OUTSOURCE BOOKKEEPING FOR MSME

OUTSOURCE BOOKKEEPING FOR MSME

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Micro, small & medium enterprises (MSME) is expected to be the lead contributor in the Indian economic growth and taking it to $5 trillion dollar mark. MSME is one of the fastest-growing sectors not only in India but across the globe. Most of the developed economies such as UK, Germany or USA were having one thing in common that they focused on their MSME Sector and the ways to bring it in the mainstream economy.

There are many functions which are beneficial for an MSME they are outsourced. One of the business management functions which most of the MSME’s outsource is the online bookkeeping services, online accounting services. Online bookkeeping services & accounting services which demands utmost specialization which certain MSME’s lack and this develops the dire need for outsourcing bookkeeping for MSME’s.

Accounting & Auditing

How outsourcing bookkeeping services for MSME’s will help?          

1. Resource planning: Resource is the baseline where every business operates. So proper resource planning should be done with minimal wastage and increase the efficiency of the enterprise because it will make it easy for you to bring economies of scale for your business.

2. Capital adequacy measurement: Not just MSME registration, a business how big or small requires some sort of capital influx. Arranging capital is the most difficult phase and many dream of an MSME registration ends here. But now the environment has changed and even the government is planning to make MSME the phase of Indian economy.

3. Managing accounts books: Online bookkeeping services will make it easy to maintain and manage your company’s books of accounts. Since the bookkeeping is the mandatory requirement under different statutory laws which need to be fulfilled such as:

I. Companies act, 2013

  • Section 128 of the companies act, 2013 specifically mentions the books of accounts for a period of 8 years immediately preceding the current year.
  • Section 25 companies that are solely formed as “Non-profit companies” are required to keep books of accounts for a period of not less than 4 years.

II. Income tax act, 1961

  • If the turnover from business/profession is more than INR 25, 00,000 or the income from business/profession exceeds INR 2, 50,000 in any of the 3 preceding financial years, then it is mandatory on the part of the assessee to maintain the records.
  • Section 6F specifies the list of various books that need to be maintained as per the Income tax act, 1961 viz. Cashbook, general ledger, copy of bills & receipts.
The books should be maintained for a period of 6 years from the relevant preceding year.

4. Improves decision making: With proper analysis of the accounts comes better decision making power. If you does not possess the books of account of your business then it might hamper your decision making power which will you and your business to grow. Hence your decision making also depends on the bookkeeping. Professional bookkeeping service will help improve the quality of accounts you maintain and makes the analysis easy.

5. Ease in reporting: Investors want to know the company’s financial results to be able to measure its investment value. Exactly this is what financial statements do. The balance sheet, statement of sales, and statement of cash flow all display the importance of your company.

Financial statements are the result of bookkeeping. Bookkeeping helps investors to keep the details up-to-date and available. Investors should be able to make smarter, well-educated choices that are essentially for bookkeeping purposes. Bookkeeping is not only about existing investors but also about potential investors.

Online bookkeeping & accounting services are the need of the hour not just for MSME but it is an essential service for every company which needs to comply with different statutory laws in India.

How CAonWEB can help you in online bookkeeping & accounting services

  • Outsourcing bookkeeping & accounting services with CAonWEB will include different packages according to your business needs and your accounts will be reviewed by bookkeeping & accounting experts.
  • Outsourcing bookkeeping & accounting services cut your capital expense as you no longer need to bear the overhead cost which is associated with in-house bookkeeping & accounting services.
  • Outsourcing bookkeeping & accounting services will increase your time management efficiency as you no longer have to maintain full-time staff for the same.
  • Outsourcing bookkeeping & accounting services deliver real-time accounting which is much more accurate.

Constraints in outsourcing bookkeeping & accounting services-

  •  Reliability and trust
  •  Third-party cost
  •  Accessibility

CAonWEB makes all these constraints our strength; we have happy & satisfied clientele which is associated with us since 2012 and increasing day by day; our costing for bookkeeping & accounting services is much less than having an in-house bookkeeping & accounting department since we offer different types of packages which will suit your business; 

How do you get 12a and 80g Certificate Online?

How do you get 12a and 80g Certificate Online?

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12 A and 80 G certificate online

Income Tax Act in India contains provisions which say that donors get the tax benefit when they support NGOs financially. NGOs and other nonprofitable organizations in order to provide tax benefits to donors needs to get itself registered under 12A and 80G.

Overview of 80G and 12A Registrations

 As NGO and the nonprofitable organization attracts a large number of individual and corporate businesses for charity purposes who are looking to save taxes, therefore it is important for NGOs to get 80G and 12A registration.  Let’s understand these provisions one by one

So why does an NGO need 80G and 12A registration?

1.      can avail income tax exemption by getting itself registered and fulfilling certain other formalities, but such registration does not provide any benefit to the person making donations.

2.      To provide income Tax benefits to the “donors”, all NGO’s must apply for 80G & 12A certification. If an NGO gets itself registered under section 80G & 12A then the person or the organization making a donation to the NGO will get a deduction of 50% of donation amount from taxable income.

3.      An NGO is applicable for government funding only if it is registered under 80G & 12A.

4.      A newly registered NGO can also apply for 80G & 12AG registration.

5.      NGO does not have to pay tax for the entire lifetime if it gets registered under section 80G & 12A.

6.      An NGO can apply for 12A certification and 80G certifications just after the registration of an NGO.

7.      Decision: – Is an 80G certification required for your NGO to attract more donors.

 

The registration process may take time up to 3 to 4 months. The Registration done once is valid for a lifetime.

What is 80G Registration for an NGO?

Under the Income Tax Act, some donations are eligible for a tax deduction under Section 80G. NGOs or other non-profits must have 80G certificates in order to qualify as an organization that can pass on tax benefits.

The application is carefully checked by the IT Department before being granted such a certification. It is obvious due to the fact that fake claims might come up by fraudulent organizations. Registration under 80G is processed by the Commissioner of Income Tax. The registration process may take time up to 3 to 4 months. The Registration done once is valid for a lifetime

Eligibility for 80G Certification

Not all NGOs non-profit making organizations eligible for 80G certification. There are certain rules which need to be followed to obtain it. So here are some important criteria:

1.      As a non-profit organization, if the entity is involved in any profit-making activities, it will have to segregate the profit-making and nonprofit making activities.

2.      Charities with one community-focused or certain religious or business purpose are not granted 80G certification. Also, gifts made to trusts operating outside India (a foreign trust) are not eligible for a tax deduction.

3.      The donations received should not be misused on any account or used for any other purpose other than for the charitable purpose as prescribed in the rule of NGO, not even to be used within the organization but only for the charitable purpose, it shall be used. Proper accounting of receipts and expenditure, auditing is done in the process of granting registration.

So make sure you have the right Chartered Accountant who is helping you. If your CA has prior experience in NGO work, then only go for it.

4.       As mentioned in the above point, the accounting books and all transactions should be kept accurate as proof before applying for an 80G certificate.

These documents will be scrutinized by the IT department thoroughly before 80G certification is issued. Therefore having an experienced chartered accountant is this process is crucial.

Documents Required for 80G Registration

1. A detailed list of welfare activities

2. PAN card of NGO and Certificate of Incorporation

3. Form 10G

Click – Apply for NGO Registration

4. Memorandum of Association, (if Society or Section 8 company)

5. Trust Deed (if trust), List of Board of Trustees

6. Copy of utility bills (Water / Electricity/  House Tax Receipt-not older than 3 months)

7. NOC (No-Objection Certificate) from the property owner, if the office is located on a rented property

8.List of donors along with their PAN and complete address;

12A registration of NGO

In order to avail exemptions under Income Tax Laws, NGOs and non-profit making organizations must have a 12A certificate. So the purpose of the registration is to avail exemption from the payment of income tax. Section 8 company, Trust or society, must apply for a 12A certificate in order to claim tax exemption as provided by income tax laws.

Eligibility for 12A Registration

  1. If an NGO is carrying on activities related to profit-making activities then the benefits granted under this section are restricted. In such cases, registration is granted exclusively if the receipts from the trade activity are less than twenty percent of the total receipts of the organization
  2. Also, it may be noted that 12A Registration is not applicable for Private or Family Trusts. The activities of the NGO should be genuinely for the benefit of the public.
  1. The accounting books and all transactions should be kept accurate as proof before applying for an 80G certificate. These documents will be scrutinized by the IT department thoroughly before 80G certification is issued. Therefore having an experienced chartered accountant is this process is crucial

Documents Required for 12A Registration

1.      Memorandum of Association, (if Society or Section 8 company)

2.      Trust Deed (if trust), List of Board of Trustees

3.      A detailed list of welfare activities

4.       PAN card of NGO and Certificate of Incorporation

  1. Annual financial statements for three preceding financial years

6.      Copy of utility bills (Water / Electricity/  House Tax Receipt-not older than 3 months)

7.       NOC (No-Objection Certificate) from the property owner, if the office is located on a rented property

Frequently Asked Questions

What are the eligibility criteria for any NGO to obtain 12A and 80G certificates?

1.      NGO income or assets shall be exclusively for the purpose of charity.

2.      Proper books of accounts of the NGO should be maintained, including all receipts and expenditures.

3.      NGO should not be formed with the benefit of a specific religious community or caste.

4.      NGO should have the core objective of charitable purposes, and the whole income should be from donations. If in case, NGO has a business income then the trustee of the NGO should maintain separate books of accounts to ensure that NGO should not divert donations received

What is the 80G Registration Procedure?

1.      80G certificate application is submitted to the Commissioner of Income Tax for further scrutiny

2.      Once the applicant submits the form and the required documents for 80G registration, the next step is the on-the-premise inspection of the Income Tax department. During the inspection process, income tax department officials might ask for additional documents and evidence.

3.      On successful verification and scrutinizing of documents and evidence, the 80G certificate is granted

What are the documents required for 80G Certificate & 12A Registration?

1.      Copy of PAN Card of the organization.

2.      Duly filled in Form – 10G.

3.      Trust Deed or COI depending on the type of NGO

4.      List of donors along with their address and PAN.

5.      List of the governing board of trustee’s members along with their contact details

6.      Address proof of Registered office

Can 80G and 12A be registered online?

Yes, You can simply get in touch with CAonWEB and get everything done online at the best price with experienced CA’s in India.

Related Blog- How To Set Up A NGO In India?

DUE DATES OF ONLINE ITR FILING?

HOW TO TACKLE THE APPROACHING DUE DATES OF ONLINE ITR FILING?

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For some online ITR filing is more like a stressful issue while for some it is not. Ever wondered why? The only thing which differentiates both is the income tax consultant, a financial expert who is guiding you throughout your financial year. Finding the best CA Services online was a difficult task up till now, but now it’s pretty much easy to find an income tax consultant in your area and get your online ITR filing done, before the due dates dodging every scope for non-filing of income tax return on time.

DUE DATES OF ONLINE ITR FILING:

Income tax return is done via a prescribed form which specifies the income earned throughout the financial year and taxes paid on it thereafter. This information on income tax return filing must be provided in the format prescribed to the income tax department before the due dates. Since income tax return filing requires calculations to be done, therefore it’s a sheer possibility that there are some miscalculations or some over or underestimations made. This is when you will have to focus on online ITR filing.

Online ITR filing is an electronic mode of ITR filing which through which a taxpayer can carry forward they lose or claim refunds from the income tax department. There are different ITR filing forms which are associated with different categories assesse?

ITR FORMS PARTICULARS
ITR-1/Sahaj Individuals having income from salary, House property & other sources Total income up to 50 lacs.
ITR-2 Individuals/HUF not carrying business or profession under proprietorship.
ITR-3 Individuals/HUF earning income from proprietorship
ITR-4/Sugam Opting for Presumptive tax scheme
ITR-5 LLP, Firm, Trust, Co-operative society etc. Those covered under ITR-7 shall not fill this form.
ITR-6 Companies other than those claiming exemption under section 11 of Income tax act.
ITR-7 Entity (person or company) required to furnish details u/s 139 [4A, 4B, 4C, 4D, 4E] of Income tax act, 1961

You can make your IT Return filing much more effective and less burdening process if you follow the checklist: (1) Don’t forget the due date of online ITR filing. (2) Plan your investments beforehand. (3) Find Online CA Service. (4) E-Verification of IT Return. (5) ITR Form which you are eligible for. (6) Documents required for online Income tax return filing. (7) Check your online ITR filing status.

FREQUENTLY ASKED QUESTIONS (faqs)

Q       What is the procedure of online ITR filing?

*  Go to e-Filing portal on Income tax website [www.incometaxindiaefiling.gov.in]

*   Enter PAN Card number which is the user ID, Password, Captcha code and then ‘Login’.

*   Tap on the ‘e-File’ and then ‘Income Tax Return’ link.

* Select Assessment Year, ITR Form Number, Filing Type, Submission Mode and Submit Online.

*   Click on ‘Continue’

* E-verify your IT Return (ITR)

*   OFFLINE METHOD (Paper verification)

*    ONLINE METHODClick on ‘Preview and Submit’ button, Verify all the data entered in the ITR.

*   Submit the ITR.

DUE DATE OF ONLINE ITR FILING?

Q       What is the last date for online ITR filing for FY 2019-20?

Status of Taxpayer Due date (Assessment year)
Individuals/HUF/Association whose accounts does not requires to be audited July, 31st
Persons whose accounts needs to be audited: –          Company –          Partner of a firm –          Individuals September, 30th
Assessee who needs to furnish report under section 92E November, 30th

Q       How to check the status of your Income tax return?

1.  Checking your online ITR filing status is a very easy process, just follow the steps with the help of reference links mentioned foreside:

2. Go to Income tax website [https://www.incometaxindiaefiling.gov.in/home]

 3. Find “ITR Status” on the left side vertical bar menu

 4. Click on “ITR Status”

5. A new window of “ITR Status” will pop-up [https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/ITRStatusLink.html?lang=eng]

6.  Fill in your details such as PAN card number, Acknowledgment number & Captcha.

7. Click “Submit”

Q       What are the documents required for Income tax return filing?

·         PAN Card: PAN is a ten-digit alphanumeric number which is issued to an individual by the income tax department.

·         Form 16 issued by the employer: Form 16 is divided in 2 parts viz. Part-A & B. Part-A contains the details of tax deducted/deposited in the central government account. Part-B contains the details of the salary paid and any other income tax deducted.

·         Interest income documents: Bank statement, Interest statement on fixed deposits, TDS Certificate & any other form which specifies the interest income which you have earned in the previous year.

·         Form 26AS: 26AS is an annual consolidated credit statement which contains all information of tax being deducted on your income throughout year. This is an auto generated form which an individual can download from the income tax website.

·         Document required to claim the expenses: Certain deduction depends on the actual expenditure being done on the same therefore keeping the track of these expenses is needed such as:

–          Contribution to provident fund

–          Children’s school fees

–          LIC premium

–          Stamp duty/registration charges

·         Other documents: Interest on housing loan, education loan and stock trading statement which will specify your tax on capital gains.

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ITR Filing

Mobile & E-Mail Validation Before ITR Filing

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Income tax department has released an advisory for all the income taxpayers that they must validate their mobile numbers & E-Mail ID before online ITR filing. This advisory came up in the wake of many online ITR filing being declined rather they were not submitted properly. It is much to your convenience because Mobile & E-Mail ID validation before online ITR filing will help in smooth functioning of your business with any hurdle. You will receive all income tax updates on time, Notifications, Due dates, Circulars/Notice etc.

What is ITR Filing?

Income tax return (ITR) is form in which the assessee furnishes the information related to his Income in the previous year to the Income Tax Department. ITR should be filed before the due date or else you will miss on to your Income tax return. There are different ITR Forms which an individual needs to fill depending on the source of Income of the assessee.

FORM PARTICULARS
ITR-1/Sahaj Individuals having income from salary, House property & other sources Total income upto 50 lacs.
ITR-2 Individuals/HUF not carrying business or profession under proprietorship.
ITR-3 Individuals/HUF earning income from proprietorship
ITR-4/Sugam Opting for Presumptive tax scheme
ITR-5 LLP, Firm, Trust, Co-operative society etc. Those covered under ITR-7 shall not fill this form.
ITR-6 Companies other than those claiming exemption under section 11 of Income tax act.

Why the need of Mobile & E-Mail ID validation before online ITR Filing Arise?

Income tax department has identified various cases where the default Mobile & E-Mail ID of the chartered accountants were provided instead of the actual income taxpayers because of which they are unaware of the government scheme, notifications, updates, notice & circulars. Since the access of the Income tax account is being held by their Chartered accountants the actual income taxpayers remains unaware.

To know more visit: What is Advance Tax and Due Dates for Advance Tax Payment

How Mobile & E-Mail ID validation before online ITR Filing is done?

This is a much simpler process and anyone can do this validation within 5 minutes.

  1. Login [http://www.incometaxindiaefiling.gov.in/home]
  2. On the top right corner there are three options
  3. New to e-filing
  4. Registered user
  5. Forgot your password
  6. Choose the option as per the requirement.
  7. Fill in your Mobile number & E-Mail ID.
  8. You will receive an OTP
  9. Put in the OTP there and your Mobile & E-Mail ID is validated.

[Note: In case you change your Mobile number or E-Mail ID in future, don’t forget to validate it and on your income tax portal]

Company Registration

How to Register a Company in India?

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Company registration in India has now become very easy and convenient. Just need to follow the 4 simple steps:

1- Acquire your Digital Signature Certificate(DSC) within the stipulated time.
2- Get your Director Identification Number (DIN) at the earliest.
3- Register your entity on the MCA Portal as New user registration.
4- Get the Certificate of Incorporation delivered at your doorstep.

With this, we have tried to cover all the basics of how to register a company.
If you still need any assistance on company registration, don’t stress over it, and let our team of experts guide you.  

Company Incorporation

MCA Introduces New Company Incorporation E-Form Spice+

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To improve the ease of doing business in India, Ministry of corporate affairs (MCA) has recently come out with a new and updated version of SPICe form viz. SPICe+ (SPICe plus form). This new MCA form will help the new companies by making the complete process of company registration easy & convenient for them.

SPICe+ will be applicable from 15th February 2020.

How Spice+ Is Different From The Older Version?

SPICe+ offers a bucket of 10 services with an integration of 3 central government ministries & departments viz. Ministry of corporate affairs (MCA), Ministry of Labour & Ministry of finance and Government of Maharashtra. It helps in limiting the procedural constraints for company registration in India and ultimately saving onto time & cost involved in new company registration. SPICe plus form also helps in ease of doing business in India

Features of SPICe+

1.    Integrated web form.

2.     SPICe+ form is divided in two parts viz. Part-A & Part-B.

3.     Part-A: Reservation of Name (for new companies)

4.     Part-B: offering multiple Services such as:-

  • Company incorporation
  • Director identification number (DIN)
  • Tax deduction/collection account number (TAN)
  • Permanent account number (PAN)
  • Employee provident fund organization (EPFO) Registration
  • Employee state insurance corporation (ESIC) Registration
  • Professional tax registration (Maharashtra)
  • Compulsory opening of the company’s bank account
  • GST Identification Number (GSTIN)

5.  Users have the complete liberty of filling Part-A first, reserve the name for their company and complete Part-B afterward OR user can file Part-A & B together at one go for new company registration.

6. Under SPICe+, a new User-friendly dashboard is created for the convenience of the users.

7.  A new Reserve unique name (RUN) service option will be applicable from 15th February 2020 (Only for existing company)

8. On-screen filing and real-time data for new company registration

9. Information entered is saved and can be modified in the future (in case of error).

10. Once SPICe+ the form is filled online, it has to be converted into PDF for affixing Digital signature certificate (DSC).

11. Digitally the signed application must be uploaded back on the portal, with the linked forms.

Read other Blog: Steps for starting a business in India?

FREQUENTLY ASKED QUESTIONS (FAQ)

Q      What is SPICe+ or SPICe plus?

Ans. SPICe+ (Simplified proforma for incorporating a company electronically) is a comprehensive & integrated web form, which is a new initiative by the MCA, Government of India for ease of doing business in India.

Q      Who can file SPICe+ form?

Ans.  Following types of companies need to fill SPICe plus form before new company registration:

  • Private limited company
  • Public limited company
  • One person company
  • Section (8) companies
  •  Any other company

Q      When one should file SPICe+ form?

Ans. One must file SPICe+ form before company incorporation and it is applicable from 15th February 2020.

file-director-kyc-2020

File Director KYC 2022 | Filing of DIR-3

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WHO HAS TO FILE e-FORM DIR-3 KYC?

As per the Ministry of Corporate Affair’s announcement, any director who has been allotted a DIN on or before 31st of March 2022 and whose DIN is in approved status, will have to submit his KYC details to the MCA. The purpose of filing form DIR-3 KYC is to ensure those correct particulars of an individual holding DIN is available with the Ministry of Corporate Affairs. It is mandatory compliance that needs to be fulfilled by all the directors.

The Due Date to File this form for FY -2021-22 is 30th September 2022.

For instant filing call us at +91-7065818801

WHAT IS DIR-3 KYC?

As per the General circular issued by the Ministry of corporate Affairs dated 27.06.2021

Every person who has already filed DIR-3 KYC can complete the KYC through a simplified web-based verification form as the data will be prefilled as per their records with the Ministry.

HOW CAN ONE FILE DIR-3 KYC?

E-Form DIR-3 KYC can be submitted only when there is no change in the erstwhile filed details of the Director. The webform is a pre-filled form using the particulars filed in DIR KYC and can be filed by providing the OTP on the respective mobile and email id of the director.

  • IEC Code Online Registration

If there is any change in the particulars filed with the Ministry the same needs to be updated by filing Form DIR- 6 once the form is approved one can file E-form DIR KYC.

WHAT IS DIRECTOR IDENTIFICATION NUMBER?

DIRECTOR IDENTIFICATION NUMBER is a unique identification number. This is a one-time process. Any person who intends to become a director in a Company has to obtain a Director Identification Number.

LIST OF DOCUMENTS REQUIRED:

The following documents are required for filing your DIR 3 -KYC form:

  • Permanent Account Number (PAN)
  • Voters Identity card/ Driving License
  • Passport (mandatory if DIN holder is a foreign national)
  • Aadhaar card
  • Personal Mobile and
  • Personal Email ID
  • Digital Signature of director (applicant)

The above-mentioned documents need to be attested from Practicing Professionals like Chartered Accountant, Company Secretary or Cost Accountants. In the case of Foreign Nationals, the above-mentioned documents need to be apostilled/ attested by the prescribed authority.

WHAT HAPPENS IF KYC IS NOT FILED WITHIN THE DUE DATE SPECIFIED?

In case, the director who is supposed to file the e-Form DIR KYC does not file it by the end of the due date, the department will mark the DIN of such director as ‘Deactivated’ with the reason of ‘Non-filing of DIR-3 KYC’. The director’s data will not be prefilled in the e-forms required to be filed with ROC and can lead to non- compliance.

A penalty of Rs. 5000/- will be levied for late filing of DIR KYC.

For any queries and services related to this, you can visit our website of caonweb and contact our team of experts.

FAQs – Director KYC

Question:- Time period for validity of OTP?

Answer:- OTP sent on email and Mobile shall be valid for 15 minutes.

Question:-If foreign director resident in Indian can use Indian Mobile No.?

Answer:-Yes, if a foreign director is resident in India, can use Indian Mobile No.

Question:-What is the due date of DIR-3 KYC is for FY 2019-20?

Answer:-Due date of filing of DIR-3KYC is 30th Sep 2022.

Question:- What are the consequences of not filing DIR KYC?

Answer:- The DIN of the director shall be deactivated due to non- filing of KYC.

Question:-Whether DIRECTOR KYC is mandatory for Disqualified directors?

Answer:- Yes, this procedure is mandatory for Disqualified directors too.

Question:-What is the late fees of filing DIR-3KYC after the due date

Answer:-The late fees of filing DIR-3KYC is Rs. 5000.

Question:- Whether DIR KYC has to be filed by the person who had already filed the form last year?

Answer:- The director can file DIR KYC by providing Email and mobile OTP only in cases where there is no change in particulars.

Question: A person has Din but is not associated with any Company or LLP is he required to file DIR KYC?

Answer: YES, every person who has DIN needs to file DIR 3 KYC irrespective of the fact whether the person holds directorship or not in the Company or LLP.

Related Blog – How do I verify my Director’s KYC?

startup registrations

Top 5 Reasons Why You Should Register Your Company

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How can one own a business which does not legally exist, that’s where this article will help you as it answers the most vital question: Why you should register your Company. In the initial stage entrepreneurs focus on the development of their unique product/ service that they intend to offer, but market research has proven that registering the Company is a necessity and not an option as it is the determining factor in the success of any business. It is advisable to register your Company keeping in mind the following factors: 

  • Establish a presence:

In a competitive market like India, establishing a Company’s presence can be a big challenge. Due to an increased number of startup registrations, it is very important to register your Company. Company registration gives a unique identity to the business. Once a new company registration is done no other company can be registered with the same name all over India, hence it gives establishes a presence and gives a unique identity to the business. New company registration also adds to the credibility of the Company.

  • Banking operations:

To operate any business irrespective of its scale of operations one requires a current account to separate personal and business finances. To open the bank account registration documents, certificates, etc. need to be attached with the application which are further cross verified by the bank. Similarly for getting loans the banks have a lengthy documentation procedure which can only be fulfilled if the company is registered and compliant. For a registered Company there is an increased access to funding sources as it is highly preferred by investors.

Also Read this blog: What is a Sec 8 company under Companies Act, 2013 with basic key points

  •  Limited Liability:

The biggest reason why people opt for company incorporation is limited liability. As the company is treated as a separate legal entity, the Company protects its owners from personal liability. This means that if the company is sued, or incurs penalties, debt its members are not liable to satisfy the claims with their personal assets. The owners/ shareholders/ promoters are only liable upto the amount invested in the company, therefore the company provides limited liability as it has a separate identity.

Now Register Your Company In Dubai

  • Makes you look serious and contract ready:

Once you enter the market with a registered business it adds to the brand building of the new company registration. It also increases the chances of getting contract as the documentation and registration is complete, and enables discounts in case of suppliers, as everyone prefers to do business with a registered Company. Even for applying for tenders one needs to have a registered entity whether its government tenders or commercial tenders.

Read Other blogs: REGISTRATION REQUIREMENTS OF OPENING A BRANCH OFFICE IN INDIA

  • Perpetual Succession:

Any change in the ownership of the Company does not affect the status of the Company. The Company goes on irrespective of its owners/ promoters/ shareholders. Even death, insolvency, insanity of any member of the Company does not affect its continuity. New Company registration is an asset for the owners, it can be passed down, sold, transferred for running the business.

Company registration is a big step and brings with it a lot of compliances, and filing obligations but at the same time it offers huge benefits which are incomparable.

Get  Import Export Code Online on lowest cost.

chartered accountant

IMPORTANCE OF CONSULTING CHARTERED ACCOUNTANTS/COMPANY SECRETARIES FOR TAX MANAGEMENT

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Institute of chartered accountants of India (ICAI) is authorized to certify the professional chartered accountants (CA) having requisite knowledge about all the aspects of finance, accounting and IT. Whereas Institute of company secretary (ICSI) is authorized to certify company secretary in India having appropriate knowledge of business/corporate law etc. which will help in smooth functioning of the business.  Both these professional qualifications have a different genre of specialization which cannot be supplemented by the other.

Being a Chartered Accountant (CA) is nothing less than a doctor. Like doctor is the specialist of a living being in the same way a Chartered Accountant (CA) is a financial specialist. Like a sick person has to visit a doctor for check-up or advice, it is a financial one should visit if he is facing any issue in his business, need some advice regarding their investments, filing of ITR, GST etc.

Get a CA at affordable price

Since we all know that India is an emerging economy and we are aspiring to become $5 billion economy by 2024, giving a boost to “Make in India” all these dreams would be fulfilled only with the help of the Chartered accountant/company secretary. There are various services that a tax consultant (chartered accountant/company secretary) provides to their clients which helps them in managing their tax related issues.

  • Investment Advise
  • Financial advisory
  • Management consulting service
  • Due diligence service
  • Forensic audit
  • Project financing
  • Compliance laws
  • Timely filing of ITR, GST etc.
  • BookKeeping
  • Auditing etc.
  • Authorized signatory

A chartered accountant plays an important role in bringing sustainable growth in the organisation and most effective & efficient use of resource, with minimal waste and maximum productivity. We can say that CA/CS & business firms are like inseparable twins which cannot exist without each other. For example: A business firm cannot work efficiently without the consultation of CA/CS and vice-versa.

Consulting a chartered accountant is very essential for your business because of many reasons-

  1. Financial viability: ability to generate sufficient funds so as to meet the requirements of the project; be it long term or short term, capital intensive or working capital requirement.
  • Business valuation: Most appropriate valuation of a business can only be done by an expert who is qualified and well trained. Talking about the business environment in India a CA is the right candidate for this work.
  • Project analysis: Before starting a new project, a complete market and competitor’s analysis must be carefully done before making that project a reality; therefore a CA is the right choice for project analysis part.
  • Capital structuring: There must be a balance between the equity and debt components of an organization which is decided by a CA depending on the type of business.
  • Legal representation: A CA could possibly be a legal representative of you in any court in income tax/GST or tax related matter where he has authorized your returns.

To know more read: POPULAR CHARTERED ACCOUNTANTS (CA) SERVICE PLATFORMS IN INDIA

Consulting a company secretary is very essential for your business because of many reasons-

  1. Link between management & other stakeholders: since management and other stakeholders are not directly in touch with each other that’s when a company secretary comes into picture and works to bridge the gap between the two important parties.
  • Compliance norms: It is the duty of company secretary to look into compliance related norms before taking in any decision for the organization.

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Company incorporation

What is a Sec 8 company under Companies Act, 2013 with basic key points

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COMPANIES ACT, 2013

Sections (8) of companies act, 2013 deals with the formulation of companies with charitable objects such as promotion of art, science, commerce, sports, education, research, welfare, without adding the words “limited” or “private limited” to the name of the new company registered.

1. The satisfaction of central government is necessary, that a person proposed to be registered as limited liability Company (LLC) under this act.

  • Includes the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment etc.
  • The profits or income of new company registered will be used for promoting objects of company.
  • The Central Government may issue license on such condition as it deems fit; allow it to be registered as a limited company.

2. Company incorporation shall enjoy the privileges and are subject to all the obligations of limited companies.

3. A firm can become a member of the new company registered.

(i) Once the new company registered under this act; are not liable to alter the memorandum or articles without prior permission of central government.

(ii) Conversion into some other form of company incorporation is only possible after complying with such conditions as prescribed from time to time.

4. Revocation of licence: Central government may revoke the licence if the company contradicts with any of the requirements mentioned under this section or in a manner violative of objectives of the company or prejudicial to the public interest, direct the new company registered to convert its status & change its name.

5. Subsequently, when the licence is revoked and the Central Government is satisfied that it is essential in the public interest that the new company registered should be amalgamated/wound up with another company incorporation under this, then the Central Government may provide for such amalgamation to form a single company with such features as prescribed by the government in the order.

{Note: Reasonable opportunity of being heard must be given}

6. Winding up/Dissolution of a company registered under section (8) companies act, can be transferred to another company registered under this section subject to certain conditions as the Tribunal may impose, or maybe sold and proceeds will be credited to the Rehabilitation and Insolvency Fund formed under section 269.

7. Amalgamation between companies could be done only if both are registered under the same section of the act, having similar objects.

8. Any default in complying with the requirements specified under this section, be punishable with a fine which shall not be less than 10 lakh rupees extending up to 1 crore rupees and the directors/officers of the company who found guilty shall be punishable with imprisonment for a term which may extend to 3 years or fine not be less than INR 25,000 extending to INR 25 lakh or both.

Read Other blogs: REGISTRATION REQUIREMENTS OF OPENING A BRANCH OFFICE IN INDIA

KEY HIGHLIGHTS OF COMPANIES ACT, 2013

Several new features were introduced in the Companies act, 2013 which makes it unique from the companies act, 1956. Some features are discussed below:

1. COMPANIES

(i) One Person Company incorporation: Companies act, 2013 brings relief for the new generation entrepreneurs who are not willing to share the stake in their company with anyone. Now an individual can form a single person company which was not possible earlier. Now the foreign investor can also set up wholly-owned private subsidiary in India. Hence it will promote foreign investment in India.

(ii) Small Company incorporation: Companies other than the public company having a paid-up share capital of not more than 50 lakh & turnover does not exceed 2 crores.

{Note: This will not apply to holding/subsidiary, companies registered under section (8) of companies act, 2013 or any company formed under special act}

(iii) Dormant Company incorporation: Earlier dormant company was tagged with a sign of caution, but this situation has done away with in company act, 2013. Now a dormant company can be formed for holding assets or intellectual property subject to the company not having any significant transactions.

(iv) Associate Company incorporation: A company having “significant influence” on the other without being a subsidiary/holding company. Here the term “significant influence” can be termed as a company having a stake of at least 20% or more.

(v) Private Company incorporation: Total number of shareholders in a private company has been increased from 50 to 200.

2. OBJECT CLAUSE

Previous companies act, 1956 requires the object clause to be classified into 3 categories viz. The main object, Ancillary object & other objects; reason for such condition was to restrict the company from commencing any other business. However, such a requirement has been done away with by coming of companies act, 2013.

Know about Section 8 Company Registration

3. PROMOTER

“Promoter was nowhere mentioned in the previous companies act. However, it was extensively used under the Companies act, 2013. A promoter is a person who is named such under any annual return.

4. BUY-BACK SECURITIES

Under the new companies act, there is no buyback of securities within one year from date of closure of the previous buyback. This period is termed as “cooling off period”. Further, if a company is a defaulter (loan), then the company incorporation shall compulsorily have to wait for 3 years after repaying the entire outstanding amount.