Saturday 24 June 2017

How to start business in India in 24 hours

What are the Type of Business Start Ups in India?

The following types of Business entitles are available in India: For creation of these business, contact  Photon at photonjournal@yahoo.com
  • How to form Private Limited Company
  • How to form Public Limited Company
  • How to form Unlimited Company
  • How to form Partnership
  • How to form Sole Proprietorship
In addition to the above legal entities, the following types of entities are available for foreign investors/ foreign companies doing business in India:
  • How to form  Liaison Office in India 
  • How to form  Representative Office in India 
  • How to form Project Office in India 
  • How to form Branch Office in India 
  • How to form Wholly owned Subsidiary Company in India 
  • How to form Joint Venture Company in India 

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What is a Private Limited Company? Contact Photon  at  photonjournal@yahoo.com

A Private Limited Company is a Company limited by shares in which there can be maximum 200 shareholders, no invitation can be made to the public for subscription of shares or debentures, cannot make or accept deposits from Public and there are restriction on the transfer of shares. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 2. For Details : contact  Photon at photonjournal@yahoo.com

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What is a Public Limited Company? contact  for creation Photon at photonjournal@yahoo.com

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.

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What are the advantages of a Limited Company? contact  for creation Photon at photonjournal@yahoo.com

A limited company has following advantages:
  • Members' (the directors and shareholders) financial liability is limited to the amount of money they have paid for shares.
  • The management structure is clearly defined, which makes it easy to appoint, retire or remove directors.
  • If extra capital is needed, it can be raised by selling more shares privately.
  • It is simple to admit more members.
  • The death, bankruptcy or withdrawal of capital by one member does not affect the company's ability to trade.
  • The disposal of the whole or part of the business is easily arranged.
  • High status.

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What are the disadvantages of a Limited Company? contact  for creation Photon at photonjournal@yahoo.com

A limited company has following disadvantages:
  • Requirement to register the company with the registrar of companies and provide annual returns and audited statement of accounts. All details of the company are available for public inspection so there can be no secrecy. There are penalties for failing to make returns.
  • Can be more expensive to set up. 
  • May need professional help to form.
  • As a director, you are treated as an employee and must pay tax.
  • The advantages of limited liability status are increasingly being undermined by banks, finance house, landlords and suppliers who require personal guarantees from the directors before they will do business.

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What entity is best suited?  contact  for creation Photon at photonjournal@yahoo.com

The choice of entity depends on circumstance of each case. Private Limited Company has lesser number of compliances requirements. Therefore, generally where there is no requirement of raising of finances through a public issue and the ownership is intended to be closely held by limited number of persons, Private Limited Company is the best choice.

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What is the minimum paid-up capital of a Private Limited Company? contact  for formation, Photon at photonjournal@yahoo.com

The minimum paid up capital at the time of incorporation of a private limited company has to be Indian Rupees 1,00,000 (about United States Dollars 2,000). There is no upper limit on having the authorized capital and the paid up capital. It can be increased any time, by payment of additional stamp duty and registration fee.

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What is the difference between authorized capital and paid up capital? Contact Photon  at  photonjournal@yahoo.com

The authorized capital is the capital limit authorized by the Registrar of Companies up to which the shares can be issued to the members / public, as the case may be. The paid up share capital is the paid portion of the capital subscribed by the shareholders.

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What is the procedure in obtaining a name approval for the proposed Company? Contact Photon  at  photonjournal@yahoo.com

An application in Form No. 1A needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated. The application is required to be signed by one of the promoters. The details to be state in the said application are as follows:1. Four alternative names for the proposed company. (The name can be coined names from the objects of the proposed company or the names of the directors, etc. but should definitely be indicative of the main object of the company. Justification for the name needs to be specified along with the application)2. Names and addresses of the promoters (Minimum 7 for a public company while 2 for private company).3. Authorized Capital of the proposed company.4. Main objects of the proposed company.5. Names of other group companies. On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 10 days to the applicant. On fulfilling of the objections a formal letter of name approval is issued.

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What is the Memorandum of Association (MOA) and the Articles of Association (AOA) of a company and what is the procedure in their regard? Contact Photon  at  photonjournal@yahoo.com

On receipt of the name approval letter from the ROC the MOA and the AOA are required to be drafted. The MOA states the main, ancillary / subsidiary and other objects of the proposed company. The AOA contains the rules and procedures for the routine conduct of the proposed company. It also states the authorized share capital of the proposed company and the names of its first / permanent directors. After the MOA and AOA are required to be stamped.
A stamp duty is required to be paid on the MOA and on the AOA. The stamp duty depends on the authorized share capital.

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What are the documents required to be executed for incorporation? Contact Photon  at  photonjournal@yahoo.com

The following documents are required to be executed (signed) before they are submitted to the ROC:

1. MOA and AOA - These are required to be executed by the promoters in their own hand in the presence of a witness in quadruplicate stating their full name, father's name, residential address, occupation, number of shares subscribed for, etc. 

2. Form No. 1 - This is a declaration to be executed on a non-judicial stamp paper of INR 20 by one of the directors of the proposed company or other specified persons such as Attorneys or Advocates, etc. stating that all the requirements of the incorporation have been complied with. 

3. Form No. 18 - This is a form to be filed by one of the directors of the company informing the ROC the registered office of the proposed company. 

4. Form No. 29 - This is a consent obtained from all the proposed directors of the proposed company to act as directors of the proposed company. (Not required in case of private company). 

5.Form No. 32 - This is a form stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors.

6.Name approval letter in original. 

7.Power of Attorney signed by all the subscribers of MOA authorizing one of the subscribers or any other person to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation. 

8.Power of Attorney in case of a subscriber who has appointed another person to sign the MOA on his behalf. 

9. Filing fees as may be applicable.

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How is the certificate of incorporation issued? Contact Photon  at  photonjournal@yahoo.com

After the documents in FAQ 5 are filed, the ROC calls the attorney on a specific date for scrutiny and making the corrections in the MOA and AOA filed. On complying with the same, the certificate of incorporation is granted to the attorney.

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When can the newly formed company start its business operations?  Contact Photon  at  photonjournal@yahoo.com

On receipt of the certificate of incorporation, the public company has to complete certain other legal formalities such as a statutory meeting (within 6 months), statutory report, etc. On completion of the said formalities and on filing of the statutory report with the ROC the ROC issues the certification of commencement of business to the company. Thereafter, the Public Company can start the business operations. The Private Company can start its business immediately on incorporation.

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How do we comply with the legal formalities when we are not stationed in India? Contact Photon  at  photonjournal@yahoo.com

You can give Power of Attorney to a person to sign the documents on your behalf. After the Company is incorporated, you can appoint Alternate Directors, to function on your behalf while you are not in India. But at least once, you should be in India within one month of the incorporation of the Company. There can be one meeting of Board of Directors during your stay in India and all other formalities including those of appointment of Alternate Directors can be complied with.

Steps To Be Taken To Incorporate A New Company. Hire services : Contact Photon at photonjournal@yahoo.com

Steps to be taken to get a new company incorporated:
• Select, in order of preference, at least one suitable name upto a maximum of six names, indicative of the main objects of the company.
• Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has apply for a fresh name on the same application. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• After the name approval the applicant can apply for registration of the new company by filing the required forms (that is Form 1, 18 and 32) within 60 days of name approval. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.
• Arrange for stamping of the memorandum and articles with the appropriate stamp duty. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father's name, occupation, address and the number of shares subscribed for and witnessed by at least one person. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• Ensure that the Memorandum and Article is dated on a date after the date of stamping. Hire Services : Contact Photon At Photonjournal@Yahoo.Com
• Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm
Declaration of compliance - Form-1
Notice of situation of registered office of the company - Form-18.
Particulars of the Director's, Manager or Secretary - Form-32.
Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees and send the physical copy of Memorandum and Article of Association to the RoC
• After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC.
Additional steps to be taken for formation of a Public Limited Company: Hire Services : Contact Photon At Photonjournal@Yahoo.Com
To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance
• File a declaration in eForm 20 and attach the statement in lieu of the prospectus(schedule III) OR
• File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
• Obtain the Certificate of Commencement of Business.
Additional steps to be taken for registration of a Part IX Company:
The Part IX Company is required to file eForm 37 and eForm 39 apart from filing eForm 1, 18 and 32.
The company is required to file eForm 1 first and then the company can file all the other eForms (18, 32, 37 and 39) simultaneously or separately. Hire Services : Contact Photon At Photonjournal@Yahoo.Com

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