Employee Stock Option Plans or ESOP for short have been used by many companies to great avail. There are stories of companies eg. Infosys using ESOPs to create exceptional wealth and loyalty among employees. One such story involves a Driver exercising their right to cash out ESOPs and becoming a millionaire in the process. Yes, you read it right!  A driver and a millionaire in the same sentence.

Another story follows Google hiring one of our Indian fellows with an annual package of 1.2  Crore rupees. However, the conditions of his employment stipulated that half his salary was in the form ESOPs. Startups can use these plans after registering their company to attract and retain talented employees who can contribute towards the swift growth of the organization.

What are ESOPs?

Technically speaking, ESOPs are the plans in which the employees get the right to buy a fixed amount of shares(determined by Employer) at a predetermined price in lieu of their salaries. Employees can only exercise the right to buy shares after a fixed period of time known as the Vesting period.  Offering the prospects of being part of the big fortunes of the company gives a sense of ownership to employees. Tapping into this sense of ownership employees are willing to work harder. This generally occurs because employees realize their financial growth is directly linked to the company performing well.

How do ESOPs work?

Basic Functioning of ESOP

Let’s take an example of Alpha Private Limited.

Alpha Private Limited is a recent startup and is looking for talented employees. The employees demand a remuneration of Rs. 15 lakh per annum as they are experts in their area. The company, however, can only afford to pay Rs. 10 lakh per annum. So in a pursuit to not lose two experts, the company allocates ESOPs to both employees with a vesting period of 4 years and hires them with 10 LPA salary.

The company did not lose two great prospective employees who will definitely accelerate the growth of the company and they did so while only investing the least possible amount of current assets. The early-phase start-ups are incapable of paying highly competitive salaries and hence use ESOP as a tool to retain employees. ESOPs are basically a promise to the employees that when the company has grown because of your efforts you will have a right to be a part of its fortunes.

Who is Eligible for ESOP?

According to the Companies Act, 2013 under Section 62(1)(b) provides that a company may, subject to compliance with conditions as prescribed under the Rules (in case of unlisted company) and SEBI Regulations (in case of listed companies), offer shares to the employees under a scheme of employees’ stock option.

With accordance with the Companies (Share Capital and Debentures) Rules, 2014 only the following employees are NOT eligible for ESOP

• Employees belonging to the promoter group of the company
• A director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than 10% of the outstanding equity shares of the company.

ESOP benefits for Startups

ESOP is a great tool to align the objectives of new prospective employees with the company shareholders i.e. Growth of the Company. Early-phase startups are almost always at a dearth of resources and the prospect of future resources can act as not only a retention tool but also as an attraction tool for future employees.

Let’s look at some of the benefits ESOPs have for startups.

1. Employee Attraction and Retention-  As previously mentioned, ESOP are a way to instill a sense of ownership in the employees. This also motivates the employees to stay associated with the company for longer durations. The early phases of startup need to retain and motivate employees to work hard and accelerate the growth of the company. ESOP ensures to the employees that they are also a part of the profits and revenue the company is generating.
2. Motivational Push- As an employee starts working for your company and sees the growth of the company they start to realize the further the company progresses, the more the value of their individual shares. This often offers as a way of motivating the employees to start putting in extra hard work and going the extra mile to ensure the company’s share value rises as does their own personal share value.
3. Cost Control –  Companies offer ESOPs as compensation for cash rewards and bonuses. Early-phase startups are most of the times not in a financial position to afford highly competitive salaries. However, offering ESOP fulfills the promise of providing exciting compensation for the employees without compromising present cash supply and financial resources. This leads to effective cost control in the present scenario where every penny matters.

However, despite all their cost-cutting and employee retention qualities, there are some drawbacks and challenges to implementing ESOPs.

Challenges to ESOP implementation

1.  Trust Issues- ESOPs are a gamble for employees, a game of chance, sacrificing immediate compensation elsewhere to just a promise of a multitude of wealth in the future. A promise of shares before the company has gone public sounds like a very hollow promise. In such cases, if prospective employees are not convinced or are hard to convince about the direction and growth of the company many talented employees could slip from the fingers of the founders which could hurt the company even more.
2. Taxation- Oh did we forget to mention taxes are involved? Let this serve as a disclaimer to all who are enthusiastic about their stock options at their new company. ESOP come with taxation rules involved. After the vesting period, when it’s time to exercise your right to the stocks of the company, a tax is liable which is the difference between fair market value share and the exercise rate(Rates agreed for buying shares at the time of employment). Employees are also to pay a Capital gain tax at the time of selling of said bought shares. It’s the differential amount of selling price and fair market value.

Things to keep in Mind for ESOPs

• Proper Documentation- Employees should ensure that the claim for being offered ESOPs in lieu of salary should be agreed to only in the presence of proper documentation.
• Exit Mechanism – All current and possible future prices of shares should be considered and the option of provisions like promoter buyback in case listing of the company is delayed.
• Taxation – As mentioned above, the allotment of shares comes with taxation as if they were salary/perquisite and employees will have to pay 30% flat on the difference on fair market value share and exercise price.

Conclusion

After an extensive study into ESOP’s exciting prospects and startups using it as a fashionable trend to include employees in the growth of the company sounds intriguing. For early-phase startups, ESOPs have come forward as a great cost-cutting tool and the benefits have reaped humungous rewards for many private limited companies among others.

At LegalRaasta we specialize in company registration for startups. If you are just starting out with forming your company, There are many things to consider to ensure smooth day-to-day operations. These include documentation, Compliances as well as Business Income Returns Filing.

Shoot us an e-mail at contact@legalrasta.com or ring us up at +91-8750008585

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There are corporate organizations in the United States and other developed countries who would opt to cut overhead cost as low as they can and still maintain the professionalism of highest order and get excellent services. In this context, India has emerged as a Business Process Outsourcing power-hub, also known as Information Technology Enabled Services (ITES), because of a talented pool of people and strong English speaking population. BPO is one of the fastest growing sector segment of the ITES Industry, but to start a BPO some serious research, planning, and creativity is necessary and most importantly a DOT OSP License Registration. 

Services Provided by BPOs

BPO provides services like tele-banking, tele-medicine, tele-education, tele-trading, e-commerce, call center, network operation center and other IT Enabled Services, by using Telecom Resources.  If telecom service is used by the BPO, it is mandatory to obtain an “Other Service Provider” (OSP) registration by applying to the Department of Telecommunication to start a BPO. It is noteworthy for businesses that wish to establish a call center / BPO that they establish the BPO as a Private Limited Company or Limited Company under the Companies Act. This is because it is one of the criteria for obtaining OSP registration. Following is a list of services provided by BPOs:

• Customer support services: 24/7 inbound/outbound call center services that address customer queries and concerns through phone, email and live chat.
• Technical support services:  Installation, product support, running support, troubleshooting, usage support and problem resolution for computer software, hardware, peripherals and internet infrastructure.
• Telemarketing services:  Interacting with potential customers and creating interest in the customer’s services/products. Up-selling, promoting and cross-selling to existing customers and completing online sales processes.
• IT help desk services: Level 1 and 2 multi-channel supports, system problem resolutions, technical problem resolution, office productivity tools support, answering product usage queries and performing remote diagnostics.
• Insurance processing:  New business acquisition and promotion, claims processing, policy maintenance, and policy management.
• Data entry and data processing: Data entry from paper, books, images, e-books, yellow pages, websites, business cards, printed documents, software applications, receipts, bills, catalogs and mailing lists.
• Data conversion services: Data conversion for databases, word processors, spreadsheets and software applications. Data conversion of raw data into PDF, HTML, Word or Acrobat formats.
• Bookkeeping and accounting services: Maintenance of the customer’s general ledger, accounts receivables, accounts payables, financial statements, bank reconciliations, and assets/equipment ledgers.
• Form processing services: Online form processing, payroll processing, medical billing, insurance claim forms processing and medical forms processing.
• Online research:  Internet search, product research, market research, surveys, analysis, web research and mailing list research.

How to Start a BPO?

If you want to start a BPO it is important to understand OSP. OSP stands for Other Service Providers referring to the service provided in the Telecommunication Industry which uses telecom resources and it is mandatory for them to register for DOT OSP License. It involves BPO/call centers, e-commerce, telebanking, telemedicine, tele-education, and other IT enabled services. Department of Telecommunication under the New Telecom Policy (NTP) 1999 made it compulsory for OSPs using telecom resources to obtain an OSP License.

In February 2000 the Telecom Commission formulated terms and conditions with regard to OSPs. According to the terms and conditions OSPs should not provide switched telephony and are allowed to take telecom resources from authorized Telecom Service Providers only. Department of Telecommunication provides registration to telecom resources providing an array of services, which includes services like telebanking, call center and other IT enabled services.

Legal Documents required for registration

In order to obtain an OSP Registration, to start a BPO it is mandatory for the entity to be a Private Limited Company. Following documents are necessary for OSP Registration in addition to the application in the prescribed form:

• Certificate of Incorporation of Private Limited Company

• Memorandum of Association (MOA) and Articles of Association (AOA)

• Board of Resolution or Power of Attorney authorizing the authorized signatory

• Name of Business and Activities Proposed

• List of Directors

• Present Shareholding

The above documents must be certified with seal by a Company Secretary or Director of the Company or Statutory Auditor or Public Notary. 

Related Article : Steps to start BPO in India

At LegalRaasta,  we provide top-notch, smooth, fast and easy processing solutions of OSP Registration.

Shoot us an e-mail at contact@legalraasta.com or give us a ring at +91 8750008585. Happy to help you walk the Legal Raasta!

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SPICe Form INC-32 is a simplified proforma similar to INC-29 that helps with fast-track incorporation of a company in India with a single application for reservation of name, incorporation of a new company or application for allotment of DIN electronically. It is recently introduced by the Ministry of Corporate Affairs (MCA). The SPICe Form INC-32 assimilates the several steps involved in the process of incorporation of a company into one- way method.

One day Company Incorporation with SPICe Form INC-32.

If you are wondering that Form INC-29 and Form INC-32 is very much similar to each other then whats the difference? Then the major difference is that under Form INC-32, there is a procedure for entering name approval already obtained by the applicant. On the contrary, there is no provision for entering a previously obtained name approval in Form INC-29. As a result, the application form can be rejected or may ask for the resubmission.

This article will further explain to you, how this SPICe or Form INC-32 can be beneficial-

Types of a company who can use Form INC-32 to be incorporated in India:

There are certain companies that can use Form INC-32 to be incorporated in India and are described below:

1. Private Limited company: Private Limited company is a type of a company in which the owner’s liability is confined to his shares and the limit for the shareholder is 50. as it is a private small business, so it restricts its shareholders from publicly trading shares.
2. Public Limited company: a Public limited company is a publicly held company whose liabilities are limited and offers its shares to the general public.
3. One Person Company: One Person company is held in the hands of a single person who is capable to start a one-person economic entity.
4. Section 8 company: Section 8 company is similar to trust or society, which are established to promote commerce, science, art, education, sports, research, religion, social welfare, donation, protection of the environment and many other things. These not-for-profit organizations provide profit and the further income is for promoting the company’s objectives. Hence, no dividend is paid to its members.
5. Producer company: Producer company is formed by 10 or more persons or 2 or more institutions engaging in agricultural activities that aims to hike their incomes, support status, and profitability along with the standard of living.

There are several other companies also that falls under the categories of a  company limited by shares, a company limited by guarantee or an unlimited company.

Procedure for filing SPICe Form INC-32

There are some specific documents that must be accompanied with the SPICe Form INC-32. These are given below:

• MOA- Memorandum of Association
• AOA – Articles of Association
• Affidavit and declaration by subscriber and director – Compulsory in all cases
• Address Proof of office
• Copies of utility bills- must not older than two months
• Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from the central government
• If the Director name is based on a registered trademark or is a subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
• NOC from the sole proprietor/ partners/other associates/ existing company
• Proof of identity and residential address of the subscribers
• Proof of identity and residential address of directors

As soon as the E- Form is filed, Central Processing Centre of the Ministry of Corporate Affairs (MCA) processed it. If found complete then only the company would register and CNN would be allocated to the individual. A valid DIN is also very significant in the process of company Incorporation. If the proposed Directors are not having a valid DIN then it is issued to them. Maximum three Directors are entitled to use this assimilated Form for filling application of allotment of DIN at the time of Incorporation of a Company. SPICe Form INC-32 is not only helpful in the fast process of allotment of DIN and incorporation certificate but for obtaining Company’s PAN, TAN and ESIC registration in a single step, it has proved important.

Declaration by Professional

It is mandatory that the SPICe Form INC-32 must be signed by a Professional Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate digitally. The declaration by a Professional that all Information presented hereby is true along with his membership number and certificate number is also compulsory to complete this form.

For further information regarding Company registration, Form INC-29, RBI Guidelines refer to our website Legalraasta.

You can also contact us for any query Phone: +91 8750008585 or Email: contact@legalraasta.com

Related Articles:

Section 8 Company

Documents required for Public Limited Company

Advantages of One Person Company

The post SPICe – Simplified Proforma for Incorporating Company appeared first on LegalRaasta Knowledge portal.

It is the easiest business type to start and operate also you don’t need to get registered formally with your states like corporations or LLCs do. Over 23 million people are sole proprietors and also it represents 73% of all businesses in the US today.

Business with small capital requirements and low level of risk are opted for being run as a sole proprietorship.

Steps to starting a Sole Proprietorship

All a sole proprietor business owner needs for the startup is:

Name of a business

The first step is the selection of a business name. The business name is important because all the decisions and all the legal actions are always taken in the name of a business, like:

• Business name will be featured by all advertising and market material.
• The business name is important for any kind of business loan, and documentation.
• Business name will carry:
  • Office forms
  • Stationery, and
  • Business cards

The name of a sole proprietorship must be registered with the locality and state where the business is organized and situated. It must file a fictitious name statement if in case the business operates under another name.

Consideration in selecting a name

1. Check the availability of the name which is selected for the business.
2. Search for the name in your state’s business division database.
3. Check the name with the U.S patent and trademark office and if the name is already taken by someone then you need to look forward to another name to avoid any legal issues.

Trademark your business name

A name of a business is an intangible asset. If the name is unique or you intend to use your business name online than you should go through the trademark process. It prevents the name and gives an advantage in a lawsuit.

A business checking account

A sole proprietor is a business entity which is not separate from the owner. It will be preferable if a sole proprietor maintains the business and personal account separately, it is more beneficial and easy to maintain all business expenses which are being claimed as a tax deduction for the business.

Legal requirements

A sole proprietorship is needed not to get registered with the state but there are legal requirements which should be considered are given below:

• Get a business license with your locality.
• Apply to the state for sales tax permit.

Sole Proprietorship registration

The process of the company registration of sole proprietorship is not same as the process of the registration of LLC or a corporation. While setting up a sole proprietorship you will simply declare business as a sole proprietorship and there is no need for filing any paperwork with the state creating a corporation.

It receives a business license and tax registration certificate. A sole proprietor should get federal employer identification number from the internal revenue service a license to sell from your state and a permission from the local board it is required.

How a Sole Proprietor pays tax?

1. The income of the sole proprietorship is taxable otherwise the business is not taxed separately. The sole proprietor has to file income, losses, and expenses with Schedule C and the standard form 1040. You can visit here for tax return filing
2. The sole proprietorship pays income tax by completing a schedule C and include the income on the owner’s personal tax return.
3. A sole proprietor can include home business expenses if he operates a business from home and traveling expenses which are for a business purpose.
4. The income from Schedule C is entered on line 12 of form 1040 along with the income from other sources.
5. Self-employment tax is added after the income tax is calculated. The self-employment tax and income tax are a total tax liability.

What must a sole proprietorship do in addition to income tax?

1. Sales tax must be collect and pay on taxable goods and services.
2. On any real property tax must be paid.
3. Employment must be collect, report, and pay if the sole proprietorship has employees.

Legal requirements for running a sole proprietorship business

• The proprietor must have a PAN card as all the returns are filed in the proprietor’s name.
• Business with the turnover exceeding INR 9 lakh needs to pay a 10% service tax and also need to be registered.
• If a business involves a procurement and sales of taxable goods then it needs to be get registered for Value Added Tax.
• If the buying and selling is across different states then registration for Central Sales Tax is mandatory.
• The proprietor can run the business from the home then the provision of the Shop and Establishment Act need to comply with.

Advantages of Sole Proprietorship

A sole proprietorship is a business which is easy to establish and run also there is no profit sharing, here are few advantages of a sole proprietorship are given below:

Less cost consuming

A sole proprietorship is a kind of a business which is least expensive also the simplest form of a business structure. A sole proprietor has to pay only a legal cost to obtain the necessary license or permits rest the cost in a sole proprietorship is minimal.

Sole control

The owner of the sole proprietorship is the sole owner of the business and have control over all decisions. A sole proprietor is not required to take permission or consent of any other person before taking any decision.

Tax benefits

The business is not taxed separately which makes easy to fulfill the tax requirements for the sole proprietorship also the tax rates are comparatively less of this business structure.

Quick decision and flexibility

It is a business entity which can take a quick decision as there is no need for a consent of numerous people the decision can be made quickly and hence it is flexible too.

The adequate relationship between employee and the customer

This business model is found in a linework where the business and personal relations are maintained in a very fine way as there is a direct interaction between the customer and the employee also it helps in receiving the direct feedback.

Ensuring the safety of the business

The safety of the business secrets is also a much easier task in the sole proprietorship, there is no such risk like other business has.

Disadvantages of a sole proprietorship

Unlimited liability

The sole proprietorship is owned and controlled by a single person where there is no profit sharing and no sharing of any loss and debts also there is no restriction on the borrowings and the sole proprietor is personally liable for all the debts and obligations of the business. However, this extends the risk as a result of employee actions.

Hard to raise money

As a business is owned and controlled by a single person and proprietor often face challenges while raising money. A sole proprietor cannot sell stock in the business which limits investors opportunities also there is a huge risk in repayment of the load because of which bank hesitate to provide a loan to the sole proprietorship. If the sole proprietor wants to raise the money or wants to take help in getting the business loan then you can go to the link.

Heavy burden

In a sole proprietorship, the entire burden is on the single person, which can not be shared or transferred from one person to another.

What makes sole proprietor unique?

1. It is the business entity which is most easy to form without any requirement to get registered with a state.
2. It is easy to run and there are no regulations regarding meetings, the board of director, etc.
3. The owner of the business is not accountable to anyone also he has complete control of the business in his hand.
4. There is no profit sharing in the sole proprietorship but the owner has to take all the losses alone.

Get legal help in setting up your sole proprietorship

It is relatively easy to set up the sole proprietorship with the help of an attorney but if one has some doubt or questions regarding the liability, taxes and another risk then the person can take help and guidance in the process of setting up of the business of any business organization attorney.

Distinguish between a Sole Proprietorship and One Person Company

By Akanksha Singh

The post Sole Proprietorship Startups appeared first on LegalRaasta Knowledge portal.

A startup could be a flagship initiative of the govt of India, meant to make a powerful scheme for nurturing innovation and Startups within the country. this may drive property economic process and generate giant scale employment opportunities. the govt, through this initiative, aims to empower Startups to grow through innovation and style.

In order to satisfy the objectives of the initiative, Government of Asian country declared Action set up that addresses all aspects of the Startup scheme. With this Action set up, the govt hopes to accelerate spreading of the Startup movement from digital/ technology sector to a good array of sectors as well as agriculture, producing, social sector, healthcare, education, etc. and from existing tier one cities to tier two and tier three cities as well as semi-urban and rural areas.

The Action set up is split across the subsequent areas:

• Simplification and Handholding
• Funding Support and Incentives
• Industry-Academia Partnership and Incubation
• Since the day, the speak on “Start-up India” theme has started, it been a burning question in every entrepreneur’s mind, whether or not their venture qualifies for these new schemes and advantages declared. Finally, Department of business Policy and Promotion (DIPP), Government of Asian country has processed that ventures can qualify as Start-up to say the advantages.

Definition of a Start-up (only for the aim of state schemes):

Start-up means:

• An entity, incorporated or registered in Asian country
• Not older than 5 years,
• Annual turnover doesn’t extraordinary authority twenty-five large integers in any preceding yr,
• Working towards innovation, development, readying or exploitation of latest merchandise, processes or services driven by technology or material possession.

It is vital to notice following points:

• Provided that such entity isn’t shaped by ripping up, or reconstruction, of a business, already living.
• Provided additionally that entity shall stop to be a Start-up if its turnover for the previous money years has exceeded authority twenty-five large integer or it’s completed five years from the date of incorporation/ registration.
• Provided more that a Start-up shall be eligible for tax advantages solely when it’s obtained certification from the Inter-Ministerial Board, set up for such purpose.

Key focuses

• Single Window Clearance even with the assistance of a portable application

• 10,000 crore reserve of assets

• 80% diminishment in patent enlistment expense

• Changed and all the more benevolent Bankruptcy Code to guarantee 90-day leave window

• Opportunity from perplexing investigations for a long time

• Opportunity from Capital Gain Tax for a long time

• Flexibility from assessment in benefits for a long time

• Dispensing with formality

• Self-accreditation consistence

• Advancement center point under Atal Innovation Mission

• Beginning with 5 lakh schools to target 10 lakh youngsters for development program

• new plans to give IPR assurance to new businesses and new firms

• Energize business.

• Stand India over the world as a start-up center point

Dispatch

The occasion was initiated on 16 January 2016 by the fund serve Arun Jaitley. Among the participants were around 40 best CEOs and startup authors and speculators from Silicon Valley as extraordinary visitors including Masayoshi Son, CEO of Softbank, Kunal Bahl, organizer Snap deal, Ola originator Bhavish Aggarwal, Paytm organizer Vijay Shekhar Sharma, Travis Kalanick, author of Uber, Adam Neumann, CEO of WeWork, BJ Arun, CEO of July Systems, Prateek Kr. Bhowmick, Co-author of ReviewAdda, Sachin Bansal, Co-originator of Flipkart, Naveen Tewari, Co-organizer of InMobi and others.

Govt’s part

The Ministry of Human Resource Development and the Department of Science and Technology have consented to accomplice in an activity to set up more than 75 such startups bolster centers in the National Institutes of Technology, the Indian Institutes of Information Technology, the Indian Institutes of Science Education and Research and National Institutes of Pharmaceutical Education and Research

The Reserve Bank of India said it will find a way to enhance the ‘simplicity of working tog ether’s in the nation and add to an environment that is helpful for the development of new companies.

Ventures

Softbank, which is headquartered in Japan, has put into Indian new businesses. The Japanese firm had sworn the aggregate speculations at US$10 billion. Google proclaimed to dispatch a startup, in light of the most astounding votes in which the main three new businesses will be permitted to join the following Google Launchpad Week, and the last victor could win a measure of US$100,000 in Google cloud credits. Oracle on 12 February 2016 declared to set up nine brooding focuses in Bangalore, Chennai, Gurgaon, Hyderabad, Mumbai, Noida, Pune, Trivandrum, and Vijayawada.

States Assessment

The Southern States of the country have indicated awesome execution, similar to Karnataka, Kerala, Andhra Pradesh and Telangana which have come about superior to whatever remains of the nation as far as their arrangements usage for supporting new companies. Their emphasis has been on enhancing foundation, particularly in the Tier-II urban areas. Bangalore, a metro city of Karnataka, is known as the Silicon Valley of India. Kerala is outstanding for the administration’s startup arrangement, “Kerala IT Mission”, which concentrate on bringing RS50 billion in ventures for the State’s startup environment. It likewise made India’s first telecom hatchery Startup town in 2012. The state additionally coordinates the financing raised by its hatchery from the Central government with 1:1. Telangana has propelled the biggest hatching focus in India as “T-Hub”. Andhra Pradesh has distributed a 17,000-sq.ft. Mechanical Research and Innovation Park as a Research and Development lab. It has additionally made a reserve called “Introductory Innovation Fund” of RS100 crore for entrepreneurs. The legislature of Madhya Pradesh has worked together with the Small Industries Development Bank of India (SIDBI) to make a store of RS200 crore. Rajasthan has likewise propelled “Start-up Oasis” scheme. In a request to advance new businesses in Odisha, the state government sorted out a two-day Start-up Conclave in Bhubaneswar on November 28, 2016.The principal destinations of the occasion is inspired youth towards enterprise, feature the start-up biological system in Odisha and draw in more new companies to the state

Instructive Institution Alliances

Under the plan, a gathering of new businesses will recognize an MOU with the prestigious organizations and will likewise set up the start-up focuses in the grounds. NIT-Silchar (The National Institute of Technology, Silchar) is one of the organizations of the nation to have joined the program IIT Madras is additionally connected with this battle. The organization has been effectively dealing with the IITM Research Park that has hatched many new companies

Feedback

The nature of instruction in the foundations of the country is constantly addressed and found not coordinating with the associations’ guidelines for the required skillet and they need to consume on preparing the fresher’s. The nation has likewise propelled the Skill India battle for tending to the issue

The post How to avail benefits under the startup india scheme? appeared first on LegalRaasta Knowledge portal.

As the sole proprietor of the firm, the first thing that has to be done is opening a current bank account in the firm’s name. The firm can be a service provider or a product provider and on the basis of their category they need the following documents to run their firm:

Service Based Business

These firms provide chargeable services to its customers either offline or online.

• Service Tax Certification:

When a person commences a new business, it is obligatory for him/her to obtain service tax registration within 30 days of commencement, if the business will have taxable service in excess of Rs.9 lakhs. Moreover, some banks deny opening a current bank account without Service Tax certification.

• Chartered Accountant Certification regarding nature of business. (Required by some private banks)

Product/Manufacturing/Sales Business

These firms sell VAT applicable products to its customers via its online or offline portal.

• Shop Act License ( In Maharashtra or Gujarat it is called Gumasta and in West Bengal, it is called Trade License)
• VAT/Sales TAX/TIN Registration.

Common Documents required in both above cases to register as a Proprietorship Firm:-

• ID and Address Proof in the form of Pan Card/Passport/Voter ID/Aadhar Card/Driving License Copy of the Proprietor.
• Either of the one Business Place Address proof:-

1. If Property on Rented: Need Rent Agreement and No Objection Certificate from Landlord.
2. If Property is owned: Need Electricity Bills or any other Address Proof.
3. For Value Added Tax: – Security Amount as Fixed Deposit or minimum two surety of dealers who are already registered in that state VAT Registration.

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