SETTING UP BUSINESS IN INDIA BY FOREIGN COMPANIESA foreign
company planning to set up business operations in India has the
following TWO options:
1. AS AN INDIAN COMPANY
A foreign company can commence operations in India by
incorporating a company under the Companies Act, 1956 through:a.
Joint Ventures; orb. Wholly Owned SubsidiariesForeign equity in
such Indian companies can be up to 100% depending on the
requirements of the investor, subject to equity caps in respect of
the area of activities under the Foreign Direct Investment (FDI)
policy. Details of the FDI policy, sectoral equity caps &
procedures can be obtained on a specific request.(Click here for
making a specific request).
1. a) Joint Venture With An Indian PartnerForeign Companies can
set up their operations in India by forging strategic alliances
with Indian partners.Joint Venture may entail the following
advantages for a foreign investor: Established distribution/
marketing set up of the Indian partner Available financial resource
of the Indian partners Established contacts of the Indian partners
which help smoothen the process of setting up of operations
1. b) Wholly Owned Subsidiary CompanyForeign companies can also
set up wholly owned subsidiary in sectors where 100% foreign direct
investment is permitted under the FDI policy.
Incorporation of CompanyFor registration and incorporation, set
of applications have to be filed with Registrar of Companies (ROC).
Once a company has been duly registered and incorporated as an
Indian company, it is subject to Indian laws and regulations as
applicable to other domestic Indian companies.Click here for a flow
chart of steps involved in formation of a companyClick here for
Company Formation in India
2. AS A FOREIGN COMPANY
Foreign Companies can set up their operations in India through:
Liaison Office/Representative Office Project Office Branch
OfficeSuch offices can undertake any permitted activities.
Companies have to register themselves with Registrar of Companies
(ROC) within 30 days of setting up a place of business in
India.
2. a) Liaison Office/ Representative OfficeLiaison office acts
as a channel of communication between the principal place of
business or head office and entities in India. Liaison office
cannot undertake any commercial activity directly or indirectly and
cannot, therefore, earn any income in India. Its role is limited to
collecting information about possible market opportunities and
providing information about the company and its products to
prospective Indian customers. It can promote export/import from/to
India and also facilitate technical/financial collaboration between
parent company and companies in India.Approval for establishing a
liaison office in India is granted by Reserve Bank of India
(RBI).
2. b) Project OfficeForeign Companies planning to execute
specific projects in India can set up temporary project/site
offices in India. RBI has now granted general permission to foreign
entities to establish Project Offices subject to specified
conditions. Such offices cannot undertake or carry on any activity
other than the activity relating and incidental to execution of the
project. Project Offices may remit outside India the surplus of the
project on its completion, general permission for which has been
granted by the RBI.
2. c) Branch OfficeForeign companies engaged in manufacturing
and trading activities abroad are allowed to set up Branch Offices
in India for the following purposes:i. Export/Import of goodsii.
Rendering professional or consultancy servicesiii. Carrying out
research work, in which the parent company is engaged.iv. Promoting
technical or financial collaborations between Indian companies and
parent or overseas group company.v. Representing the parent company
in India and acting as buying/selling agents in India.vi. Rendering
services in Information Technology and development of software in
India.vii. Rendering technical support to the products supplied by
the parent/ group companies.viii. Foreign airline/shipping
company.A branch office is not allowed to carry out manufacturing
activities on its own but is permitted to subcontract these to an
Indian manufacturer. Branch Offices established with the approval
of RBI, may remit outside India profit of the branch, net of
applicable Indian taxes and subject to RBI guidelines Permission
for setting up branch offices is granted by the Reserve Bank of
India (RBI).
Company Formation in IndiaCompanies ActCompanies incorporated or
registered in India are governed by the Companies Act
1956.Shareholders and DirectorsA. There is no need to appoint local
director or shareholder to incorporate a company in India.B.
Foreign nationals can incorporate company in India and hold foreign
equity to the extent of 100% which is dependent upon sector in
which company will operate and is subject to approval from either
Reserve Bank of India(RBI) or Foreign Investment Promotion Board
(FIPB).Memorandum & Articles of AssociationThe memorandum and
articles are the primary legal document of a company. Memorandum
contains the name of the company, authorized share capital, initial
members and object clause. Articles are a set of internal
regulations that govern the day to day operations of the company.
Both memorandum and articles have to be filed with Registrar of
companies at the time of incorporation or if there are any changes
thereafter. At least two subscribers (shareholder) are required in
the memorandum and each of the subscriber must subscribe to at
least one share in the company.Share CapitalShares must be
expressed in a fixed amount. "No par value" or "bearer" shares are
not permitted. Shares to be subscribed must be expressed in Indian
rupees.Annual MeetingsAn annual general meeting (AGM) must be held
once in every financial year and not more than 6 months after the
end of financial year. However, a company need not hold its first
AGM until 18 months of its incorporation.Public FilingsThe names
and personal particulars of the directors and secretary, register
of charges, share capital, registered office address etc. must be
filed with the Companies Registry for public inspection upon
incorporation and if there is any change thereafter.Accounts &
AuditorsEvery company is required to appoint an auditor each year
at its AGM. An auditor must be qualified by virtue of the Institute
of Chartered Accountants of India Act 1949 and completely
independent of the company. Audited accounts of the company serve
as tool for various stakeholders like creditors, bankers, investors
and revenue authorities.Benefits of company incorporation through
us:Our executives will spend the time it takes to ensure your
Indian offshore corporate structure provides the following
benefits: Limited liability for corporate directors; Minimisation
of international tax liabilities; Minimal statutory filing
obligations; Incorporation in a politically stable jurisdiction; A
corporate bank account with an international retail or private
bank; Nominee shareholders and directors for confidentiality of
beneficial owners; Low share capital requirements;Corporate Finance
ServicesWe help organisations in following matters: Preparations of
Project Reports including Financial Viability of the Project.
Assisting clients in raising finance through various instruments
available in market viz. private placement of shares,
Inter-Corporate Deposit, Terms loans, working capital limits.
Assistance in External Credit Borrowing (ECB) from overseas bodies
and approval from Indian authorities.Corporate MattersCompany
legislation requires businesses to perform many administration
tasks that take up a lot of valuable company time. The last thing
you need as a business owner is to be stressed out trying to ensure
you are complying with the Companies Act 1993.The possible threat
of penalties for failing to keep up with the changing rules is too
great a risk to take.Here, we are able to relieve this burden for
you. Our services include: General advice on company law Company
formations Filing of annual returns on your behalf Preparation of
all documentation related to minutes and resolutions Maintenance of
statutory books Assistance in changes of directors, shareholders,
addresses, and office details Bonus Issues Share transfers
Registered Office Facility
Establishing an IT or ITES CompanyDo you want to establish
Information Technology (IT) or Information Technology Enabled
Services (ITES) business in India?India is considered as one of the
preferred destinations for many Corporations doing business in IT
or ITES.The reasons are obvious: Availability of qualified manpower
with proven computing skills. Largest English speaking population.
Highly cost effective infrastructure. Focus Area of Central and
State Government. Availability of ready to use, state-of-the-art
infrastructure in the form Software Technology Parks of India in
almost every major city. 100% income tax exemption to 100% export
oriented units registered under STP scheme of the Government of
India.These Software Technology Parks (STPs) are equipped with
leasehold plots of land and ready to use offices, 24/7 power
supply, broadband connectivity and single window clearance. The
benefits of registration under STPI can also be enjoyed in owned
set-up and the custom bonding requirements have been relaxed.To
know more on our STPI Consultancy services click here.We specialize
in setting up your business in India IT and ITES sector. Our expert
team provides the following services for clients in IT & ITES
sector: Incorporation of a company. Compliance with Registrar of
Companies (ROC). Liaison with the Reserve Bank of India towards FDI
approvals Registration of the Corporation under STP scheme to avail
the above referred benefits. Registering the Corporation with the
Income Tax Department and obtaining Permanent Account Number (PAN)
and Tax Account Number (TAN). Setting up Payroll and Payroll Taxes.
Setting up the accounting by using the client preferred software.We
do not just set-up your business in India. We also continue to help
you by: Offering part time CFO services. Undertaking write-up work
for you. Preparation of Financial statements. Calculation and
payment of withheld taxes. Preparation and filing of returns of
income and withheld taxes. Filing of various returns with the
Registrar of Companies. Any other consulting under the Income Tax
Act and the Companies Act.This way you can focus on core issues of
business of software development / processing and we take care of
the other non-core functions.STPI ConsultancySTPI (Software
Technology Parks of India) SchemeThe 100% Export Oriented Unit
scheme (STP scheme) is for setting up of software development and
IT enabled services firm in India for 100% Export. A distinctive
feature of the STP/EHTP scheme is it provides single point contact
services for member units, enabling them to conduct exports
operations at a pace commensurate with global standards. The STP
scheme is administered by the Directors of STPI.STPI scheme
benefits and highlights1. Income tax holiday as per section 10A of
the IT Act.2. Customs duty exemption on imports of capital
equipments. Equipment can also be imported on loan or lease
basis.3. All relevant equipment/goods including second hand
equipment can be imported (except prohibited items).4. 100% excise
duty exemption on indigenous items procurement.5. Central Sales Tax
reimbursement on indigenous items procurement.6. Green card
enabling priority treatment for government clearances / other
services.7. 100% Foreign Direct Investment permissible through
'Automatic Route' of RBI.8. Sales in the DTA (Domestic Tariff Area)
up to 50% of the foreign exchange earned by the STP/EHTP unit.9.
100% Depreciation on capital goods over a period of five years.10.
Software units may also use the computer system for training
purpose (including commercial training).Periodic Compliance
Services1. Statutory Reports for STP Units2. Statutory Compliance
for STP UnitsStatutory Reports for STP Unitsa. Monthly Progress
Reports (MPR) & Quarterly Progress Reports (QPR): All units are
required to submit Monthly Progress Reports & Quarterly
Progress Reports by 7th of a month on completion of previous month
and by 10th of a month on completion of previous quarter
respectively in the prescribed format . It is a mandatory
requirement and units which are irregular in submitting MPRs &
QPRs can be denied services of STPI.b. Annual Performance Reports
(APR): Yearly performance report should be submitted as per the
prescribed format.Statutory compliance for STP
unitsAccountsDistinct Identity:If an industrial enterprise is
operating both as a domestic unit as well as an EHTP/STP unit, it
shall have two distinct identities with separate accounts,
including separate bank accounts. It is, however, not necessary for
it to be a separate legal entity, but it should be possible to
distinguish the imports and exports or supplies affected by the
EHTP/STP units from those made by the other units of the
enterprise.Maintain the accounts as under:a. Maintenance of Sales
Invoices.b. Maintenances of Fixed Asset Registers.c. Maintenance of
Foreign Inward Remittance Certificate file (FIRC) & Bank
Realization Certificate (BRC) file where the original of the FIRCs
and BRCs are kept.d. Maintenance of contract file, where copies of
contracts received from buyers are maintained.BankingThe units are
free to have as many bank accounts as it desires but shall have to
designate a single branch of the bank with which all export
documents will be submitted. In other words the work of handling of
all shipping documents & realization of export proceeds will
have to be entrusted to this designated bank branch.FDI Foreign
Direct InvestmentAn OverviewThe Government of India has recently
undertaken a comprehensive review of the FDI policy and associated
procedures. As a result, a number of rationalisation measures have
been undertaken which, inter alia include, dispensing with the need
of multiple approvals from Government and/or regulatory agencies
that exist in certain sectors, extending the automatic route to
more sectors, and allowing FDI in newsectors. The latest changes in
the FDI policy were notified videPress Note 4 (2006 Series).As per
the extant policy, FDI up to 100% is allowed, under the automatic
route, in most sectors/activities. FDI under the automatic route
does not require prior approval either by the Government of India
or the Reserve Bank of India (RBI). Investors are only required to
notify the concerned Regional Office of RBI within 30 days of
receipt of inward remittances and file required documents with that
office within 30 days of issue of shares to foreign
investors.ROUTES FOR FOREIGN DIRECT INVESTMENT (FDI)a. Automatic
RouteFDI up to 100% is allowed under the automatic route in all
activities/sectors except the following which require approval of
the government: Activities/items that require an Industrial Licence
Proposals in which the foreign collaborator has an existing
venture/tie up in India in the same field Proposals for acquisition
of shares in an existing Indian company in some cases All proposals
falling outside notified sectoral policy/caps or under sectors in
which FDI is not permittedb. Government Approval RouteAll
activities which are not covered under the automatic route, require
prior Government approval. Areas/sectors/activities hitherto not
open to FDI/NRI investment shall continue to be so unless otherwise
notified by Government.Role of D Batra & Co. (DBC)DBC provides
strategic advice on Foreign Direct Investment (FDI) in India. DBC
has executed substantial FDI assignments for a number of foreign
corporations, the assignments included detailed presentations viz.
options available to a foreign entity for doing business in India;
documenting cases for approval; obtaining of approvals and
permissions from the Reserve Bank and/or Foreign Investment
Promotion Board and/or Government of India for setting up of
liaison, branch, project offices, wholly owned subsidiaries, JV
companies etc.DBC also advises on the methodology to be followed in
regard to the management of foreign exchange.
PROCEDURE TO SETUP BUSINESS IN INDIA
INTRODUCTIONFirst Question comes to our mind that what type of
company we are going to setup in India?Types of business entities
in India:In India, the following types of business entities are
availablePrivate limited companyPublic limited companyUnlimited
companyLimited liability partnershipPartnershipSole
proprietorshipLiaison officeProject officeBranch officeJoint
venture companySubsidiary companyBoth the Indian promoters and the
foreign promoters can form the above mentioned business entity.We
here are talking in the formation of public limited company. A
company in India can have foreign directors provided some
conditions are fulfilled the directors of an Indian company both
Indian and foreign directors are required to obtain Director
Identification Number and Digital Signature Certificate.There are
some restrictions regarding issuing sweat equity for a company in
India.Also see Annual corporate fillings in India for corporate
maintainance requirements in India.PUBLIC LIMITED COMPANYA public
company is defined as a company which is not a private company. The
following conditions apply only to a public company:It must have at
least seven share holders.A public co. is not authorised to start
business upon the grant of the certificate of incorporation. In
order to be eligible to commence business as a corporation it must
obtain another document called trading certificate.It must publish
a prospectus or file statement in lieu of a prospectus before it
can start transacting business.A public company is required to have
at least 3 directors.It must hold statutory meetings and obtain
government approval for the appointment of the management.There are
several other provisions contained in the companies ACT,1956 which
are applicable only to public companies and should be
consulted.Liaison office/representative officeA liaison office
could be established with the approval of the government of India.
The role of liaison office is limited to collection of information,
promotion of exports/imports and facilitates technical/financial
collaborations. Liaison office can not undertake any commercial
activity directly or indirectly.TYPICAL PROCEDURE TO ESTABLISH
BUSINESS IN INDIAIn India establishing a business take some time.
Besides incorporation there are many other formalities in
establishing business in India. The following chart contains
technical formalities including incorporating a public/private
limited company in India:Obtain DIN for proposed directors of the
new companyObtain DSC for proposed directors of the companyFilling
the proposed name of the company for approval to the registrar of
the companies; get the memorandum and articles of association
wetted by the ROC and Printed along with the certificate of
commencement.Make an application to the supritendent of stamps or
an authorised bank requesting for stamping fo the memorandum of
association and articles of association.Present the required
documents along with the registration fee to the registrar of
companies to get the certificate of incorporation.Obtain company
sealApply for UTI investors services limited/national securities
depository limited to obtain a permanent account number.Register
with employees provident fund organisationRegister for provision
tax.PROMOTERPromoter is an Entitythatplansaprojectorformationof a
newfirm, and thensellsorpromotesthe plan or idea to othersPromoters
of company(1) These promoters have power of defining the object of
a company and to decide on the various connected matters regarding
the incorporation of Public ltd company. The company promoters are
going to incorporate is a public company and these promoters are to
enter into preliminary contracts with vendors and to make
arrangements for preparation, advertisement on the circulation of
prospectus.(2) Company will pay the remuneration to the promoters
after promotion.(3) If Company does not agree to enter into the
contracts before the incorporation of the company the promoters
will be liable for that.REQUIREMENTSDIN (director identification
number)As per provision new section 266A, inserted by company
Amendment Act 2006, every individuals that is directors of a
company will make an application for the allotment of DIN to
central government in DIN form.DIN is the first requirement so
firstly Directors of company are going to formulate, will obtain
DIN.e-Form 1ACompany is going to suggest six names to the registrar
of company for the selection of one suitable name in e-Form. Six
names are as given below--XYZ company limited- PQR company
limited-MYN health insurance limited-ILK company limited-MNP
company limited-JSM company limitede-Form 1A is signed by the Mr.
Yogesh who is one of the promoter of company.The registrar of
companies intimated Mr. Yogesh within in six month, the best
suitable name is MYN health insurance limited.MEMORANDUM OF
ASSOCIATIONMOA is the charter document of the company, the promoter
going to promote for the registration of company under company Act
1956. The MOA was prepared according to table B of schedule 1 for
making company limited by share.CONTENTS OF MOA-(1)Name clause- the
promoter of company going to suggest to the registrar of company
MYN health insurance company as a main name and other suggested
name also to show that our company Public Company is limited by
shares. We are using limited word at the end of the name and the
name accepted by the registrar will be engrave on its seal and be
published affix on the outside of every office or place where
business will be carried on.Domicile clauseThe registered office is
the address given to the registrar of the companies of the office.
Notice in form no. 18 is the form required to fill for the domicile
of the company and this form should be submitted to the registrar
of the companies with in 30 days of the incorporation of the
business. Also the name of the company should be written outside
the registered office in two languages one in the local language
and another English.Object ClauseThis clause very important as
specifies which are the activities to be carried out and which not
to be carried out. The company cannot do anything which is not
written in the memorandum of associationThis clause must specify
:-The company will carry on business of insurance against the
health of people.Insurance is done against various diseasesThe
company may diverse the business.In case of non trading company
whose business is not confined to one state must mention the
objects which are extended to the states in which they are going to
operate.Doctrine of ultra vires state that the company cannot do
anything beyond what is written in the MA clause and are not
reasonable incidentally or necessary to the attainment of objects
is ultra-vires the company and therefore void. No liability of the
company arouse on such transactions which are beyond the power
mentioned in the memorandum of association.Liability clause A
declaration that the liability of the members is limited as the
company is limited by the shares.The following are exceptions to
the rule of limited liability of members :-If a member agrees in
writing to be bound by the alteration of MA / AA requiring him to
take more shares or increasing his liability, he shall be liable
upto the amount agreed to by him.If every member agrees in writing
to re-register the company as an unlimited company and the company
is re-registered as such, such members will have unlimited
liability.If to the knowledge of a member, the number of
shareholders has fallen below the legal minimum, (seven in the case
of a public limited company and two in case of a private limited
company ) and the company has carried on business for more than 6
months, while the number is so reduced, themembers for the time
being constituting the company would be personally liable for the
debts of the company contracted during that time.(5) Capital
Clause- MYN company have authorized capital of 10 crore and value
of each share us Rs. 100.(6) Association Clause- this clause was
followed by names, addresses and description of subscribers. The
persons who are desire for the motion of company and the number of
shares by these subscribers are 2000 in total.ARTICLES OF
ASSOCIATIONThe AOA is subsidiary document of MYN health insurance
company, which specify all the rights and duties of all the members
and directors. Company is following the table A of schedule 1, in
which they made all the rules and regulations of their
own.CONTENTS-(1)Share capital- authorized capital of company is Rs.
10 crore and it is divided into Rs. 100 per share.(2) Calls on
share- MYN Company has divided the face value of shares that Rs.
100 into five parts.(a)Application money- Rs. 15 per
share(b)Allotment money- Rs. 35 per share(c) First call- Rs. 20 per
share(d) Second call- Rs. 20 per share(e) Third call- Rs. 10 per
shareRULES AND REGULATIONS--Directors have right to receive and
postpone a call of share.- If the shareholders will not pay the
unpaid amount after the due notice, share will be forfeited by the
company.-MYN lien on shares-MYN health insurance company limited
will have first lion on the shares and debentures registered in the
name of members and upon the proceed of sales.The Board of Director
of MYN health insurance Company limited may declare on share wholly
or in part to be exempt this procedure.-Transfer of sharesThe
shareholders of the company can transfer the share of company where
they feel like.-Alteration of capitalAs provide in MOA of MYN
health insurance of company limited the capital of company can be
increased or decreased by passing a special regulation and making
alteration in AOA.-Dividend and ReservesThe company will transfer
10% of its net profit to reserve for its future and rest after
making necessary deductions will be divided as dividend to the
shareholders.-Borrowing powersSubject to the provision of section
58 A, 202 and 243 of the company act 1956, MYN health insurance
company limited may from time to time raised or borrow any sum or
sums of money.-Conversation of share into stockBy passing a special
resolution, the MYN health insurance company limited can convert
any paid up shares in to stock.-General Meeting(1)First A.G.M.
shall be held by the company within 18 months of its
incorporation.(2) Subsequent A.G.M. of company shall be held in
each subsequent calendar year and not more than 18 months shall
elapse b/w two A.G.M.-Directors-(a)Member of directors shall not be
less than 3 or limit on maximum.(b) First directors of company
are-- Yogesh- Shivam- Manoj(c) The first directors shall holds
office until the close of first A.G.M. of the company.Powers of
directors-The board shall be enlist exercise will soul powers do
will such aid and things as company is authorized is exercise and
do.-Power to make calls-power of issue of debenture-power to borrow
money otherwise than by debentures- Power to make loans-The
seal-Company has a common seal and directors shall precicle for the
sale .-Audit-Every year the accounts of the company shall be
balanced and audited and correctness of the profit and loss account
and balance sheet ascertained by one or more auditors.-Winding
up-If MYN health insurance limited company will be wound up and the
assets available for distributed among the members as such to repay
the whole of the assets will be distributed so that, as .. as may
be, the losses shall be .by the members in proportion and the
capital paid up.E-Form 32- this form mention the particulars of
directors. The personal details here and with the addresses are
provided are similar. E-Form 32 is signed by the promoter of the
company.CERTIFICATE OF INCORPORATIONCOMPANY NAME: MYN HEALTH
INSURANCE LTD105899I HERBY CERTIFY THAT MYN HEALTH INSURANCE LTD.
ON THIS DAY HAS BEEN INCORPORATED UNDER THE COMPANIES ACT, 1956 AS
A PUBLIC LIMITED COMPANYSigned at Chandigarh1 NOVEMBER 2009Seal of
RegistrarS.N.PANDEYRegistrar of companiesCERTIFICATE OF
COMMENCEMENT OF BUSINESSI hereby certify that MYN health insurance
Ltd. of Ludhiana. which was incorporated under the Companies Act,
1956 on the 9-November, day of Monday 2009 prescribed form that the
conditions of sections that has been complied with this certificate
is given under my hand and is entitled to commence the
business.Seal of RegistrarRegistrar of CompaniesAdvantages of
incorporating in IndiaMany tax exemptions available to the company
set up in Speciel Economic Zone;Many tax incentives available to IT
companies;India has got double taxation treaties with many
countries.Minimum authorised capital of only INR 100,000 and INR
500,000 for private and public company respectively is required to
form an establishment in India.Skilled and intelligent employees
are available at nominal rate.With its large base of English
speaking skilled human resource, it is most sought after
destination for business process outsourcing, knowledge process
outsourcing etc.Applicable laws for forming a company in IndiaThe
laws applicable for incorporating a company in India include the
Indian companies ACT,1956 read with companies (central government)
general rules and forms, 1956 the Indian Income TAX Act, and other
laws and regulation. The foreign exchange management Act,1999 is
applicable for foreign investments and transactions.REVIEW OF
LITERATURE1-KUMAR SANJAY AND ASSOCIATESWe at KSA focus on helping
clients design and build Tomorrows organisation. We provide real
world solutions to complex business issues through audit and
assurance functions, taxation-international and domestic, due
diligence studies evaluation of entry options, partner search,
joint venture formations, merger & acquisitions, business
valuation studies, assistance in business negotiations and project
feasibility studiesWe are a team of professionals with diverse area
of specialisation including Corporate Strategists, Tax Advisory
Experts, Financial Analyst and Market Analyst and M & A
Specialists. Our philosophy has always been to develop and deliver
solutions that not just meet but exceed the business expectations
of Client.2-Dr. Vijay Vitthals Experience(Business Analyst
Healthcare Misys Healthcare Systems) (Hospital & Health Care
industry)January 2007 December 2009 (3 years )Business Analyst,
Software Development Analyst, Misys EMR, Misys Connect, Misys
Healthcare Systems (India) Pvt Ltd under Misys Software Solutions
(India) Pvt Ltd Author and owner of Functional Requirement
Specification / Functional Document Specification of
Interoperability for Misys EMR Connect for both Misys EMR and Misys
CPR products Client facing skills /experience in delivering
healthcare industry solutions Author for Functional Requirements
Specification to the connect product which connects all healthcare
EMR products and also to Misys EMR product solving client issues
Drafted Functional Requirements Specification for Development
Analyst Group3-SUNIL GOYAL(M.Com, M.A.,LLB., Diploma in Labour
Law),(Diploma in Taxation, AICWA, FCS, FCA)According to Shri Sunil
Goyal (Senior Most partner of the firm) and formed the firm in the
year 1980. Having a vast experience since 1980 in the areas of
taxation, audits, corporate laws and ranging experience on
different aspects relating to functioning of public sector entities
at the State and National level including Statutory audit of large
number of public sector companies and activitiesrelated to
socio-economic development of the State and the CountryHaving
experience of more than 10 years in the areas of Auditing and
Assurance Services,Mergers and Acquitions, Disinvestments, Joint
Ventures and Collaborations, Foreign Exchange Management Act,
Taxation including Tribunals and Settlement Commission, Investment
Planning, Trustee services, Hand Holding of Foreign Companies to
setup business in India Project Related Services, SOX Audit
etc.Elected as Central Council Member of the Institute of Chartered
Accountants of India in the year 1994 and been serving the Central
Council of the ICAI4-Nada Kobeissi (Long Island University)Journal
of Small Business Management, Vol. 47, Issue 4, pp. 489-513,
October 2009Thus the aim of this paper is to investigate potential
relationship between banks' CRA lending activities, and new
business start-ups and economic growth in local markets. The paper
proposes that new start-ups will have spillover effects that will
consequently contribute to community development. After controlling
for several potential variables that could have an impact on
business start-ups and community developments, the study found a
strong positive effect. Beside its social and economic
implications, the study also considered policy implications
associated with the CRA regulation as a welfare improving
initiative in low-income communities. It offers ground for certain
government intervention in the loan marketThus the aim of this
paper is to investigate potential relationship between banks' CRA
lending activities, and new business start-ups and economic growth
in local markets. The paper proposes that new start-ups will have
spillover effects that will consequently contribute to community
development. After controlling for several potential variables that
could have an impact on business start-ups and community
developments, the study found a strong positive effect. Beside its
social and economic implications, the study also considered policy
implications associated with the CRA regulation as a welfare
improving initiative in low-income communities. It offers ground
for certain government intervention in the loan market.Date posted:
October 13, 20095-Conflict Resolution and the Role of Corporate Law
Courts: An Empirical StudyJoseph A. McCahery (Tilburg University -
Tilburg Law and Economics Center; Tilburg University - Law School;
European Banking Center (EBC); European Corporate Governance
Institute (ECGI))Erik P. M. Vermeulen (Tilburg University -
Department of Business Law)August 12, 2009ECGI - Law Working Paper
No. 132/2009We study private enforcement of corporate law in a
civil law jurisdiction that has a relatively weak company law
regime. First, we develop a benchmark for how effective the court
is in resolving confl icts in a speedy and decisive manner. We base
our findings on a hand-collected database of filings of legal
actions brought against companies between 2002-2008. The main
conclusion is that the grant of injunctive relief provides an
incentive for the parties to the lawsuit to seek out settlements
and thereby prevent further costly and unwanted litigation. Our
results emphasize the importance of the private enforcement of
intra-firm disputes and the effectiveness of a specialized court in
providing protection to minority shareholders.Keywords: legal
procedure, private enforcement, corporate law, derivative
actionsDate posted: August 23, 2009 ; Last revised: September 25,
20096-Corporate Governance and Innovation - Venture Capital, Joint
Ventures, and Family BusinessesJoseph A. McCaheryTilburg University
- Tilburg Law and Economics Center; Tilburg University - Law
School; European Banking Center (EBC); European Corporate
Governance Institute (ECGI)Erik P. M. VermeulenTilburg University -
Department of Business LawMarch 2006Most of the literature on
corporate governance focuses on listed companies. However, the
majority of firms worldwide are non-listed. Given the importance of
these firms for innovation and job creation, the absence of a
robust debate on the best governance practices for these firms is
perplexing. Corporate governance for non-listed companies, such as
joint-ventures or venture-capital-backed start-ups and spin-offs,
is concerned with ensuring that firms are run efficiently and
protect the interests of business parties and investors. The
article recounts the history of corporate governance from the
development of the joint venture business form to the recent
initiatives that help to foster the legal infrastructure to keep a
modern economy in gear. We argue that the corporate governance
debate for non-listed companies will proceed along three
dimensions: (1) legal and institutional structures, (2) contractual
arrangements, and (3) optional, best practice guidelines.Keywords:
corporate governance, innovation, best governance practices,
non-listed companies, joint ventures, family-owned businesses,
venture capital, company lawDate posted: April 04, 20067-Does the
Takeover Bids Directive Need Revision?Joseph A. McCaheryTilburg
University - Tilburg Law and Economics Center; Tilburg University -
Law School; European Banking Center (EBC); European Corporate
Governance Institute (ECGI)Erik P. M. VermeulenTilburg University -
Department of Business LawFebruary 4, 2010TILEC Discussion Paper
No. 2010-006Does the Takeover Bids Directive need revision? The
answer to this question will most likely affect the Commissions
assessment of the Directive in 2011 and could initiate its
revision. Proponents of such a revision urge the Commission to
redress the shortcomings of the Directives implementation in two
ways: 1) revising the mandatory provisions of the Directive making
them less easily to avoid; and 2) creating new provisions that
would weaken incumbent managers lock on control that would make
corporate control more contestable. In this short essay, however,
we show that the Commissions opt out strategy has proved, in
practice, to be remarkably popular with Member States and does not
need any further discussion.Keywords: Takeover Bids Directive,
Market for Corporate Control, EU Lawmaking, Mandatory Bid Rule,
Board Neutrality, Break Through RuleDate posted: February 09,
20108-How Does Corporate Mobility Affect Lawmaking? A Comparative
AnalysisWilliam W. BrattonUniversity of Pennsyvlania Law School;
European Corporate Governance Institute (ECGI)Joseph A.
McCaheryTilburg University - Tilburg Law and Economics Center;
Tilburg University - Law School; European Banking Center (EBC);
European Corporate Governance Institute (ECGI)Erik P. M.
VermeulenTilburg University - Department of Business LawJanuary
2008ECGI - Law Working Paper No. 91/2008Amsterdam Center for Law
& Economics Working Paper No. 2008-01 Georgetown Law and
Economics Research Paper No. 1086667This paper examines the impact
of increased corporate mobility on corporate lawmaking in the
European Union (EU). More specifically, we seek an answer to a
simple question: Has the increased mobility which arose from the
implementation of the Societas Europaea (SE) and the path-breaking
decisions of the European Court of Justice (ECJ) led to an outbreak
of regulatory competition and the emergence of a Delaware-like
member state in Europe? Two types of corporate mobility are
distinguished: (1) the incorporation mobility of start up firms and
(2) the reincorporation mobility of established firms. As to
incorporation mobility, the Centros triad of cases makes it
possible for start-up firms to incorporate in a foreign
jurisdiction. Many entrepreneurs have taken advantage of this new
freedom of establishment. However, recent data from Germany and The
Netherlands indicate declining numbers of such foreign
incorporations over time. Reincorporation mobility is still far
from generally available in the EU. As a result, competitive
pressures do not yet motivate changes in the fundamental governance
provisions of national corporate law regimes.Keywords: corporate
mobility, costs of regulation, regulatory competitionDate posted:
January 25, 2008 ; Last revised: April 16, 20099-Limited
Partnership Reform in the United Kingdom: A Competitive, Venture
Capital Oriented Business FormJoseph A. McCaheryTilburg University
- Tilburg Law and Economics Center; Tilburg University - Law
School; European Banking Center (EBC); European Corporate
Governance Institute (ECGI)Erik P. M. VermeulenTilburg University -
Department of Business LawDecember 2004Tilburg Law and Economics
Center Discussion Paper No. 2004-024This paper evaluates the
primary legal and financial mechanisms that help support the
development of a venture capital market. Specifically, we argue
that emulating the organizational and contractual pattern of the US
venture capital market could enhance the development of the
European venture capital market. We first show that the
modernization of the 'venerable' limited partnership form, based on
US experiences, offers substantial contracting benefits for
investors and is crucial to the operation of a mature venture
capital market. We then argue that the emergence of more efficient
limited partnership structures may arise as a consequence of the
competition between European states. We argue that the United
Kingdom, which has recently embarked on general and limited
partnership law reform, could, in light of the competitive
lawmaking environment that the ECJ has opened up, be in the best
position to enter the competition within the EU. It then explores
the prominent features of the UK special Limited Partnership
statute, which makes it possible for venture capitalists to
organize their contractual relations that are best suited to the
characteristics of the venture capital market. Finally, our
analysis provides an understanding of the competitive forces that
shape the ongoing reforms of limited partnership law and related
business forms in Europe.Keywords: Venture capital, venture capital
market, innovative companies, limited partnership, public
policyDate posted: February 09, 200510-Network Effects and
Regulatory Competition: An Introduction to the Expectations and
Challenges of Partnership Law ReformErik P. M. VermeulenTilburg
University - Department of Business LawOctober 2005TILEC Discussion
Paper No. 2005-028This article examines the theoretical arguments
for and against the importance of new partnership-type business
forms. Section 1 briefly reviews the history of partnership law
reform in Europe. The review of traditional partnership law reveals
that the absence of new business forms may be due to status quo
bias and network effects. Section 2 turns to the importance of
partnership law reform and the introduction of new business forms
to a robust economy. Section 3 evaluates whether we can project a
pattern of regulatory competition in the business organization law
context that could prompt lawmakers to innovate by introducing new
partnership-type business forms.Keywords: Network effects,
Regulatory competitionDate posted: October 22, 200511-The Corporate
Governance Framework of Non-Listed CompaniesJoseph A.
McCaheryTilburg University - Tilburg Law and Economics Center;
Tilburg University - Law School; European Banking Center (EBC);
European Corporate Governance Institute (ECGI)Erik P. M.
VermeulenTilburg University - Department of Business LawThis
article appears as Chapter One in Corporate Governance of
Non-Listed Companies. The chapter evaluates the role of corporate
law in formulating effective solutions to the core agency problems
that arise in non-listed companies. We show how a range of legal
strategies, which were originally designed for public companies but
later adapted to closely held firms, can be used effectively to
promote economic value while detecting and correcting problems that
occur in non-listed companies.The book is divided into three parts.
Each of these three parts has a major theme: the theme of Part I is
how the creation of clear and simple default rules provide a
governance framework for non-listed companies; the theme of Part II
is the private ordering of non-listed companies; and the theme of
Part III is the analysis of best practice guidelines that
supplement the contractual relations between parties.Keywords:
corporate governance, non-listed companies, joint ventures,
family-owned businesses, innovation, venture capital, company
lawDate posted: February 10, 200912-The New Company Law - What
Matters in an Innovative Economy?Joseph A. McCaheryTilburg
University - Tilburg Law and Economics Center; Tilburg University -
Law School; European Banking Center (EBC); European Corporate
Governance Institute (ECGI)Erik P. M. VermeulenTilburg University -
Department of Business LawMasato HisatakeResearch Institute of
Economy, Trade and IndustryJun SaitoNikon CorporationSeptember
2006Lower barriers of entry for new firms and more flexibility in
structuring a business organization are the two important factors
motivating the introduction of the new company law. In general,
policymakers use new company law initiatives to encourage
entrepreneurship, innovation, and cooperative arrangements. This
paper distinguishes the different strands of company law reforms
arising in the United States, Europe and Asia and points to the
underlying conditions that shape the markedly different reform
outputs. Our empirical analysis points to three important factors -
(1) private ordering, (2) fiscal transparency, and (3) limited
liability - that effect the incentives for new firm creation.
However, we find that many of the new company law reforms are
incomplete. Nevertheless, these new company law reforms retain the
ability to generate rents due to their adaptability and
responsiveness to social and economic change.Keywords: New Company
Law, Innovation, Contracts, Incomplete Law, Corporate TaxationDate
posted: November 12, 200613- Towards a New 'Company' Structure for
High-Tech Start-UpsErik P. M. VermeulenTilburg University -
Department of Business LawDecember 2000As far as the venture
capital market is concerned, it is widely assumed that Europe lags
way behind the United States. Recent papers have asserted that, in
order to bridge this gap Europe should piggyback on US capital
market institutions and their securities regulations. This paper
critically examines these claims and suggests that European
policymakers should focus on overcoming the institutional, legal,
fiscal, and cultural obstacles that are understood to impose
significant costs on start-up firms. A really underrated issue in
the success formula of the US venture capital industry is the
influence of legal forms on the quality of venture capital
contracting. This paper analyzes the characteristics of European
company structures, particularly the Dutch private company, and
questions whether they are sufficiently flexible and responsive to
solve the two-sided agency problems that characterize the
relationship between the entrepreneur and the venture
capitalists.This paper then argues that the introduction of an
optimal organizational form for high-tech start-ups, based on US
experiences, is crucial to Europe's attempt to emulate the
successful US venture capital market. It is suggested that
policymakers, with the support of interest groups, should undertake
the task of developing a new limited liability vehicle. Indeed, a
new organizational form, which is characterized by clarity and
simplicity, may make high profile venture capitalists more willing
to invest in new enterprises. The prospects for the introduction of
a new vehicle depend on the regulatory competition and emulation,
which together may eventually culminate in overcoming path
dependent barriers to the European venture capital market.Date
posted: January 12, 200114-Traditional and Innovative Approaches to
Legal Reform: The 'New Company Law'Joseph A. McCaheryTilburg
University - Tilburg Law and Economics Center; Tilburg University -
Law School; European Banking Center (EBC); European Corporate
Governance Institute (ECGI)Erik P. M. VermeulenTilburg University -
Department of Business LawMasato HisatakeResearch Institute of
Economy, Trade and IndustryJun SaitoNikon CorporationLower barriers
of entry for new firms and more flexibility in structuring a
business organisation are the two key factors motivating the
introduction of the new company law. In general, policymakers use
new company law initiatives to encourage entrepreneurship,
innovation and cooperative arrangements. This paper distinguishes
the diverse strands of company law reforms arising in the United
States, Europe and Asia and points to the underlying conditions
that shape the markedly different reform outputs. Our analysis
points to three important factors - (1) private ordering; (2)
fiscal transparency; and (3) limited liability - that effect the
incentives for new firm creation. However, we find that many of the
new company law reforms are incomplete. Nevertheless, these new
company law reforms retain the ability to generate rents due to
their adaptability and responsiveness to social and economic
change.Keywords: new company law, innovation, contracts, incomplete
lawDate posted: May 14, 200715-Venture Capital Beyond the Financial
Crisis: How Corporate Venturing Boosts New Entrepreneurial Clusters
(and Assists Governments in Their Innovation Efforts)Joseph A.
McCaheryTilburg University - Tilburg Law and Economics Center;
Tilburg University - Law School; European Banking Center (EBC);
European Corporate Governance Institute (ECGI)Erik P. M.
VermeulenTilburg University - Department of Business LawMay 29,
2010In his book, 'Boulevard of Broken Dreams: Why Public Efforts to
Boost Entrepreneurship and Venture Capital Have Failed - and What
to Do about It,' Harvard Business School Professor, Josh Lerner,
explains that governments can only play a limited role in spurring
innovation and entrepreneurship. Government initiatives are usually
characterized by poor design and a lack of understanding for the
venture capital process. He argues that governments better limit
their role as catalysts by: (1) ensuring that the economic
environment is conducive to entrepreneurial activity; and (2)
providing direct investments. In this paper, we investigate the
recent examples of governments that have followed either one of
these suggestions. Relying on standard measures of success, we find
that the participation of multinationals plays a crucial role in
realizing the success of these initiatives. In the aftermath of the
financial crisis, there is a world-wide revival of corporate
venturing activities. We can now see that, insofar as it operates
through corporate venture capital investments, the venture capital
market is getting its magic back - and that when corporations
participate in the process, it gives both strategic and financial
benefits to the parties involved, such as governments, traditional
venture capitalists, and entrepreneurs. The paper shows a shift in
the fundamental nature of corporate venture capital and provides an
account of the governance structures and contractual
characteristics that encourage successful alliances between
corporations and venture capital funds and their portfolio
companies.Keywords: Venture Capital, Corporate Venturing, Corporate
Venture Capital, Innovation, EntrepreneurshipDate posted: May 29,
2010FINDINGSSo this is the proper procedure to setup a business in
India you have to go through the proper process from the idea
generation to the commencement of the business. There are certain
laws which you have to adhere and disobeyance to it is crime. You
have to accumulate all the documents required to be filed with the
registrar. Along with the setup of business in India their are
certain advantages of incorporation of business in India.And To
setup a business in India is not a difficult task there are many
government organisations which help you in
it.REFRENCES:kumaran.wordpress.com/.../procedure-involved-to-start-a-company-private-limited-in-india/
-madaan.com/incorporateprocedure.htmlwww.companyformationindia.com/steps-to-set-up-a-pvt-ltd-company.htmlwww.taxguru.in/.../procedure-to-set-up-a-branch-office-in-india.htmlbhagatneeraj.trustpass.alibaba.com/.../Company_set_up_procedure_in_India.htmlwww.indianembassy.org/...business_In_India/Incorporation_of_business.aspwww.bmswiz.com/companyformation.aspwww.rbi.org.inelagaan.com/income-tax-blogs/procedure-set-branch-office-indiawww.companyformationindia.com/set-up-a-public-limited-company.htmlECGI
- Law Working Paper No. 132/2009
Steps involved in starting business in IndiaRegistration
Requirements:No:ProcedureTime to complete:Cost to complete:
1Obtain director identification number (DIN) online from the
Ministry of Corporate Affairs portal (National)1 dayINR 100
2Obtain digital signature certificate online from private agency
authorized by the Ministry of Corporate Affairs (National)3 daysINR
1,500
3Reserve the company name online with the Registrar of Companies
(ROC) (National)2 daysINR 500
4Stamp the company documents at the State Treasury (State) or
authorized bank (Private)1 dayINR 1,300 (INR 200 for MOA + INR
1,000 for AOA for every INR 500,000 of share capital or part
thereof + INR 100 for stamp paper for declaration Form 1)
5Get the Certificate of Incorporation from the Registrar of
Companies, Ministry of Corporate Affairs (National)5 daysINR 14,133
(see comments)
6Make a seal (Private)1 dayINR 350 (cost depends on the number
of seals required and the time period for delivery)
7*Obtain a Permanent Account Number (PAN) from an authorized
franchise or agent appointed by the National Securities Depository
Ltd. (NSDL) or the Unit Trust of India (UTI) Investors Services
Ltd., as outsourced by the Income Tax Department (National)7
daysINR 67 (INR 60 application fee + 12.36% service tax + INR 5 for
application form, if not downloaded)
8*Obtain a Tax Account Number (TAN) for income taxes deducted at
source from the Assessing Office in the Mumbai Income Tax
Department7 daysINR 57 (INR 50 application fee + 12.36% service
tax)
9*Register with the Office of Inspector, Shops, and
Establishment Act (State/Municipal)2 daysINR 6,500 (INR 2000 + 3
times registration fee for trade refuse charges)
10*Register for Value-Added Tax (VAT) at the Commercial Tax
Office (State)12 daysINR 5,100 (registration fee INR 5000 + stamp
duty INR 100)
11*Register for Profession Tax at the Profession Tax Office
(State)2 daysNo cost
12*Register with Employees Provident Fund Organization
(National)12 daysNo cost
13*Register for medical insurance at the regional office of the
Employees State Insurance Corporation (National)9 daysNo cost
Detailed Steps and Explanation of procedure to start Business in
India
Procedure1.Obtain director identification number (DIN) online
from the Ministry of Corporate Affairs portal (National)Time to
complete:1 dayCost to complete:INR 100Procedure:The process to
obtain the Director Identification Number (DIN) is as follows:1.
Obtain the provisional DIN by filing application Form DIN-1 online.
This form is on theMinistry of Corporate Affairs 21st Century (MCA
21) portal. The provisional DIN is immediately issued.The
application form must then be printed and signed and sent for
approval to the ministry by courier along with proof of identity
and (address):a.Identity proof(any of the following): Permanent
Account Number card, drivers license, passport, or voter
card;b.Residence proof(any of the following): drivers license,
passport, voter card, telephone bill, ration card, electricity
bill, bank statement;2. The concerned authority verifies all the
documents and, upon approval, issues a permanent DIN. The process
takes about 4 weeks.
Procedure2.Obtain digital signature certificate online from
private agency authorized by the Ministry of Corporate Affairs
(National)Time to complete:3 daysCost to complete:INR
1,500Procedure:To use the new electronic filing system under MCA
21, the applicant must obtain a Class-II Digital Signature
Certificate.The digital signature certificate can be obtained from
one of six private agencies authorized by MCA 21 such as Tata
Consultancy Services.Company directors submit the prescribed
application form along with proof of identity and address. Each
agency has its own fee structure, ranging from INR 400 to INR
2650.
Procedure3.Reserve the company name online with the Registrar of
Companies (ROC) (National)Time to complete:2 daysCost to
complete:INR 500Procedure:Company name approval must be done
electronically. Under e-filing for name approval, the applicant can
check the availability of the desired company name on theMCA 21 web
site.The ROC in Mumbai has staff members working full time on name
reservations (approximately 3 but more if the demand increases). A
maximum of 6 suggested names may be submitted. They are then
checked by ROC staff for any similarities with all other names in
India.The MCA receives approximately 50-60 applications a day.
After being cleared by the junior officer, the name requests are
sent to the senior officer for approval.Once approved, the selected
name appears on the website. Applicants need to keep consulting the
website to confirm that one of their submitted names was
approved.In practice, it takes 2 days for obtaining a clearance of
the name if the proposed name is available and conforms to the
naming standards established by the Company Act (1 day for
submission of the name and 1 day for it to appear on theMCA
website).
Procedure4.Stamp the company documents at the State Treasury
(State) or authorized bank (Private)Time to complete:1 dayCost to
complete:INR 1,300 (INR 200 for MOA + INR 1,000 for AOA for every
INR 500,000 of share capital or part thereof + INR 100 for stamp
paper for declaration Form 1)Procedure:The request for stamping the
incorporation documents should be accompanied by unsigned copies of
the Memorandum and Articles of Association, and the payment
receipt.The company must ensure that the copies submitted to the
Superintendent of Stamps or to the authorized bank for stamping are
unsigned and that no promoter or subscriber has written anything on
it by hand. The Superintendent returns the copies, one of which is
duly stamped, signed, and embossed, showing payment of the
requisite stamp duty. The rate of stamp duty varies from state to
state.According to Article 10 and Article 39 of the Indian Stamp
Act (1899), the stamp duty payable on the Memorandum and Articles
of Association for company incorporation in Mumbai, Maharashtra, is
as follows:a. Articles of Association:INR 1000/- for every INR
500,000/- of share capital (or part thereof), subject to a maximum
of INR 50,000,000;b. Memorandum of Association:INR 200;c.Form-1
(declaration of compliance):INR 100.Once the memorandum and
articles of association have been stamped, they must be signed and
dated by the company promoters, including the company name and the
description of its activities and purpose, father-s name, address,
occupation, and the number of shares subscribed. This information
must be in the applicants handwriting and duly witnessed.
Procedure5.Get the Certificate of Incorporation from the
Registrar of Companies, Ministry of Corporate Affairs
(National)Time to complete:5 daysCost to complete:INR 14,133 (see
comments)Procedure:The following forms are required to be
electronically filed on thewebsiteof the Ministry of Company
Affairs:e-form 1; e-form 18; and e-form 32.Along with these
documents, scanned copies of the consent of the initial directors,
and also of the signed and stamped form of the Memorandum and
Articles of Association, must be attached to Form 1.The fees for
registering a company can be paid online by credit card or in cash
at certain authorized banks. One copy of the Memorandum of
Association, Articles of Association, Form 1, Form 32, Form 18 and
the original name approval letter, consent of directors and stamped
power of attorney must be physically submitted to the Registrar of
Companies. The certificate of incorporation is sent automatically
to the registered office of the company by registered or rush
mail.The registration fees paid to the Registrar are scaled
according to the companys authorized capital (as stated in its
memorandum):a.INR 100,000 or less: INR 4,000. If the nominal share
capital is over INR 100,000, additional fees based the amount of
nominal capital apply to the base registration fee of INR
4,000:b.For every INR 10,000 of nominal share capital or part of
INR 10,000 after the first INR 1,00,000, up to INR 500,000: INR
300;c.For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 500,000, up to INR 5,000,000: INR
200;d.For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 5,000,000, up to INR 1 10,000,000: INR
100;e. For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 10,000,000: INR 50.The payment of fees
can be made:1. offline:one can upload all incorporation documents
and generate the payment challan. Against this challan, the
applicant must obtain a demand draft for filing fees amount in
favour of - the Pay and Accounts Office, Ministry of Corporate
Affairs, New Delhi and this demand draft is payable in Mumbai. The
applicant must make the payment at specified branches of certain
banks. It takes around one week for clearance of payment. Only
after the clearance of payment does the ROC accept the documents
for verification and approvals;2. online:the applicant makes the
payment by credit card and the system accepts the documents
immediately. Please note that in Mumbai, the ROC requests for
pre-scrutiny of documents for any corrections, before they are
uploaded. Once the documents have been uploaded, they can then be
approved without any further correction. The online filing
mechanism requires only one copy of scanned documents to be filed
(including stamped MOA, AOA, and POA).Schedule of Registrar filing
fees for the articles and for the other forms (l, 18, and 32):a.INR
200 for a company with authorized share capital of more than INR
100,000 but less than INR 500,000;b.INR 300 for a company with
nominal share capital of INR 500,000 or more but less than INR
2,500,000;c.INR 500 for a company with nominal share capital of INR
2,500,000 or more.
Procedure6.Make a seal (Private)Time to complete:1 dayCost to
complete:INR 350 (cost depends on the number of seals required and
the time period for delivery)Procedure:Although making a company
seal is not a legal requirement for the company to be incorporated,
companies require a seal to issue share certificates and other
documents. The cost depends on the number of words to be engraved,
the number of seals required, and the time period for delivery. The
cost can range from INR 300 to INR 500.
Procedure7.Obtain a Permanent Account Number (PAN) from an
authorized franchise or agent appointed by the National Securities
Depository Ltd. (NSDL) or the Unit Trust of India (UTI) Investors
Services Ltd., as outsourced by the Income Tax Department
(National)Time to complete:7 daysCost to complete:INR 67 (INR 60
application fee + 12.36% service tax + INR 5 for application form,
if not downloaded)Procedure:Under the Income Tax Act, 1961, each
person must quote his or her Permanent Account Number (PAN) for tax
payment purposes and the Tax Account Number (TAN) for depositing
tax deducted at source. The Central Board of Direct Taxes (CBDT)
has instructed banks not to accept any form for tax payment
(challan) without the PAN or TAN, as applicable. The PAN is a
10-digit alphanumeric number issued on a laminated card by an
assessing officer of the Income Tax Department.In order to improve
PAN-related services, the Income Tax department (effective July
2003) outsourced their operations pertaining to allotment of PAN
and issuance of PAN cards to UTI Investor Services Ltd, which was
authorized to set up and manage IT PAN Service Centers in all
cities where there is an Income Tax office. The National Securities
Depository Limited (NSDL) has also launched PAN operations
effective June 2004, setting up TIN Facilitation Centers.The PAN
application is made through the above mentioned service centers
using Form 49A, with a certified copy of the certificate of
registration, issued by the Registrar of Companies, along with
proof of company address and personal identity. A fee of INR 60
(plus applicable taxes) applies for processing the PAN application.
IT PAN Service Centers or TIN Facilitation Centers will supply PAN
application forms (Form 49A), assist the applicant in filling out
the form, collect filled-out forms, and issue an acknowledgement
slip. After obtaining PAN from the Income Tax department, UTIISL or
NSDL as the case may be, will print the PAN card and deliver it to
the applicant.The application for PAN can also be made online but
the documents still need to be physically dropped off for
verification with the authorized agent. For more details
see(www.incometaxindia.gov.in,www.utiisl.co.in, and
www.tin.nsdl.co.in )
Procedure8.Obtain a Tax Account Number (TAN) for income taxes
deducted at source from the Assessing Office in the Mumbai Income
Tax DepartmentTime to complete:7 daysCost to complete:INR 57 (INR
50 application fee + 12.36% service tax)Comment:The Tax Account
Number (TAN) is a 10-digit alphanumeric number required of anyone
responsible for deducting or collecting tax. The provisions of
Section 203A of the Income Tax Act require that all persons who
deduct or collect tax at the source must apply for a TAN. The
section also makes it mandatory for the TAN to be quoted in all
tax-deducted-at-source (TDS) and tax-collected-at-source (TCS)
returns, all TDS/TCS payment challans, and all TDS/TCS certificates
issued.Failure to apply for a TAN or to comply with any of the
other provisions of the section is subject to a penalty of INR
10,000/- . The application for allotment of a TAN must be filed
using Form 49B and submitted at any TIN Facilitation Center
authorized to receive e-TDS returns.Locations of TIN Facilitation
Centres can be found atwww.incometaxindia.gov.inand
http://tin.nsdl.com The processing fee for both applications (a new
TAN or a change request) is INR 50 (plus applicable taxes). After
verification of application, the same is sent to the Income Tax
Department and upon satisfaction the department issues the TAN to
the applicant.The national government levies the income tax. Since
outsourcing, any authorized franchise or agent appointed by the
National Securities Depository Services Limited (NSDL) can accept
and process the TAN application. The application for a TAN can be
made either online through the NSDL website (www.tin-nsdl.com) or
offline.Upon payment of the fee by credit card, the hard copy of
the application must be physically filed with the NSDL.
Procedure9.Register with the Office of Inspector, Shops, and
Establishment Act (State/Municipal)Time to complete:2 daysCost to
complete:INR 6,500 (INR 2000 + 3 times registration fee for trade
refuse charges)Procedure:A statement containing the employer-s and
manager-s names and the establishments name (if any), postal
address, and category must be sent to the local shop inspector with
the applicable fees.According to Section 7 of the Bombay Shops and
Establishments Act,-(1948), the establishment must be registered as
follows: Under Section 7(4), the employer must register the
establishment in the prescribed manner within 30 days of the
opening of the business. Under Section 7(1), the establishment must
submit to the local shop inspector Form A and the prescribed fees
for registering the establishment. Under Section 7(2), after Form A
and the prescribed fees are received and the correctness of the
statement on the form is satisfactorily audited, the certificate
for the registration of the establishment is issued on Form D,
according to the provisions of Rule 6 of the Maharashtra Shops and
Establishments Rules of 1961.Since the amendments in the
Maharashtra Shops and Establishment (Amendment) Rules, 2003 dated
15th December 2003, the Schedule for fees for registration and
renewal of registration (as per Rule 5) is as follows:a. 0
employees: INR 100;b. 1 to 5 employees: NR 300;c. 6 to 10
employees: INR 600;d. 11 to 20 employees: INR 1000;e. 21 to 50
employees: INR 2000;f. 51 to 100 employees: INR 3500;g. 101 or more
employees: INR 4500.Hence in the given case the registration fees
would be INR 2000, as there are 50 employees In addition, an annual
fee (three times the registration and renewal fees) is charged as
trade refuse charges (TRC), under the Mumbai Municipal Corporation
Act,-(1888).
Procedure10.Register for Value-Added Tax (VAT) at the Commercial
Tax Office (State)Time to complete:12 daysCost to complete:INR
5,100 (registration fee INR 5000 + stamp duty INR
100)Procedure:Beginning April 1, 2005, the sales tax was replaced
by the VAT, which requires registration by filing Form 101.The
authorized representative signing the application must be available
at the Sales-Tax Office on the day of application verification. The
applicant goes to the Sales-Tax Office and up to the registration
counter. The clerk at the counter verifies that the applicant has
all the required documents and gives the applicant a token (waiting
number). After a short wait, the applicant-s number is called and
the applicant approaches the desk of a sales-tax officer.There, all
the information on Form 101 is manually entered into the system by
the officer. Within 10 minutes, the system generates a Tax
Identification Number (TIN) Thereafter, the company is considered
fully registered to pay taxes. However, the applicant must wait
between 10 and 15 days to receive the VAT registration certificate
by mail.In addition to Form 101, other accompanying documentation
includes:1) Certified true copy of the memorandum and articles of
association of the company;-2) Proof of permanent residential
address. At least 2 of the following documents must be submitted:
copy of passport, copy of drivers license, copy of election photo
identity card, copy of property card or latest receipt of property
tax from the Municipal Corporation, copy of latest paid electricity
bill in the name of the applicant;-3) Proof of place of business
(for an owner, in the case of Doing Business): Proof of ownership
of premises viz. copy of property card, ownership deed, agreement
with the builder or any other relevant documents;-4) One recent
passport-sized photograph of the applicant;-5) Copy of Income Tax
Assessment Order with PAN or copy of PAN card;-6) challan on Form
No. 210 (original) showing payment of registration fee at INR 5000
(in case of voluntary RC) and INR 500 (in other cases).The whole
process will be put online by the spring of 2009. This means that
rather than physically having to go to the office, companies will
fill in all their details online for Form 101 and then go to the
office only so that the Sales Tax Office can verify the above
listed-documentation.
Procedure11.Register for Profession Tax at the Profession Tax
Office (State)Time to complete:2 daysCost to complete:No
costProcedure:According to section 5 of the Profession Tax Act,
every employer (not being an officer of the government) is liable
to taxation and shall obtain a certificate of registration from the
prescribed authority. The company is required to apply to the
registering authority using Form 1.The registration authority for
the Mumbai area is located at Vikarikar Bhavan, Mazgaon in
Mumbai.Depending on the nature of the business, the application
should be supported with such documents as proof of address,
details of company registration number under the Indian Companies
Act (1956), details of the head office (if the company is a branch
of company registered outside the state), company deed,
certificates under any other act, and so forth.
Procedure12.Register with Employees Provident Fund Organization
(National)Time to complete:12 daysCost to complete:No
costProcedure:The Employees Provident Funds and Miscellaneous
Provisions Act (1952) applies to an establishment, employing 20 or
more persons and engaged in any of the 183 industries and classes
of business establishments, throughout India excluding the State of
Jammu and Kashmir.The applicant fills in an application and is then
allotted a social security number. The Provident Fund registration
focuses on delinquent reporting, underreporting, or non-reporting
of workforce size. Provident Fund registration is optional if the
workforce size is not more than 20. The employer is required to
provide necessary information to the concerned regional Provident
Fund Organization (EPFO) in the prescribed manner for allotment of
Establishment Code Number. No separate registration is required for
the employees.Nevertheless, all eligible employees are required to
become members of the Fund and individual account number is
allotted by the employer in the prescribed manner. As per an
internal circular, the code number is to be allotted within 3 days
of submission, if the application is complete in all respects.
However, in many cases applicants have received the intimation
letter with the code number in 12 to 15 days. An online application
facility is not provided so far.
Procedure13.Register for medical insurance at the regional
office of the Employees State Insurance Corporation (National)Time
to complete:9 daysCost to complete:No costProcedure:Registration is
the process by which every employer/factory and every paid employee
is identified for insurance purposes and their individual records
are set up for them.As per the Employees State Insurance (General),
Form 01 must be submitted by the employer for registration. It
takes 3 days to a week for the Employer Code Number to be issued.
The- intimation letter- containing the Code Number is mailed to the
employer and that takes an additional couple of days.The Employee-s
individual insurance is a separate process that is initiated upon
the employer-s registration. The employer is responsible for
submitting the required declaration form and employees are
responsible for providing correct information to the employer. The
employee temporary cards (ESI Cards) are issued on the spot by the
local offices in many places.The temporary cards are valid for 13
weeks from the date of the employees appointment. It takes about 4
to 5 weeks to get a permanent ESI card.
We also did a series of posts about the legal information of
doing business in India in a 4 part series. Here are those articles
that you may find extremely useful in your quest to do business in
India.