Activities to Be Performed after Incorporation Of Company

If you have recently incorporated your private limited company or under the process of incorporation then you must get yourself familiar to the new provisions of Companies act 2013.

The most important things that every promoter or director of a newly incorporated private limited company should know after getting certificate of incorporation or before getting into the process of incorporation.

Checking Company’s Master Data after Incorporation

Certificate of incorporation for a private limited company is the last step in the process of incorporation. Once you received the certificate of incorporation, it means, all legal formalities required for company registration are completed in India.

At Gapeseed Consulting, we have legal consultants like chartered accountants and Company Secratories who help us in the process of company incorporation and do all such things that are required to complete the registration process.

Now the question is how to cross check to know that the company is incorporated with correct details like authorized share capital, registered office, category, CIN, paid-up share capital, status and date of incorporation etc.

These are the most important thing that every company should keep it right.

We suggest you to check these details in company’s master data by visitingthe website of Ministry Of Corporate Affairs after getting certificate of incorporation.

If you find any changes or incorrect details then immediately inform to your chartered accountant or Company Secretary to take necessary actions for its correction.

You need to check following things in company’s master data;

Authorized share capital
Paid up share capital
Registered office address
Status i.e. Active or Inactive
Date of incorporation

File E-Form INC22 For Situation Of Registered Office

Situation of registered office has to be intimated within 30 days from the date of incorporation to the registrar of companies. This can also be filed at the time of incorporation along with other e-forms if registered office of the company is going to be the director’s residence or owned house.

If it’s not filed at the time of incorporation then within 30 days from the date of incorporation, then it is a Non-Compliance u/s 22 of the Companies Act,2013

As per section 12 of Companies act 2013, a company shall, on and from the 15th day of its incorporation and all times thereafter shall have a registered office. This means the company should enter into a rent or lease agreement within 15 days from the date of incorporation and within 30 days from the date of registration should file INC-22 with ROC.

Display Company’s Identity And Other Details

After incorporation, it’s the duty of the company to display following things outside the company’s registered office;

Name of the company
Registered office address of the company
Corporate identity number or CIN
Telephone number, email ID
Website address and fax number if any

These details are also required to be printed in all business letters, bill-heads and in all other official publications.

Putting CIN or corporate identity number in all official publications is a new requirement in Companies act 2013. This provision was not there in old Companies act 1956.

In case of failure to quote CIN number, penalty of Rs. 1,000 per day shall be imposed on the defaulting company and on every officer in default for every day during which such default continues up to a maximum limit of Rs. 1,00,000.

If company has changed its name in last two years then it shall paint or affix or print, as the case may be, along with its name, the former name or names so changed in all official publication including letter head and bill-heads.

Appointment Of Company Auditor

As per section 139(6) of Companies Act 2013, company has to appoint its first auditor within 30 days from the date of incorporation in a board meeting. If board of directors are not able to appoint then it has to be appointed within 90 days in a general meeting of members.

First auditor as appointed is required to hold office till the conclusion of first annual general meeting. Companies Act 2013 does not require any form to be filed with ROC but this is a requirement of law and it has to be complied within time.

Open A Bank Account And Issue Shares To Subscribers

Companies Act 2013 requires the company to allot and deliver share certificates within 2 monthsfrom the date of incorporation to all subscribers of MOA. It’s also mentioned that each subscriber will deposit subscription money as specified in MOA to company’s bank account by cheque or through net banking.

We suggest to open a bank account with the help of MOA, AOA and certificate of incorporation and then takecheque from each subscriber and deposit it in company’s bank account.

File Audit Report, Financial Statements And Annual Report Before Due Date

A private limited company is required to file its balance sheet, profit and loss account, auditor’s report and annual return every financial year before the due date with the registrar of companies. Non compliance to this provision will attract additional fee in addition to the normal fee that are charged while filing the e-Form.

Now you know mandatory things that promoter or directors of a private limited company should remember after incorporation of a private limited company. In case of any doubt or clarification please contact us by using our comment form.

For more information about Activities to Be Performed after Incorporation Of Company, feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

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Outsourced Accounting Services ,
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Importance of Accounting for Startups ,
Simple Tips to Design a Salary Structure for an Employee,
Online Tax Filing ,
Tax Accounting Services for start-ups and small businesses,
Procedures and Documentation For Startups,
Payroll Services for Startups.

8 Tips to retain the best of your employees

In any business, big or small, one of the major tasks is to retain the best and most skilled employees. There’re a lot of things a person must keep in mind, when handling employees. For a long term stay in an organisation, any employee would have certain expectations from the organisation. Let us check the,

8 tips on how to retain the best of your employees

Gapeseed Consulting emphasizes on Employee Motivation, Engagement and Appreciation as the prime factor in retaining an organisational culture. Any culture is defined by the people, the employees and the teams. And to turn people into employees and then team, you need to create a culture and the following tips shall help:

• Reward, Recognition and Appreciation

If an employee works up to the standard, or does something out of the box for organizational benefit, he / she in return expects and deserves appreciation. This appreciation could be done in the form of rewards, like increments, trophies, bonus, monetary awards, additional perks. The employee should get due recognition for the hard work and dedication.

• Equitable treatment

Every employee, working on the same level, putting the same amount of effort deserves equal opportunities and equal treatment. For example, if in an organisation, ‘A’ is paid more than ‘B’, working on the same level because he’s connected to the senior, it will automatically pull B’s morale down. If there’s any discrimination against an employee, he would probably start finding other opportunities for growth.

• Proper Supervision

People leave managers and supervisors more often than they leave companies or jobs. The expectations for employees should be well defined to prevent confusions and agony in the future.
There should be clarity about expectations,earning potential,feedback about performance, scheduled meetings.

• Freedom of expression

Any employee wouldn’t want to leave an organization where he is free to express his thoughts and ideas, sometimes employees can come up with brilliant strategies and ideas and when they are left unheard or ignored, it lowers the employees morale. Their expression can prove to be very beneficial.

• Don’t threaten employees’ job or income

A threat to an employee’s job or income makes him feel as if he needs to search for a new platform to exploit his potential. Under any circumstances, this shouldn’t be done to the hardworking and dedicated employees.

• Clean out the dead weight

This sounds tough, but works for an organization’s benefit. There may be people in the organisation who hold other employees back in certain ways like negativity, unethical work, politics, gossips etc. Great people need to work with other great people. Do the hard work of removing those who slow everyone else and the organisation down.

• Friendly Competition

Employees can be put into friendly competition; this could be done by building teams and framing equal time spans for completion of certain tasks. These tasks could fetch the employees awards in form of monetary rewards, trophies etc. Such competitions, help employees work harder to increase their potential and opportunities.

• Above market Standard Rate

When some employees work beyond their boundaries, beyond their comfort for the benefit of the firm, they deserve more than the rate established by the market. This doesn’t imply that they need to be given sky high salaries, somewhere 20%-30% above the standard rate for the job so that they value doing it in the firm.

The above are 8 tips to retain the best of your employees, the same can be picked individually or one at a time. The idea is to make stronger and more approachable workplaces by creating an appropriate environment. You can connect with Gapeseed Consulting for processes or interim HR services through consultants to create HR Systems and align them with your organisational goals.

Feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

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Benefits for HR and Payroll Software,

7 Qualities for Recruitment Process Outsourcing,

Employee Provident Fund.

Private Limited Company and its Incorporation

WHAT IS A PRIVATE LIMITED COMPANY?

A private limited company is a type of privately held business entity registered under the Companies Act, 2013. In this type of business entity, the owners are liable to their shares. Private companies issue stock and have shareholders, they cannot trade on public exchanges and shares are not issued through an initial public offering (IPO). A private limited company must have at least one shareholder and can have a maximum of fifty shareholders. This makes the entity to stand between partnership and a public company. It is widely acceptable among entrepreneurs as it is more convenient to start a Private Limited Company.

INCORPORATION OF A PRIVATE LIMITED COMPANY

A Private Limited Company can be incorporated as per the procedure explained below :

Director Identification Number (DIN) & Digital Signature Certificate (DSC)

A person intending to become a director of a company requires a unique identification number which is issued by the Ministry of Corporate Affairs. This number then is used to record the details of the director of the company. The Digital Signature Certificate is the digitalised version of all the paper certificates. This certificate can be used to prove the director’s identity, access information and sign documents digitally. Certain documents are required for DIR-3 application:

Identity Proof: A copy of PAN card is mandatory whereas a copy of the Driver’s license is optional.
Address Proof: A copy of the Passport / Election ID / AADHAR card / Driver’s License is sufficient.
Passport Size photo
Mobile Number
Education Qualification
Verification signed by the applicant.

Company Name Availability

The name of the company must not be pre-existing, applicants must first search for any existing Trademark and then decide on the company’s name. The Promoters of the company have to provide at least 6 names in the order of their preference to the Registrar of Companies for name availability.

Memorandum of Association (MOA) & Articles of Association (AOA)

When the name of the company has been approved by the Registrar of Companies then the Subscribers have to draft a MOA & AOA specifying their Names, Address, Occupation and the sign the subscription pages of the Memorandum and Articles of Association formed.

The Memorandum of Association is a document regarding the main objectives as well as the secondary objectives of a company. It covers all the necessary fundamental provisions of the company’s constitution.

Articles of Association is a contract based on mutual understanding between the company and its members defining their rights and duties.

Filing E-Forms with Registrar of Companies

After the drafting of Memorandum of Association and Articles of Association, an application has to be sent to the Registrar of Companies regarding the incorporation of the company. This Application must contain all the necessary documents of the Company and its Directors.

Verification of Documents

The company must pay the desired fees to the Registrar of Companies and must get Stamp Duty to get the documents verified.

Issue of Certificate of Incorporation

When all the documents are verified and duly approved by the Registrar of Companies, a digitalised ‘Certificate of Incorporation’ is mailed to the Directors of the company. Once the Incorporation Certificate is received , company can start with its operations .

ADVANTAGES OF A PRIVATE LIMITED COMPANY

Separate Legal Entity

A company is a legal entity and a juristic person under the law. The members (Shareholders/Directors) of a company have no liability to the creditors of the company. This form of organisation has wide legal capacity, acquire and hold property and also incur debts in its own name. As a juristic person, a company can sue in its own name and can be sued by others. A company’s common seal is considered as its signature but is not mandatory.

Limited Liability

Limited liability means the status of being legally responsible only to a limited amount of debts of a company. A company is a separate legal entity from its members. The liability for repayment of debts incurred by the company lies on the company itself and not on the owner. Unlike other business entities the liability of the members in respect of the company’s debts is limited.

Uninterrupted Existence

A private limited company has perpetual succession. A perpetual succession means the company has uninterrupted existence until it is legally dissolved or voluntarily. A company, being a separate legal person will continue to exist even if a member dies or ceases irrespective of the changes in the membership.

Easy Transferability

Shares of a Private Limited company which is limited by the number of shares can be transferred by a shareholder to any other person. The shares and other interest of any member in the company is dealt as a movable property and can be transferred in the manner provided by the Company. Shares can be transferred by filing and signing a share transfer form and handing it over to the buyer of the shares along with the share certificate. It is easier for a member to leave the membership of the company and also to transfer its share of ownership.

Owning Property

A company as a legal entity is capable of owning its funds and properties. No shareholder can make any claim upon the property of the company as the owner of the company and the company itself are two separate entities.

If you are looking for incorporating a private limited company or still perplexed as to what is most appropriate for your kind of business, feel free to get in touch with us. You can visit us for consultation and speak to our CS to ascertain the right direction.

For more information on Incorporation of a Private LTD company , feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

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One Person Company and its Incorporation

ONE PERSON COMPANY

One Person Company (OPC) is a form of business entity that is owned and managed by a single entrepreneur. This concept was introduced in India through the Companies Act, 2013 supporting entrepreneurs who are capable of starting a venture by creating a single person economic entity. A One Person Company is also a separate legal entity from its members just like a Private Limited Company or a Limited Liability Company. In this type of business entity, only one person is required who can be the Director and as well as the shareholder of the company. This venture of One Person Company is still in its emerging stages which makes it much more difficult for entrepreneurs to adopt, it is mainly suitable for people starting an unregistered Proprietorship. The entrepreneur can set up their company without sharing their profits as One Person Company does not need a middleman to target the markets.

Features of One Person Company (OPC)

One Shareholder

One Person Company is a business entity which is owned and managed by a single person. The Company Incorporation Rule states that only a resident and also a citizen of India can form a One Person Company. The entrepreneur hold all the shares of the company as it has only one member. The people who are Foreign citizens and are Non-Resident citizens cannot indulge in the formation of a One Person Company. A shareholder can only have shares in a single One Person Company and not in various companies.

Director

A One Person Company can be managed by a Single Person. In this type of business entity, the Sole Shareholder can become the Sole Director of the business. A One Person Company can have a maximum number of 15 directors even if it may be having a Sole Shareholder.

Nominee

This states that the Shareholder of the company has to nominate a person who in the event of death or inability to continue the work in the company will come forward to take the charge of the One Person Company. The present shareholder will issue a written consent in the name of the nominee, the nominee must also be a resident and a citizen of Indian. The person nominated must not have any other One Person Company under control.

Incorporation of a One Person Company (OPC) in India

A One person Company can be incorporated as per the procedure explained below :

Director Identification Number (DIN) & Digital Signature Certificate (DSC)

1. Identity Proof: A copy of PAN card is mandatory whereas a copy of the Driver’s license is optional.

2. Address Proof: A copy of the Passport / Election ID / AADHAR card / Driver’s License is sufficient.

3. Passport Size photo

4. Mobile Number

5. Education Qualification

6. Verification signed by the applicant.

Company Name Availability

The name of the company must not be pre-existing, applicants must first search for any existing Trademark and then decide on the company’s name. The Promoter of the company have to provide at least 6 names in the order of their preference to the Registrar of Companies for name availability.

Memorandum of Association (MOA) & Articles of Association (AOA)

When the name of the company has been approved by the Registrar of Companies then the Subscriber have to draft a MOA & AOA specifying their Names, Address, Occupation and the sign the subscription pages of the Memorandum and Articles of Association formed.

Articles of Association is a contract based on mutual understanding between the company and its members defining their rights and duties.

Filing E-Forms with Registrar of Companies

Verification of Documents

The company must pay the desired fees to the Registrar of Companies and must get Stamp Duty to get the documents verified.

Issue of Certificate of Incorporation

Post Incorporation

After the Incorporation of a One Person company some necessary formalities are required immediately, such formalities are:

 Opening a Current Bank account in the name of the Company

 The Company must apply for the Shop Act License

 The Shareholder must be issued a Share certificate by the Company

 The subscription money must be payed through the Current Bank account

of the Company

BENEFITS

1. A One Person Company is a separate business entity and have Limited liability to its members.

2. This type of Company helps an entrepreneur to establish its own business without depending upon a second person.

3. A Legal Auditor is not required in this business unlike any other business enterprise.

4. A One Person Company being a separate legal entity can own property in the Company’s name and the shareholder cannot make any claim upon the property.

For more information on Incorporation, feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630

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Limited Liability Partnership and its Incorporation (LLP)

It is an association of 2 or more persons who have set up this business structure for carrying on a lawful business with a view to profit, with the partners having a limited state of liability. LLPs are governed under the Limited liability Partnership Act, 2008. It can be said that LLP is a combination of Partnership and Private Limited Company as it encompasses features of both. Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management.

How to Incorporate a New Limited Liability Partnership

A Limited Liability Partnership may be incorporated as per the procedure explained below :

Registration

Register yourself on the website of Ministry of Corporate Affairs, developed for LLP services . Fill in the registration form then select your user name and password. Therein, upload digital signature certificate.

Designated Partners Identification Number (DPIN)

All designated partners of the proposed LLP shall obtain “Designated Partner Identification Number (DPIN) / Director Identification Number (DIN)”.

Digital Signature Certificate

Partners/Designated partners whose signatures are to be affixed on the e-forms has to obtain class 2 or class 3 Digital Signature Certificate (DSC) from any authorised certifying agency.

Name reservation

Log on to the LLP portal. After login, click “E-Forms” link. Open Form-1 for reservation of name and fill in the details. Choose the name of the proposed LLP (upto 6 choices can be indicated). After this attach the digital signatures and submit the e-form and pay the necessary fee.

Details of minimum two designated partners of the proposed LLP, (at least one of them must be a resident of India) is required to be filled in the application for reservation of name. Only individuals or nominees on behalf of the bodies corporate as partners can act as designated partners.

Incorporation of LLP

Once the name is reserved by the Registrar, log on to the portal and fill up Form-2 “Incorporation Document and Statement”.
Pay the prescribed registration fee as per the slab given in LLP Rules, 2009, based on the total monetary value of contribution of partners in the proposed LLP. Statement in the e-form is to be digitally signed by a person named in the incorporation document as a designated partner having permanent DPIN and also to be digitally signed by an advocate/company secretary/chartered accountant/cost accountant in practice and engaged in the formation of LLP . On submission of complete documents, the Registrar after satisfying himself about compliance with relevant provisions of the LLP Act can register the LLP, maximum within 14 days of filing of Form-2 and will issue a certificate of incorporation in Form-16.

Incorporation documents must be filed with the following attachments.

1. Copy of authorisation where the partner is a limited liability partnership, or company, or a limited liability partnership incorporated outside India or a company incorporated outside India.
2. Proof of address of registered office of limited liability partnership.
3. Details in respect of names of partners/witnesses and their signatures.
4. Attachments in respect of details of individuals/bodies corporate where the number exceeds five.
5. Optional attachments as may be required.

LLP agreement must be filed in (E-Form 3) with the Registrar within 30 days of incorporation.
The LLP Agreement must be stamped in accordance with the stamp Act.

CHARACTERSTICS

Separate legal entity : Like a company LLP also has a separate legal entity. So the partners and the LLP are distinct from each other.

No requirement of minimum capital : In case of companies there should be a minimum amount of capital that should be brought by the members or owners who want to form it. But to start an LLP there is no requirement of minimum capital.

Minimum number of members : To start a limited liability partnership at least two members are required initially. However, there is no mentioned limit on the maximum number of partners.

No requirement of compulsory audit : All the companiesare required to get their accounts audited. But in case of LLP, there is no such mandatory requirement.

BENEFITS

• It is flexible to organise the internal structure of an LLP
• There is no maximum limit for the no. of partners in LLP
• Raising and utilisation of funds depends on the partners will
• LLP is exempted of Dividend Distribution Tax (DDT)
• The partners have limited liability
• There is no requirement of minimum capital
• One can easily become a Partner or leave the LLP
• An LLP can easily attract finance from PE Investors, financial institutions, etc.

DEMERITS

• Any act of the Partner without the other partner , may blind the LLP
• LLP cannot raise money from public, unlike a company.
• Angel investor or venture capital firm does not prefer LLP

Save Tax through the following Tax Exemptions

Did you know that it is possible to save your income tax out flow by far a large amount?

Do you want to know about Tax Planning through Tax Exemptions?

Did you know that we can help you with this year’s Tax Filing? Are you wondering about redeeming some of the previous year’s tax which you filed and weren’t aware of exemptions.

Then this is the post for you. Read further to understand how you can save tax through following tax exemptions. All this is possible legally under the Indian Income Tax Act which allows certain deductions which can be claimed to save tax at the time of filing of Income Tax Return by all classes of taxpayers . All you need to do is a proper tax planning which would allow certain deductions from your gross total income and income tax would be levied on the balance income as per the income tax slabs. Here are certain year-end tax tips to get smarter with tax management.

House Rent Allowance (HRA): It is the best tax saving tool which a taxpayer can use. Under this you can save upto 50% of your salary if you are staying in a metropolitan city like Mumbai, Delhi, Chennai or Kolkata else 40% if you reside in non-metro. Apart from this if actual rent paid is lower than 10% of your basic salary received then there is no exemption. Be aware that you cannot claim any exemption under this section if you love in your own home or of you are not paying rent to anyone.

Medical Reimbursement: If your employers provide you medical reimbursement facility for your medical expenses you can get tax exemption. No income tax on medical reimbursement is levied up to Rs. 15000 provided all bills for the same are produced by the employee to the employee. This also includes premiums that your company might be paying for your health insurance schemes and on treatments of any critical diseases. It is to be noted that no income tax on medical reimbursement is levied upto Rs. 15000, the amount received as medical allowance would be fully taxable.

Deductions on Section 80C, 80CCC: Under Section 80C a deduction of Rs.1,50,000 can be claimed from the total income you earn. In simple terms you can save up to Rs. 1,50,000 from your total taxable income under this section. Please note this deduction is allowed to an individual or a HUF. Under Section 80CCC it provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to in Section 10(23AAB).

Leave Travel Allowance (LTA): It is the most common element of compensation which the employers use to remunerate employees due to the tax benefits attached to it. An LTA is the remuneration paid by an employer for Employee’s travel in the country, when s/he is on leave with the family or alone. LTA amount is tax free. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt. Please note that The total cost of the holidays is not covered, only the travelling cost is covered.

Spend more: Increasing expenses, such as paying off bills or other debts or paying out bonuses to employees, it will help increase your deduction for the current year. If you’ve delayed major purchases for your business, you should go ahead and buy it. Not only can you find great deals as businesses try to clear out inventory, you’ll have more deductions. In general capital improvements and new equipment should be capitalized and depreciated over 5, 7 or 10 year period.To know more about tax planning, tax exemptions and to get smarter with tax management for this financial year, drop us a line here and we will be happy to provide you our Tax planning services . You can also write us at info@gapeseedconsulting.com or, call us for Tax Advice at, +91-9599444639.

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The Evolving Role of Internal Audit in Growing Companies

Without any doubts, today’s organizations face a global economic crisis of historical proportions. In response to that, management, board of directors and leaders throughout the organization are taking fresh look at virtually all aspects of the business to assess how to enhance productivity, processes and systems, yet still stay “in control.” They are starting, and very likely will continue, to think and respond differently as they determine how to operate their businesses successfully and maintain plans for long-term growth in today’s unique business environment.

As the mandate and role of internal audit continue to evolve, managements are increasingly counting on internal audit functions in their efforts for managing fraud risks and keeping organisations protected. Increasingly, the internal audit function is not to monitor and detect but also to investigate fraud incidences when they arise. The role of internal audit in fraud risk management by way of preventing, detecting and investigating fraud has amplified as a result of economic uncertainty and increased focus of certain organisation’s management on fraud risks.

Internal auditors traditionally look beyond financial risks and statements to consider wider issues such as the organisation’s reputation, growth, impact on the environment etc. The fundamental function of an internal audit team are Assurance, Assessment and Recommendations, Oversight, Advisory Services.

The changing role of Internal Audit

Internal auditing professionals not only must understand these challenges and their organization’s key objectives, but also ensure that amid the many organization wide changes taking place on almost a daily basis, key controls and processes are adequately addressing these changes and the new risks that emerge, and are functioning as intended. Internal audit plays a critical role in helping companies successfully “manage the change” by providing assurances that with every new process, procedure and initiative, any significant new risks that emerge are identified, monitored and managed effectively, so that the enterprise is protected on an on-going basis and to a level that satisfies management and the board.

An effective audit planning process that focuses on organisational strategic imperatives and key business risks will identify an appropriate blend of advisory and assurance reviews. The updating of the audit plan can no longer be an annual process. The audit plan must be refreshed regularly (e.g., quarterly) and with triggering events. Leading functions are developing a ‘3 + 9’ plan — a three month frozen window and nine month fluid plan. For those that do not, the risk of unpreparedness, of being too slow to react to the changing risk environment or market events is simply too great, leaving organisations perplexed to react to events, some of which include:

Transactions (mergers, acquisitions, carve-outs or divestiture)
New product launch or retirement
New market entry
Patent expiry
Litigation

Mandate for Internal Audit

Strategic and valued advisor:The Internal Audit function serves as a subject-matter resource to business management around strategic initiatives, challenges and changes in the organisation. The function has the people, knowledge and experiences to effectively provide this level of service.
Business insight: In addition to covering the ‘basics,’ the Internal Audit function is designed to provide high-quality, relevant business insight as an integral part of its activities. Business insight is not a by-product, but an explicit outcome from the function’s activities.
Control and compliance monitoring structure:Internal Audit functions should be focused on evaluating the design and the effectiveness of internal controls in the areas outlined, in their charter or mandate. This also includes focusing on compliance with key regulations and policies.

Also, internal audit must think expansively when seeking ways to add value to the organization. Too often, we find internal audit functions stop short of making recommendations that could create value for the organization for fear of overstepping their place. However, “consulting” is part of the Institute of Internal Auditors’ definition of internal auditing, and we believe that appropriately empowering this function provides management with greater opportunities to create value without compromising independence.

At Gapeseed Consulting we work with your organization, virtually of any size to assist you with your internal audit activities. We believe the Internal Audits are now required to find different ways to increase shareholder value and increase the attractiveness of the company to investors, senior executives, especially the risk officers and advisors on board.

Internal Audits are required for all set of businesses which are emerging as progressive business units, our Internal auditors partner and build relationships with the client business in order to keep a finger on the pulse of the organization and thereby act as your growth partners.

To know more about our Internal Auditing services click here or get in touch with our team at, ranu@gapeseedconsulting.com

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Union Budget 2016-17, Keypoints for Startups

In continuation to our previous blog on what the government has in bag for the startups this blog will take you through what the budget has which can help you make your startup successful.

Overview

With so many startups coming up now and then, the government has now realized that how significantly it can drive our social and economic growth of the nation. This has resulted into coming up with initiatives likes Digital India, Make in India, and Start Up India, Stand Up India.
In the Union Budget 2016-2017 though it has emphasized on different key areas like Agriculture, Rural Development and Infrastructure etc. but it didn’t stand up to the hopes of the entrepreneurs There is uncertainty whether union budget 2016-2017 would truly help India to startup and stand up?

Let’s start with what the government had in for the startups

According to the government notification, an entity will be identified as a startup.

A time upto five years from the date of incorporation.
The turnover has to be less than 25 crore in the last five financial years.
It is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.

Compliance Regime based on Self-Certification

Compliance pertaining to 6 labour & 3 environmental laws will be allowed to be self-certified through the Startup mobile app.
No inspections will be carried out under labour laws for a 3 year period.
Startups classified as White Category as defined by the Central Pollution Control Board will be allowed self-certification under environmental laws, with only random checks proposed.

Relaxed Norms of Public Procurement for Startups

In order to provide an equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/companies in public procurement, Government shall exempt Startups(in the manufacturing sector) from the criteria of “prior experience/turnover” without any relaxation in quality standards or technical parameters. The Startups will also have to demonstrate requisite capability to execute the project as per the requirements and should have their own manufacturing facility in India.

Funding Support through a Fund of Funds

Corpus of INR 10,000 crore: Initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4years (i.e. INR 2,500 crore per year).

“Fund of Funds”: The Fund will be in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.

Credit Guarantee Fund for Startups

Credit Guarantee Fund would help flow of Venture Debt from the formal Banking System.

Corpus of INR 500 crore per year for the next four years: In order to encourage Banks and other Lenders to provide Venture Debts to Startups, Credit guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/SIDBI is being envisaged with a budgetary Corpus of INR 500 crore per year for the next four years.

Tax Exemption on Capital Gains

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with tax exemption regard capital gains as follows:

Long term capital gains tax exemption: New Section 54EE inserted to provide long term capital gains tax exemption if capital gains proceeds are invested by an eligible tax payer in units of specified fund to be notified by the Central Government, subject to conditions. The maximum investment allowed upto INR 50 lakh.
Budget proposes to amend Section 54GB to provide long term capital gains tax exemption arising on account of transfer of a residential property if such capital gains are invested in an eligible startup by way of subscription of share subject to the tax payer holds more than 50% shares and utilizes monies to purchase new asset. Further, the Budget proposes to amend the expression “new asset” to include computers or computer software in case of technology driven startups.

Tax Exemption to Startups for 3 years

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with regard to tax exemption to Startups for 3 years as follows:

New Section80-IAC inserted in the Income Tax Act, 1961 to provide 100% deduction of the profits and gains derived by an eligible startup from a business involving innovation development, deployment or commercialization of new products, processes or services driven by technology or intellectual property, for 3 consecutive years out of 5 years beginning from the year of incorporation. The said benefit is available to an eligible startup setup before April 2019. However, MAT will apply.

Tax Exemption on Investments above Fair Market Value

Purpose: To encourage seed-capital investment in Startups
Investments made by incubators in Startups proposed to be insulated from the rigors of Section 56(2)(viib) of the Income-tax Act, 1961. Any consideration received by Startups for issuance of shares over FMV to incubators, not to be taxed in the hands of the Startup.

Startup India Hub: The govt. would create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding.

Rolling-out of Mobile App and Portal

The App shall be made available from April 01, 2016 on all leading mobile/smart devices’ platforms to provide the following services:

Registering Startups with relevant agencies of the Government
Tracking the status of the registration application and anytime downloading of the registration certificate.
Filing for compliances
Collaborating with various Startup ecosystem partners
Applying for various schemes being undertaken under the Startup India Action Plan

Legal Support & Fast-tracking Patent Examination

Startup Intellectual Property Protection (SIPP) scheme will be introduced on a pilot basis for a one year period to facilitate filing of Patents, Trademarks and Designs. The scheme would include:

Fast-tracking patent application.
Setting up a panel of “Facilitators” who will advise on different Intellectual Property Rights (“IPR”)

Are bate of 80% on patent filing fees vis-à-vis other companies is proposed.

This was a quick synopsis which is useful for the startups or those who are planning to startup. Incase, you seek any further clarity or recommendations on your startup, feel free to write to us at, info@gapeseedconsulting.com

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Start Up India Stand Up India Scheme

Now that you have been following our posts for so long, we would like to inform you about the
latest schemes regarding Start-Up India initiated by our government. This information might be of some use to you… On 5th April PM Modi officially launched one of the schemes in Noida. The official portal has been set up. Now it has become even easier for you to get detailed information regarding the Start up India plan. The portal was made live on April 1 2016. You can find all the information regarding the enrolment into the scheme which includes the online application forms, how to apply for loan etc. To simply know the working just navigate to the “Action plan” on the portal. For all latest notifications, you can navigate to “Notification” Section. A pdf file containing the list of incubators can be downloaded by interested applicants. For List of SEBI Registered funds, you can Visit HERE. If you have any queries regarding the “Start-up India Scheme” you can make use of the official Contact Us Page.

The whole world witnessed the launch of an ambitious programme in India on 16th January 2016.
The launch event took place in Vigyan Bhawan, New Delhi. Many of you still might not be clear about the goal, highlights and features of Start-up India programme but through this article you can find all the available information regarding the same. So if you have queries like – What is Start Up India Stand Up India Scheme ? Who can Apply ? How to Apply ? Application Form downloads etc, read the given information for the answers.

The economy of any country depends on its countrymen. Larger the number of employed or working
people, better be the economy. The Indian government has realized that Indians have great
potential when it comes to ideas; all they need is a promising opportunity or maybe a kickstart. Many people dream of starting up their own business, but due to financial or lack of opportunity they are unable to do so; hence Indian govt in the leadership of Mr. Narendra Modi has decided to offer a gift as a nation wise program- “Start Up India”.

Mr. Narendra Modi in his speech acknowledged that Indians have ideas and capability, all the need is a little push.

“Start Up India” is a revolutionary scheme that has been started to help the people who wish to start their own business. These people have ideas and capability. The government decided to give them support to make sure they can implement their ideas and grow. Success of this scheme will eventually make India, a better economy and a strong nation.

Start Up India Scheme – From Job Seekers to Job Creators

Technology is evolving with a pace faster than ever. This has given birth to various new businesses like E-commerce, internet marketing etc. giving a great scope of development in such areas. Those who plan to start new business are eligible to apply. Gapeseed Consulting knows that setting up a business has its own constraints – forming a company, taking approvals, taking care of legal compliances and registration etc. It isn’t a cakewalk for others but it is definitely easy for our clients. We will walk you through all the steps required for your Start-up.

During his speech at the event, Mr. Modi said that they are trying to make the youth Job Creators, rather than Job Seekers. He also said that one’s mindset should not be towards earning money in the initial phase, it should be rather on grabbing and using the opportunities.

Start Up India Stand Up India Scheme – Action Plan in Detail and How Gapeseed Consulting can do it for you.

E- registration has to be done. The application forms for start-up India are made available in
April 2016.
A self-certification system has been launched.
A dedicated web portal and mobile app will be developed.
Arrangement of self-certificate based compliance.
No inspection during the first 3 years.
80 percent reduction in the application fee of start-up patent.
Easy exit policy.
Inclusion of Credit Guarantee Fund.
Relaxation in Income Tax for first three year.
Special Arrangement for Female applicants.
Introduction of Atal Innovation Mission: Innovation courses will be started for the students.

As per the sources, the online application forms will be launched this month in April 2016. Interested applicants need to provide the required details in the application form. We will help you review you application so as it doesn’t get rejected.

For further queries and to know more about the Start-up India initiative, you can drop us a line here or feel free to send in an email to info@gapeseedconsulting.com

Gapeseed Consulting will be more than happy to help you setting up your own business.

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PROCEDURES and DOCUMENTATION FOR STARTUPS

Now that you have an understanding about the launch procedure and also in ascertaining the best
suitable option for your start-up idea. This post will help you understand the procedure for Formation/Registration/Incorporation of Private and Public Company in India. Also Detailed Documents required for the same can be found here.

Whether you are just starting a business or incorporating a business already in existence, it is helpful to know and understand the formation and ongoing requirements each state places on corporations and limited liability companies. Incorporation / Formation of company involve a number of steps. We have tried to simplify the procedure to the maximum extent possible in the following steps

Step 1: Digital Signature

The basic step to company incorporation is to get DSC made of all directors. The Information
Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in
electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorised to sign the documents. To know the names of Certification Agency (CA) from where DSC can be acquired refer to our Free Guide.

Step 2: Acquire Director Identification Number

INCOME TAX PAN IS MANDATORY, so before applying of DIN a person must have his PAN number.
Details on PAN and DIN must be same. Step by step process to be followed by the applicant can be found in our resource section.

Step 3: Register DSC

Third step is to register DSC of the person authorized to sign E-forms on MCA21 or if you want us to do it for you drop us a line here.

Step 4: Apply for Reservation of Name [S.4(4)]

As per section 4(4) of Companies Act, 2013 read with rule 9 of Companies Incorporation Rules, 2014, application is to be made to registrar for reservation of name. 6 names can be proposed after checking its availability at MCA21 and as per guidelines given in the said rules and the procedures & documents required to be attached to INC – 1 are also available in the resource section.

Step 5: Drafting and Printing of Memorandum and Articles of Association

A public company limited by shares may adopt all or any of the regulations contained in model
articles of association registered along with its memorandum of association. The memorandum and articles shall be in conformity with the provisions of Section 4 and 5 of the Companies Act 2013. Read more here.

Step 6: Filing of Company Incorporation form – eform INC 7, DIR 12 & INC 22

As per Rule-12 of Companies (Incorporation) Rules, 2014, application for incorporation of a private and Public company, with the Registrar, within whose jurisdiction the registered office of the company is proposed to be situated, shall be filed in Form no. INC 7 [Rule 12 to 18] along with Form no. INC.22 for situation of registered office of the Company, (as the case selected in form no. INC 7) and DIR -12. There is a list of documents to be filled for Filing of company incorporation form get in touch with us to know it all.

Step 7: Filing of Commencement of Business – eform INC 21

On registration, a company cannot commence business or exercise any borrowing powers until it
files a declaration by directors in Form INC – 21 to the effect that every subscriber to the
memorandum has paid the value of the shares agreed to be taken by them as specified in section
1(1)(a).

E-form INC.21 is required to be filed with concerned Registrar of Companies for obtaining approval for commencement of Business and exercise of borrowing powers. This E-form is required to be filed by all companies incorporated under Companies Act 2013.

To know about the Procedure for commencement of Business under Companies Act, 2013 check out
our resources.

We hope that this post helped in understanding the procedures and documentations requirement
for your start-up. In case if you have any query about our startup series or services that we offer, please send in an email to info@gapeseedconsulting.com

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