TAX AUDIT LIMIT FOR BUSINESS/PROFESSION IN INDIA

TAX AUDIT LIMIT FOR BUSINESS/PROFESSION IN INDIA

According to Section 44AB, Income tax act 1961 (As amended by finance act, 2017) accounts of persons carrying business/profession need to be audited.

Every person carrying on: –

Business Total sales/Turnover/Gross receipts exceeds INR 1 Crore in any previous year.
Profession Gross receipts exceeds INR 50 lacs in any previous year.
Business (Section 44AE  Section 44BB  Section 44BBB) Profits & gains from business are deemed to be the profits & gains of such person under the specified sections, and the person has claimed his income to be lower than profits of the business in any previous year.
Profession (Section 44ADA) Profits & gains from profession are deemed to be the profits & gains of such person under the specified sections, and the person has claimed his income to be lower than profits from the profession and his income exceeds the maximum amount not chargeable to income tax in any previous year.  
Business (Section 44AD-4) Provision of the section 44AD (4) Income tax act 1961, are applicable in his case and his income exceeds the maximum amount not chargeable to income tax in any previous year.

These previous year accounts must be audited by the accountant before the specified date and furnish the report duly signed & verified by such accountant including such particulars as may be prescribed.

Read other blog: STATUTORY AUDIT OF FINANCIAL STATEMENTS OF COMPANY

Who will not be covered under this section?

  • Person who declares his profits & gains in previous year as per section 44AD (1) of Income tax act 1961, and his total sales/turnover/gross receipts does not exceeds INR 2 Crore in any previous year.
  • Person whose income is in the nature specified under section 44AB/44BBA of Income tax act 1961.
  • Person who is required to get his accounts audited under any other law, then it shall be sufficient with provisions of this sections that person get accounts of such business/profession audited under such law before the specified date and further report by an accountant in the form prescribed under this section.

IMPORTANT SECTIONS RELATED WITH SECTION 44AB, INCOME TAX ACT

Section 44AE: Provision for computing profits/gains of business from plying, hiring or leasing goods carriages

Section 44BB: Provision for computing profits/gains in connection with business of exploration of mineral oils

Section 44BBB: Provision for computing profits/gains of foreign companies engaged in business of civil construction & various turnkey projects.

Section 44ADA: Provision for computing profits/gains of profession on Presumptive basis

Section 44AD (4): Provision for computing profits/gains of business on Presumptive basis

Section 44AD (1): A sum equal to 8% of total turnover/gross receipts of assesse in previous year OR a sum higher than aforesaid sum claimed to have been earned by assesse, shall deemed to be the profits/gains chargeable to tax under the head “Profit & gains from business/profession”

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FREQUENTLY ASKED QUESTIONS (FAQ’s)

Q. What is auditing?

A. Auditing is a process which comes into place once the whole process is completed. It creates checks & balance, review & inspection on the whole process. There are various types of audits for example: Cost audit, tax audit, company audit covered under cost accounting law, income tax law, and company law respectively.

Chartered Accountant conducting the Tax audit is required to furnish the report in the format (Form 3CA/3CB & 3CD) as prescribed in income tax law.

Q. What are the due dates of filing tax audit report?

A. According to section 44AB, every person who is required to get its accounts audited should get its audit report on or before due date of filing of return of income i.e. 30th September of following assessment year.

For example: tax audit report for the financial year 2017-18 must he furnished on or before 30th September, 2018.

Exception: International transaction/domestic transaction specified under section 92E, must file the audit report in format (Form 3CEB) on or before 30th November of the assessment year.

Q. Who will audit the books of accounts?

A. Chartered accountant authorised by ICAI are required to prepare and audit the accounts as specified by the Income tax act.

Q. What is the format of these audit reports?

Form 3CA: case where the accounts of the business or profession of a person have been audited under any other law

Form 3CB: Audit report under section 44AB of the Income -tax Act 1961, in the case of a person referred to in clause (b) of sub – rule (1) of rule 6G

Form 3CD: Statement of particulars required to be furnished under section 44AB of the Income-tax Act, 1961 PART – A

Form 3CEB: Report from an accountant to be furnished under section 92E relating to international transaction(s) and specified domestic transaction(s).

Q. What is the penalty in case of any delay in account audit?

A. If any person fails to gets his accounts audited for year(s), the Assessing officer (AO) can impose a penalty. The penalty shall be lower of the two:-

(1) 0.5% of the Total sales/Turnover/Gross receipts

(2) INR 1, 50,000

Q. If any person is required to get its accounts audited under any other law, then is it mandatory to get his accounts audited once again as per section 44AB?

A. No, Section 44AB categorically specifies that if any person get its accounts audited under any other law, then he does not have to comply with requirements mentioned under the section

chartered accountant firm

POPULAR CHARTERED ACCOUNTANTS (CA) SERVICE PLATFORMS IN INDIA

Whether you are an individual or a company, planning for your tax liabilities is a necessity. A rational tax advisor is a certified Chartered Accountant by ICAI. A good tax advisor can save you a considerable amount of funds in your pocket. They have the proficiency to understand the complex Direct Tax & Indirect Tax code.

There are various chartered accountants in India helping all the budding entrepreneurs/new entrants in setting up their business. There are various services that a CA provides to their clients which help them & the Indian economy as well.

  • Investment Advise
  • Compliance laws
  • Timely filing of ITR, GST etc.
  • Bookkeeping
  • Auditing etc.
  • Company registration

 Some of the famous CA service platforms which provide multiple services to their clients are:

  1. Cleartax (https://cleartax.in/)
  2. Caclubindia (https://www.caclubindia.com/)
  3. Caonweb (https://www.caonweb.com/)
  4. Taxguru (https://taxguru.in/)
  5. Vakilsearch (https://vakilsearch.com/)

These are some of the best online service platforms that provide CA service online to their clients. In this globalized era where everyone is talking about removing the geographical barriers making it easy for potential customers to carry forward their business. In this modernized 21st century, taking the service directly in the hand of the customer, making the customers more aware of the recent financial update or anything will help them in taking their business forward.

Read more: Are you looking for a Chartered Accountant online in India?

Every company have a certain area of expertise in which they provide services. Depending on the type of service they offer, customer base, global presence, channel partners etc. we would easily differentiate between the companies.

Among those companies mentioned above, CAONWEB is having one of the best service platforms which provide service not just specific to their existing clients but they also have a CA service platform where you can find a CA in your area even if you are not their customer.

WHAT IS MSME REGISTRATION FEES & Process_

WHAT IS MSME REGISTRATION FEES & PROCESS?

NO FEES is being charged by anyone, whosoever wants to register their organisation under MSME Act, 2006. Udyog Aadhaar or MSME Registration is made free by Government of India since 2016. You can visit the Udyog Aadhaar website and directly get your MSME registration done without paying for it.

MICRO, SMALL & MEDIUM ENTERPRISES (MSME): Driver of Indian economy

Over the years MSME has been a game changer and plays an important role in driving the economic growth of India. MSME has emerged as the most dynamic & vibrant sector for Indian economy. Irrespective the line of business you are in, be it manufacturing, servicing, registration can be obtained through MSME Act.

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What is Micro, small & medium enterprises (MSME)?

According to Micro, Small & Medium enterprise development act, 2006 MSME’s are classified in two broad categories:

1.    Manufacturing enterprise:  Engaged in production of goods which comes under the purview of Schedule (I) of Industries act, 1951 or which requires installation of plant & machinery in the formation of final product.

2.    Service enterprise: Engaged in providing or rendering services to individuals/corporates/groups of persons which requires equipment installation for the same.

The following enterprises are categorized depending on the Investment in plant & machinery/ service enterprise.

  MANUFACTURING ENTERPRISE SERVICE ENTERPRISE
Micro Enterprise Less than 25 Lakh Less than 10 Lakh
Small Enterprise 25 Lakh – 5 Crore 10 Lakh – 2 Crore
Medium Enterprise 5 Crore – 10 Crore 2 Crore – 5 Crore

What is the MSME Registration process?

Before getting into the step by step process of MSME registration one should be aware about the documents which are required to be attached with your application.

Company Registration | Startup Business

Related Blog – All you need to know about Company Registration as a startup

DOCUMENTS REQUIRED FOR MSME REGISTRATION

Aadhaar card: Aadhaar number is now compulsory for registration of MSME under the act. Since Aadhaar number acts as a nationwide identification for every individual therefore it helps in a complete transparent process.

PAN card: For all the financial transaction related with one’s personal income or an organisation, PAN card helps it to automatically track the 

Accounting & Auditing

Business address proof:

Self-owned property- Allotment letter, Possession letter, Purchase deed, Property tax receipt.Rented property: Rent agreement, NOC from landlord, any other receipt, evidencing the landlord ownership over the property.

Sale bill/Purchase bill: Invoice related to the product which you have purchased or you want to supply further is required to be submitted.

MOA/AOA/Partnership deed: In case of partnership firm, it has to submit its partnership deed & certificate for the same. Copy of MOA/AOA/Resolution passed in AGM is also to be submitted.

License copy: Industrial license so obtained by the Government of India should be submitted while submitting application for MSME.

Bills of machinery purchased: Since the installation of machinery is helpful in identifying the category in which the MSME will fall into. Therefore, its bills & receipts must be kept safe and are required to be submitted.

FSSAI Registration | Food  Licence

STEP BY STEP MSME REGISTRATION PROCESS

1.    Fill in Aadhaar number in the appropriate field to start of your SSI Registration application form.

2.    Once your Aadhaar is verified then only you can proceed further in the form.

3.    Applicant must fill the details as mentioned in the Aadhaar card issued by UIDAI.

4.    OTP Verification: OTP will be sent to the registered mobile number with UIDAI.

5.    Category: Applicant must mention the social category to which it belongs (General, SC, ST, OBC). The proof for the same can be demanded by the authority, as and when required.

6.    Gender: Male/female/transgender whichever category you fall under.

7.    Name of Enterprise: Legal name of enterprise under which all the transactions of the business will be done, should be mentioned.

8.    Permanent Account Number (PAN): Applicant must mention the PAN details in case of co-operative, public limited, Limited liability partnership while it will be optional in any other type of organization.

9.    Official address: postal address of the organization including the state, district, Pin code, mobile no.

10.   Date of Commencement of business must be specified in the appropriate field.

11.   Bank details: IFSC code of the bank branch and the account number where an individual account exist must be mentioned.

12.   Person employed: Details of employees who are directly working under the payroll of the company must be mentioned while applying for MSME registration.

13.  Investment: While computing the total investment, the original investment (purchase value of items) is to be taken into account.

14.  Submit: The Applicant must click on the Submit button to generate OTP which will be sent to email id mentioned for registration.

15.  The Applicant have to enter OTP received on mobile (linked with Aadhaar) second time.

16.  Enter Captcha: The Applicant must enter Captcha before clicking Final Submit button.

GST Registration

Related Blog:  WHAT IS THE GST REGISTRATION PROCEDURE

Benefits associated with MSME Registration

·       Ease in getting government tenders.

·       15% import subsidy in fully automatic machinery.

·       Approvals & Registration process becomes easy.

·       Low interest on loans.

·       Tariff & tax subsidies.

·       Exemptions under direct tax.

·       Benefits of all the government schemes.

·       Financial support from the government for participating in international expos.

More Information to click here – CAONWEB

Attach Your Car With Ola To Start A Business

ATTACH YOUR CAR WITH OLA TO START A BUSINESS

Nowadays, the service industry is not only the fastest-growing but it is also having one of the largest contributions in India’s GDP (28% appx).

It is not only dominant in India GDP, but it also brings in a considerable amount of foreign investment and also provides large scale employment opportunities.

One of the most trending business in some of the prime location in India such as Delhi NCR, Mumbai, and Bangalore etc. are providing cab service. It just requires you to have a smartphone & a vehicle. (Even if you don’t have a vehicle the service provider is having an option with which you can start the business).

Read the remaining article carefully and you will understand all the formalities required to be fulfilled to attach your car in OLA.

Read other blogs: Transactions in which it is mandatory to give your PAN Card number

DOCUMENTS REQUIRED

Documents of the driver:

More documents may be required for leasing.

  • Valid commercial Driving license (yellow badge)
  • Aadhaar card
  • PAN card
  • Current & permanent Address proof document (For example electricity bill)
  • Bank details (passbook & cancelled cheque book)
  • Reference (address & phone numbers)

Car Documents

  • Registration certificate
  • Vehicle permit
  • Insurance of vehicle

Other Documents required

  • PAN card
  • Aadhaar card
  • Address proof (For example electricity bill)
  • Canceled cheque

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DIFFERENT TYPES OF CABS CUSTOMERS CAN BOOK WITH OLA:

  1. OLA Share
  2. OLA Micro
  3. OLA Mini
  4. OLA Prime
  5. OLA Autos
  6. OLA Bike
  7. OLA E-Rickshaw
  8. OLA Luxury
  9. OLA Outstation
  10. OLA Rental
  11. OLA Shuttle

Read more blogs: YOUR PAN CARD MIGHT BECOME INOPERATIVE FROM 01, JANUARY, 2020

WAYS TO START A BUSINESS WITH OLA

There are 3 ways of starting a business with OLA:

Joining OLA as a partner

  • If you own a car then it is easy to attach it with OLA
  • Call or visit the nearest OLA centre and they will provide you with all the details required to attach your car with OLA.
  • Be sure to read all the information carefully before attaching your car with OLA.
  • Submit the necessary documents as mentioned in the article.
  • OLA will then start the training process.
  • The signing of the contract with OLA.
  • Run your car as an OLA cab in your city.

Joining OLA as a driver

  • For those who don’t own a car but still wants to start their business with OLA
  • Simply visit the office of OLA and understand the details required to attach your car with OLA
  • Submit the necessary documents mentioned in the article above.
  • Depending on the car you lease, one has to pay a rental fee of INR 700 – 1200 to OLA. This will be automatically deducted from your daily earnings and the remaining amount will be transferred to your account through NEFT/Cash.
  • OLA will then start the training process.
  • The signing of the contract with OLA.
  • Start working as an OLA Driver.

Joining OLA as a fleet operator

  • For those who have multiple cars, can attach them as a fleet with OLA.
  • Call your nearest regional office and collect the information regarding OLA fleet.
  • Submission of documents
  • If you are not able to find the drivers, OLA will help you find them.
  • OLA will inspect your car & check whether it is meeting the standards of the company or not.
  • OLA will then train these drivers and will make them technology-friendly.
  • After completion of all the processes, OLA will register you as fleet operator under it.
  • The signing of the contract with OLA.
  • Start working as an OLA fleet operator.

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FREQUENTLY ASKED QUESTIONS

Q. How to get a car on a lease in OLA?

  • Get your documents verified
    • Pay the verification fees & security deposit
    • You will get the car once your profile is verified

Q. Initial payment to lease a car in OLA?

  • A non-refundable charge of INR 4,000 is to be paid.
  • Refundable charge of INR 21,000 – 31,000 based on the vehicle.

Q. What is the procedure to pay the daily rental of OLA?

  • OLA will deduct your daily rental from daily earnings and will transfer the remaining to your account through NEFT/Cash.

Q. How much time does OLA takes to complete the registration process?

  • If all your documents are complete and ready to be verified then it will hardly take a day to start with your booking process.
Your PAN Card might become

YOUR PAN CARD MIGHT BECOME INOPERATIVE FROM 01, JANUARY, 2020

  • 31st December 2019 is the last date to link PAN-AADHAR after which your PAN will become “inoperative”.
  • Earlier the rule was that if you fail to link PAN-AADHAR then your cwill become “invalid” i.e. you never had a PAN.
  • However, the Government is yet to define the meaning of being “inoperative”.
  • In the recent budget which was presented in July 2019, the government had amended the PAN-AADHAR linking rules.
GST Registration

Why this change in the rule was announced?

  • These changes were announced by the government to secure the previous transactions done by the taxpayers using PAN.
  • This will be beneficial not only for the government but for the honest taxpayers as well.

Related Blog – All you need to know about Company Registration as a startup

What will happen if PAN is not linked with AADHAR till 31, December 2019?

  • There is no clarity as to what will happen if you are not able to link PAN-AADHAR within the prescribed time limit. The government is yet to clarify the exact meaning of the word “inoperative”.
  • The government will also notify whether these inoperative accounts will be re-activated after being inoperative.

How to link PAN- AADHAR?

EXISTING USER

  • If you are an existing user and you have previously filed your returns using your PAN then chances are that you have already mentioned your Aadhar no. while filing your tax return.
  • Income tax department might have linked both you PAN-AADHAR in case they have your details with them.
  • You can check your status regarding the same by visiting the www.incometaxindiaefiling.gov.in

NON-EXISTING USER

Click on the above-mentioned link and fill-up the form by filling the details of your PAN-Aadhar and get it linked.

OTHERS

  • Via SMS: Sending an SMS from your registered mobile number to 567678 or 56161 using the format UIDPAN<SPACE><12 digit Aadhaar><Space><10 digit PAN>

Related Blog: How to check your PAN card status?

file TDS return online

How to File TDS return Online and when is the right Time to file?

TDS is abbreviation of Tax Deducted at Source. TDS filing is one of strategy utilized for gathering income tax in India. It is administered under the Indian Income Tax Act 1961 and overseen by Central Board of Direct Taxes (CBDT). Under this demonstration, any installment secured under these arrangements will be paid in the wake of deducting recommended rate. It is a piece of the Department of Revenue and overseen by Indian Revenue Service (IRS). In an association, the business gathers charge from their representative and sends it straightforwardly to the personal assessment office.

This tax must be stored in treasury of Indian Government inside a predefined time. There is no uniform pace of finding for this duty. It might be run from 1% to 30% or more, contingent upon the element on which it is appropriate. There are two personalities engaged with the procedure of TDS filing; one is Deductor and the other is Deductee. The Deductor is an individual or an organization/association who is in charge of deducting the cash (charges) before the installment is made and the Deductee is the individual who is at risk to make good on the regulatory obligation or from whom the duty is deducted.

Basically, TDS is deducted on following area where one should match with the criteria before TDS filing like;

  • Salaries
  • Interest payments by banks
  • Commission payments
  • Rent payments
  • Consultation fees
  • Professional fees

Procedure to Upload TDS Statement, to file online TDS return

  • You will sked to fill username, password and captcha code; Note: user name will be your TAN number
  • After login go to TDS section mentioned in the menus
  • Click on the upload TDS
  • You will be asked to fill some details in the form like FVU version, Financial year, Form name, Quarter, and upload type.
  • Note: upload type will be regular while filling TDS filing.  
  • After filling above mentioned details, click on validate, which will validate the statements mentioned by you in the form.

Upload TDS Statement using DSC in online TDS Return

  • Above mentioned steps will be remaining same, update the TDS zip file which was prepared by using the utility downloaded from tin-NSDL website.
  • Attach the signature file by clicking on browse button
  • Now click on upload button.
  • It will show a message with transaction id and also sent a copy to the registered email id.

Upload TDS statement using EVC in TDS filing

All the steps mentioned above will remain same except e-verify. You will see a e-verify button at the bottom, after clicking E-verify button, three option will be provided like

In option 1 you will see text like “I already have an EVC to e-Verify the Form”

In option 2 you will see “I do not have an EVC and I would like to generate EVC to e-verify my form”

And in Option 3 you will see “I would like to generate Aadhaar OTP to e-verify the form”.

If you have selected 1 option, then you have to fill EVC number and click on submit.

If you have selected 2 option, then it will further provide to three another options like

  • EVC through net banking
  • EVC through account number
  • EVC through demat account number

EVC through net banking

  • Login to the e-filing portal through networking
  • Click on e-file menu then generate EVC.
  • Select the required TAN number from the drop down menu.
  • EVC will be sent on the registered mobile number.
  • Now login to the e-filing portal again.
  • Go to TDS section, click on upload TDS, then select the option that I already have an EVC under click here to e-verify.
  • Enter the EVC and click on submit.

EVC through account number

To go through this option note that you bank details must be registered with the account.

It will provide you confirmation message that something like “Do you want to generate EVC then click yes”. After clicking on yes, EVC number will be sent to the registered mobile number.

Read another blog: Seven Steps for Private Limited Company Registration in Delhi

EVC through demat account number

In this case also demat account details should be pre validated else it will provide you a message like account details has not been validated.

It will also provide you confirmation message that something like “Do you want to generate EVC then click yes”. After clicking on yes, EVC number will be sent to the registered mobile number.

When you will select option 3 for TDS filing

  • Note: Mobile number should be registered with Aadhaar card. Then only you will receive OTP on registered number. After the click on submit. 
  • Else it will show a message like PAN and Aadhaar card are not linked.

To File TDS return, there are some due dates declared by government according to 2018-19

  • 1st quarter would start from 1st April to 30th June therefore, TDS return due date would be 31st August 2018.
  • 2nd quarter would start from 1st July to 30th September therefore, TDS return due date would be 31st October 2018.
  • 1st quarter would start from 1st October to 31st December therefore, TDS return due date would be 31st January 2019.
  • 1st quarter would start from 1st January to 31st March therefore, TDS return due date would be 31st May 2019.

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Various forms available to file TDS return

  • Form 24Q for TDS on salary
  • Form 27Q for when deductee is foreigner or running foreign company/ non resident
  • Form 26QB when installment for exchange of unmovable property
  • Form 26Q TDS in any other case.

You can also see the TDS return status by following below steps:

  • Login to the portal with credentials
  • Click on TDS
  • Click on View filed TDS.
  • Then again you have to provide information related to financial year, form name, and quarter.
  • Now click on view details button.
  • It will show you all the TDS return status.

If you are still facing any issue then you are free to call on (0120) 4231116, where our expert will guide you.

Cash Withdrawal of above 1 crore _ Deduct TDS under section 194N from Sep 1, 2019. (1)

Cash Withdrawal of above 1 crore? Deduct TDS under section 194N from Sep 1, 2019.

The objective of introducing Section 194N by government in the Union Budget 2019 of July 2019 is to discourage cash transactions in the country and promote the digital transaction in India or promote less cash economy. ‘Section 194N –TDS on cash withdrawals over and above Rs 1 crore’ has been introduced through the Finance Bill, 2019. 

To whom is 194N applicable?

Applicable  to withdrawals made by below:

  • An Individual
  • A Hindu Undivided Family (HUF)
  • A Company
  • A partnership firm or an LLP
  • A local authority
  • An Association of Person (AOPs) or Body of Individuals (BOIS)

Who will deduct TDS?

Applicable  The following payers will deduct TDS

  • Any bank (private or public sector)
  • A co-operative bank
  • A post office  

Who are exempted from 194N?

  • Any government body
  • Any bank including co-operative banks
  • Any business correspondent of a banking company (including co-operative banks)
  • Any white label ATM operator of any bank (including co-operative banks)
  • Any other person notified by the government  

Dates of applicability?

The threshold of Rs 1 crore is with respect to the previous year, calculation of the amount of cash withdrawal for triggering deduction under section 194N of the Finance Act shall be counted from April 1, 2019  

The Central Board of Direct Taxes (CBDT) has further clarified that if a person has already withdrawn Rs 1 crore or more in cash up to August 31, 2019, in the current fiscal, the two percent TDS shall apply on all subsequent cash withdrawals.

Private Limited Company Registration

Private Limited Company

A private limited company is an organization which is secretly held for independent ventures/company. The obligation of the individuals from a Private Limited Company is constrained to the measure of offers separately held by them. All the information about Private Limited Company is talked about in the article.

Area 2(68) of Companies Act, 2013 characterizes privately owned businesses. As indicated by that, privately owned businesses are those organizations whose articles of association confine the limit the exchange capacity of shares and restrict them to buy or subscribes. There are many characteristics of a private company.

Below are some features of a public company which differs it from Public companies:

  • In Private Limited Company, no minimum share capital is required.
  • Private Limited Companies don’t have permission to transfer their share freely unlikely public companies
  • Private Limited Companiescan hire a minimum of 2 employee and maximum 200 in their company
GST Registration

Types of Private Limited Company

Well, there are three types of Private Limited Companies

  • Limited by shares, the risk of the individuals is highly controlled to the sum unpaid to the organization regarding the shares held by them.
  • Limited by guarantee, here the individuals’ liabilities are restricted to the measure of cash they certification to pay on the off chance that the organization is beating up.

Related Blog – All you need to know about Company Registration as a startup

  • Unlimited liability, the risk of individuals is boundless in this kind of privately owned businesses. Owned resources of individuals can be connected and sold when the organization is being beaten up.

Different requirements of Private Limited Company

  • Members should be in between 2 to 200
  • Minimum two directors are must and every director should have DIN i.e. Director Identification number
  • Name should have included Pvt. Ltd on the end of the company’s name
  • Registered office address is a must.
  • Digital signature certificate is also must require in the digital world
  • Professional certificate is also needed like CA, secretary and many more
Accounting & Auditing

Various advantages of Private Limited Company

Incorporated association, an organization is made when it is enrolled under the Companies Act. It appears from the date referenced in the certificate of joining. As per the MCA’s company act, Company which owned more than two employees should be registered with full name.

Legal person, well companies are not a person. These are registered under the law and cannot work as their own because it must require some legal person to run it which are chosen by shareholders. These persons are called directors of the board.

Separate Legal entity, an organization has a lawful particular substance and is independent of its individuals. The loan company of the organization can collect their money just from the organization and the property of the organization. They can’t sue singular individuals who are part of the company.

Ceaseless Existence, an organization is a steady type of business association. Its life does not rely on the passing, indebtedness or retirement of any or all shareholder or executive. Law makes it and law alone can break up it. Individuals may come and go however the organization can continue forever

Related Blog – Company incorporation in Dubai

Common Seal/stamp, an organization not being a person can’t sign on the documents unlikely human person. It acts through a characteristic individual who is called its executives/directors. Be that as it may, having a legitimate character it very well may be bound by just those records which bear its sign. Along these lines, the law has accommodated the utilization of regular seal, with the name of the organization engraved on it, as a substitute for its signature.

Company Registration In Dubai

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To conclude Private companies are totally different from public companies and a private company is registered association under the company act of government which is artificial legitimate individual, having a free lawful, element with a ceaseless progression, a typical seal for its signs, a typical capital comprised of transferable shares and conveying highly controlled risk.

Choose Your City For Company Registration.

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Seven Steps for Private Limited Company Registration

Seven Steps for Private Limited Company Registration in Delhi

Private Limited Company is the most popular and prominent type of corporate legal entity in India. The Ministry of Corporate Affairs, the Companies Act, 2013 and the Companies Incorporation Rules, 2014 regulate private limited company registration. A least two shareholders and two directors are required to register a private limited company. While a corporate legal entity can only be a shareholder, a natural person can be both a shareholder and the director.

Besides, foreign citizens, foreign corporate entities or NRIs may be directors or shareholders with Foreign Direct Investment of a company making it the preferred entity option for international promoters.

Are you thinking of setting up your business in Delhi? Do you want to know the process involved in private limited company registration in Delhi?

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Pre-requisites for Private Limited Company Registration in Delhi

  • 2 Directors
  • 2 Shareholder
  • Registered Office Address (Residential/ Non-Residential)

Document required for private limited company registration in Delhi

The applicant must mandatorily submit the following documents along with the identity card and address proof:

  1. Memorandum of Association
  2. Article of Association
  3. Copy of PAN Card
  4. Copy of Aadhar Card
  5. Firm Address Proof like Electricity Bill or Telephone Bill or anything similar that has full name and address of the firm in legible language. (not more than two months old)
  6. Rent agreement or Electricity Bill if the business place is taken on rent duly attached with No objection Certificate (NOC) issued by the owner.

Process for Private Limited Company Registration in Delhi

  1. The first step is to apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN)
  2. Then apply for approval of the name with Registrar of Companies (ROC), Delhi
  3. The third step is to apply for Registration in INC-32 forms
  4. The last step is to obtain a Registration Certificate.

Following are the steps involved in registering a private limited company:

Seven Steps for Company Registration

1. Obtain DSC

Since we are taking an online route to register a private limited company, Digital Signature is mandatorily required. It is mandatory for all the subscribers and witnesses in the memorandum and article of association. You can obtain Digital Signature Certificate either online or offline from government recognized certifying agencies. There are two category of DSC available, i.e. Class 2 and Class 3. Under Class 2, your identity will be verified against a pre verified database, whereas under class 3, you need to be present in person before the registering authority.

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2. Run Name Approval

There are two options to get name approval

  1. Incorporate a company via Reserve Unique Name (RUN) form.
  2. Apply for the proposed name through SPICe(INC-32)

Option 1:

In an attempt to ease the registration procedure, RUN web service has been introduced by Ministry of Corporate Affairs. While filling RUN form, be extremely careful as it gives you only one chance for applying and in case of rejection of name (based on valid grounds) there is no second chance available. In this case you have to re-file another RUN form by again paying the prescribed fees.

To apply for a name using RUN web from, the applicant must first create a MCA account. The account is free of cost. After creating and logging into the MCA account, the registrant can choose “Private Limited” as the type of company to be registered. He further needs to provide one name choice and check against the database of MCA to check the availability.

It is important to note that MCA Run System only check for identical company names. However the Company Incorporation Rules, 2014 says a company cannot be registered with an identical name. Hence even if the MCA database shows the availability of name, it does not guarantee approval.

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Option 2:

However, with effect from March 23, 2018, Ministry has decided to permit two proposed Names and one re-submission (RSUB) while reserving Unique Names for the Companies.

You must think carefully before adopting a name because any name that violates the rules will not be allowed to use. There’s a list of undesirable names that can’t be used.

 If it is identical with or too closely resembles the following, a suggested name will be considered as undesirable.

  1. Existing company names and LLPs or names approved by the Company Registrar and LLPs.
  2. A registered trademark or trademark for which others have applied for registration and used it or owned it.
  3. Names are given under and in violation of the Emblems and Names Act, 1950.
  4. Foul words or phrases. Words or expressions used as a derogatory term and offensive to a group of people.
  5. Names with “British India” words.
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3. Obtain Director Identification Number for Incorporation

All individuals who are proposed to be the director of the company should have a valid Director Identification Number. The person should apply for DIN only through the SPICE from. All the details should be filled in the SPICE form along with their PAN or Passport details. On incorporation of the company, DIN will be allocated to the person who has duly applied for DIN.

If a person already has a DIN and incorporating a new company, SPICE form must still be used and DIN can be entered wherever applicable.

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4. Selecting Your Business Activity

Next, you should choose the operation your Private Limited Company will engage in. You can decide from any of the alternatives that you have been given. And if you cannot find the correct option for your operations, you can select the’ other’ option. It is requested to appoint a professional so that he/she can help you with drafting memorandum and article of association.

5. Form SPICe (INC-32)

Ministry of Corporate Affairs has introduced Form SPICe (INC-32) to simply the process for incorporating and registering a company online. Prior to the introduction of SPICe form, a company is required to file several documents like DIR-3, DIR-12, INC-1, INC-7, INC-22 for different registration requirements. Now all these forms have been merged together in a simplified way.

A professional’s digital signature is mandated to file the INC-32 form. The professional must certify the correctness of all the information provided in the form. The professional can be a Chartered Accountant, Company Secretary, Cost Accountant or advocate.

6. e-MoA(INC-33) and e-AoA (INC-34)

The intention behind introducing e-MoA and e-AoA is to simply the company registration process in India. e-MoA and e-AoA stands for electronic Memorandum of Association and electronic Articles of Association respectively.

The forms need to be filed online on MCA portal and they are linked with SPICe (INC-32). Both of these forms must be mandatorily filed by the subscribers of the Memorandum and Article of associations.

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7. PAN and TAN Application

 You can apply for the PAN and TAN of the company through the single SPICe form by using forms 49A for PAN and 49B for TAN. After submitting the SPICe form, the system will auto-generate PAN and TAN form. All you need to do is download it, attach electronic signatures and upload both forms to the MCA portal. 

If all the information in the form is properly filled in along with the necessary documents, MCA will approve the registration and a CIN (Corporate Identity Number) will be given. This CIN can also be tracked on the MCA portal online.

Ministry of Corporate Affairs has significantly made the registration process a lot more simple and easier in an effort to spur new start-ups.

Frequently Asked Questions

1. What is the fee for Incorporation?

The MCA has announced zero fees for incorporation up to 10 lakh of an authorised capital in an attempt to simplify the company incorporation process and encourage new start-ups. Hence, Businesspeople would be able to save a thousand rupees as an incorporation fee. Notwithstanding the announcement of zero fees for the SPICE form, eMOA and eAOA–stamp duties would still be valid for incorporation as before depending on the state of incorporation.

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2. What are the changes made in the registration process in 2017 and 2018?

By reducing the forms for name approval, DIN application and incorporation, the MCA has accomplished substantial process decrease while enhancing the ease of using SPICe form.

A significant drawback in using the SPICe form earlier was that Entrepreneurs or Professionals were unable to acquire previous approval of the name. In the event of refusal of name while using SPICe Form, they were compelled to redo incorporation paperwork. But now, MCA has streamlined the name approval process and made it optional by implementing a web-based method for name authorization called RUN.

3. Can a proposed director of a new company apply for DIN through Form DIR-3?

As per the company registration process 2018, DIR-3 form can only be used for adding a director by existing companies. Hence, due care must be taken by the professionals to ensure that DIN, through DIN-3 is not obtained for a proposed director of a new company.

4. What are the documents required for filing SPICe (INC-32)

The following documents are required for filing SPICe (INC-32):

  • If the Director or Subscriber is an Indian National
  • PAN Card
  • Address Proof:  It can be Passport, Voter ID Card (Election Card), AADHAR Card, Electricity Bill, Telephone Bill, Ration Card or Driving License.
  • Residential Proof: It can be Bank Statement, Electricity Bill, Telephone Bill or Mobile Bill.
  • If the Director or Subscriber is a Foreign National
  • Passport
  • Address Proof: It can be Driving License, Residence Card, Bank Statement or Government issued form of identity containing address.
  • Residential Proof: It can be Bank Statement, Electricity Bill, Telephone Bill or Mobile Bill.

5. What is the time required to register a company?

Since nowadays a company registration has become a fast track process, it takes lesser time to register a company online as compared with the old process.

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