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Business set-up Services

Business set-up Services

Individual/proprietorship registration

A sole proprietorship is an unregistered business unit which is owned, managed and controlled by one person. Most of the business in India runs as sole proprietorship’. Proprietorship is a kind of structure which is easy to start and have very minimal regulatory compliance requirement for incorporation/registration and regular operation.. However, after the start-up phase, proprietorship’s do not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence – which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganised, small businesses that will remain small and/or have a limited period of existence. However tax rate benefit is there which is available to an individual like increasing tax rate in place of fixed tax rate and to claim basic exemption which is not available in case of a company or LLP. Proprietorship unit can also take the benefit of presumptive taxation scheme of govt of India, under this scheme the proprietor does not need to maintained huge books of account and can pay tax on just 6% (if banking transaction) or 8% (If Cash Transaction) of his total turnover if his turnover does not exceed 2 core per year (if proprietor is in business) for professional they can pay taxes on 50% of total income if income does not exceed 50 lac per year.

Partnership Formation or registration

A Partnership Firm is a form of business where two or more person can come together and start business. Partnerships firms are easy to start and are very popular amongst small and medium sized businesses in the unorganized sectors. There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm. However it is advisable to register a Partnership firm due to the added advantages. 

Limited Liability Partnership registration

Limited Liability Partnership (LLP) was passed by parliament in 2008. The objective behind to introduce this new concept of Limited Liability Partnership (LLP) is to maintain the international standard and provide a form of business which is not as complex as a company but have the feature of limited liability to the owners. In Year 2016-17 total 29403 LLP was registered and 320 companies converted them in LLP(Source PIB: Ministry of Corporate Affairs) to take the advantage of less formal format of running business that is LLP. There are fewer formalities in areas of legal compilation, annual meeting, resolution, Loan from directors, Loan to Directors, sale of undertaking etc as compared to any other Company. LLP may have partners varying from 2 to many. There is no maximum limit for partners in LLP.

The cost of registration of LLP is low as compared to any other company (Public or Private).

LLPs are not required to audit their accounts unless they satisfied any of the following condition:

  • When the contributions of the LLP exceeds Rs. 25 Lakhs, or
  • When annual turnover of the LLP exceeds Rs. 40 Lakhs

LLP have to face less compliance burden as they have to submit only two statements i.e. the Annual Return & Statement of Accounts and Solvency.

LLP is not liable to pay the tax on the income and share of its partner. Thus, no dividend distribution tax is payable as under section 40(b). 

If the partners of LLP withdraw profits from the company, an additional tax liability in the form of DDT is not payable by partners.

OPC registration

One person company format is good for the people who believe that they want to run the show on their own and don’t want to share the ownership and decision making with others. However in the long run they need to create a good team either in the form of shareholders or Directors or may be employees. OPC is nothing bur an organised form of proprietorship business, a single shareholder cum director can run this company. The benefits of company like limited liability are also available to OPC. A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company. Minor cannot become member or nominee of the One Person Company or can hold share with beneficial interest. An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of anybody corporate.

Private Limited Company registration

Private limited company is very popular format for running business for the people who intent to do their business in more formal manner. Private limited is now days become very attractive because govt of India reduce the Income Tax rate from 30% to  25% if the turnover of the company is upto 250 crore. Now people are looking at registering private limited company and not LLP or partnership firm. Private limited can have easy access of capital from domestic as well as foreign investor. Private Limited Company can be started by minimum two directors and two shareholders who can or cannot be same person. However appointment of Auditor is mandatory for every private limited company without waiting for any threshold limit.

Public limited company registration

Public Limited Company is a type of organisation which run by the investment of public and whose shares may be traded in stock market or can issues deposits. For Public Limited Company Registration, the company must have minimum 3 Directors, 7 Shareholders. A Public limited company have all the advantages of Private Limited Company and the ability to have any number of members, ease in transfer of shareholding and more transparency. Public company can borrow the money from general public in the form of IPO or FPO. Public companies have easy access to public deposit.

Non Profit organisation or NGO Set up Services:

  1. Trust Registration along with 12A & 80G registration under Income Tax

Trust is a very popular form of organisation for running NGO or organisation with no profit motive. Trust is governed by Indian Trust Act 1882. For the creation of trust we need a Settlor, Trust property and the beneficiary of such property. Trusts are generally created by group of persons for doing social benefit activity in the society. Trusts have many advantages like Incomes are exempted from Tax & donor who are donating funds to the trust can claim the income tax exemption under income tax Act, but these benefits are available only when such trust obtain the approval from Income tax department for claiming benefit & providing benefit to donor under section 12A & 80G respectively.

  • Society Registration along with 12A & 80G registration under Income Tax

Society registration is an association of persons who have come together and decided to do something for the benefit of the member of this society or general public. A society can be created by at least 7 persons. Registration of society is mandatory with respective authority in respective states, like in Delhi the power of registering society has been given to the SDM office in different regions. A society can also apply with Income Tax department to claim the exemption of donation received under section 12A & 80G.

  • Section 8 Company or Non-profit company registration along with 12A & 80G registration under Income Tax

The Section 8 company is more organised way of running an NGO, the person managing this are called Directors individually & Board of Directors in team. This company also has shareholders who have invested in the company for the purpose of social activity. This format is very popular especially for the Multinational NGO who has operation in many countries. This format is very helpful for attracting foreign party for the donation in the company. Because anyone can have the access of the company information which are publically available at the portal of ministry of corporate affairs which is not possible in case of Trust & Society.

Business continuation or statutory registration services:

  1. Shops & establishment registration of commercial establishment

The purpose of enactment of the Shops and Establishment Act is providing statutory obligation and rights to both employees and employers in the unorganised sectors ofemployment. It varies state to state as it’s a state law covered under List ii of schedule vii of Constitution of India. This Act is designed to regulate the payment of wages, hours of works, leave, holidays, terms of services and other condition of people employed in the shop and commercial establishment. In case of Delhi every establishment is required to be registered under The Delhi Shop and Establishment Act, 1954 within 90 days from the commencement of work.  Generally this is required by all kind of organisation including NGO, Societies, trust etc. except some exemption like establishments pertaining to any kind of educational activities in Maharashtra.

We at Jivanthyam help companies to register their branches in every state of India.

  • ESIC registration

ESIC Act, 1948 provides certain benefits to employees in case of sickness, maternity, and injury. Presently I51 ESIC hospitals are available across the country where insured person can avail benefits provided by the Act. It applies factories and establishments having 10 or more persons in employment whose gross salary is upto Rs.21,000 (before 1st Jan, 2017 it was Rs. 15,000).As per ESIC Act and applicable rules Employers and Employees are required to contribute 4.75% and 1.75% of gross wages respectively, which is to be deposited by employer within 21 days of the following month. Apart from these benefits it also provides following Benefits:

  1. Dependant Benefit- Dependent benefit is paid at the rate of 90% of wage in the form of monthly payment to the dependents of deceased insured person, when death occurs due to employment injury or occupational hazards.
  2. Funeral Expenses-an amount of rupees 10,000 is paid to the dependents or to the person who performs last rites from day one of registration.
  3. Unemployment Allowance- Unemployment is paid to an insured person who becomes unemployed after being insured 3 or more years, due to closure of establishment, retrenchment or permanent disable. Allowance is paid at rate of 50% of wage for maximum period of one year.

We at Jivanthyam help companies to register their branches in every state of India.

  • PF registration

The objective of PF fund is to help employees save a fraction of their salary every month so that he can use the same in an event that the employee is temporarily or no longer fit to work or at retirement. Employers and employees both contribute @12% of gross Salary in contribution out of which 8.33% goes for EPS and 3.67% goes for EPF. In Budget, 2018 Government reduced Women employees’ contribution to 8% from 12%. It applies establishments where 20 or more persons are employed and gross salary is uptoRs. 15,000.

Apart from Employees Provident Fund and Employee Pension Scheme, Act also provides for Employee’s Deposit Linked Insurance Scheme (EDLI) for which only employer has to pay 0.5% of gross salary. Employee’s nominees are eligible to get minimum 1.5 lac and maximum 6 lac in case of death of employee. All members of EPF are automatically covered under EDLI.  

In 2016 Government announced Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), according to PMRPY government will pay 8.33% Employer’s contribution  of  Employee Pension Fund (EPF) and also 3.67% of Employee Provident Fund(EPF) in case of Textile Industry for 3 years from registration of new employee. As per conditions of PMRPY Establishment should be registered with EPFO on or after 1st April, 2016 and Employee whose UAN is created on or after 1st April, 2016. In Budget 2018, finance minister also announced that now government will pay entire 12% contribution of employer for all industries not only for textile industry.

We at Jivanthyam help companies to register their branches in every state of India.

  • Professional Tax registration

Professional Tax is levied by the State government on every earning individual. The criteria to levy this tax are different in different state. However Rs. 200 per month is a general rate applicable in maximum states. Exemption Limit and rate of Professional tax vary state to state. For salaried employees, Employer is liable to deduct professional tax every month and remit to respective government and other entity shall make their payment directly to State Government. Recently Punjab also announce levy of professional tax on individual who is liable to pay income tax under Income Tax Act, 1961. This Tax is generally found in all part of India except North India. However recently Government of Punjab in May 2018 notified the professional tax rules in the state as per which every person @ Rs 200 per month whether in employment or profession is liable to pay to state government.

We at Jivanthyam help companies to register their branches in every state of India wherever Professional Tax is applicable.

  • Contract Labour registration

 Act applies to the Principal Employer of an Establishment and the Contractor where in 20 or more workmen are employed or were employed even for one day during preceding 12 months as Contract Labour. Act regulate the employment of contract labour and to bring them at par with directly employed labour with regard to the working conditions and other benefits and also to provide for abolition of contract labour in certain circumstances. Recently government of Haryana taken a very progressive steps and increase this limit of 20 employees to 50 employees to get a unit registered under contract labour Act. Industry really welcomes this move.

We at Jivanthyam help companies to obtain the license in every state of India.

  • FSSAI registration or license

Food safety and standards authority of India (FSSAI) play an important role in controlling food quality levels in order to ensure safety. FSSAI prescribes standards for food business operators, which are mandatory to be followed by them. FSSAI License are mandatory for every person before starting any Food Business. Petty food business operators are required to obtain FSSAI registration whose annual turnover does not exceed 12 lac and. There are 2 kinds of licence under FSSAI Central and State, which License is required by a person to operate food business, is determined by his turnover or volume of production as case may be. The companies registered under FSSAI also need to follow the guidelines or rules related to labelling or rebelling of goods.

We at Jivanthyam help companies to obtain the license in every state of India.

  • Import & Export code license

IEcode is 10 digit number issues by The Directorate General of ForeignTrade (DGFT) which is mandatory to import and export goods and services. It is mandatory requirement for claiming refund of various taxes and export incentives. IE code is issued for lifetime; it also doesn’t require any renewal after allotment.