FAQ
Company Law & Corporate Advisory
For registering as an MSME, it is imperative to have an Aadhar Number, but you can make a choice with regards to registering with a PAN or without a PAN.
For starters, you need to visit the website “udyamregistration dot gov dot in” (as MSME registration is now known as Udyam Registration for all intents and purposes) and go to the section “For Entrepreneurs Who Are Not Yet Registered As MSME” and enter your Aadhaar Number. Following this, you’ll have an option to proceed either with PAN or without. If you proceed with PAN, your details are automatically verified by government databases and you can fill in your ITR details.
After your PAN details are verified and you click on “Validate PAN”, the Udyam Registration Box will appear where you enter the necessary company/industry details.
If you proceed without PAN and fill the Udyam Registration, make sure to update your PAN and GSTIN details within the designated timeline later.
Once the details are verified and sent, you shall see a “Thank You” message along with your registration number. The MSME certificate has no expiry date as long as the company complies with all the necessary legal and financial norms.
Primarily, it is required by an LLP to file e-form LLP-8 and LLP-11, where the former essentially denotes a statement of accounts and solvency and the latter denotes the annual return of the LLP. Form LLP-11 must be filed on or before 30th May of every year and form LLP-8 must be filed on before 30th October every year. Both the forms are filed with the Registrar of Companies.
Other than these, there are annual income tax compliances which shall be undertaken by the LLP. This includes filing the income tax return under form ITR-5. The due dates vary accordingly, in case if the LLP requires an audit (the due date for the return being 30th September every year) or in case it doesn’t require an audit (30th July every year).
The primary difference between a private limited company and an LLP is the regulatory act which governs the two, where Pvt. Ltd. Companies are governed by the Companies Act, 2013 and LLPs are governed by the LLP Act, 2008.
A point of similarity is that both of these entities offer limited liability, where the private assets of the partners (in case of LLP) and shareholders (in case of Pvt. Ltd. Company) aren’t at risk provided either the company or the LLP goes into any form of debt. The key difference here is that there can be a distinction between shareholders and management (directors, etc.) in a Pvt. Ltd. Company, whereas it is the partners of the LLP who are management personnel as well.
It is relatively cheaper to start and maintain an LLP, while it has limitations where it cannot raise funds from the public and as for a Pvt. Ltd. Company, it is advantageous since it is incorporated as a separate legal entity and it can have its own assets – however, it has more compliances as compared to an LLP and can’t trade its shares publicly. Another aspect of differentiation between the two is that an LLP offers no limit on the number of members, while a Pvt. Ltd. Company limits the maximum number of members to 200. As for number of directors, both types of entities require a minimum of two directors (or two designated partners in case of an LLP) – where there is a limit of 15 directors in a Pvt. Ltd. Company and no limit on the number of partners in an LLP.
Tax Planning
As for Financial Year 2019-20 (or Assessment Year 2020-21), the corporate tax rate in India varies for certain kind of companies and the distinction has been made clear recently via Indian tax laws, in an attempt to make the tax system more streamlined.
For domestic companies/corporates opting for Section 115BAA, i.e., not seeking any particular form of incentives/benefits/exemptions as stated in the said section, the said companies will be taxed at a flat rate of 22% with an applicable surcharge (10%) and education cess (4%) added to this rate, making the effective tax rate to be 25.17%.
As per section 115BAB, new manufacturing companies, set up/incorporated on or after October 1st, 2019 and commencing manufacturing activity up to 31st March 2023 will be taxed at a rate of 15%. The surcharge will be 10% for these companies, with education cess being same across the board at 4%.
Moreover, companies set up/registered on or after March 1st, 2016 in certain manufacturing capacity per section 115BA are also liable to be taxed at the rate of 25%.
Besides the above, all domestic companies/corporates will be taxed at a flat rate of 25% if their total turnover is less than INR 400 crore in FY 2017-18, otherwise they’ll be taxed at 30%. Further, if net income of the companies/corporates is above INR 1 Crore and up to INR 10 Crore, the rate of surcharge will be 7% and above INR 10 Crore, the rate of surcharge will be 12%. The education cess remains at 4%.
Partnership firms and LLPs (Limited Liability Partnerships) are liable to be taxed at the rate of 30% for FY 2019-20 (AY 2020-21).
There will be a surcharge of 12% of taxable income if net income exceeds INR 1 crore. However, the surcharge shall be subject to marginal relief (where income exceeds INR 1 crore, the total amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of INR 1 crore by more than the amount of income that exceeds INR 1 crore).
Health and Education Cess will be 4% of income tax, plus the surcharge.
For starters, it is important to understand what is implied by capital gains. In India, if the sale of any capital asset such as immovable property, listed/unlisted shares, equity, jewelry, mutual funds, etc. results in an income, such income is liable to be taxed under the head if capital gain as per the provisions of the Income Tax Act in India.
There are two types of capital gains – Long-term capital gains and short-term capital gains, which are taxable in the hands of assessee at different rates. The short-term capital gains arise on account of sale of short-term capital assets.
For the purpose of determining whether the assets are short-term capital assets or long-term capital assets, we are required to verify the period of holding of such capital assets. The holding period for a capital asset to be qualified as a short-term capital gain ranges from a period of 1 year to 3 years, based on the kind of capital asset you’re holding. The same along with rates of taxes applicable on such sale of assets are discussed below:
– Securities (other than units) listed on a recognized stock exchange, units of equity-oriented funds/units of UTI, zero coupon bonds, etc. if held for less than or equal to 12 months qualify as short-term capital gains and are liable to be taxed at 15%
– Unlisted shares, land or building or both, if held for less than or equal to 24 months qualify as short-term capital gains and are taxed as per slab rates
– Units of debt-oriented funds, unlisted securities (other than shares), and other capital assets if held for less than or equal to 36 months qualify as short-term capital gains and are taxed as per slab rates
There are also some exceptions to the above rule viz, where the gain arising on account of transfer of assets, which forming a part of block of assets on which depreciation has been allowed under the Income Tax Act, then irrespective of period of holding, such gain is taxable as short-term capital gain. Also, the capital gains arising on account of transfer of an undertaking under slump sale are deemed to be short term capital gains when the undertaking is ‘owned and held’ for less than or equal to 36 months immediately before the date of transfer.
MSME Registration
MSME are classified according the Turnover of the organisation and amount of Investment in Plant, Machinery & Equipment. Both the Conditions must be satisfied in order to be classified in a particular category of MSME definition.
|
CONDITIONS |
MIRCO |
SMALL |
MEDIUM |
|
Investment in Plant, Machinery & Equipment |
Up-till Rs 1,00,00,000 |
> than Rs 10,00,00,000 |
> than Rs 50,00,00,000 |
|
Turnover |
Up-till Rs 5,00,00,000 |
> than Rs 50,00,00,000 |
> than Rs 2,50,00,00,000 |
Hence, you can apply for MSME Registration, if your enterprise has done investment in Plant, Machinery / equipment’s up-till the limits as specified as above besides having Turnover in above mentioned limits. Further, both new and existing enterprises can apply for MSME registration and get the certificate.
Some of the Benefits of Having MSME Certificate or Udyog Aadhaar Certificate
- 100% Collateral Free loans from all banks subject to bank policy.
- Reduction in interest rates from Banks.
- Special consideration on International Trade fairs.
- Waiver in Security Deposit in Government Tenders and Departments.
- 50% subsidy for patent registration.
- Most states government offer subsidies on power, taxes and entry to state-run industrial estates.
- Tax Benefits.
- Business registered under MSME are given higher preference for government license and certification.
- There are many government tenders which are only open to the MSME Industries.
- The MSMED Act, 2006 specifies 45 day credit period for the recipient of any goods or services to pay to the MSME supplier.
- Name of Enterprise
- Nature of Business of enterprise
- Date of Incorporation / start of Business
- Email & Mobile Number of enterprise
- Business address of Enterprise
- Copy of PAN of Enterprise
- Number of Employees in enterprise
- Investment in Plant, Machinery & Equipment
- GST Number of enterprise, if available
- Applicant name
- Copy of Applicant Aadhaar Card & PAN Card
It will take 24-36 hours to complete the entire process and you will get MSME Registration certificate directly on your email.
Trademark
- Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark.
- An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service.
- Letters or numerals or any combination thereof.
- The right to proprietorship of a trade mark may be acquired by either registration under the Legislation or by use in relation to particular goods or service.
- Devices, Including fancy devices or symbols
- Monograms
- Combination of colors or even a single color in combination with a word or device
- Shape of goods or their packaging
- Marks constituting a 3- dimensional sign.
- Sound marks when represented in conventional notation or described in words by being graphically represented.
Term of registration of a trademark is ten years, which may be renewed for a further period of ten years on payment of prescribed renewal fees.
Non-user of a registered trademark for a continuous period of five years is a ground for cancellation of registration of such trademark at the behest of any aggrieved party.
Only the proprietor of a trademark whose trademark has been registered in India can use the symbol ® in India. Using the symbol ® unless your mark has been registered in India is unlawful.
Using this symbol with your trademark simply implies that you claim to be the proprietor of the trademark. There is no prohibition on the use of the symbol ™ in India.
Goods & Service Tax (GST)
- Login to the GST portal
- Go to Dashboard – Services – Registration – Amendment in core fields
- Go to place of business tab and fill in the details of the new place of business.
- Upload the documents such as rent agreement along with electricity bill in case the premises is rented or documents of ownership in case the premises is self-owned.
- Save the application and then submit the same with DSC in case of companies or EVC in case of individuals.
- Once the application is filed, the officer has a maximum of 15 days to either approve the application or raise a query in case of any doubt.
- Once all above steps are completed then the company is ready to conduct its business activity in India.
The Goods and Services Tax (GST) , was introduced in India on 01st July 2017 , with a view to have a “One Nation One Tax” regime. Following taxes have been subsumed in GST:
(A) Taxes levied and collected by Centre :
1. Central Excise duty
2. Duties of Excise (Medicinal and Toilet Preparations)
3. Additional Duties of Excise (Goods of Special Importance)
4. Additional Duties of Excise (Textiles and Textile Products)
5. Additional Duties of Customs (commonly known as CVD)
6. Special Additional Duty of Customs (SAD)
7. Service Tax
8. Central Surcharges and Cesses so far as they relate to supply of goods and services
(B) Taxes levied and collected by State’s/UT’s :
1. State VAT
2. Central Sales Tax
3. Luxury Tax
4. Entry Tax (all forms)
5. Entertainment and Amusement Tax (except when levied by the local bodies)
6. Taxes on advertisements g. Purchase Tax
7. Taxes on lotteries, betting and gambling
8. State Surcharges and Cesses so far as they relate to supply of goods and services
The GST registration certificate is issued in Form GST REG-06. The GST Registration Certificate includes the GST Number (GSTIN) and key details of the registered business name, address, and date of registration of business are displayed. The second page shows the details of additional place of business and the third page shows the detail of person in charge of the business.
The process to get the GST registration certificate is as follows :
1. Visit GST India Protel at http://www.gst.gov.in;
2. Click on the “Login” button;
3. Enter the ‘Username’ and ‘Password’ along with the captcha code in the relevant field and click ‘Login’;
4. On the dashboard, go to ‘Services’ then ‘User services’ and then click on ‘View/Download Certificate’;
5. Click on ‘Download’ icon on the screen to download the GST certificate.
Yes, In GST regime export of goods and services is considered as Inter- state Supply and as per section 24 of CGST Act every person who engages in inter state supply of goods or services is required to take compulsory registration. However as per Notification No .10/2017- Integrated Tax dated 13th Oct 2017 central government has exempted the inter state supplier of taxable service having aggregate turnover not exceeding INR 20 Lakh from the compulsory requirement of registration . Further limit of INR 20 Lakh will be taken INR 10 lakh in case of special category state.
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