we provide our clents the legal help to get their companies registered,make legal documents,filing tax returns,copyright,patent and trademark ina very simpliefied manner and let u save your time and efforts with a professionally equipped team of lawyers,chartered accountants and company secretaries. we ensure to be your legal hand over your visionary world
startup registration,legal documentation,copyright,trademark and patent
1. LEGAL SYNERGY
CORPORATE OFFICE: CORE TEAM MEMBERS:
#21 ARIHANT NAGAR CA RAJIV JAIN
WEST PUNJABI BAGH (9654364067)
DELHI-110026 ADV. ANJALI JAIN
(9958565238)
Your friendo-legal hand
2. ABOUT US
LEGAL SYNERGY provides the comprehensive services over a
single platform. Believing in customer satisfaction, we ensure to
provide professional services with personal interest giving you
the most convenient and safest approach to provide a legal
background to your vision in the fields like
COMPANY REGISTRATIONS,TAX FILINGS,DOCUMENTS LIKE
HIRING AGREEMENTS, EMPLOYMENT CONTRACTS, PROPERTY
RELATED AGREEMENTS,PATENT AND COPYRIGHT REGISTRATION
AND OTHER MANDATORY COMPLIANCE'S etc.
3. SERVICES WE PROVIDE
*STARTUP BUSINESS
*TAX AND REGISTRATIONS
*TRADEMARK,COPYRIGHT AND PATENT
* LEGAL DOCUMENTATION
* MANDATORY COMPLIANCES
*CLICK ON THE TOPIC YOU NEED TO KNOW THE DETAILS
4. STARTUP BUSINESS
• PRIVATE LIMITED COMPANY
• LIMITED LIABILITY PARTNERSHIP
• ONE PERSON COMPANY
• PARTNERSHIP FIRM
• SOLE PROPRIETORSHIP BUSINESS
BACK
6. TAX AND REGISTRATIONS
REGISTRATIONS FILINGS
VAT REGISTRATIONS VAT RETURNS
SERVICE TAX REGISTRATION SERVICE TAX RETURNS
IMPORTER EXPORTER CODE INCOME TAX RETURNS
PROFESSIONAL TAX
REGISTRATION
WEALTH TAX
SHOPS AND ESTABLISHMENTS PROPERTY TAX
PASSPORT REGISTRATION EXCISE RETURNS
PASSPORT RENEWAL
PANCARD REGISTRATION
SSI/MSME RESISTRATION
DSC REGISTRATION
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7. WEB/APP
RELATED
TERMS OF SERVICE
AND PRIVACY
POLICY
DISCLAIMER
HIRING
DOCUMENT
EMPLOYMENT
CONTARCT
CONSULTANCY
AGREEMENT
FREELANCER
AGREEMENT
INVESTMENT
SUPPORT
FOUNDER’S
AGREEMENT
TERM SHEET SHAREHOLDER’S
AGREEMENT
SHARE
PURCHASE
AGREEMENT
PROPERTY
MATTERS
GIFT DEED SALE DEED RESIDENTIAL
RENTAL
AGREEMENT
MAKE A WILL
CONFIDENTIAL
AGREEMENT
NON DISCLOSURE
AGREEMENT
LEGAL NOTICE LEGAL NOTICE
SERVICE/VENDO
R RELATED
SERVICE LEVEL
AGREEMENT
MASTER SERVICE
AGREEMENT
VENDOR
AGREEMENT
BUSINESS
COLLABRATION
AGREEMENTS
MEMORANDUM
OF
UNDERSTANDING
FRANCHISE
AGREEMENT
JOINT VENTURE
GAREEMENT
LEGAL DOCUMENTATION
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8. SECRETARIAL
COMPLIANCES
CONVERSION CLOSURE CHANGES IN
BUSINESS
ESOP ACCOUNTS
ANNUAL FILINGS
FOR PVT. LTD
SOLE
PROPRIETORSHIP
TO PVT. LTD
CLOSE
YOUR PVT.
LTD
ADD A DIRECTOR EMPLOY
-EE
STOCK
OPTION
PLAN
MAINTAIN
YOUR
ACCOUNTS
ANNUAL FILINGS
FOR LLP
PARTNERSHIP TO
LLP
CLOSE
YOUR LLP
REMOVE A
DIRECTOR
INCREASE IN
AUTHORISED
CAPITAL
PVT. LTD TO
PUBLIC LTD
ADD A DESIGNATED
PARTNER
PVT. LTD TO ONE
PERSON COMPANY
CHANGE OBJECTIVES
OF BUSINESS
CHANGE OFFICIAL
ADDRESS
CHANGE COMPANY
NAME
CHANGE LLP
AGREEMENT
MANDATORY COMPLIANCES
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9. Private Limited Company, the most popular legal structure for
businesses, should be chosen by anyone looking to build a scalable
business. Start-ups and growing companies pick it because it allows
outside funding to be raised easily, limits the liabilities of its
shareholders and enables them to offer employee stock options to
attract top talent. As these entities must hold board meetings and file
annual returns with the Ministry of Corporate Affairs (MCA), they tend
also to be viewed with more credibility than a Limited Liability
Partnership (LLP), One Person Company (OPC) or General Partnership.
BACK
PRIVATE LIMITED COMPANY
10. LIMITED LIABILITY PARTNERSHIP
Limited Liability Partnership (LLP), introduced only in 2008, has
quickly become a popular legal structure for businesses. Its main
improvement over the General Partnership is that, as the name
indicates, it limits the liabilities of its partners to their contributions to
the business and also offers each partner protection from the
negligence, misdeeds or incompetence of the other partners. The LLP is
also cheaper to incorporate than a private limited company, requires
fewer compliances and can be a smart choice from a tax perspective.
However, if you're looking to raise venture capital or attract talent with
employee stock options, private limited is the way to go as LLPs cannot
easily accommodate it. This is why they are most popular with
professional services firms (web designers or architects, for example)
that require no equity funding.
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11. ONE PERSON COMPANY
The One Person Company (OPC) was recently introduced as a
strong improvement over the sole proprietorship. It gives a single
promoter full control over the company while limiting his/her
liability to contributions to the business. This person will be the
only director and shareholder (there is a nominee director, but
with no power until the original director is incapable of entering
into contract). So there's no chance of raising equity funding or
offering employee stock options. Furthermore, if an OPC hits an
average three-year turnover of over Rs. 2 crore or has a paid-up
capital of over Rs. 50 lakh, it must be turned into a private limited
company or public limited company within six months.
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12. PARTNERSHIP FIRM
A General Partnership is a business structure in which two or
more individuals manage and operate a business in accordance
with the terms and objectives set out in the Partnership Deed.
This structure is thought to have lost its relevance since the
introduction of the Limited Liability Partnership (LLP) because its
partners have unlimited liability, which means they are personally
liable for the debts of the business. However, low costs, ease of
setting up and minimal compliance requirements make it a
sensible option for some, such as home businesses that are
unlikely to take on any debt. Registration is optional for General
Partnerships.
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13. SOLE PROPRIETORSHIP BUSINESS
A sole proprietorship is a business that is
owned and managed by a single person. You could have one up
and running within 15 days, which makes it very popular among
the unorganised sector, particularly small traders and merchants.
There is no such thing as registration; proprietorships are
recognised by other registrations, such as a service tax
registration or sales tax registration. As you would imagine with a
business that’s so easy to set up, though, its shortcomings are
severe: the liability of the proprietor is unlimited and it does not
have a continuous existence
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14. VALUE ADDED TAX
Value-added Tax (VAT) Registration, also
erroneously known as TIN and CST Registration, is mandatory for
any business entity engaged in the sale of goods in India and a
turnover of over Rs. 5 lakh (although it may be higher in some
states). It is a multi-stage state tax that accumulates at various
stages of production and supply. At every stage, the purchaser
pays the tax and is allowed to offset the same on subsequent
sale. Consumers, therefore, ultimately bear this tax. VAT is
collected by the state government and it is essential to know
what the VAT rate is for the type of good or service you provide in
each state you provide it in. Returns need to be filed on the 20th
of each month (partnerships, LLPs and proprietorships can do so
quarterly).
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15. SERVICE TAX
Service tax is an indirect tax levied on a wide array of services
specified by the Central Government under the Finance Act,
1994. The service provider (a restaurant or tour operator, for
example) pays the tax and recovers the amount from its
customers. To pay this tax, the service provider must be
registered with the Central Government if the preceding fiscal
year's turnover is over Rs. 9 lakh. However, collection must start,
at the rate of 14.5%, only when the turnover of the business
exceeds Rs. 10 lakh. Service Tax is to be paid to government via
designated branches once every quarter by LLPs, partnerships
and sole proprietors and once every month by all other entities.
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16. IMPORTER EXPORTER CODE
All businesses engaged in importing and exporting goods must
have an Importer Exporter Code (IEC). Without one, you cannot
import or export. You don't need to be a registered entity to
apply for one; you can apply even as an individual. The IEC does
not apply to technology and services. However, it does in certain
cases in which international trade is restricted, such as nuclear
weapons and automatic guns. The IEC is a 10-digit code with
permanent validity issued by the Directorate General of Foreign
Trade.
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17. PROFESSIONAL TAX
Professional Tax is a state-level tax that applies to salaried
employees and professionals, including chartered accountants,
lawyers and doctors. The following states impose this tax:
Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil
Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa,
Tripura and Madhya Pradesh. Registration is mandatory within 30
days of employing staff in a business or, in the case of
professionals, 30 days from the start of the practice. This tax
needs to be deducted from the salary or wages paid; the amount
varies by state and amount.
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18. SHOPS AND ESTABLISHMENTS
The Shops and Establishments Act regulates
conditions of work, lists rights of employees in the
unorganised sector and provides a list of obligations for
every employer. It applies nationwide to shops, commercial
establishments, hotels, restaurants, eating houses, theatres
and other places of public amusement or entertainments.
Every shop and establishment is required to register itself
under the Act within 30 days of commencement of work,
whether or not it has employees.
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19. SSI/MSME REGISTRATION
Small Scale Industries (SSI) or Micro, Small and Medium
Enterprises (MSME) can register themselves under the MSMED Act. It
isn't necessary, but very beneficial to do so, as it only exists to offer
benefits to those registered under it. These benefits include priority
sector lending, excise and direct tax exemptions, capital investment
subsidies and power tariff subsidies. To qualify as an MSME,
manufacturing enterprises need to have investment of less than Rs. 10
crore in plant and machinery, while service enterprises must have no
more than Rs. 5 crore invested in plant and machinery. If, at any time,
you cross this investment limit, you need to cancel your registration
under the MSMED Act.
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20. PASSPORT REGISTRATION
A passport is a document that enables its
bearer to travel internationally. It is issued by the Government of
India only to Indian citizens. It is governed by the Passports Act,
1967. The Consular Passport & Visa (CPV) Division of the Ministry
of External Affairs, functioning as the central passport
organisation, is responsible for issuing Indian passports on
demand to all eligible Indian citizens. Passports are issued at 37
locations across India and at 162 Indian High Commissions,
embassies and consulates abroad.
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21. SALES TAX RETURN
All business entities engaged in the sale of goods (traders and
manufacturers) need to have a Value Added Tax (VAT)
Registration, often called TIN Registration, once their annual
turnover crosses Rs. 5 lakh (Rs. 10 lakh in some states). The tax
needs to be collected from consumers and deposited in a
designated bank account to the state government. You then need
to file VAT returns each month if you're running a private limited
company and quarterly if you're running a partnership, LLP or
proprietorship. This needs to be done on the 20th of each month
for the previous month.
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22. SERVICE TAX RETURN
If you have a Service Tax Registration, you need to file returns
twice a year, regardless of whether your turnover exceeds Rs. 10
lakh. In fact, even if you don't have any revenues, you still need
to file returns as nil by October 25 (for April to September) and
by April 25 (for October to March). Before this filing, however, all
your service tax dues need to be cleared. Failure to pay service
tax or file service tax returns by the due date would result in
penalties. The fine is Rs. 500 if the delay is up to 15 days, Rs.
1000 if the delay is up to 30 days and an additional Rs. 100 per
day thereon, subject to a maximum of Rs. 20,000.
BACK
23. TRADEMARK REGISTRATION
A trademark is any unique expression related to a
product or service that distinguishes it from others. This
expression could be a word, slogan, photograph, logo, graphic,
colour combination, sound or even smell. Owners of trademarks
have exclusive rights to their use under the categories they are
registered in (there are a total of 45 categories, called classes).
Trademark registration enables owners to easily establish their
right to the trademark in court and earn royalties. It also deters
piracy and prevents similar names from being registered by other
businesses. In India, you could get a ™ within three days, but it
takes up to two years for it to be registered so that you can use
the ® symbol.
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24. TRADEMARK OBJECTION
The Trade Marks Office can, for various
reasons, have objections to your trademark application. This may
be because the word or logo is too similar to an existing
trademark, because it could hurt religious sentiments or if it is
likely to cause confusion, among various other reasons. You must
file your response to this objection within a month from when
the Examination Report has been published online. If it has been
sent to you or your lawyer, then a month from when it was
received. If you don't, the Registrar could abandon the
application altogether.
BACK
25. TRADEMARK ASSIGNMENT
Trademark rights are transferrable through
assignment agreements. When a trademark is assigned by an owner to
another party, its ownership is conferred upon the other party, either
completely (with goodwill) or for a limited number of products or
services (without goodwill). It usually involves a one-time payment.
Such an agreement (often called an assignment deed) can be signed
even if the trademark is unregistered; creative designers, for example,
are often asked to assign ownership of the work to the entity that
commissioned it. Registered trademarks can also be assigned, of
course. In both cases, the assignee must apply to the Registrar within
six months.
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26. TRADEMARK RENEWAL
Registered trademarks have a 10-year validity and can be
renewed indefinitely. The Registrar has set a wide window for you to do
so, beginning from 6 months before the date of expiry. Even if you've
forgotten, as even large organisations tend to do, you will be sent a
notice to the registered address regarding the expiry before the 6
months is up. If you still do not file for renewal, the Registrar may
advertise its intention to remove the trademark in the Trade Marks
Journal. This is, however, likely to happen only 12 months after the
expiry date. Between 6 and 12 months after expiry, trademark
registration can be renewed on payment of a fine through a process
called restoration.
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27. COPYRIGHT REGISTRATION
Copyright Registration confers upon its owner
sole rights to copy or reproduce the work or grant permission to
another to do so. The applies to literary (books, scripts, even
software) and audio-visual (music, photographs, movies) works.
Business entities often copyright instruction manuals, product
literature and user guides. Copyright is usually owned by the
creator of the work, but may also be owned by the employer of
its creator or the person who has commissioned the work
(unless there is an agreement to the contrary in either case).
Copyrights are also transferrable.
BACK
28. PATENT SEARCH
A patent gives its owner the right to prevent others from
making, using, importing or selling the invention without approval.
Before such a right is granted, there obviously is a rigorous check on
whether the process or product is inventive (i.e. isn't obvious), novel
(hasn't been anticipated in any published document) and industrially
applicable (possesses utility). It involves a search of the database of
the intellectual property regulator of India to check whether there
exists an object or invention that is the same as or similar to
applicant's invention. This is also known as a prior art search.
BACK
29. PROVISIONAL PATENT
As a patent can be so crucial in maintaining a business
advantage, many inventors/businesses wish to patent their
inventions even before they are finalised. This is possible through
a provisional patent, which helps the inventor establish earliest
ownership over the invention on submission of the provisional
specifications of the product or process. As India follows the first-
to-file system, this would ensure that the holder of the
provisional patent would also be granted the permanent patent.
The documents for the permanent patent would, however, have
to be filed within 12 months or else the application would be
abandoned entirely.
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30. PATENT
A patent is a right granted to an individual or
enterprise by the government that excludes others from making,
using, selling or importing the patented product or process
without prior approval. In exchange for this right, the applicant
must fully disclose the minutae of the invention. A patent for a
product or process that proves successful can give its owner a
serious competitive advantage over rivals. It is valid for 20 years,
after which it falls into the public domain. A patentable invention
can be any art, process, method or manner of manufacture;
machine, apparatus or other articles; substances produced by
manufacturing; computer software with technical application to
industry or used with hardware; and product patent for food,
chemicals, medicines and drugs.
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31. TERMS OF SERVICE AND PRIVACY POLICY
All online businesses need a terms of service
agreement and privacy policy prominently displayed on
their website. Most users ignore them and perhaps wonder
whether they're of any use at all, but all entrepreneurs
know their importance. While the terms of service
agreement explains the conditions on which service is being
delivered, privacy policy explains to users what will and will
not be done with their information.
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32. DISCLAIMER
A disclaimer is a statement/notice informing the user of
any product or service of the possible consequences of the
same. The law mandates the display of a disclaimer in certain
cases, such as where there is an inherent risk of harm to one's
health (the warnings displayed on cigarettes are a prime
example), but are used commonly in all product and service
literature. A disclaimer helps to clearly establish/limit one’s
rights and liabilities with respect to the user of a particular
product or service. It is used in situations which involve an
element of risk or uncertainty.
BACK
33. EMPLOYMENT CONTRACT
An employment contract is necessary when
hiring any employee or consultant, whether
part-time of permanent. It is a comprehensive
document that addresses all terms and
conditions governing employment, as well as the
rights, duties and responsibilities of each party
with respect to the other. Common points would
include breakdown of salary, date of joining,
notice period and non-compete clause.
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34. CONSULTANCY AGREEMENT
A Consultancy Agreement clearly lays down the
most relevant details about the relationship
between consultant and employer. It stipulates the
job requirements, time for completion, the mode
and method of payment as well as other aspects
related to the rendering of service by the
consultant. Of particular importance if the
consultant is working toward developing a new
design or invention is stating who owns the
resulting intellectual property.
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35. FREELANCER AGREEMENT
A freelance agreement clearly lays down the
most relevant details about the relationship
between freelancer and client. It stipulates the job
requirements, time for completion, the mode and
method of payment as well as other aspects
related to the rendering of service by the
freelancer. Now that modes of communication
enable freelancers to work for employers across
the world, such agreements have grown in
popularity, particularly in the IT industry.
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36. FOUNDER’S AGREEMENT
A founders' agreement outlines the various roles
and responsibilities of the founding members of a
company, the equity vested in them, the ownership of
intellectual property created by them and their roles
and responsibilities. It is a broad agreement covering
various aspects of the endeavour that the founders are
about to undertake, including the consequences of their
departure or death.
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37. TERM SHEET
A term sheet is a critical document, particularly for an
Indian businessman. Months into negotiation and contract
drafting, you may find out that there is no agreement on
the basics of the contract. A term sheet solves this problem
by putting into place a framework for the final contract. The
term sheet, therefore, reflects the broad consensus of the
parties on the material terms and conditions, such as price,
quantity, valuation, due diligence and pre-emption.
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38. SHAREHOLDER’S AGREEMENT
A Shareholders' Agreement is simply an agreement governing
the relationship between the shareholders of a company. These
include their rights and obligations, transfer of shares, how the
company is going to be run and how important decisions are to
be made
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39. SHARE PURCHASE AGREEMENT
A share purchase agreement (SPA) is an agreement between
2 parties in which the seller agrees to sell the stated number of
shares to the buyer at a particular price. The aim of the
document is to prove that the terms of the agreement were
mutually agreed upon. Such an agreement specifies the
consideration and the number of shares to be sold, the
conditions precedent (the authorisations necessary, for example)
and covenants by the parties. The shares will be allotted after
this agreement is signed (and on the basis of this agreement)
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40. LEGAL NOTICE
A legal notice is a formal communication to a
person or entity informing him that you intend to undertake
legal proceedings against him. It is a step taken before filing a
suit, and is meant to warn the other party that legal action
may be taken against him/her, if he/she fails to comply with
some specified condition. For example, a legal notice served
upon a tenant by a landlord for non-payment of rent usually
states that if the tenant fails to pay the outstanding amount by
a specified date, the landlord will take legal action against
him.
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41. NON DISCLOSURE AGREEMENT
A non-disclosure agreement (NDA) is a legal contract
stating that certain information is confidential, and the
extent to which its disclosure is restricted to third
parties. It can be entered into with a person or
organisation. Confidential information includes trade
secrets, business plans, business methods and strategies,
drawings, charts and more. Software programs and code
are also confidential information.
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42. GIFT DEED
The lawful owner of a property can transfer it to
another party without any monetary consideration
through a gift deed. All such deeds must be signed by the
donor, attested by 2 witnesses and then registered.
Charges will vary in each state as stamp duty must be
paid on the value of the property. Generally, such gifts are
given by one family member to another, but there is no
such restriction. However, gifts from relatives (and
wedding gifts) are exempted from tax.
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43. SALE DEED
Now that you've found the place you want to buy or
found a buyer for your property, you need an agreement
prepared. There is no underestimating this document, given
the large sums involved in property deals. The agreement
between you and the other party should cover
comprehensively the terms on which the sale will take
place, the conditions, and the date on which the sale will be
completed. Sale Deed is the document that would be
executed once final possession is given.
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44. RESIDENTIAL RENTAL AGREEMENT
A rental agreement protects the interests of both the landlord and
tenant. The terms of the agreement bring clarity to the
arrangement, such that the consideration, rights and obligations of
both parties, and the rental term are established. In most Indian
cities, rental agreements last only 11 months to protect against
rental control laws. Agreements with a longer term need to be
registered.
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45. MAKE A WILL
A will allows you to communicate how your assets are to
be distributed among those close to you after your death. This
document ensures that your belongings do not devolve as per
the laws of inheritance (which vary for each major religion)
but as per your wishes. Its creation is frequently postponed,
but it's a good practice to have one in place and then keep
updating it when necessary. All such a document needs to
contain is a declaration that it is being made free from any
pressure, the details of your property and who will inherit it.
It need not be registered, but it is suggested that you do so at
the office of the sub-registrar.
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46. SERVICE LEVEL AGREEMENT
A service level agreement (SLA) is a formal document
between a service provider and the user. It does not define how
the service will be delivered but rather provides a measurable
framework for the provision of that service. Some metrics that
are used to define the SLA might include the mean time between
failures, an agreed accepted level of downtime across an agreed
time frame, support response and resolution times.
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47. MASTER SERVICE AGREEMENT
A Master Service Agreement is a contractual agreement in
which two parties, a client and service provider, agree to
terms and conditions that are to govern all transactions
between them for the long-term. Contracts such as this find
use in sectors that involve a large number of transactions
between the provider of a service as well as a customer and
may include a separate statement of work for each. The IT
sector is the most common user of such an agreement.
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48. VENDOR AGREEMENT
A Vendor Agreement is an agreement stipulating the
conditions under which the work is to be performed by the
vendor. It is a comprehensive agreement covering various
aspects such as the quality of goods supplied or service
provided, duration of the contract, terms and mode of
payment. Such an agreement would be useful to those
hosting a large event (a trade exhibition, for example)
where several vendors will be selling their wares.
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49. MEMORANDUM OF UNDERSTANDING
A Memorandum of Understanding (MoU) is a document
in which two or more parties declare that they agree on a
common course of action or business. It is the first stage of
the making of a contract. An MoU is generally recognised as
binding even though it creates no rights and obligations in
itself. To be legally operative, an MoU must identify the
contracting parties, spell out the subject matter of the
agreement and its objectives, summarise the essential
terms and must be signed by the contracting parties.
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50. FRANCHISE AGREEMENT
A franchise agreement is an agreement wherein the
franchisor agrees to lend the trade name or business
system to another person or entity (the franchisee). The
contract will define the basis of the arrangement
between the two parties, specifying the consideration to
be paid by the franchisee (partial payment is often in the
form of royalties for the use of the franchisor's
trademark), how the brand name can be used, the length
of the arrangement, and clauses dealing with penal
provisions, ranging from fines and compensation to
cancellation of the franchise.
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51. JOINT VENTURE AGREEMENT
A joint venture (JV) agreement is entered into by a group
of persons or companies to do business together or to
collaborate on a particular project without losing their individual
legal identities. Such an agreement is legally binding and clearly
lays down the areas of cooperation and divergence, and makes
provisions for profit-sharing and operations. Usually, before
entering into such a formal agreement, the parties sign a
Memorandum of Understanding (MoU)
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52. ANNUAL COMPLIANCES FOR PRIVATE
LIMITED COMPANY
All the benefits of a private limited company, such as the
ability to raise capital easily and accommodate shareholders,
come at the cost of increased compliance. While the majority of
small businesses do not fulfil their compliance requirements in
their opening years, they end up paying heavy penalties (up to
Rs. 1 lakh a year) for failing to do so. In the worst scenario, such
companies and their directors are even blacklisted for a short
period of time.
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53. ANNUAL FILINGS FOR LLP’S
Limited liability partnerships (LLPs) have
very few compliances to fulfil, in comparison to
private limited companies. LLPs need only file
information related to statement of accounts and
annual returns on an annual basis. Penalties,
however, are huge for failure to comply. Entities
that don't end up doing so could be fined heavily,
with penalties going up to Rs. 5 lakh in some cases.
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54. INCREASE IN AUTHORISED CAPITAL
The maximum number of shares a private limited
company can issue is decided by its authorised capital. Most
start-ups start their journey with the minimum authorised
capital of Rs. 1 lakh, but this is too little as the business
grows. To issue new shares or raise the capital a company is
authorised to raise, the capital clause of theMemorandum
of Association needs to be amended by passing a special
resolution of the board. If, at this point, you may also need
shares to be issued to existing promoters or new
shareholders.
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55. ADD A DIRECTOR
As per section 260 and section 284 of the Companies Act, 1956,
the Articles of Association of a company are the source of
authority from where the Board of Directors draws the right to
add new directors to the Board or remove existing ones. The
Articles of Incorporation must provide for the addition of
Directors. The person appointed must be eligible as per the
relevant clauses in the Articles of Association and must give his
consent to be a director in written form which the company must
register with itself.
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56. REMOVE A DIRECTOR
A company can remove a director if he incurs any of the
disqualifications specified under the Act, absents himself from
board meetings over 12 months, enters into contracts or
arrangements against the provisions of section 184, is disqualified
by an order of a court or Tribunal, or is convicted by a court of any
offence and sentenced to imprisonment for not less than six
months.
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57. ADD A DESIGNATED PARTNER
In case of a Limited Liability Partnership (LLP), at least two
individuals who are partners shall act as designated partners.
These partners must have a Designated Partner Identification
Number and their names must feature in the LLP agreement.
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58. CHANGE THE OBJECTIVES
To change the goals or aims and objectives of your business, you
need to amend the Memorandum of Association. The MoA contains the
object clause. Now, this can be difficult to do, particularly if you're a young
company looking to completely change the main objects. But if you follow the
right methods, it can be done quickly. For example, one mistake many
companies make is to include several domains in the main objects. This will
not be approved. For example, if you are in the software business, you can
cover all software services in the main objects, but other services, such as
design, should be included in ancillary or other objects of the company.
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59. CHANGE OFFICIAL ADDRESS
The registered office of a company or LLP is the principle
place of business and all official correspondence from the Ministry of
Corporate Affairs is sent to the mentioned location. The registered
office address can be changed within the local limits of the city, town
or village by simply giving notice to the concerned registrar within 30
days from the date of change. If, however, you are moving the
registered office to another state, a special resolution needs to be
passed and an advertisement needs to be placed in a newspaper,
before notice is given to government.
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60. CHANGE COMPANY NAME
To the Registrar of Companies (RoC), changing
your name is no small matter. As you've already incorporated,
you're aware of the rules involved in selecting a name for your
company. The same applies for changing your name, too. The
procedure is well-defined and to be followed strictly. And just
in case you haven't complied with all RoC requirements, you
can't go ahead with this until you do.
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61. CHANGE LLP AGREEMENT
The Limited Liability Partnership (LLP) Agreement is the
charter of the LLP, similar to the Memorandum of Association and
Articles of Association for a private limited company. It defines the
scope and extent of the LLP's operations as well as the rights, duties,
obligations of the partners. Altering the agreement is
straightforward. All you need to do is pass a resolution approving the
revision in the LLP Agreement. The second step is to file Form 3 with
the Registrar within 30 days of the amendment in the agreement.
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62. CLOSE YOU PRIVATE LIMITED COMPANY
Winding up a private limited company is a tedious, but
necessary, procedure. Without doing so, you would need to
annually meet the requirements of the Registrar of Companies
(which means spending money on audit and compliances). The
bigger reason you would want to do this, of course, is because it
releases the assets and investments made by you.
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63. CLOSE YOUR LLP
To close down a limited liability partnership (LLP), the
resolution to do so must be filed with the Registrar within 30 days of
its passing. Once this has been done, the majority of the partners need
to make a declaration to the effect that the LLP has no debts or that it
is in a position to pay all debts within a specified period not exceeding
one year from the date of commencement of winding up of LLP. Within
15 days of the passing of the resolutions, statement of assets and
liabilities for the period from the last accounts closure to the date of
winding up of LLP must be submitted, attested by at least two
partners. A report of valuation of the assets of the LLP must be
prepared.
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64. MAINTAIN YOUR ACCOUNTS
Accounting is the process of storing, sorting and
recording financial transactions. All businesses are required by law to
submit their accounts to the Income Tax (IT) Department. Several
start-ups tend to ignore this requirement early on, and then scramble
to put together their accounts when they are raising funding or being
acquired. Maintaining the books in-house certainly is a tedious and
possibly expensive affair, but getting it done would significantly
reduce pains in complying with the requirements of the IT
Department, give the promoters and shareholders a good sense of
how the business is doing, prove eligibility for loans in later years,
and even satisfy investors.
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65. SOLE PROPRIETORSHIP TO PRIVATE
LIMITED COMPANY
As the proprietorship has almost no definition, besides that
given to it by one of the many licenses you can take to get one
(SSI, VAT or Service Tax registration, for example), transferring the
business to a private limited company is easy. All you need to do
is go ahead and start a private limited company and submit an
agreement between the sole proprietor and the private limited
company, declaring that all the assets are to be transferred to the
latter.
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66. PARTNERSHIP TO LLP
A Limited Liability Partnership (LLP) can prove to be a much
better business vehicle than a regular partnership. Partners aren't
disadvantaged by personal liability and the LLP does away with
the excessive regulations of the Indian Partnership Act, 1932.
Furthermore, there are tax benefits, no audit requirements
below a certain capital, no cap with regard to number of partners
or capital contribution requirements.
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67. PRIVATE TO PUBLIC LIMITED COMPANY
It's great news that you're looking to go public. The process
to convert from private to public limited company is simple, but will
take 30 to 35 days to complete, as there are many steps involved. First
you need to alter the articles of association, then delete the word
private from your name, commence the registration process and finally
wait for the certificate of commencement of business. Do note,
however, that some requirements and charges will depend on whether
or not you already have three directors, seven members (shareholders)
and a paid-up capital of Rs. 5 lakh (all are necessary for a public limited
company).
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68. PRIVATE TO ONE PERSON COMPANY
A private limited company can convert itself into a one-person
company (OPC) if it has a paid-up capital ofless than Rs. 50 lakh and an
annual turnover of less than Rs.2 crore. An OPC also need a nominee.
The procedure is time-consuming, as you cannot use the INC-29
procedure, but should be completed inside 25 working days. Our
package includes everything from the filing of the forms for conversion
to the alteration of your Memorandum of Association and Articles of
Association.
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69. EMPLOYEE STOCK OPTION PLAN
All entrepreneurs have at least one common problem: how
to motivate employees in a way that’s mutually beneficial. The most
practical solution to this is the employee stock options plan (ESOP),
used by small and large businesses alike. It not only keeps deserving
employees motivated to grow your company, rather than just fulfil
their duties, it ensures that you don’t lose them for a number of
years. In an ESOP, companies provide their employees with stock
ownership, often at no up-front cost, but in lieu of work performed.
Shares are allocated to employees, but may vest only after a pre-
defined period.
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