning and packaging of the produce of its members. Further, it can manufacture machinery, sale or supply machinery, equipment or consumables mainly to its members.

Requirements

Following are the requirements of for forming a producer company-

  • Producer Company can only have equity share capital.
  • The minimum paid-up capital requirement for incorporating the producer company is Rs 5 lakhs.
  • Minimum 10 or more individuals or any two or more producer institutions or the combination of both may form the producer company.
  • A producer company can have maximum 15 directors
  • A producer company cannot be deemed to be a public company under any situation.
  • The maximum amount of dividend to be paid by the producer company is determined by its articles of association.

Process of registration of producer company-

  1. In order to start the procedure of incorporating the producer company the proposed directors of the producer company must obtain the digital signature certificate.
  2. After obtaining the DSC the next step is to acquire the director’s identification number by filing the form in DIR-3 along with required documents.
  3. The applicant is required to make an application for the name reservation in form 1A along with the fees of Rs.1000. Utmost care should be taken while choosing a perfect name for the company as it acts as the identity of the company.
  4. Further, the memorandum of association and article of the association shall be drafted as per the objectives of the companies.
  5. The application of incorporation along with the required documents shall be submitted to ROC.
  6. If the registrar is satisfied with the application for incorporation of Producer Company, then he/she will approve the same and issue Certificate of Incorporation within 30 days of receiving the application.
  7. The liability of the members of the producer company so formed shall be limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them and be termed a company limited by shares.
  8. After registration, the producer company will also become the body corporate just like the private limited company but subject to certain conditions. Unlike a Private Limited Company, a Producer Company does not have a limit on the number of members. Further, though the name of a Producer Company ends with the words “Producer Limited Company”, it shall under no circumstance become or be deemed to become a public limited company.
28
Nov
17
Amending the details of the Directors Identification Number

Every person who is the director of the company or intends to be the one is mandatorily required to obtain a distinct identification number called the DIN (Director Identification Number). Further, this number helps to keep a check on the track record of the director. Some situations may arise wherein the directors are required to revise the details of the DIN.

Filing Form DIR-6

In order to process the changes in the particulars filed in the DIR-3 an individual who has been allotted a Director Identification Number shall intimate such change to the Central Government within a period of thirty days of such change in Form DIR-6.

The applicant shall download Form DIR-6 from the official portal of MCA and fill in the relevant changes, attach the copy of the proof of the changed particulars and verification in the Form DIR-7 all of which shall be scanned and submitted electronically.

Any charted accountant in practice or the company secretary in practice must digitally sign the Form DIR-6 filled electronically.

Documents

Following attachments shall be made with the Form DIR-6 in all cases-

  1. A valid proof of change in particulars of DIN. Like a copy of verification by the director in Form No. DIR-7.
  2. As the proof of Identity of director/ designated partner the income Tax PAN number shall be submitted in case of Indian nationals. While in case of foreign nationals, passport is a mandatory requirement for proof of identity
  3. As the proof of residence of director/ designated partner the address proofs like bank statements, electricity bill, telephone bill, utility bills etc. shall be attached. In case of Indian director/ designated partner, documents should not be older than 2 months from the date of filing of the eForm. While in case of foreign director/ designatese d partner, address proof should not be older than 1 year from the date of filing of the eForm.
  4. The proofs submitted should be translated in Hindi / English from professional translator carrying his details (name, signature, address) and seal in case of proofs which are in languages other than Hindi/ English.

Key Points

The key points to be noted while making the request for change in the particulars of DIR-3 are as follows-

  1. In case the details like name/father’s name/DOB as per Income-tax PAN are incorrect, director/designated partner is required to first correct the details in Income-tax PAN before filing this form.
  2. In case the contents specified in the eForm matches with already filled DIR-3/DIN details, then the application shall be marked as a potential duplicate and shall then be processed by DIN Cell. EForm shall be allowed to be resubmitted only once in case of processing under this.
  3. If the details filed are not identified as potential duplicate, DIN shall be auto-approved by the system and will be sent to DIN cell for verification if verification is not passed, an email is sent to the director for correction of defects by filing eForm DIR-6.
  4. In case eForm is filed for updating of income-tax PAN in respect of Disabled DIN, then the status of DIN shall be changed to ‘Approved’ consequent upon approval of the E-Form.
27
Nov
17
Procedure of opening a Current Bank Account for a Private Limited Company

The procedure for Opening a current bank account for the Private limited company is very easy. Private limited companies prefer to open a current bank account rather than opening a saving bank account. As saving bank account has the limit on the maximum number of transactions that can be carried out. Current accounts, on the other hand, have no transaction limits. Thus, all entrepreneurs open current accounts as soon as they start their business. Strict KYC rules have been prescribed by Reserve Bank of India for opening a current bank account. For Private Limited Companies the Reserve Bank of India has prescribed certain documents to be submitted to the bank in order to open a current account with any bank.

Documents required by banks to open a current account in the name of company

As per the KYC norms, following documents are required to be submitted with bank by private limited company-

  1. Certificate of Incorporation
  2. Memorandum of Association and Article of Association
  3. Certified true copy of board resolution for opening bank account and the identity of those who are authorized to open a bank account.
  4. List of Directors’ as per bank’s format
  5. Copy of address proof of registered office of company (If address of registered office is different from the one given in Certificate of Incorporation)
  6. Identity proof of all directors and authorized signatories
  • PAN Card
  • Adhar card
  • Voter Identity Card
  • Passport
  • Driving license
  • Arms License
  • Senior citizen card issued by state government or central government
  • Fisherman identity card issued by state government or central government
  1. The shareholding pattern of the private limited company as per bank’s format.
  2. PAN card of company or PAN card application acknowledgment copy(for companies which are incorporated within 90 days of application for opening of bank account)
  3. Proof of appointment of current director(s) in the case of a change in the board. As a proof copy of minutes of the board meeting in which such decision is taken shall be submitted.
  4. Proof of resignation of director(s) in the case of a change in the board.

In order to open a current account, every private limited company must file the account opening form along with the documents mentioned above.  Further, the company is required to submit the certified copy of the board resolution that will specifically indicate that the company desire to open a bank account. In addition to this, the resolution will specify the name of the directors who are authorized signatories both solely and jointly. Moreover, it will specify that the Know your customer(KYC)  will be updated from time to time.

21
Nov
17
Choose a Right Name for Your Startup

Choosing an appropriate name is one of the most important decisions that should be taken by any Startup.  In order to choose an appropriate name, a proper research must be conducted. After choosing a name the startup must ensure that the name chosen must be available for registration. Many times people start investing in the branding of their business name without even checking its availability, which may prove to be costly and may drag you in litigation in future for trademark infringements of other’s brand. So, before you begin, you should make sure that your business name is available for registration with the Registrar of Companies

Factors that should be considered while choosing a perfect name for the company are as follows-

  1. Unique and unforgettable- The name chosen shall be distinct and memorable. Every company wants a name that stands out from the crowd, a catchy handle that will remain fresh and memorable over time helps to acquire large market share.
  2. Avoid critical spellings- While creating a name, stay with words that can easily be spelled by customers. Some startup founders try unusual word spellings to make their business stand out, but this can be trouble when customers ‘Google’ your business to find you, or try to refer you to others. Also, customers are unable to memorize the unusual spellings.
  3. Keep it simple- The name chosen must be simple and short. Avoid using special characters and algorithms.

4.Easy to pronounce- Try to choose the business name that customer can pronounce and remember easily. Skip the acronyms, which mean nothing to most people. When choosing an identity for a company or a product, simple and straightforward are back in style, and cost less to brand.

  1. Avoid using restrictive name-While choosing the brand name make sure that the name chosen must allow your business to move around or add to its product line. This means avoiding geographic locations or product categories to your business name. With these specifics, customers will be confused if you expand your business to different locations or add on to your product line.

6.Ensure that the name is available- After finalizing a name an applicant must check the availability of the name chosen in order to avoid any further litigation.

  1. Suggestive company name- Try to choose a name which suggests the activities of the business entity rather than choosing any random name. Suggestive name helps the business entity to attract more customers.
  2. Use common suffixes- Try to choose common suffixes like“.com” or the standard suffix f. If these suffixes are not available for the name you prefer, pick a new name rather than settling for an uncommon suffix.

 Thus, a startup shall keep all the factors mentioned above in mind while choosing his company name as it will assist it in establishing a good brand image in the market.

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