Hey, are you looking for a Net Worth Certificate for Visa by Chartered Accountant? , you’ve landed at the right place. Like you, there are so many people looking for a Networth Certificate. Most queries come for similar reasons like VISA application for Canada visa, UK Visa, US Visa, Franchise application.
Hence, we have put together this article to clarify all your queries including
What is a Net Worth Certificate
What is the need of a Networth Certificate
How to get the Networth certificate by CA
What are the Documents Required for the Networth Certificate
We’re sure it would be worth reading a 2-minute article than missing out on any crucial information. Good choice, so, here you go:
What is a Net Worth Certificate?
ANet Worth Certificate is a document drafted and certified by a Chartered Accountant. It takes into account all the assets and liabilities of an individual or a company. The main role of the certificate lies in gauging the financial health of the applicant by the decision-maker.
A Chartered Accountant’s certification is usually required as part of visa applications, bank loans, franchise applications, etc.
The networth of an individual or company is the total assets of the individual or company minus the total liabilities.
That is why net worth is a good indicator of a person’s total financial value at any given point in time.
A positive net worth that is growing year on year shows good financial health whereas a negative net worth or year-on-year declining net worth indicates poor financial conditions. Net Worth is used as an indicator of financial health in various processes.
What is the need of a Net Worth Certificate / Networth Certificate?
Net Worth Certificate is essential for the below reasons:
Net Worth Certificate forVisa Application Net Worth Certificate for Visa by a CA is a mandatory requirement during a visa application process. The requirement of the certification is to determine the financial net worth of the visa applicant.
Networth Certificate by CA forBank Loans Networth Certificate by CA is sometimes a requirement during a bank loan application. It helps in ascertaining the financial net worth of the loan applicant.
Franchisee Application The Networth certificate by a CA is a requirement during franchisee agreements as well. The franchisors are interested to evaluate the net worth of the franchisee
How to get a Net Worth Certificate?
Connecting with a Chartered Accountant We at CA in Delhi, help you connect with a Chartered Accountant who would be best suited for Net Worth Certificate
Review Phase A chartered accountant reviews your assets and liabilities through a set of documents required for the certificate and complies with a net worth calculation. In the case of properties, you might also need to get the help of property valuers. CAs generally have property valuers in their network, and can further help you connect with property valuers
CA Certification Once all the documents have been reviewed by Chartered Accountant, and Net Worth is communicated to you, a CA will prepare the certification (by generating UDIN), and will certify the same. That’s it!
What are the Documents Required for the Networth Certificate
GST Refund- Goods and services tax is about smooth cash flow and regulatory compliance, making it easier to do business in India. To ensure this stable flow, the government must establish a barrier-free refund system. The current tax structure is very cumbersome, and national tax refunds can take months or even years.
GST provides an efficient and dynamic invoice tracking system to check and systematically monitor every transaction, which is of great help to manufacturers and exporters, especially in 100% export-oriented units or special economic zones. Due to the slow repayment process, its working capital was frozen.
The GST refund service
We have a number of associated GST refund consultant in Delhi and can help you solve the following problems:
Submit a reimbursement application,
Prepare a complete document of the reimbursement process,
Prepare a confidentiality statement for disclosing tax data to others,
All necessary certificates to the department,
Representative auditor on behalf of the client,
Follow up regularly in the department to receive reimbursement as soon as possible,
Any suggestions on reimbursement,
In some cases, refunds will be issued. Let’s take a closer look.
Refund of tax credits
Export goods or services to LUT/Bonds without paying GST
Delivery of goods or services to FWZ units and developers to LUT/Bond without paying GST
Refund of accrued temporary tax credits arising from the inversion of the tax structure, If the provisional tax rate is higher than the provisional tax rate.
IGST reimbursement for zero nominal delivery
4. Use GSTS to pay for exported goods or services
5. Use GST to pay for goods or services to SEZ units and developers
Refunds are part of a well-thought-out export plan.
6. Export review (refundable for both the supplier and the recipient),
Refund to UIN holder
7. Refund of taxes paid for purchases from UN agencies, embassies, etc.
8. Return to the Correctional Services Department Canteen
Tax refund for international tourists
9. The tax refund paid by international tourists for goods purchased in India and exported abroad when they leave India.
Other reimbursements
10. Reimbursement based on a decision, order, order, or instruction of the Appellate Body, Court of Appeal, or any other court.
11. Refund after completion of preliminary inspection
14. If the delivery is regarded as an interstate delivery and later proves to be a domestic delivery, pay IGST compensation on the contrary
15. When the goods or services are actually delivered, a refund of the receipt of the prepaid tax is issued
The above list is for reference only and is not exhaustive.
GST will not issue refunds until the taxpayer makes a request. They have a systematic approach. Taxpayers must apply and obtain it following the correct procedures. Refund to your bank account.
When is the deadline for submitting a refund request?
Taxpayers must submit their application within two years from the relevant date specified in the description of Article 54 of the 2017 CGST Law. The meaning of “relevant dates” should be understood to mean that these dates are different under different circumstances,
As described below:
S.No
Situations
Relevant Date
(a)
If possible, for goods exported outside of India, refunds of taxes paid on the goods themselves or (if applicable) the inputs or services used in these goods can be refunded,
(i)
If the goods are exported by sea or air
The date on which vessel or aircraft in which goods are loaded, leaves India
(ii)
If goods are exported through a land route
The date on which such goods pass the frontier
(iii)
If goods are exported by post
Date of dispatch of goods by the post office concerned
(b)
In the case of a supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods
The date on which return related to such deemed exports is filed
(c)
For services exported outside India, if the tax paid on the service itself or (if applicable) the intermediate or intermediate consumption used in these services can be refunded,
(i)
Where the supply of services had been completed before the receipt of payment against such supply
Date of payment in convertible foreign exchange or in INR wherever permitted by RBI
(ii)
Where payment for the services had been received in advance before the date of issue of invoice
Date of issue of invoice
(d)
If the tax can be recovered due to a decision, order, order, or order of the Appellate Body, Court of Appeal, or other Court
Date of communication of order
(e)
In case of a refund of unutilized ITC arising due to ‘inverted tax structure’
According to Article 39, the reimbursement period expires during the period in which the reimbursement occurs.
(f)
In the case where tax is paid provisionally under this Act or the rules made thereunder
The date of adjustment of tax after the final assessment thereof
(g)
In the case of a person, other than the supplier
The date of receipt of goods or services by such person
(h)
In any other case
The date of payment of tax
These respective data consider because any negligence in submitting a redemption request within the specified time frame may result in unnecessary freezing of funds.
What is the GST refund process?
1. Any taxpayer must use form GST RFD-01 to apply for a refund. After submitting the form in the GST RFD-02 form, a confirmation of further use generates and sent to the applicant via email and SMS.
2. If the system detects an error in the refund request, reported it within 15 days. The responsible officer issues the GST RFD03 form (defect memorandum) to the applicant and points out the problem through the shared portal requested electronically. Submit a new reimbursement request after these deficiencies are remedied.
3. After reviewing the application and submit evidence, and determining that the required compensation amount should attribute to the applicant, the person in charge issues a preliminary compensation order from GST RFD04, in which the compensation for the designated applicant, temporarily canceled within 7 days from the date of receipt of the confirmation letter.
4. The authorized amount on the GST RFD05 form charge electronically to one of the bank accounts specified by the applicant in their registration details and refund request.
5. If you find the attachments in order, please fill in GST RFD06. Refunds must be approved in all aspects within 60 days of receipt of all claims. In the case of delayed approval, the interest rate is @6% p.(As currently communicated) must be paid under section 56 of the 2017 CGST Act.
Can I refuse a refund?
If the person in charge believes that the complaint is inappropriate or not paid to the complainant, he must provide the complainant with the GST RFD-08 form within 15 days after receiving the claim and request a response on the GST RFD-09 form. notify. After reviewing the applicant’s response, the office can accept or reject the return request and approve the order accordingly.
Is there a minimum return threshold?
If the refund amounts below 1,000 rupees, no refund to the applicant. This restriction applies to all tax authorities (not the total tax). When the excess credit returns in the cash account book, the limit do not apply.
Applicant
Refund claimed
Admissibility
Mr. A
CGST: Rs 900 + SGST Rs 900
Refund inadmissible – as limit shall be applied for each tax head separately and not cumulatively
Mr. B
IGST: Rs 1200
Refund admissible fully
What evidence needed to avoid disclosing tax information to others to apply for a refund?
In addition, the documents need to prove the approval of the tax
(i) When the amount of the refund request is less than 200,000. There are enough people to process reimbursement applications.
(ii) A certified public accountant must be provided for reimbursement requirements of 200,000 or more. However, no prior declaration/certification requires in the following cases:
(a) Refund of tax paid
Exports of goods and services, or inputs or services used to perform these exports
(b) Reimbursement of unused ITC under Article 54(3);
(c) For incomplete or partial supply and no invoices or receipts Rebates paid for the supply of return receipts;
(d) Refunds of taxes paid on transactions that treat them as domestic deliveries but later treated as interstate deliveries, or, conversely,
(e) Taxes or interest borne by the declared group of applicants.
The process itself is tedious, and if done correctly, the rewards can be very simple and straightforward. This will change the face of the long-term cost recovery process and promote the manufacturing or export industry. Refunds that use to take years can now complete in just 60 days. The powerful IT system GSTN actively supported this on-site event.
If you want to get started with GST Refund Application, reach out to Chartered Accountants from CA in Delhi‘s homepage
Government Scheme for Business | Startups | Benefits
Financing is the number one roadblock that nearly each government scheme for Business registration in India has to cross. It is capital that brings a modern Startup registration concept into reality. No different choice however cash ought to assist you to efficaciously kick-begin your commercial enterprise. Big corporates, MNC, massive commercial enterprise homes have large chunks of assets at their disposal to spend money on their new initiatives however for an MSME registration, small commercial enterprise getting authorities to provide is little challenging.
So earlier, making plans to begin your small commercial enterprise undertaking in India. It has to aspect in all of the standards offers to search for your commercial enterprise falling under one’s standards.
What is a Government Grants?
The government provides the shape of economic help that is furnish via way of means of the authorities. To realize the authentic capacity of the assignment. Government provide is extra like a central authority investment or help in favor of a selected assignment. Authorities provide no manner a responsibility at the authorities, Neither the authorities act a guarantor in any credit score furnished to that entity.
How does Government Grants works?
Government offers aren’t automated and that they want to carry out via way of means of the promoter. They ought to introduce the assignment to the authorities.
Promoters letter of request. >>> Recommendation letter from the authority. >>> Bank assertion to be attached. >>> Affidavit (Details of any VC, Angel investor onboard). >>> Copy of banks inspection report. >>> Government application form.
This is the fundamental framework via which software to get a central authority to provide assignment will cross through. In India, authorities offers might be in diverse bureaucracy introduced via way of means of:
Directly by central authorities
Directly by state authorities
Institution under Union authorities of India
Institution under State authorities of India
Public region unit (PSU) scheme
Why Government Scheme is benifical for Startups?
1. Business enlargement:
The government provides & mortgage help assist in commercial enterprise enlargement via way of means of manner beginning positive. New areas, enhance commercial enterprise manufacturing, increase new advertising techniques to fulfill all of the commercial enterprise operations. It assist them in optimizing compliance cost.
2. Technology adoption:
With the assist of presidency offers, buying a new modern gadget that offers up-to-date skills turns into clean and convenient. Significantly will increase output manufacturing and decreases needless wastage.
3. Training & improvement:
Continuous improvement of the professional personnel via way of means of arranging workshops, seminars, pilot initiatives will assist your personnel to grow. To encourage and enhance the abilities of positive sections, the authorities now and then set up workshops for his or her ability up-gradation.
4. Improving assignment consequences:
Apart from commercial enterprise enlargement, era adoption, authorities offer ought to significantly enhance the assignment consequences of the proposed commercial enterprise undertaking. Project enlargement, advanced scale and multiplied commercial enterprise timelines will in the end cause an advanced assignment consequence.
What are the compliences procedure for Government Scheme?
The receipt of presidency offers and its next adjustment withinside the books of money owed is important for 2 reasons:
If a central authority provide, already acquire and being invest with the commercial enterprise then it has to accounted with inside the books as consistent with the standards of accounting.
Since it’s miles favore that our books have to show the authentic photograph of our organization, consequently it turns into essential that the real quantifiable parent have to stated in our books to realize the volume via way of means of which the company benefits from such authorities offers.
The income tax department, MCA & diverse accounting our bodies how offers have to handled inside the company’s books of money owed. Since we realize that it calls for deep technical know-how to correctly make preparations to control authorities’ offers with books of money owed, you have to seek advice from a chartered accountant.
Extra Mural research funding (Ministry of science & technology)
High risk and high reward research (Science & engineering research board)
Stand up India (SIDBI)
Pradhan Mantri Mudra Yojana (Ministry of Finance)
The above programs are some of the government funding programs that are conducive to the registration of Indian start-ups, but the list is too numerous to mention, and almost every industry has a corresponding government funding program.
How can I get financial help from the government of India to start my business?
Pradhan Mantri Mudra Yojana (PMMY) is one of the well-known programs of the Indian government to help many start-ups and small businesses in India. The plan is for anyone who needs between 50,000 upto INR 10 Lacs. Divided into three categories:
Shishu: Upto 50,000
Kishore: 50,001 – 5 Lacs
Tarun: 5,00,001 – 10 Lacs
Apart from these schemes, there are various schemes under which the government of India helps Startup registration to get financial aid. Some of the measures which include indirect ways of getting financial aid are an interested subvention scheme, a Micro-credit scheme for MSME registration, Refinance from NBFCs, etc.
How do you find the best CA Services for the Startup registration?
Startup registration >> compliance service required for business >> guidance on various government grants and various other services which are essential in all your business operations are being provided by us.
If you want to get start with Government Scheme for Business, reach out to Chartered Accountants from CA in Delhi‘s homepage
TDS on Sale of Property by NRI | DTAA | Applicability
This article details the applicability of TDS on Sale of Property to NRI real estate in India. This article explains the following topics in detail:
Applicability of TDS to NRI real estate sales
What is the TDS tax rate for NRI real estate sales?
TDS deduction amount
TDS payment, TDS refund, and TAN number.
Things sellers need to pay attention to.
Things buyers need to pay attention to.
How to avoid double taxation on real estate sales by NRI sellers in 2 countries/regions
Returning NRI funds outside India
Reduce your TDS obligations by submitting Form 13
Applicability of TDS on Sale of Property by NRI properties:
When buying/selling properties, TDS on Sale of Property by NRI must deduct. When paying the seller, the buyer deducts the amount (technically called TDS) and pays the balance until the buyer deducts the amount for the buyer to declare to the income tax authority.
The amount deducted depends on the seller’s living conditions, India- The number of TDS to deduct 1% of the selling price. If the seller NRI, the number of TDS to deduct based on the amount received by the seller.
When calculating the number of TDS to deduct, the buyer’s residency status non calculated, only the seller’s residency status consider.
If the seller is an Indian resident, the form and amount of the TDS withholding tax are detailed here-the TDS for an Indian resident when selling a property is 1%.
If the seller NRI, the form and amount of TDS withholding tax display below.
What is the TDS tax rate for NRI real estate sales?
The TDS amount when selling an NRI property should deduct according to the following ratio:
Nature of Capital Gains
Description
TDS Rate on Sale of Property by NRI
Long Term Capital Gains
Property held for more than 2 years
20%
Short Term Capital Gains
Property held for less than 2 years
Income Tax Slab Rates of Seller
Additional fees and taxes will also apply to the above amounts:
Therefore, in the case of long-term capital gains, the effective TDS tax rate for the sale of NRI real estate is as follows:
Particulars
Property Sale Price (Rs.)
Property Sale Price (Rs.)
Property Sale Price (Rs.)
Less than 50 Lakh
50 Lakhs to 1 Crore
More than 1 Crore
Long Term Capital Gains Tax
20%
20%
20%
(Add)
Surcharge
Nil
10% of above
15% of above
Total Tax (incl Surcharge)
20%
22%
23%
(Add)
Health & Ed. Cess
4% of above
4% of above
4% of above
Applicable TDS Rate (incl. Surcharge & Cess)
20.8%
22.88%
23.92%
Particulars
Property Sale Price (Rs.)
Property Sale Price (Rs.)
Long Term Capital Gains Tax
20%
20%
(Add)
Surcharge
25% of above
37% of above
Total Tax (incl Surcharge)
25%
27.4%
(Add)
Health & Ed. Cess
4% of above
4% of above
Applicable TDS Rate (incl. Surcharge & Cess)
26%
28.496%
In the case of short-term capital gains (that is if the property has been owned by the seller for less than 2 years), the surcharge and these expenses will be added to the applicable tax rate according to the income tax schedule. This is the explanation.
This TDS deducts every time the NRI paid for the purchase of a property, and even if the advance payment for the purchase of the property, the TDS must also deduct.
It must deposit by the buyer in the income tax office, showing that TDS deduct from the payment to the NRI.
In addition, regardless of the transaction value of the real estate, this TDS must be deducted when purchasing NRI real estate, even if the value of the real estate is less than 5 million, this TDS must also be deducted.
TDS deduction amount:
According to Article 195, the TDS for NRI property sales should ideally be deducted from the capital gains. However, the seller cannot calculate capital gains. It must be done by a tax inspector.
Sellers must submit a Form 13 application to the income tax authority and require them to calculate capital gains. The process of submitting this form is a bit complicated, and the seller can apply to the income tax authority through a chartered accountant.
The income tax department calculates the seller’s capital gains and issues a zero/negligible certificate based on the capital gains from the sale of the real estate.
The seller must give this certificate to the buyer and the buyer. You will withhold TDS at the tax rate shown on your income tax return.
If the seller does not receive this certificate from the income tax office, the TDS must be deducted from the total sales price, not from the capital gains. The seller needs to obtain this certificate from the income tax officer.
It is recommended to include the details of the withholding TDS in the purchase agreement of the property. It is also important to note that this property is not the responsibility of the registrar. To ensure that TDS is retained. Even if the TDS is not withdrawn or is withdrawn by mistake, the registrar will register the sales contract.
If the TDS is incorrect or not deducted, the income tax department will not take any action against the seller but will contact the buyer to submit the TDS. If the buyer forgets to deduct the TDS or the deducted TDS is less than the TDS, the income tax department will charge the buyer TDS.
TDS payments, TDS refunds, and TAN numbers :
There are many requirements to consider when buying a property from NRI. First, the buyer must have a TAN number to retrieve TDS. However, if the property is purchased from an Indian resident and the property is purchased from a non-Indian resident owner, the property is mandatory.
There is this TAN No. Not the seller and different from PAN No. If the buyer does not have a TAN number, he must apply before deducting TDS. It should be noted that if there are two buyers, they must apply for a TAN number.
The TDS deducted by the buyer in this way will be deposited with the income tax authority within 7 days of the end of the month in which the TDS is deducted. Example: If the TDS is deducted in June, the TDS must be deposited in the income tax office by July 7 at the latest.
After the TDS deposit, the buyer must submit a TDS report. This TDS report must be submitted on Form 27Q and must be submitted separately for each quarter for which TDS is deducted. The TDS extract must be submitted within 31 days after the end of the quarter in which the TDS was withdrawn.
After submitting the TDS deposit and TDS application, the buyer must also present Form 16A to the property seller.
Things sellers should pay attention to:
Sellers should consider the following points regarding TDS retention when selling NRI properties.
Try to obtain a certificate for calculating capital gains from the income tax department to reduce the deductible TDS.
It may take 2-4 weeks for the income tax official to issue the TDS minimum withdrawal certificate and request various documents. Check detailed information such as purchase price, purchase date, any repair/construction costs, etc.
If the seller is unable to obtain the certificate, TDS will be deducted from the sales value and will result in excessive deduction of TDS. The property registration documents must also be provided to the seller on the buyer’s Form 16A.
If the seller intends to reinvest the capital gains in India, the seller can reduce its capital gains, thereby reducing TDS and tax liability.
To choose this certificate, you can also request a refund of the excess TDS at the end of the year.
The two businesses (ie co-owners) must submit Form 13 separately to reduce the TDS fee.
Things buyers should pay attention to:
When buying a property from NRI, the buyer has many obligations. The buyer must:
Deduct the TDS at every payment, not at the time of land registration.
The deducted amount deposited into the income tax authority following the TDS payment plan.
The TDS declaration will also submitted to the Income Tax Department according to the TDS declaration submission schedule.
The buyer must issue a Form 16A to the seller after the TDS declaration submitted. Form 16A is a TDS certificate to confirm that the buyer has filed the TDS.
If TDS delays payment, monthly interest of 1% / 1.5% charged. If a TDS refund submission late, a fine of 200 rupees will be charged.
It is imposed every day. A fine of up to 1 lakhs. For mortgage loans, TDS is deducted when paying the seller, not when paying EMI to the bank.
How to avoid double taxation when TDS on Sale of Property by NRI properties in 2 countries/regions:
Many countries/regions tax their residents’ property sales, regardless of where the property is located. Example: An NRI headquartered in the United States sells real estate in India, and both parties in the United States tax the transaction. The United States will tax the NRI in the United States, and India will tax the property in India, resulting in double taxation.
However, to avoid double taxation, India has signed double taxation treaties with other countries. These agreements stipulate that people who pay real estate sales taxes in India can receive tax credits. Paying in India will reduce your tax liability in another country.
In this case, this must be done in the country where the tax credit is applied for. For example, if you are a U.S. NRI and you want to sell your property in India, you will need to disclose these gains/losses from the sale of the property in the U.S. tax return under Part D of Form 1040. While paying taxes to the U.S. government, you can deduct taxes paid in India because India has a double taxation treaty with the U.S.
Repatriating funds outside India by NRI:
To repatriate funds for Indian real estate sold outside India, NRI must also send the 15CA and 15CB forms to the bank. These forms must create on the income tax website and submit to the bank.
Form 15CA create by NRI itself or your auditor, but Form 15CB can only create by Chartered Accountant. The Chartered Accountant must also sign and seal the Form 15CB.
You must determine the source of the funds to repatriate and declare that all taxes on these funds are clear in India.
NRI cannot repatriate more than (USD)$1 million from India per calendar year.
Reduce your TDS requirement by filling out Form 13:
To reduce TDS when selling NRI real estate, NRI must submit Form 13 to the income tax department to issue a zero/lower TDS deduction certificate. This helps NRI greatly reduce the liability of TDS, which is why most NRIs choose this certificate.
However, submitting this form is challenging, so most NRIs will hire a CPA to submit this application.
If you want to get start with TDS on Sale of Property by NRI, reach out to Chartered Accountants from CA in Delhi‘s homepage
Form 15CA and 15CB | Form 15CB Certificate Online | 9711430728
Form 15CB is a certificate to be furnished by a Chartered Accountant in cases where any payment/aggregate of payments exceeding ₹5 Lakh in an FY, chargeable to income tax is made to a Non-Resident, not being a Company or to a Foreign Company, and a certificate from the AO u/s 195 / 197 is not obtained. In form 15CB, a CA certifies the details of the payment, TDS rate, TDS deduction, and other details of nature and purpose of remittance. In other words, Form 15CB is the Tax Determination Certificate in which the CA examines a remittance with regard to changeability provisions.
Generally, Form 15ca cb isn’t essential to make a price overseas if expenses fall under the described limit. That’s due to the fact you’re a member of the Remittee. In the case of hire charged to NRIs / overseas vendors, Under Section 195 of the Income Tax Act 1961, any man or woman accountable for creating a price to non-citizens shall subtract TDS on the quotes in the region from the bills rendered or credit granted to non-citizens. The Reserve Bank of India additionally calls for that, besides such non-public remittances which have been expressly removed, no remittances ought to be rendered to a non-resident without sending a mission in Form 15CA accompanied through an accountant’s certificates in Form 15CB, Remember that this is
Individuals making bills for bills/invoices have to practice Form 15CA to the earnings tax portal every time earlier than buying the extra expenses.
If the cumulative quantity to be made every 12 months reaches Rs five lakh, the Remitter has to obtain Form 15CB from the Chartered Accountant.
If you pay a foreign merchant, it is your responsibility to find out if the referrer is an NRI, which will make it easier for you to deduct TDS for invoices and make it easier to comply with income tax laws. This obligation and power are to increase the transfer tax because non-residents will not be able to apply for tax in the future. According to Article 37BB of the Income Tax Regulations of 1962, it was reported on the 15CB form.
Revised Form 15ca cb submission rules
The latest 15CA and 15CB electronic form submission rules took effect on April 1, 2016. The bulk of the form submission process required focuses on the new laws being followed. The Income Tax Department updated the rules for creating and submitting Form 15CA and Form 15CB (see the rules for Form 15CB above). Starting April 1, 2016, the updated rules will apply.
The main changes are as follows:
No one is allowed to submit forms 15CA and 15CB for transfers that do not need to submit a specific type of payment
List in accordance with Rule 37BB. Forms 15CA and 15CB are not required to submit. The extension from 28 to 33, including import payments,
Form no. 15CB is only applicable to Non-residents who are taxable and pay more than 5 lakh.
If the amount or amount paid during the fiscal year does not exceed Rs 5 lakh, only Part A 15CA is required.
Part B 15CA certified under Section 197 by a conformity assessment officer or under an accreditation order obtain under Section 195, paragraphs 2 or 3, completed. For example, if the order or certificate obtained from AO
Part C of, Form 15CB 15CA is not required. It can be completed after the auditor receives the certificate of Form No. 15CB,
Part D Type No. 15CA. If the amount does not meet the legal requirements paid. For example, if the transfer is tax-exempt, Form 15CB is not required.
There is a fine of 1 lakh. Form 15CA / CB certification, any standard does not appear
Forms 15CA and 15CB are very popular
Workers should issue 15CB regularly at least, and Form 15CA must also create on behalf of the staff. A method of collecting taxable transfer data in the hands of non-resident users is first an effective information retrieval procedure, which use by the income tax department to track overseas transfers and their existence separately to estimate tax liability. In modern times, control has deteriorated rapidly. Without control, it is impossible to ensure the taxation or non-taxation of taxable transfers from abroad. In the Transfer route, the bank forces to purchase forms 15CA and 15CB before allowing shipments.
Authorized distributors/banks are now more cautious to collect all these forms from them before shipment because they now need to submit the 15CA received from the sender under the revised rule 37BB along with the receipt. Tax authorities that conduct all procedures under the Income Tax Law and the published revised FEMA guidelines. In this regard, according to the updated RBI guidelines, RBI does not guide tax deductions for source international transfers.
Therefore, shippers encourage to retain these types of 15CA and 15CB when purchasing imported goods.
This is an attempt to provide a detailed checklist/procedure for the effective deployment of Form 15CA and Form 15CB. Effective from April 1, 2016
Procedure steps:
We use to help our clients transfer funds from India to outside India after fundraising and taxation. Here are the four steps of the procedure you need to follow:
Obtain a Certified Public Accountant (CA) on Form 15CB-If the TDS is correct, the CA needs to verify the source (using its own procedure) to determine the source of funds. Deduct the designated source.
Submit Form 15CA online,
Submit documents to the bank that holds the NRE account,
Form 15CA,
Form 15CB,
Verification (cheque) or money order request amount,
Request letter, Form requirements provided by the relevant bank, and fill in any other documents, requirements, or procedures.
4. Transfers- After checking the submitted documents, the bank will process the transfer and credit it to the NRE account.
Compulsory information is required when filling in the certification Form 15ca cb:
Details of Sender:
Sender’s full name
Complete address, an email with the sender’s phone number,
Permanent account number the availability of the sender,
Sender’s full location,
Sender’s email address and phone number,
Transaction Person’s status (today) (company/company/other)
2. Details of Payment:
Provide transfer date
The type of transaction carries out according to the agreement (a copy of the invoice will be request from the customer)
The source of payment confirmation (if any)
The country and currency of the transfer
The transfer amount in Indian currency
3. Bank details of the sender’s name:
Remitter’s bank name
Remitter’s bank branch details
BSR The Code Bank Branch Details
4. Details of Remiitee:
In Committee requires the full name
Committee full address, email with committee telephone number
Committee country details (where the mail will be sent to)
The main location of the committee’s business
5. Documents Fill in the Committee Documents:
Form 10F, which is formally filled out by an authorized representative of the committee.
Commission’s tax residency certificate (tax registry of the country/region where the commission is registered)
Part of the order/certificate received (if applicable)
6. Other required information
The name of the authorizer/signatory’s father
Authorized representative/signature
Proof of tax paid for remittance from India,
Recommended shipping date
Full name of designated bank and branch
Remittance receipt
Request the sender’s electronic signature,
Penalties under Section 271I of the Income Tax Law:
Anyone who fails to submit the 15CA 15CB form or fails to submit the 15CA 15CB form to the Income Tax Office entitle to a fine of 1 lakh Indian rupees. If the individual provides false information or an incorrect part of the 15CA form. The person will consider non-compliance until they can prove a reasonable reason for not submitting the form.
FAQ- Frequently Asked Question
What is Form 15CB? Any person responsible/ required to transfer funds out of India needs to obtain a certificate from Chartered Accountant in Form 15CB. Form 15CB will be given by the chartered accountant to the Clients after checking the TDS on the same. A chartered accountant should check the provision of tractability of payment given to the non-resident Indian. A chartered accountant should provide tax under the income tax act and where DTAA applies tax as per DTAA, tax residence certificate details.
What is Form 15CA? Form 15CA is an undertaking by the Remitter to be furnished electronically giving details of proposed remittance and tax deducted at source under the provisions of Section 195(6) of the Income Tax Act, 1961. This undertaking is to be given after obtaining a certificate in Form 15CB from a Chartered Accountant.
What Kind of payment is Covered under 15CA 15CB?
Payments made abroad to Non –Resident. If any payment is made by any person to a non-resident, any sum whether or not chargeable to income tax shall furnish form No. 15CA 15CB. Earlier only income chargeable to income tax in India had to be reported only but now all payments are covered.
Form 15CA needs to be filled in all the transactions with non-residents [Sec 195(6)]
For all the Import Transactions
To all credit card transactions
All transactions with Non-resident even if payment is made to an Indian Bank account
To all transactions related to payment of Interest, Royalty, and Fee for Technical Services (FTS)
For the Commission paid abroad
For the Salary paid abroad
What is the provision while payment made through Bank Transfer / Credit Card / Paypal about under 15CA 15CB compliance?
Special Cases where 15CA CB is applicable and should be taken care of:
Payments Made to Facebook or Other Advertisement Agencies
Payments made for Software purchased / Subscription Purchased
Any domain/hosting or any website purchased.
Note: That means, any payment to non-resident(either by Bank Transfer / Credit Card / Paypal will now be covered).
What are special cases where compliance under Form 15 CB from Chartered Accountants will not be required?
Form 15 CB from Chartered Accountant will not require in certain cases –The single payment made to a vendor does not exceed Rs. 50,000 and aggregate of all payments to particular vendor do not exceed Rs. 250,000 during a financial year. The payment is not chargeable to tax and nature is included in the “Specified List”. The specified list specifies 39 natures of payments and also mentions the purpose code for each nature.
What are the penalties under 15CA 15CB Noncompliance?
Penal Provision: If such information is not furnished or the information furnished is inaccurate then a U/s 271-I penalty of Rs. 1 Lakh may impose. And If the relevant form non filled or incorrectly filled, then the penalty of Rs. 1,00,000 can be levied on the assesses.
If you want to get started with Form 15ca cb, reach out to Chartered Accountants from CA in Delhi‘s homepage
Convert Private Limited Company to LLP | Full Guide
Overview of Convert Private Limited Company to LLP
To Convert Private Limited to LLP, even if the partners change, LLP still retains its power and independence. This is because the LLP is regarded as an independent legal entity that supports the partners and, as the name suggests, bears limited liability.
LLPs are the preferred business model because they are an alternative tool for the company’s business, providing the benefits of limited liability, while providing its members with the flexibility to organize internal governance based on mutually agreed arrangements, such as in a joint company.
The management and services of limited liability companies are governed by the 2008 Limited Liability Company Law. The law was formulated to support small and medium enterprises. To achieve this goal, the limited liability company has received many benefits.
Greater scope for self-governance
Compared with other organizations, LLP requires compliance procedures.
There is no upper limit on the number of partners.
The law does not stipulate the minimum number of meetings with partners.
LLP
MAT has sensitive statutory record-keeping obligations.
LLP profits are not subject to sales tax (DDT).
There is no obligation to audit the LLP.
Eligibility to Convert Private Limited to LLP
The LLP Act allows private limited partnerships or unlisted joint-stock companies to become LLPs under the following conditions:
At the time of registration, your assets have no security interest,
No e-forms are pending,
The company has no outstanding allegations,
All shareholders have approved the conversion,
All creditors of the company have approved the conversion,
The company must at least submit a balance sheet and annual report,
All shareholders approved the conversion to LLP partners,
The company must have a share capital,
The company may not be a company under Section 25 company or Section 8,
Companies that cannot be converted to LLP:
All companies in the banking, finance, and insurance industries,
All companies with asset-backed loans/collateral,
In addition, all companies with FDI are subject to performance conditions.
All these companies have external commercial credit.
All companies that have received FDI in the approval process.
Documents required to Convert Private Limited to LLP
Each shareholder of the company approves the conversion of the company into an LLP registration form in the prescribed format
Incorporation document
Declaration of application for registration of LLP
Customs clearance certificate from the tax bureau Company assets
The list of all lenders together with their agreed conversion+
MAT does not apply to LLP.
LLP income is not subject to contribution tax (DDT).
No Audit is required for LLP.
Approval from other countries and, if necessary
Authorize the submission of a statement.
Procedure to Convert Private Limited to LLP:
Step 1-All designated partners who do not already have DIN must obtain DIN.
The first step in the conversion to LLP is to determine the intended designated partner. These designated partners must receive their DIN in time. In addition, they must apply for a DSC before the DIN application because a digital signature is required to process the DIN application.
Step 2 – Convene a Meeting Board of Directors
The company must convene a board meeting and pass a resolution to approve the company’s conversion into an LLP. In this case, the above-mentioned resolution must be passed by the required majority. The decision of the board of directors must then be submitted to the MCA along with the required forms and attachments.
Step 3- Request for LLP Name Reservation
Next, you need to reserve the name for the LLP and obtain the admission certificate.
Step 4- Submit the registration form (FilLiP form)
After the new name is a reserve and assigned, you need to apply for LLP registration together with the following documents;
LLP Confirmation of office address
Subscription form
Approval of designated partners
Confirmation of the identity of all partners
Confirmation of the residences of all partners and designated partners,
The LLP partner is the detailed information of the partner’s other organization.
Step 5- Submit your application for conversion to LLP
Form 18 must be filled out and submitted correctly to convert an existing business to LLP.
This form must be submitted together with the registration
Form 18 following information must be included:
The company’s shareholders agree to convert the company to an LLP.
The updated income tax return.
The latest balance sheet and annual report submits to the MCA.
Any court decision or order that favors or opposes the company.
Availability of security interests in company assets.
In addition, the previous request for conversion regarding
Whether the existing shareholder of the propose LLP was reject’s.
The list of secured creditors who agree to the conversion of the company
To independently verify the bank statement.
The company’s shareholder statement.
Step 5-Receipt of the company formation contract
Once all procedures are complete, the ROC will review the information provided and issue the company formation contract under all conditions meet. After that, the company became an LLP.
Step 6- Draft LLP contract
After registration, the designated partner must prepare a draft of the LLP contract, which must contain the following information:
The LLP’s name
All partners and the designated partner’s name
governance rules
Proposed business partners
The rights of business partners
Contribution form
The proportion of profit sharing and obligation
Step 7-eForm-3 file and eForm-14
The next step is to submit two forms, Form3 and Form 14.
eForm3 contains LLP data. This form submits within 30 days of your company’s conversion to LLP, with an LLP agreement attached.
eForm-14 used to threaten the Registrar of Companies to become a limited company. This form submits within 15 days of conversion.
Finally, the following documents attached to Form 14:
Copy of certificate
A copy of the EForm FiLLiP
Tax register by the limited liability company is transfer into the LLP:
In this section, we consider the tax implications of converting a private limited to an LLP. As far as the IT Act concern, a transfer from a private limited to an LLP no considered a “transfer” and therefore, capital gains tax is rarely levied
However, there is no need to levy capital gains tax on conversion if the following conditions are :
The company’s assets and liabilities become the assets and liabilities of the LLP.
All shareholders of the company become partners.
In addition, profit sharing, equity ratio. , the partner’s share corresponds to the company’s share.
Except through capital contribution and profit-sharing agreements, the company’s shareholders have little direct or indirect benefits from LLP.
In addition, in any three years prior to the conversion date, total sales, sales, and total sales will not exceed 6 million.
The total asset value recorded in the ledger for each of the past 3 years did not exceed Rs. 50 crore.
If you are looking for your Convert Private Limited to LLP, you can reach out to Chartered Accountants listed on CA in Delhi ‘s homepage.
Post Company Incorporation Compliances – Mandatory
Overview of Post Company Incorporation Compliances:
Post Company Incorporation Compliances, In recent years, young people in India seem to have made more attempts to start a business. This incentive to build their legacy through a business empire is a boon for companies. A simpler and more effective process. However, entrepreneurs need to know the content of the business registration. But how exactly does the company registration process work in India? This article explains the process of the company and the compliances that follow registration.
Documents required to register a company in India:
For the registration of a Private limited company, at least two shareholders and the managing director and the following documents are required:
Current passport photo,
The Application form has been filled out correctly,
Proof of identity: Aadhar card, passport, voter ID, grocery card, PAN card, or driving license,
Bank statement of the last two months,
Digital signature certificate of the future director,
Director ID number,
Work certificate: electricity, water, gas or telephone invoice/lease/owner NOC/Ownership Registration Certificate/India’s Property Tax Certificate
Business Registration in India: Process Overview
First, the entrepreneur needs to choose a name that complies with the nomenclature for his company. You must use the SPICe + A form to submit your name to the Corporate Affairs Department for approval.
After the MCA approves the proposed name, the business owner must correctly fill out and submit the SPICe + B form. You also need to upload a copy of the above-mentioned supporting documents.
Then entrepreneurs need to meet with legal experts and start preparing their articles of association and company articles.
Once all the documents required by the 2013 Companies Act are in place, the entrepreneur must go through the online registration process and have to pay the necessary processing fees online.
The MCA officer will review all your records and process your registration application. If they are satisfied, they will issue a registration certificate within seven days.
After the entrepreneur gets the registration certificate, he can apply for a company PAN card, TAN, etc. In addition, entrepreneurs can also apply for registration with the National Workers Insurance and Insurance Fund. The MCA portal also allows entrepreneurs to simultaneously apply for GST registration for fast approval.
Post Company Incorporation Compliances in India:
You must follow multiple compliance measures to make it run smoothly. The following is a brief overview of the compliance that must be met immediately after registering a company in India.
If the address is different from the office address at the time of registration, it is the internal address of the MCA headquarters.
The first meeting of the company’s board of directors shall be held no later than 30 days after registration.
Appoint an initial auditor and submit information about him to the MCA via Form 1 ADT.
Open a bank account within 60 days of registration.
Issue shares within 60 days of company registration.
According to Article 10A, a registered startup can only be submitted after registration 180 Form Record INC20A MCA within days.
Hold regular board meetings and prepare, manage and save your meeting minutes.
The company may need to submit an MSME every six months.
Companies registered under ESI, PF, and GST must submit monthly or quarterly reports as required. In addition, companies that own TAN must deduct and store the required amount of TDS each month. Once every quarter.
The following is a brief overview of the requirements that companies must meet each year
If the company approves the customized solution, MGT14 send to the MCA.
Use the DPT3 form to report company deposits and pre-payments.
Use the DIR3 form to update and complete all information about KYC directors. Organization and extraordinary general meeting of shareholders.
Create and update legal documents, including participant roster, shareholder roster, and company roster.
Conduct a statutory audit if applicable with the Company Law, 2013(if applicable).
If applicable, conduct a tax audit under the Income Tax Act of 1961.
Conduct and report the results of goods and services tax audits by the 2017 Goods and Services Tax Act.
Use forms AOC4 and MGT7 to prepare and submit annual financial statements to MCA as required.
After registration, start-up companies can apply for business expansion.
Optional post-registration registrations in India
The following is a brief overview of the various additional registrations that startups can apply for after registration to expand their business.
Import and export registration for business expansion in overseas markets.
If the company meets the requirements of the MSME Act, register with MSME. This will help companies take advantage of various government benefits, such as loans, grants, and social security programs. The Samadhan MSME program allows companies that file complaints to also charge customers.
Trademark registration in case the company wants to protect its trademark, and a unique name or logo is a distinctive feature of the product.
You can take advantage of these benefits by starting your registration in India, which provides various tax reliefs at regular intervals.
If the company engage in the trade of food-related products or services, register with FSSAI.
If you are looking for your Post Company Incorporation Compliances, you can reach out to Chartered Accountants listed on CA in Delhi‘s homepage.
GST for eCommerce Sellers in which e-Commerce platforms such as Amazon, Flipkart, and Snapdeal are expanding rapidly. These platforms allow other sellers to sell on these platforms.
To be able to sell on these platforms, sellers must register for GST. This is a complete guide for people who wish to sell products on any of these platforms.
GST rules are different for people who provide services through platforms such as UrbanClap, food through Swiggy, or taxi services through Uber/Ola. This guide only applies to people who sell products on Amazon. Flipkart, Snapdeal, Meesho, Udaan, Shopclues, or other similar platforms. In addition, this guide does not apply to people who sell on their own website, and general terms apply.
See also: For GST for eCommerce Sellers
Amazon, Flipkart, and other online platforms. And GST calculator
GST registration: GST for eCommerce Sellers
Anyone who wants to sell products on one of these platforms must register for GST for eCommerce Sellers and obtain a GSTIN. The 40/20/10 lakh limit does not apply to online sales. These platforms also do not allow registration without a GSTIN.
No separate registration is required for online sales. Those who already have a GSTIN do not need to register again. In addition, there is no need to intimidate/notify/modify during registration.
However, the person named must register in the usual way. Registered members under the membership plan are not allowed to sell online.
Please note that people who sell through this website are not e-commerce operators. Amazon, Flipkart, etc. are e-commerce operators, not people who sell through them. Therefore, the rules that apply to e-commerce operators do not apply to you.
Please do not choose an e-commerce operator when submitting the registration form, as this may cause serious problems.
This Provision use for online sellers and offline sellers. Currently, GSTR3B must be sent before the 20th of the next month of each month. In addition, GSTR1 must be submitted every quarter (April to June, July to September…) until the end of the next month. Individuals with a turnover of more than Rs 1.5 crore must submit GSTR1 each month before the 11th of the next month. Those with sales of less than Rs 1.5 crore can voluntarily choose to submit GSTR1 every month, and once this is done, they cannot be changed for that year.
Note:That even if there is no transaction at all, the GST for eCommerce Sellers declaration form must be submitted from the registration month, Other words, NIL returns are also required to be filed, otherwise a penalty.
The GST refund system takes effect on April 1, 2020. Online sellers must submit regular refunds. (GST RET01) on the new system. When the sales reach Rs. 5 crores, a regular refund must be submitted quarterly; otherwise, it must be submitted monthly.
TaxAdda specializes in providing value-added tax refund services for online merchants. Visit our service page to learn more.
Who should pay the consumption tax?
A common question every new GST for eCommerce Sellers asks himself is who is responsible for paying for GST?
Amazon, or the seller selling on it. The answer is that the seller is responsible for the goods and services tax on the goods sold.
Something that the seller sells directly to the buyer. Amazon only acts as an intermediate commission agent. Therefore, the seller is responsible for paying GST, not Amazon.
The method of calculating GST will be described later in this article.
Commissions and your contribution:
The online platform charges sellers a certain percentage of the sales price as a commission. The percentage depends on the platform and product category.
The platform must charge 18% of the GST on the prescribed commission, and the seller can offset the provisional tax of the prescribed GST.
The platform can also issue points for commissions or other expenses. The GST for this credit must be deducted from the GST on the invoice to receive the temporarily declared tax credit.
The platform also issues invoices for transportation, advertising, and other expenses. Profitable loans can be drawn for all these expenses.
Invoicing to customers:
As mentioned above, sellers sell products directly to buyers, so sellers must issue GST invoices to customers, and attach customer name, address, product details, amount, price, GST amount
Other details, even though the customer Is the invoice customer. Almost all major platforms provide invoices directly to customers through their platforms. The seller only needs to print the invoice and send it with the goods.
TCS And How To Claim:
Amazon’s requirements, Flipkart must deduct TCS equal to 1% of the total sales price of the amount due to you. This TCS can be declared. As a tax credit for online retailers. The mentioned TCS is displayed in the TCS list, and it is necessary to compare the sales specified in this statement with the actual sales and accept the TCS. Then add the total number of TCS.
Can I sell Flipkart on Amazon without GST?
If you sell tax-free products, you can only sell them online without GST. If you sell products covered by GST, you must purchase a GST number to sell online. You must take GSTIN even if the bill is less than 20 Lakh.
Do I need to register specifically to sell online?
No, there is no special register for online sales. If you are already registered, you can provide the same GSTIN on Amazon, Flipkart, etc.
Can buyers choose to add their GSTIN to the invoice?
Amazon and PayTm provide customers with the option to add their own GSTIN. However, Flipkart does not provide this option. The GSTIN must be included in the invoice so that the buyer can receive a tax credit when entering GST.
How much money does the online retailer get from their bank account?
The amount paid by the e-commerce operator corresponds to the turnover. Amount minus commission minus packaging and shipping costs minus TCS minus advertising costs (if any) minus storage costs (if applicable).
How do you calculate the goods and services tax to be paid?
The goods and services tax paid corresponds to the goods and services tax on the sale of goods less all input tax credits. Generally available pre-tax credits are goods and services tax, which should be paid at the time of purchase of goods, invoices, advertising invoices, transportation invoices, etc. For examples of online sellers, see our GDS guidelines.
If you are looking for your GST for eCommerce Sellers, you can reach out to Chartered Accountants listed on CA in Delhi‘s homepage.
How to check Company registration myths and debunk
Company registration myths and debunk in which company registration is the natural first step in starting a business because it provides many incentives. Although registered companies have far more benefits than unregistered companies, most companies in India are sole proprietorships or partnerships.
In every corner of the country, more than ever, the importance of company registration needs to be emphasized. Due to various myths and misunderstandings related to the company registration process, Indian entrepreneurs are reluctant to adopt a company structure. Let us debunk ten basic assumptions about the entrepreneurial process.
We have selected some of the most common business registration myths in India to get a clear understanding of what the law allows. The law affects your business to avoid costly mistakes.
(1) Myth-The company headquarters needs to register the company.
Debunked- You can legally register your business in a residential area. Many entrepreneurs do not know that they can legally set up a limited liability company in any residential area. The 2013 Company Law did not impose restrictions on the registration of new businesses in residential areas, but required companies to provide their names and registered addresses at every location where they operate.
(2) Myth- Applicants must submit original documents.
Debunked- Accept the scanned copy formally certified by the applicant. To deceive and deceive entrepreneurs who do not know the actual procedure, the original documents are never required. Galaxy file during company registration.
(3) Myth- Need to register for consumption tax.
Debunked- There is a misunderstanding that it is necessary to register for consumption tax, which is incorrect. Only those who provide taxable services need to apply for GST registration. It does not exceed the threshold set by the government, which allows small service providers to enjoy the tax-free treatment of goods and services.
(4) Myth- Registering a company requires a minimum annual turnover.
Debunked- Sale of business registration, It is also possible to register a new business that generates little or no revenue.
(5) Myth- The distribution of shares among directors is a mandatory requirement for company registration.
Debunked- It is a myth that all directors of a company must own shares. Shareholders who invest funds in a company do not need to be directors. They do not need to own shares in the company.
(6) Myth-The tax rate applicable to private companies is unfavorable.
Debunked- The tax rate of a private company can sometimes be higher than the tax rate of a sole proprietorship or partnership. However, corporate income tax is calculated after deducting expenses from the income. This benefit does not apply to sole proprietorships and partnerships. In addition, registered companies can enjoy higher tax incentives.
(7) Myth-Only people can invest in a company.
Debunked- Only people can own or share a company is completely wrong. According to the law, a company is a legal entity, so a registered company can also invest in the shares of another company.
(8) Myth-the company’s share capital must be deposited in the bank at the time of establishment.
Debunked- Limited has great flexibility. The company’s share capital does not have to be deposited in a bank when it is established. Even if your business is open, all changes regarding capital, business, official address, etc. are possible from today.
(9) Myth- The company is expensive to maintain.
Debunked- The myth that a company’s maintenance costs are very high is fragmented. In terms of accounting, regulatory compliance, and tax reporting, the cost is extremely low. Vakilsearch can provide your business with these services at an affordable price.
(10) Myth- Business registration must be updated every year.
Debunked- It is not mandatory to renew your business registration every year. One-time registration of your company is sufficient. In addition, if your company does not pass the judicial dissolution process, your company will be registered with the MCA until the time expires.
Conclusion:
In the end, don’t be fooled by myths and misunderstandings, but research yourself, and CA In Delhi provides reliable and trustworthy company registration information official channels. In addition, our business registration services are inexpensive. Contact us now and let our qualified experts advise you on legal issues.
If you are looking for your Company registration myths and debunk, you can reach out to Chartered Accountants listed on CA in Delhi‘s homepage.
Producer Company Registration | Benefits | In India
Since agriculture is the backbone of the Indian economy, this sector employs more than 50% of India’s total labor force and accounts for nearly 17-18% of the country’s GDP. In 2002, Producer Company Registration in which the concept of “producer company” was introduced to solve the urgent problem of farmers and farmers collectively referred to as producers. This article will tell you more about the manufacturing company registration process, training, and benefits.
Definition of Producer Company
A producer company allows farmers’ cooperatives to function as legal entities dependent on the Corporate Law Department.
The purpose of the manufacturing company involves all or part of the following issues:
Production,
Harvest,
Procurement,
Qualification,
Pooling,
Handling,
Marketing,
Selling,
Import/Export of primary products.,
Members of producer companies can carry out these activities independently or through other facilities:
Processing, including preserving, drying, brewing, distillation, harvesting, canning, and product packaging
Manufacturing or sales of equipment supply/machinery
Providing education to mutual assistance between members and others.
Provide technical services, consulting services, training, R&D, and all other activities to promote the interests of its members.
The generation, transmission, and distribution of energy, the recovery of land and water resources, their use, protection, and communications related to primary products.
Insurance of producers or their primary produce,
Promoting techniques of mutuality and mutual assistance,
Social measures or benefits that are beneficial to members are determined by the board of directors.
Other activities may in any way contribute to the observance of the principle of mutual benefit among members.
The financing of acquisitions, processing, marketing or other activities described in paragraph (aj) includes the provision of credit lines or other financial services to its members.
Formation and Producer Company Registration
A production enterprise should include:
Ten or more people, each of which is a manufacturer;
Two or more production bases; or
An association of ten or more individuals and manufacturing organizations. Manufacturing companies must comply with the targets set by the law.
The registrar will issue the registration certificate within 30 days after receiving the required documents.
Steps: How to Form a Producer Company
The procedure for registering a manufacturing company is almost the same as for a limited company:
Step 1
Receive the digital signature certificate (DSC) and director identification number (DIN) of all directors, and provide self-verified copies of documents, such as PAN, Aadhaar card, and contact information,
Step 2
File the proposed enterprise call in FORM-1A with the RoC of the respective country(state) at the side of the prescribed fee. Notify the RoC Availability of the name.
Step 3
Necessary documents, If the MoA includes the company’s assets and the amount of registered capital, the AoA includes the company’s articles of incorporation.
Step 4
Submit other documents, such as the formal statement on Form B. 1 stating compliance with all relevant issues related to the establishment of the company; an oath signed by the subscribers of the proposed company The book requires approval from directors, utility bills, and NOC.
Step 5
After the certificate is issued, the company becomes a legal entity like a limited company. Under no circumstances can you become a joint-stock company.
Operating a Producer Company Registration
The basic requirements that a manufacturing company must meet are below. They abide by the following rules:
Every manufacturing company must have at least 5 directors and a maximum of 15 directors.
After the company is registered, the directors must join within 90 days.
Likewise, the directors may be appoint or elected by the members in the annual general meeting (AGM)
Each appointed director must follow the relevant provisions for a term of at least one year and a maximum of 5 years.
The general meeting of shareholders held once a year, and you will receive a notice stating the meeting agenda, MoM (minutes of the meeting), audited balance sheet, and other information. The notice will be issue no later than 15 months between the date of the annual general meeting and the date of the next general meeting.
In addition, the first general meeting of shareholders held within 90 days from the date of registration.
The overall balance sheet, P&L accounts, and records are check at each general meeting of shareholders’ and directors’ reports. It submitted to the Registrar within 60 days after the general meeting of shareholders.
If the manufacturing company forms the producer companies, these companies are represente by the executive director and president.
In addition, proper books of account are maintaine for cash flows, expenses, sales and purchases of goods, assets and liabilities, labor costs, and income statements.
Internal audits must be conducted by auditors in a certain frequency and manner under the methods prescribed by the company’s articles of association and per the Institute of Certified Public Accountants 1949.
Benefits of founding a manufacturing company
Manufacturing companies enjoy the following benefits:
Each member of the company receives a sum of money, in which the value of one or more products allocate to them determined by the directors. Distribution in cash or through equity. This may depend on the conditions under which board.
Members can obtain bonus shares proportional to the withholding amount.
In addition, the provisional income regulations and the remaining amount after the regulations are form can be allocate as sponsorship bonuses and participation in business activities in the form of cash or shares.
The members of the manufacturing company are also entitle to receive financial assistance not exceeding 6 months through the credit line.
Loans and guaranteed loans, as stated in the terms, stipulate repayment within 3 months, up to 7 years.
If you are looking for your Producer Company Registration, you can reach out to Chartered Accountants listed on CA in Delhi‘s homepage.
