Setting up a proprietorship business does not need much effort. It can be accomplished very simply through a few local registrations. DCS ensures you hassle free setting up of your proprietorship business by providing adequate consultancy, services allied to set up of business and post set up support.
Obtaining PAN has been made inevitable by the Income Tax Department for any Individual having an income above the basic exemption limit. Also, you get liable to deduct taxes at source very soon after you start your full-fledged operation. Thus TAN also becomes inevitable for you. At DCS we conveniently provide these services auxiliary to the start up of your Firm. In addition to your Firm�s start up we will also look into the PAN & TAN Registrations with the Income Tax Department.
Once you operate in the Service Sector you have to pay tax on the services provided by you under the Service Tax Laws. Thus for this you need to be registered as an assessee with the Service Tax Department. Along with other registration and incorporation services we also help you in registering with the Service Tax Department.
For the firm engaged in sale of goods, the trader firm has to be registered with the Sales Tax Department of respective state. We help you obtain the Sales Tax Registration without any complications.
We provide assistance in your registration with the Professional Tax Department, obtaining Trade License and other local registrations and other basic compliances to continue uninterrupted operation after your set up.
Frequently Asked Questions
- Limited Liability Partnership
- Sole Proprietorship
Generally the time required to establish your business depends upon the form of organization and nature of business. Keeping in view, Company form of business, it would take around 15-20 days to establish business excluding the time taken for preparing and signing the documents
In India, basically there are two types of tax numbers, which are outlined below:
- General Tax Numbers: Tax Numbers like PAN & TAN are generally required to be obtained by all types of business.
- Specific Registration: These registration are required based on the nature of business carried by the organization for in case of business of trading, Value Added Tax number will be required subject to fulfillment of certain conditions .
Following tax numbers are required based on the nature of the business:
- Service Tax Number: For providing specified taxable services.
- Value Added Tax Number: For making sales within particular state.
- Central Sales Tax Number: For making inter-state sale of goods.
- Excise Duty Number: For manufacturing excisable goods.
- Import & Export Number (IEC): For effecting import and export of goods and services.
It is necessary for all the businesses carrying any of the aforesaid activity, to procure this number; it has to satisfy other eligibility criteria.
In India, Company is the form of business that is highly regulated. Companies are governed by Companies Act 2013, which has more than 600 sections.
Partnership and Sole Proprietorship forms of business are the least regulated form of business and therefore it is most easy to close them. The closing does not involve the permission of any judicial authority like High Court.
Company is the most recommended form of organization for carrying business on medium or large scale due to the following:
- Highly recognized form of business
- Large sources of funds raising.
- Recognized by Financial Institutions and Investors for lending.
- Regulated form of business
Company is an association of persons registered under the Companies Act 2013. It is a separate legal entity distinct from the persons who own or manage it.
- Private Limited Company
- One Person Company
- Public Limited Company
- Section 8 Companies
- Liability of the shareholders is limited to the extent of face value of shares held by them. Thus the investors have a sense of security while investing.
- The management hierarchy of a Company is very clearly defined. Hence it becomes easy to appoint, retire or remove directors.
- There are more regulations governing this form of business than the others. Hence, there is more public confidence.
- A Company enjoys high credibility as the books of accounts and other documents are available for public vigilance.
- The winding up of the Company is also regulated by law. Hence, it becomes easy to dispose off this form of business.
- The status of this form of business is comparatively higher compared to the other forms of business.
- A company has a distinct entity from its owners. Hence it can sue or can be sued in its own name.
A Private Limited Company is a company limited by shares. The Companies Act, 2013 requires the minimum paid up capital of Rs. 100000/- for a Private Limited Company and also imposes a certain restrictions such as:
- restricts the right to transfer its shares
- except in case of One Person Company, limits the number of its members to 200
- Public Limited Company
- prohibits any invitation to the public to subscribe for any securities of the company
The concept of One Person Company (OPC), is a new form of company introduced by the Companies Act, 2013 which enables the entrepreneur working as a Sole Proprietor enter the Corporate Framework. It combines the benefit of both Sole Proprietorship and Company form of businesses.
A Public Limited Company is limited by shares with no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The shareholders liability is limited to the extent of the unpaid amount of the face value of shares and the premium thereon in respect to shares held by a shareholder. It should have a minimum paid up share capital of five lakh rupees.
Section 8 Companies are the charitable organizations registered in the form of Companies.
- Private Company: 2
- Public Company: 7
- OPC: 1
- Private Company: 2
- Public Company: 3
- OPC: 1
- Private Company: INR 1,00,000/-
- Public Company: INR 5,00,000/-
Paid up Capital refers to that amount which has been received by the Company from the shareholders in lieu of share capital issued to them.
Shareholders are the persons/ entities holding shares in a Company.
The Articles of Association contain the regulations for the management of the Company. This document contains rules, regulations and bye-laws for the general administration of the company. The articles of a company shall be in respective forms specified in Tables, F, G, H, I and J in Schedule I as may be applicable to such company.
Memorandum of Association is the document that states the name, address of registered office, objects of the company and any other incidental matter. This is accessible to the public. The memorandum of a company shall be in respective forms specified in Tables A, B, C, D and E in Schedule I as may be applicable to such company.
Director's Identification Number is the unique identification number issued by the Government to the individuals. It is mandatory for every individual to obtain DIN before being appointed as a director.
Every individual, intending to be appointed as a director of the company, can file an application for allotment of DIN.
- Address Proof: Passport, election (voter identity) card, and ration card, driving license, electricity bill, telephone bill or aadhaar shall be attached as address proof and should be in the name of applicant only.
- Identity Proof: Income Tax PAN Card is the mandatory proof of ID for Indian Nationals. In case of foreign nationals, Passport is the mandatory ID proof.
Yes, DIN & PAN are related. The PAN Card is the mandatory proof of identity while applying for DIN. Moreover, the DIN authorities verify the details of the individual from the PAN database.
The Central Government (Office of Regional Director (Northern Region), Ministry of Corporate Affairs, NOIDA) allots the DIN. The DIN is valid for the lifetime of the individual. Also, there is no requirement of renewal of DIN.
DSC refers to the Digital Signature Certificate. It is mandatory for the directors to have their DSCs in order to sign the Electronic Forms to be uploaded at the MCA Portal.
OPC is registered as a Private Limited Company.
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.
For the above purpose, the term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.
Further, minors can neither be members or nominees in an OPC.
An individual can be a Director/ Member in only one OPC.
An individual can be a nominee in only one OPC.
An OPC, being registered as a Private Limited Company, needs a minimum authorized capital of Rs. 100000/-.
The tax rate applicable to an OPC is 30%.
An OPC has the option to dispense with requirement of holding the AGM.
Is there any threshold limits for an OPC to mandatory get converted into either private or public company?
In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.
What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?
Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
- LLP is a body corporate and a legal entity separate from its partners;
- The LLP will have perpetual succession;
- The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008;
- The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature;
- Indian Partnership Act, 1932 shall not apply to LLP.
- The mutual rights between the partners of LLP are governed by the LLP agreement.
- Renowned and accepted form of business worldwide.
- Low cost of Formation.
- Easy to establish.
- Easy to manage & run.
- No requirement of any minimum capital contribution.
- No restrictions as to maximum number of partners.
- LLP & its partners are distinct from each other.
- Partners are not liable for Act of partners.
- Less Compliance level.
- No exposure to personal assets of the partners except in case of fraud.
- Less requirement as to maintenance of statutory records.
- Less Government Intervention.
- Easy to dissolve or wind-up.
- Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
A minimum of two partners will be required for formation of an LLP. There is no limit on the maximum number of partners.
Yes, a body corporate may be a partner of an LLP.
Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if :
- has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
- is an undischarged insolvent; or
- he has applied to be adjudicated as an insolvent and his application is pending.
Only an individual can be appointed as a 'Designated Partner' and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
Designated Partner's Identification Number (DPIN) is a eight digit numeric number granted to any person intending to be appointed as Designated Partner for the purpose of its identification, on the lines similar to Director's Identification Number (DIN) required for Directors in case of Companies. Every Designated Partner is required to have atleast a provisional DPIN for forming a LLP.
Designated Partners are partners who are responsible for managing the compliance under the LLP Act and Managing Partner are partners , who are managing the business of the Firm and therefore it is not necessary that a Designated Partner is also a Managing Partner & vice versa.
No, Only an Individual or Body corporate can be partner and the definition of Body Corporate does not include partnership in its ambit. However any partner of the Partnership firm in his individual capacity can hold partnership in LLP.
In reference to LLP, contribution can be termed as, what a partner is contributing towards the Limited Liability Partnership for running of his business. Contribution in case of LLP is alike Share Capital in case of Company.
Only the Limited Liability Partnership whose contribution exceed Rs. 25 Lakh or the Limited Liability Partnership whose turnover exceed Rs. 40 Lakh are required to annually get their accounts audited by any Chartered Accountant in practice.
Every LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A Statement of Accounts and Solvency shall be filed by every LLP with the Registrar of LLP every year.
LLP incorporated in India will be assessed as if it is a partnership firm. LLPs are in the same parlance as partnership firms so far tax provisions are concerned and therefore Minimum Alternate Tax and Dividend Distribution Tax will not be applicable for LLP.
No, the profit sharing ratio can be decided as per the LLP Agreement and the same can have the provision of non- profit sharing partner.