Corporate digest-november 2017

Venture Care
D i g e s t
Strategy | | |Finance Digital Legal
November 2017 INR 150/- www.venture-care.com/magazine
- (Legal & Compliances) - (Finance)- (Special Story)
STEP TO START A SECTION
8 COMPANY IN INDIA
PLAN TO FUND YOUR
BUSINESS
FORMATION OF A SINGAPORE
PRIVATE LIMITED COMPANY
GENERIC VS. STRATEGIC ORGANIZATION
- (Strategy)

Index
Editorial
Special Story
Index
FORMATION OF A SINGAPORE PRIVATE LIMITED COMPANY
3
4
Legal & Compliance
COMPANY CLOSURE 21
Finance
VALUING START-UPS 10
GENERIC VS. STRATEGIC ORGANIZATION 18
Index
Strategy
STEP TO START A SECTION 8 COMPANY IN INDIA 29
PLAN TO FUND YOUR BUSINESS 13
2www.Venture-Care.com/Magazine November 2017

Prashant KumarPrashant Kumar
Editor
Happy Reading...
Editorial
Companies are keen to come to India
and do the business. Similarly, Indian
entrepreneurs are also keen to do the
business at global forum. Encouraged by
the Singapore Government's liberal foreign
direct investment, policies, business-friendly
corporate tax policies, tax exemptions on
foreign-sourced incomes and rst-world
infrastructure, more and more India
companies are making Singapore their
incorporation destination. Strategic
location, Ideal place for global trade and
c o m m e r c e , t a x b e n e  t s ,  e x i b l e
immigration policies are some of the key
benets which are attracting Indian
corporate to do business in Singapore. In
this article, you will come to know the
basic requirements to open a company
in Singapore.
Business valuation is required for internal as well as external purposes. Valuing a
running company may be easy. Valuing start-up companies LOOKS even easier; but
truth is not that. There are many concerns attached with it. You will have fair idea of
valuation approach of a start-up in this article.
Every business needs funds to grow. Requirements may be different. But whatever
may be the purpose, there has to be a well dened/explained plan to get the fund.
For example, there should be well architected revenue model, sound business plan,
feasibility report, nancial modeling (to have fair idea of sensitivity of impact of
utilization of fund), selection of fund provider(s) and nally negotiation and exit plan.
The article attempts to provide complete approach to plan to fund.
Companies get open and few acquire high and sustained growth and few die
slowly. In nut shell, few are generic and few are strategic organizations. This article
has found 20 basic symptoms at which you can identify the organizations' character.
There are a number of companies, which are registered under the Companies Act,
1956/2013, but due to various reasons they are inoperative since incorporation or
commenced business but became inoperative or defunct later on. The article
focuses on the ways in which a company can be closed. It also discusses the
eligibility criteria, benets, hiccups in the closure of companies. Hope you the article
will be informative to you.

Formation of a Singapore
Private Limited Company
Formation of a Singapore
Private Limited Company
Singapore is known for its professional business environment and offers huge
progression opportunities to the investors. Singapore is said to be one of the most
politically stable economies in the world. It is estimated to be one of the few
countries in the world where business can be set up with ease and at the same
time, the owners can gain significant revenues. Furthermore, its strategic location
makes it the perfect hub to gain access to the South East Asian markets. It is
difficult to enter markets like Malaysia, Vietnam, Indonesia and Philippines
without a Singapore setup, which helps ease issues like language constraints and
cultural habits of people and businesses in these countries.
Encouraged by the Singapore Government's liberal foreign direct investment
policies, business-friendly corporate tax policies, tax exemptions on foreign-
sourced incomes and first-world infrastructure, more and more India companies
are making Singapore their incorporation destination.
Special Story

All companies in Singapore must be registered with the Accounting & Corporate
Regulatory Authority (ACRA) and abide by the Companies Act. When setting up
business in Singapore, the most common legal form of foreign investor is the Private
Limited by Shares (Pte Ltd).There are many advantages of a private limited company
for Foreign Investor. Following are the advantages of company formation in
Singapore.
Strategic Location
Its strategic location ensures top-notch connectivity. Singapore's port is one of the
busiest in the world, and the country is characterized as a prime International
Maritime Center.
Ideal Place for Global Trade and Commerce
Singapore is located at the heart of the Asia Pacific region, which makes this area
an ideal destination for international companies planning to tap major Asian
markets including Taiwan, India, China, Malaysia and even Australia.
Outstanding Tax Benets
Tax resident status can be enjoyed by foreign companies who set up a Singapore
subsidiary company. In other words, they can avail the benefits of tax incentives and
exemptions exclusive to local businesses. A newly incorporated parent Company,
with at least one individual shareholder that has a minimum of 10% shareholdings,
is entitled to the local tax exemption of zero tax for the first S$ 100,000 of its
chargeable income.
Flexible Immigration Policies
The Singapore government provides several tax incentives to certain foreign
companies to attract more companies to set up their business operations from
Singapore. It also offers long-lasting competitive benefits. Thus, there is an extensive
list of foreign investors lined up to set up their Business in Asian Market.
Special Story

Ease of Doing Business
The World Bank's yearly Doing Business Report, has ranked Singapore consistently
amongst the top in the world for 'Ease of Doing Business.' Singapore scored high
points in areas that are important for entrepreneurs and start-ups; namely access
to capital and credit, as well as how effectively insolvencies are resolved.
Better Infrastructure and Lower Corruption
Start-up companies need all the assistance to achieve their maximum potential.
Even the most experienced entrepreneurs cannot operate in an environment that
is hostile towards business growth. The difference between Singapore and India,
with regards to fostering new businesses, is apparent.
Availability of Skilled Workforce
Not having the right team is one of the key reasons why a start-up with a good
idea can fail. The level of talent available in the country is directly proportional to
how skilled the employees of a start-up company can be.
Basic Requirement to open a Singapore Company:
Minimum 1 Shareholder (Individual/Corporate Entity)
1 Singapore Resident Director or foreigner holding valid employment pass
1 Singapore Resident Company Secretary
Minimum Paid-up Capital of S$1 share capital can be held in any currency
A local registered ofce address
A Director or Shareholder can be the same or different person.
100% local or foreign shareholdings is also allowed
Maximum 50 Shareholders for a private limited company
Director must be a resident of a country or must own an Entrepreneur Pass or a
Dependent / Employment Pass.
Name of the business entity
Special Story

Time Requirement:
Process in online and takes from several hours to several days to complete.
Before You Register Company in Singapore
Keep in mind the following company information you'll need to provide for
registering a business in Singapore:
Company Name:
Provide your company name to be registered in Singapore. This is required to
check availability of the same and to get approval for your new company name
before registering business in Singapore.
Brief Description of Business Activities :
Provide details of Business Activities to be done through your company in
Singapore. Some business activity may require relevant permits / licence.
Directors:
You must have at least one Resident Director in Singapore. This person can be a
citizen, permanent resident, or someone with a valid employment pass or
dependent pass. You can appoint as many directors, local and foreign, as you
want Directors need not be shareholders.
Shareholders:
For Private Limited Company, you can have between one and 50 shareholders.
Shareholders can be individuals or entities, local or foreign. After incorporation, you
can issue or transfer shares to shareholders. Your Company is considered as an
Exempt Private Company (EPC) if the private company has at most 20
shareholders, and No corporation holds (directly or indirectly) any benecial
interest in the EPC's shares. EPC will enjoy audit exemption if the Company is fullled
the small company requirement. A minimum of one shareholder is required. 100%
foreign ownership is allowed.
Company Secretary.
Under the Singapore Companies Act, Section 171, you have six months to
appoint a qualied company secretary once you incorporate.
Special Story

Paid-up Capital:
Your company must have at least S$1 in paid up capital, though you can
increase the amount at any time after incorporation. Singapore companies do not
use authorized capital. It can be Ordinary shares, preference shares or other
shares.
Registered Address:
You need to register a local business address. It can be residential or commercial,
but can't be a post ofce box. Homeowners are allowed to conduct small-scale
businesses using their residential premises.
Taxation.
Following tax exemptions and incentives are given to Singapore Companies:
Pay no more than 8.5 percent tax on your rst S$300,000 of annual prots and
17 percent thereafter.
Forget about dividend or capital gains taxes.
Registration Procedure and Timeline
Singapore Registrar of Companies is fully computerized. Your application is get submitted
in under an hour and the Registrar can normally incorporate your business in the same
day. You can reserve your company's name and register your company at the same time.
Reserve Your Company Name
The Singapore Government must approve your company name before you can register
it. The Company Registrar will oversee the process.
You can reserve your company name for 60 days and can get extension for another
60 days.
Register Company
After the Registrar of Companies approves your company name, they will process your
incorporation application and documents within a few hours.
Special Story

Post-Registration Formalities
Documents Issued
Certicate of Incorporation
The Singapore Company Registrar issues an email conrming the incorporation of th
company. It includes the company's Unique Entity Number (UEM), which is the standard
identication number issued by government to any entity registered in Singapore. A hard
copy of the certicate of incorporation can be purchased if required.
Company Business Prole
The Company Registrar will create a company business prole for your Singapore register
company after the company registration process is completed.
Once you have the email notication and business prole, you can proceed with all
legal and contractual tasks you need to perform in Singapore. You might need to open a
corporate bank account, lease ofce space or set up your phone and Internet accounts.
Opening a Corporate Bank Account
A private limited company is a separate legal entity from its directors and shareholders;
therefore it will need its own bank account. Thus, a resolution by the board of directors of
the company sanctioning the opening of the account and specifying the signatories to
the account is required. You have to choose a bank to open your current account which
does not require your physical presences.
Applying for Business Licenses
Certain businesses require a special license. The companies that perform following
activities will require applying for special Licenses:
Restaurants
Educational institutes
Travel agencies
Financial services
Import/export of goods
Employment agency
Goods and Service Tax (GST) Registration
If Company's annual revenue exceeds S$1 million, the company must register for GST. If
your annual revenue is below S$1 million, you don't have to obtain GST registration.
Annual Filing Requirements
Every company must hold its AGM every calendar year, with its nancial statements
tabled at the AGM for shareholders' approval. Every company must le its annual returns
within one month of its AGM date
Annual Income Tax Requirements
All Singapore incorporated companies must appoint an auditor within three months of
incorporation; unless the company is exempted from audit requirements There are certain
companies which are exempted from compulsory Audit Requirement.
Special Story

Valuing Start-upsValuing Start-ups
There is a famous saying “whenever there is transaction, there is valuation”. It is
true. But the reverse is NOT true- “whenever there is valuation, there must have
been transaction”.
Many times valuation is isolated from transaction.
A start-up has developed an idea. It has validated the idea. Business promoters
would like to the value of their start-ups now and after, say, 1-3-5 years. Why so?
They need it to conrm that:-
Whether idea has been successful
Whether business model and business plan has been successful.
The growth rate of the business
Employees and other stakeholders' satisfaction
Improvement in protability
Strategic position in market place etc.
Finance

Start-up valuation is different from valuing any running business due to many
reasons. Start-ups may not have:-
Business experience
Operational skill set
Brand name for their products/services
Strong R&D base
Dedicated execution team
Experience of affording sudden economic shocks
Required amount of fund etc.
However, the best part of is that start-up owners are not based and secondly,
they can be guided and moulded on the above issues easily.
Let us discuss some techniques for the start-up valuation.
Asset approach:
New businesses normally have few assets. Under this approach, market value of
all the assets is assigned. Assets include current assets also. Apart from that, value
of intangibles must also be assigned. The combined value will be the value of
business.
All principals and employees add value.
Assigning value to all paid professionals based on their skills, knowledge, experie-
nce and their contribution to the organization may be a fair idea.
Finance

Early customers and contracts in progress add value to the business. Existing
customer relationship and contracts should be monetized.
Use of discounted cash ow is also a good idea. A reasonable number of future
years for which sales seem to be visible can be forecasted. The cash prot should
be capitalized at a discount rate. While estimating the discount rate care should
be taken to factor the risk and uncertainty and if possible a bit conservative
discount rate should be chosen.
Earnings multiple approach- earnings multiple is selected and the average
earnings should be multiplied to reach valuation gure. This approach is usually
applied to a more mature start-up.
To conclude, whatever may be the techniques used for start-up valuation, care
should be taken that:
It is unbiased
It is relevant
It considers all the aspects of valuation
It is explanatory
It serves the purpose of various stakeholders
It should help in making decisions
Finance

Plan to fund your businessPlan to fund your business
It has been observed that many business owners start thinking about funding their
business and approach to investors and nally whosoever investor is ready, if any,
business owners go ahead with him. Later on the promoter-owner has to face
many unnecessary problems because of it. It, sometimes, becomes self-devastating
because of leakage of business idea.
Right way of getting fund starts with proper planning. Plans give insight to the
owner and condence of investors in business idea and management.
Finance

From planning to Funding
Get a feasibility report of your business idea
We develop a business idea. We want it to give it a hard core shape of business.
We want to survive. We want to grow. We want to acquire market share and so
we want to acquire another businesses. Feasibility report is the document which
helps in the above all. Feasibility report, overall, says that whether the business shall
be feasible at various dimensions.
Executive summary- An outlook of feasibility study
Skill set of management needed to carry the business
Product feasibility- It should include USP of the product also.
Price feasibility- What should be the feasible price of the product along with the
associated services
Market sustain ability- overall sustain ability of the product in the market
Legal and environmental feasibility- Rules and regulations of central, state or
local bodies& others
Technical feasibility
Financial Feasibility- Finance needed and whether the product is nancially
viable, Start of revenue generation
Limitations- During study
Make Feasibility report more effective:
Executive summary should be to-the-point
Language of the report should be easy to understand
Primary or secondary data sources, if any, should be mentioned.
All the dimensions which may affect the business positively or negatively should
be considered.
Develop a business model and business plan
Business Model
Revenue generation model and Initial target market are its key components.
Revenue model should give fair idea of “From Where sound and consistent revenue
can be generated and How”. Initial target market says “Who are the customers,
How their needs can be fullled”.
Finance

Business Plan
Business plan is very essential from company's future point of view.
Requirements are:
1. NO Bias:-It should be unbiased and disclose all the weaknesses and challenges.
2. Dynamism:- The business plan should be dynamic/exible and if possible
auto-adjustable.
3. Well communicated to the managers:- Business plan should be framed in
consultation of the internal managers who have responsibility to get it
executed successfully.
4. Authority should match responsibility:- it is also a requirement that managers
should be given required level of authority so that they can execute their
responsibility.
5. Estimation of “Near to Right” amount of capital needed:- Company may plan
for new product development, exploring new technology, exploring new
marketing channels etc. For all these it needs capital. Company should
estimate at least “Near to Right” amount of capital to achieve the above.
6. Study of trend in the industry:- Another requirement of setting growth oriented
business plan is that the company should study and analyse past, present and
expected future trend. Main trend parameters may be-
A. Product changes in the past
B. Pricing of the product
C. Changes in export market demand
D. Entry of new competitors
E. Expected variants in the products in future etc.
Finance

7. Right identication of “KSF” & Triggers and possible changes in future:-
Identication of right KSF and trigger points is also required for setting up growth
oriented business plan. Over a period of time these may change therefore,
there should be proper track of it.
Designing a pitch deck
A pitch deck is usually a 10-15 slide presentation designed to give a short
summary of company, business plan and startup vision. Pitch decks also serve very
different purposes, from trying to get a meeting with a new investor, to presenting
in front of a stage, and each one of them should follow a different structure. A
pitch presentation should be completely self-explanatory.
Pitch deck should be prepared as one page word document and power point
presentation slides.
Identifying investors
There are two types of investors- “pure nancial investors” and “Strategic investors”.
Pure nancial investors don't poke their nose into the business strategy and
operation. They will be happy with small equity stake in your business but they will
require much higher return and will prefer to exit from your business as early as
possible after making money. Strategic investors are different. They will assist you in
the business strategy and operational matters. They will be happy with relatively
lower return (but more than average market return) will prefer to stay in the business
for longer time period. They will prefer to exit from the business after getting
signicant capital gain or will acquire the business later on at premium price.
Sorting out of investors
It is not a good idea to approach all prospective investors; be it nancial investor
or strategic investor. They need to be sorted out.
Finance

Let's see what may be the general parameters on which you can sort them out:
A. Are they talking about too much on nancial returns?
B. Are they discussing too much on exiting from your business?
C. Have they invested in past in related or any other business?
D. Do they want to keep their nominee director on board?
Approach, Negotiate & sign MOU
It is good to approach few investors say 2-3 initially. Take a fair idea that what
they want. Convince them that you need “this amount of nance at this given
stage”. Negotiate on their expected return (of course they will demand higher
one). Some of the investors will demand much higher dividend once your business
becomes protable and on top of it higher capital appreciation while exiting from
the business.
It is imperative to have and MOU signed with investors.
To conclude
If sound planning is done before approaching any investor then chances of
failure is close to NO. In nut shell, “plan to fund” not “fund to plan”.
Finance

Generic vs. Strategic organization
Organizations differ in approaches. Approach makes them unique. Very few
organizations are unique in nature. Let us discuss that what the difference
between these two types of organizations are.
Strategy

Sr.
No.
Parameters Generic organization Strategic Organization
1 Working
methodology
Traditional Innovative
2 Focus Profit maximization Wealth creation
3 Approach Repeated and
traditional
New and unique
4 Culture Local Global and local both
5 Attitude Common Professional
6 Orientation Cracking the deal and
getting the orders
Identifying the actual needs of
customers and fulfilling those.
7 Customers Customers’
satisfaction
Customers’ delight
8 Employees Short term asset Long term asset
9 Compensation to
employees
Not assessed properly Assessed properly and
periodically
10 Corporate
governance
Not on priority at all At priority
11 Expansion of
business
Not so much Aggressive on this aspect
12 Internal discussions
on matters
Among very few
people
Relatively with large number
of people in the organization
13 Communication Communication gap is
visible
Well established
communication channel and
therefore no communication
gap
14 Decision making Limited to only top
level of management
Extended to middle level
managers.
15 Product Traditional and
becomes out-dated
later on
Modified or new products are
developed
Strategy

16 Brand focus Not or little and therefore
little investment in
creating brand
Very high investment in
creation of brand and
brand recall
17 Adaptation of new
ideas
Reluctant Receptive
18 Services Not exactly serving the
need of customers
Value added services are
provided
19 Marketing way Traditional Innovative to reach
customers
20 Training & Skill
development of
employees
Not visible Periodic as well as when
required
The above differences listed out may act as guide to organizations to convert
themselves from generic to strategic.
Start-ups should try to create themselves as strategic organization right from the
day one. Growth prospects in being strategic in nature are of course higher than
those in generic.
Common steps of transformation could be:
Selecting a parameter
Assessing whether that falls under generic organization or strategic organization
What are the changes required in the selected parameter
Making time frame to make those changes
Take off for changes
Strategy

COMPANY CLOSURE
There are a number of companies, which are registered under the Companies Act,
1956/2013, but due to various reasons they are inoperative since incorporation or
commenced business but became inoperative or defunct later on.
We all are aware the situation of Defaulting Companies as Registrar of
Companies (herein after referred as ROC) the authority under Section 248 (1) of
Companies Act, 2013 (hereinafter referred as Act) has issued notice against those
defaulting companies and ask them to reply within 30 days from the date of
receiving notice from the ROCs unless contrary provide the companies name will
be struck off from the Registrar maintained at MCA portal ofcial site and directors
of defaulting company will be disqualied for next ve years.
Legal & Compliance

To enable inactive private limited companies to quickly close or wind up, the
Ministry of Corporate Affairs has introduced Fast Track Exit Mode (FTE) - an easier
way to close inactive companies at a cheaper cost with lesser formalities.
Venture Care can help you guide through the procedure for the closure of your
company quickly and easily.
A COMPANY CAN BE CLOSED BY ADOPTING THE FOLLOWING WAYS:-
Strike off a company:
Any defunct company desirous to strike off its name from the register of Registrar
of company can apply in Form FTE for strike off its name from the register
maintained by ROC. Similarly, ROC has also power to strike off any defunct
company after satisfying himself of the need to strike off a defunct company and
has reasonable cause.
Winding up
The winding up of a company may be either –
A. By the Tribunal (also known as compulsory winding up)
B. Voluntary winding up
C. subject to the supervision of the Court
Here we will discuss striking of Company by ling Form FTE.
Eligibility Criteria to File Form FTE:
1. A company has failed to commence its business within one year of its
incorporation.
2. A company is not carrying on any business or operation for a period of two
immediately preceding nancial years.
3. ROC data base need to be updated and the Company is free from all its
legal compliances.
4. There should not be any creditor, if it is there take NOC from them that they
are ready to waive off their dues and they have no objection if the company
apply for strike off.
5. Bank Account of the company should be closed.
6. Fixed Asset of the company should be discharge.
7. There should not be any legal cases pending against company.
A company requires doing various compliances of Registrar of Companies (ROC),
Income Tax (IT) and other Legal bodies like regular ling of income tax return,
appointment of Auditor, balance Sheet and annual return ling with ROC and
more. Failing to maintain compliance for a Company could result in nes and/or
debarment of the Directors from incorporating another Company as name of
director will be shown as defaulting Director in the register of Director of ROC.
Legal & Compliance

Situations in which Company can not apply for Strike off:
The Company shall not made any application for the strike off of the Company if
any time in the previous 3 month the company has done any of the below
mentioned workings:
A. Has Changed its name or
B. Has Shifted its registered ofce from one State to another;
C. has made a disposal for value of property or rights held by it, immediately
before cesser of trade or otherwise carrying on of business, for the purpose of
disposal for gain in the normal course of trading or otherwise carrying on of
business;
D. has engaged in any other activity except the one which is necessary or
expedient for the purpose of making an application under that section, or
deciding whether to do so or concluding the affairs of the company, or
complying with any statutory requirement;
E. has made an application to the Tribunal for the sanctioning of a Compromise
Or Arrangement and the matter has not been nally concluded; or
F. is being wound up under Chapter XX, whether voluntarily or by the Tribunal.
Legal & Compliance

Companies that cannot use Fast Track Exit option:
A. Companies Registered Under Section 8
B. Listed companies;
C. Companies that have been delisted due to non-compliance of listing
regulations or listing agreement or any other statutory laws;
D. Vanishing companies;
E. Companies where inspection or investigation is ordered and being carried
out or actions on such order are yet to be taken up or were completed but
prosecutions arising out of such inspection or investigation are pending in the
Court;
F. Companies where notices have been issued by the Registrar or Inspector
(under Section 234 of the Companies Act, 1956 (old Act) or section 206 or
section 207 of the Act)and reply thereto is pending;
G. Companies against which any prosecution for an offense is pending in any
court;
H. Companies whose application for compounding is pending;
I. Companies which have accepted public deposits which are either
outstanding or the company is in default in repayment of the same;
J. Companies having charges which are pending for satisfaction
Benet to Close Company under FTE:
Fast mode to Close
Under FTE Company can be closed quickly, whereas traditional methods take
longer and are more cumbersome. Hence, closing a company under fast track
exit scheme is faster and easier.
Avoid Fines
A company that doesn't le its compliance on time incurs nes and penalty
including debarment of the Directors from starting another Company. Hence, it is
better to ofcially wind up a company that is inactive and avoid potential nes or
liabilities in the future.
Low Cost
When compared to maintaining compliance for a dormant company, it might
actually be cheaper to wind up a company under. This is most cheapest way to
wind up company in minimum budget or in minimum cost.
Easy to Close
The fast track exit scheme was specically introduced by the Government to
make it easy for inactive companies that have NIL assets and liabilities to close
down or wind up. Hence, the formalities for winding up of a company under fast
track exit scheme are easy to complete
Legal & Compliance

Avoid Compliance
A company is a legal entity and a juristic person established created under the
Companies Act. Therefore, a company required regular maintenance of
Compliance throughout its life cycle. Fast track exit used can be used close a
company that is not active and avoid compliance responsibilities.
Documents Required:
Application in form FTE.
Copy of Board resolution authorizing the ling of this application;
A statement of accounts showing the assets and liabilities of the Company
made up to a day, not more than thirty days before the date of application
and certied by a Chartered Accountant
In the case of a company regulated by any other authority, approval of such
authority shall also be required.
Indemnity bond to be given collectively by all directors on Rs. 500 Stamp paper;
Afdavitto be given individually by each director on Rs. 200 Stamp paper
Government ling fees: INR 5,000/-
Legal & Compliance

Procedure for closure of company by ling Form FTE :
Provide your company document as listed below so we can decide whether
your company is eligible to le Form FTE for striking of name of the company.
A. Last Audited Balance sheet and prot and loss account.
B. MOA & AOA of the company.
C. Bank Statement of the Company.
D. Details of the company.
After reviewing document of your company if your company is eligible for ling
Form FTE then we can proceed with documentation as listed below.
A. Board Resolution
B. Statement of Account
C. Indemnity Bond
D. Afdavit
E. Last le ITR Acknowledgment.
F. NOC from creditors, if any.
G. Sign copy of Form FTE if director does not have DSC.
We will provide you all draft to be executed as listed above
Once we received all documents from you we will le Form FTE with ROC.
The Registrar shall, on receipt of such application Issue a public notice. Such
notice shall be published in following manner
A. Place copy of notice on the ofcial website of MCA on a separate link.
B. Published in the Ofcial gazette
C. Publish in one English and one vernacular language newspaper, both
having wide circulation in the state in which registered ofce of the
Company is situated.
Intimation to Authorities for any objections:
The Registrar of Companies shall, simultaneously intimate the concerned
regulatory authorities regulating the Company, having jurisdiction over the
Company, viz;
A. Income Tax Authorities
B. Central Excise Authorities
C. Service Tax Authorities
If the authorities have any objections, they have to furnish the same within a
period of 30 days from the date of issue of the letter of intimation.
Legal & Compliance

Issue notice of Striking off and dissolution of Companies:
If no objections received then ROC shall issue a notice u/s 248(5) of striking off of
Company and publish the same in ofcial gazette. The copy of notice shall also be
placed on the ofcial website of the MCA.
Effect of Strike off:
It shall on and from the date mentioned in the notice under sub-section (5) of
section 248 cease to operate as a company and the Certicate of Incorporation
issued to it shall be deemed to have been cancelled from such date except for
the purpose of realising the amount due to the company and for the payment or
discharge of the liabilities or obligations of the company
Time Required for whole procedure :
Whole procedure may take 1-2 month to get strike off status from ROC.
Frequently Ask Question:
1. What is Closure of Company?
When existence of the Company as a legal entity comes to an end it is known as
the Closure of the Company.
2.What is the difference between Closure, Winding up, Dissolution of Company?
- Closure of the company is done voluntarily and is done through the fast track exit
scheme.
- Winding up of the company may be voluntary or by the order of the Court by
appointing an ofcial liquidator to monitor the process of winding up.
- Dissolution is initiated by the Court for ending the legal existence of the Company.
3. Why ROC ling is required for Closing a Company?
It is necessary to le Closure with the ROC as ROC or MCA data base need to be
updated and the Company is free from all its legal compliances as it is ofcially
closed.
Even though business of the company is closed, unless closure documents are led
and approved by the ROC, company is not legally closed and the company
needs to le all the regular returns.
4. What is Fast Track Exit (FTE) Scheme?
FTE is a company closure scheme initiated by MCA for easy and faster closure of
Company.
Legal & Compliance

5. Which Company is eligible to apply for Closure of Company?
Any Company which is not a Section 8 Company and has been inoperative for
more than 1 year from the date of its incorporation can apply for Closure of
Company under FTE scheme.
6. What are the expenses and cost involved in Closing a Company?
The ling fees for Form FTE isRs. 5000.
7. What documents are required for Closure of Company?
Application for Striking off of the Company, Board Resolution for closure, Consent
of Directors, Director's Afdavit, Indemnity Bond, Statement of Assets and Liabilities.
8. What Forms to be led for Closing Company under Easy Exit Scheme of ROC?
Form FTE
9. What is time limit to le Closure documents with ROC?
The Form has to lled be led with ROC ofce within 30 days from the date of
Signing of the Statement of Assets and Liabilities.
Legal & Compliance

STEP TO START A
SECTION 8 COMPANY IN INDIA
As one of the largest markets in the world, India has a vast trade and commercial
domain. However making prots through trade and commerce is not the only
factor which is prominent in the Indian market. India as a huge country lacks
behind in sectors like education, employment, health care, food, and safety, etc.
Our government is under a lot of pressure to ameliorate the conditions within the
national legislation. The central government cannot address each and every issue
simultaneously and this creates a space for specic organizations which assist the
government working for the well-being of society. Such organizations are known as
Non-prot organizations or non- government organizations.
A Non-prot organization can be registered as a Company under Section 8 of the
Companies Act, 2013.It can also be registered as Trust or a Society. Section 8
company can be incorporated for promotion of commerce, art, science, sports,
education, research, social welfare, religion, charity, protection of environment or
any such other object, provided it intends to apply its prots, if any, or other income
in promoting its objects and intends to prohibit the payment of any dividend to its
members.
Legal & Compliance

PROS OF SECTION 8 COMPANY
NO MINIMUM PAID UP CAPITAL REQUIREMENT:
As per Companies Act, 2013 unlike private and public limited companies, Section
8 Company do not require any minimum capital contribution for incorporation.
They can commence there business without any share capital. The fund required
for business can be brought in the form of donation and subscription from public
and members of the Company.
TAX DEDUCTION:
Since Section 8 Companies are non-prot making companies they are exempted
from certain income tax provisions. They are also given numerous deductions and
benets. Individual Donating Money in Section 8 companies also avail the benets
of deduction under Section 80G of income Tax Act, 1961.
NO NEED TO USE TITLE :
Unlike Private Limited company which uses 'Private Limited' as title after its name,
Section 8 Company is not required to add any sufx or title to its name.
NO STAMP DUTY PAYABLE:
A section 8 Company is exempted for the payment of stamp duty applicable for
registration as applicable in case of other structures such as private limited or a
public limited company.
CREDIBLE:
A Section 8 Company has more credibility as compared to any other Non-prot
organization structure be it a Trust or Society. As it is a licensed by the central
government. It has more stringent regulations such as no change in MOA and
AOA can be done at any stage or situation in a Section 8 Company. A section 8
company due its strict compliances as regard to functioning has a more reliable
image in comparison to other legal structures.
POINT TO BE KEPT IN MIND BEFORE REGISTERING SECTION 8 COMPANIES:
A. Decide regarding the proposed name to be applied, objects to be carried by the
Company, authorized capital.
B. Name of Section 8 Company shall include the words Foundation, Forum, Association,
Federation, Chambers, Confederation, Council, Electoral trust and the like words.
C. It should intend to apply its prots, if any or other income in promoting its objects.
D. It should intend to prohibit the payment of dividend to its members.
E. A partnership rm is allowed to be a member of the Section 8 company
Legal & Compliance

MINIMUM REQUIREMENTS FOR SECTION-8 COMPANY:
A. At least two shareholders
B. Minimum two directors
C. Shareholders and Directors could be same.
D. At least one Director should be Indian resident
E. There is no minimum capital required.
F. Registered Ofce Address Proof (Rent agreement if the premises is not
owned by the company)
G. Documents claiming the ownership such as Sale Deed or House Tax receipt
along with an NOC.
PROCEDURE FOR INCORPORATION OF SECTION-8 COMPANY:
A. Get Digital Signature Certicate (DSC) of all members.
B. Get Director Identication number (DIN) of all Directors by using DSC.
C. Suggest at least Six Company name. We will do search for name availability.
D. Apply to ROC for name approval.
E. Once name is approved by ROC File application to Central Government in
Form INC -12 for grant of License to start Section 8 Company.
F. Once Central Government issues License le Incorporation document with
ROC like MOA AOA Consent of Director, Afdavit and declaration from
directors etc.
G. Once Incorporation form is approved by ROC, ROC shall issue Certicate of
Incorporation with PAN and TAN No.
Requirement to Apply for DSC:
All members should have DSC
1. Pan Card Self Attested
2. Residential Proof Self Attested
3. Dully ll and sign DSC application form.
Legal & Compliance

Requirement to Apply for DIN:
(Minimum Two Directors are required)
1. Photograph of the Applicant - To be Self-attested.
2. PAN - To be Self-attested
3. Mobile No.
4. Email id.
5. Educational Qualication
6. Occupation
7. Proof of residence of applicant
8. Address proofs like passport, election (voter identity) card, ration card,
driving licence, electricity bill, telephone bill or bank account statement
shall be attached and should be in the name of applicant ( shall not be
later than 2 months).
9. DSC of Individual.
Requirement to Apply for Name Availability:
1. Six Proposed name with signicance of Name
2. Authorized Capital- Optional
3. Jurisdiction of Registrar of Companies.
4. Main Object to be pursued by Company
Requirement to Apply for Central Government License of Section 8Company:
1. Draft MOA & AOA
2. INC -15 Declaration by each subscriber (On Non- judicial stamp paper of
Rs. 100/- and duly notarized).
3. Afdavit by each subscriber regarding non disqualication (On Non- judicial
stamp paper of Rs. 100/- and duly notarized).
4. Declaration by each subscriber regarding non acceptance of Public deposit
(On Non- judicial stamp paper of Rs. 100/- and duly notarized).
5. Consent from all Directors in DIR- 2
6. Estimated statement of Income & Expenditure for Next three years and it
should be signed the proposed Promoters.
7. Estimated Balance Sheet for Next three years and it should be signed the
proposed Promoters.
8. List of proposed Promoters and Directors of the Company
9. Statement of ground on which application is made.
Requirement to Apply for Incorporation of Section 8Company:
1. Registered ofce address of Company.
2. Recent Address proof with NOC from Owner.
TIME PERIOD:
Time Required for Incorporation of Section 8 Company Shall be 30-60 days,
depending on government approval.
Legal & Compliance

REGISTRATION OF COMPANY UNDER SECTION 12A AND 80G OF
INCOME TAX ACT.
Income of an organization is exempted if NGO has 12-A registration. This is one
time registration.
If an organization has obtained certication under section 80-G of Income Tax
Act then donors of that NGO can claim exemption from Income Tax.
Application for registration under section 12A and 80G can be applied just after
registration of the NGO.It can be applied to the Commissioner of Income Tax
(Exemption) having jurisdiction over the institution.
Both applications can be applied together or it can be also applied separately.
If some organization is willing to apply both applications separately, then
application for registration u/s 12A will be applied rst. Getting 12A registration
must for applying application for registration u/s 80G of Income Tax Act.
Legal & Compliance

About Venture Care:-
Venture Care is India's 1st of its kind online Business Solution Company which
helps to Plan, Launch, Manage and Grow Businesses. Find More about us at
www.venture-care.com
WHAT WE DO
Since 2010, Venture Care (a S&F Advisory Brand) is helping businesses and
enterprises to Plan a Business, start a business, run a business, Grow a
Business and Close or Exit from a Business.
We at Venture Care generate ideas, spark actions and quantify time-bound
results by providing tailored, practical and affordable solutions for the growth
of your company. Venture-Care is dedicated to turning good ideas into
measurable change
Our team of Chartered Accountants, Business planner, Technocrats,
Strategist, Marketers, Senior Bankers, Company Secretaries, Tax Experts and
other professionals enables us to help and guide you to flourish your
business aspirations.
17 Ajinkytara, Kalaniketan Society
s.no. 29, Kalanagar
Near Rajrshi Shahu & Janta Bank.
Dhankawadi Pune 43.
ask@venture-care.com
020 65363633
Head Office (India)
Venture Care
www.Venture-Care.com/Magazine
Branch office
(Netherlands)
Venture Care
JonkerFransstraat 46,
3031 AV Rotterdam, (NL)
NL@venture-care.com
Phone: +31 614 575 275

Corporate digest-november 2017

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