Business – TaxoLawgy

How to do the incorporation of your One Person Company?

January 15, 2020 by aishagarg, posted in Business

Introduction to a One Person Company

Conversely, the concept of the one-person company was brought to India by the Companies Act, 2013 to assist the entrepreneurs. They are the people who are capable enough to start a venture allowing them to create a single person economic entity.

Advantages of having an OPC

Following are the advantages of a One Person Company:

You can have more than 1 directors but shareholders cannot be more than 1
Member’s death doesn’t affect the OPC
OPC is effortless to set up and maintain
Members have restricted Liability Under OPC liability
Registration and incorporation of OPC requires less paperwork
OPC enjoys no interference from third parties.

Eligibility criteria for the incorporation of OPC

The entrepreneur desirous of incorporating an OPC must a citizen of India and resident in India.
Legal entities like LLP and company cannot be an OPC.
Promotor selects a nominee during the incorporation process
The minimum authorized capital must be Rs 1 Lakh.
Minors, foreign citizens, any person incapacitated by contract cannot be members of an OPC
If the paid-up capital is more than Rs 50 lakhs or if the turnover is above 2 crores OPC cannot exist.
The OPC must have at least 1 shareholder/Nominee/Directors.

Documents required for registration of OPC

Below are the documents necessary for the registration of an OPC, the director of the one-person company has to submit these documents:

PAN card or scanned copy of passport in case of foreign nationals and NRI
Scanned copy of passport, voter ID or driving license.
Copy of current bank account, phone or mobile bill, electricity or gas bill.
Passport size photographs
Signature or thumb impression
Memorandum of Association
Articles of Association
Affidavit and consent of the proposed director

Moreover, self-attest the above documents. NRI and a foreign national have to compulsorily notarize their documents.

Authority for registration of OPC

The RoC (Registrar of Companies) is the appropriate authority for registering the OPC.

Fees required for registration of OPC

In general, the government’s fee for the registration of an OPC and a small company are as follows:

Nominal share capital limited to Rs. 10,00,000	Rs 2000
Nominal share capital between Rs. 10,00,000 to Rs 50,00,000	Rs 2000; Rs 200 added for every 10,000 or part thereof of nominal share capital.
Nominal share capital between Rs. 50,00,000 to Rs 1 crore	Rs 1,56,000. Rs 100 added for every Rs. 10,000 or part thereof of nominal share capital
Nominal share capital amounts to Rs 1 crore and above	Rs 2,06,000. Rs 75 added for every Rs. 10,000 or part thereof of nominal share capital to a maximum of Rs 250 crore.

Please note: The fees for companies without share capital is fixed to Rs. 200 irrespective of their turnover.

Procedure for registration of OPC

Thereby, the process for registration of OPC is as follows:

Digital Signature Certificate (DSC): The first step is to obtain a DSC, the director would require documents for address proof (Aadhar Card, Pan Card etc.). It is mandatory for digital company registrations.
Director Identification Number (DIN): The director has to fill the SPICe form to avail DIN. Director’s name and address proof have to be submitted. Form DIR-3 is filled for an existing company.
Name approval application: Moreover, the name for company registration can be approved either through the RUN web service of MCA (Ministry of Corporate Affairs) or Form SPICe32. Submitting a preferred name with signature. The ministry will decide to approve that name. The company’s name once approved shall affix Private Limited at the end for example XYZ (OPC) PVT. LTD.
Filling the forms with MCA: To complete the OPC registration, the above-mentioned documents will have to be attached with the SPICe form, SPICe-MoA and SPICe-AoA along with DSC

Issuing of incorporation certificate

Once the uploaded documents are verified the RoC (REGISTRAR OF COMPANIES) issues ‘Certificate of Incorporation’. Hence, the business shall commence.

Compliances Post OPC Registration

Consequently, post OPC registration there are certain compliances which are as follows:

A minimum 1 board meeting every 6 months. The time gap between meetings shouldn’t be less than 90 days.
Also, properly mention the books of accounts
Likewise, timely completion of Statutory audit of financial statements
Thereby, income tax returns have to be filed every 30th September
Similarly, Financial statements in Form AoC-4 and RoC annual return in Form MGT7 have to be filed.

To summarize, we hope all the important details about the formation of a One Person Company or OPC in India were covered and we believe it will be helpful in setting up your company conveniently.

TDS Return Filing

January 6, 2020 by aishagarg, posted in Business, Finance

What is TDS?

Tax deducted at source(TDS) is basically a system where tax is deducted as per the provisions of Income Tax Act 1961 at the point of generation of income. A TDS Return is a quarterly statement which has to be submitted to the income tax department of India. It is compulsory to be filed on time.

Who should file a TDS return?

It is the duty of every person who is making payment for specified goods and services to deduct TDS and file TDS return. The specified payment includes commission, salary, interest, professional fees, brokerage, royalty, contract payments etc. The person whose tax is being deducted is called ‘deductee’ and the person who deducts TDS is called ‘deductor’.

Benefits of filing TDS return

Some of the benefits are as follows:

Assists in regular collections of taxes
Ensures to the government a regular flow of income
Reduces the burden of paying a heavy tax

Eligibility criteria for TDS return

TDS return can be filed by organizations or employers who avail a valid TAN (Tax Collection and Deduction Account Number). Any person making specified payment as mentioned under Income Tax – IT Act are required to deduct tax at source and needs to deposit the same within the prescribed time for following payments.

Payment of salary
Payment by way of winning puzzles, lotteries etc.
Income by way of winning horse races
Insurance commission
Payment as per National Saving Scheme and other schemes.

Types of TDS Returns

The different types of TDS are as follows:

Form 24Q- The TDS deducted on salaries
Form 26Q – The TDS deducted on payments other than salaries
Form 27Q- The TDS deducted on payments made to Non- Residents
Form 27EQ – TCS

Documents required to file TDS

The following documents are required:

Aadhar Card
Salary Slips
Interest certificates from bank and post offices
FORM 16
FORM 16A/FORM 16B/FORM 16C
FORM 26AS
Tax saving investment proof
Deductions under section 80D TO 80U
Home loan statement from banks/NBFC
Capital Gains.

TDS Rates for TDS Returns

The rates at which the TDS can be deducted for TDS returns are provided below in the government website link which we have attached specially for the purpose: https://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=/charts%20%20tables/tds%20rates.htm&grp=&searchFilter=&k=&IsDlg=0.

What is TAN?

TAN (tax deduction and collection account number) is a 10-digit alphanumeric number which is required by a person who is liable to deduct TDS and file TDS return. This number is provided so that it can be mentioned in all TDS Certificates issued, returns, challans etc. If a person does not apply for TAN, he may be penalised up to Rs. 10000.

Who is required to issue TDS certificates?

Every person who is deducting tax as per provisions of section 203 is required to issue a TDS certificate. Even banks and other such organizations deducting TDS on pensions issue TDS certificates.

Penalty, in case of delay in filing TDS return

According to section 234E, a penalty of Rs 200/- per day shall be paid by the person until the time default continues. It is to be noted that the total penalty should not exceed the TDS amount.

Penalty for non-filing of TDS return

If the return is not filed within 1 year from the due date or if incorrect information has been furnished it shall be liable to a fine (penalty). The minimum amount of penalty should be Rs 10,000/- and the maximum is Rs 1,00,000/-.

How to file TDS?

Below are the few steps you need to follow:

Visit the government website www.tin-nsdl.com where you can find the file format in which e-TDS return is to be prepared.
The TDS return is to be prepared in accordance with the format in clean text ASCII format and ‘txt’ extension for filename.
The file made needs to be scrutinised for being free from errors. FVU (file validation utility) provided by NSDL assists in rectifying the errors and verifying the same.
The finalised generated FVU file can be then submitted or uploaded at incometaxindiaefiling.gov.in website

How Taxolawgy can help you file TDS Returns?

Connects you with quality experts
Provides you with the best services at affordable prices
Ensures 100% Transparency; i.e. no hidden costs or additional fees
Maximizes ease via online services
Reduces service timeline through minimum paperwork

Reasons to outsource accounting services

10 Reasons to outsource accounting service

December 6, 2019 by aishagarg, posted in Business

An accounting department is generally a very important part of any business. Maintaining accurate and up-to-date financial records is crucial for the success of any business. Many Small and Medium Enterprises (SME) try to save resources by not hiring an accounting department and doing their work themselves. Their time can be better spent by particularly doing the tasks they are supposed to do. Finance and accounting tasks can be easily outsourced and crucial resources can be effectively used for more important purposes. We have accordingly presented 10 reasons to outsource finance and accounting services in this article. Click here to know 10 legal services you can outsource.

1. To save time

Accounting and bookkeeping tasks can consume a lot of time. Furthermore, pending accounting and bookkeeping tasks can pile up and suck the life out of a business. Outsourcing these tasks can result in the saving of time and other precious resources.

2. To save money

Hiring and maintaining an accounts department can put a significant strain on the financial resources of any small and medium enterprise(SME). Especially, startups suffer the most from the increased financial strain due to setting up an accounts department. Outsourcing finance and accounting services can reduce this strain multiply and result in improved financial stability.

3. Privacy

The internal financial records are very confidential for any business. To keep them secret is of topmost concern. Handling your financial and accounting tasks to a local accountant may result in the breach of privacy. Whereas, outsourcing these tasks to a professional outsourcing firm can result in maintaining the privacy of your records.

4. To reduce errors and frauds

It is essential to reconcile financial statements every month to detect frauds and errors. Reconciliation of financial statements is a complex task but is important all the same. As a rule, financial statements can be sent to an outsourcing firm to establish credibility and detect frauds.

5. Inability to hire accountants

If you are a startup and finding it difficult to invest the crucial capital you have in accounting and bookkeeping, you can always outsource it to another firm. Furthermore, if you are a small to medium-size enterprise, you can save crucial resources like time and money by outsourcing your accounts department to another firm.

6. Lacking expertise

If your accounting team is lacking expertise in some accounting tasks, you don’t need to hire a new in-house accountant for those tasks. You can outsource those tasks to expert finance and accounting outsourcing firms for a much lower cost. Furthermore, your time and money will be saved.

7. Getting a neutral viewpoint

To make any important decision, you need financial reports in your hand to analyse the current financial scenario. In such situations taking suggestions and assistance from a neutral source can be beneficial. As a result, you can get rid of any biases which may exist in your firm. You can outsource any reports you require to get a neutral viewpoint.

8. Access to the latest technology

Particularly, your small and medium enterprise (SME) may lack the latest technology for accounting. You can overcome such a problem by outsourcing that task to another firm which has that technology. As compared to the cost of upgrading the technology, the task can be easily outsourced at a much affordable price.

9. Ease of scalability

Small and medium enterprises (SME) start on a low scale, but grow bigger and bigger with time. However, it might happen at times that accounting work at a particular time is too much for the current accounting team to handle. At such times, another accounting firm can be hired to outsource surplus work.

10. Boost your resources

When any SME looks for saving money by doing their accounting tasks by themselves, they are actually wasting resources. No non-accounting personnel should spend their time on accounts, as it can be better and productively spent on the tasks they are meant to do. By outsourcing all accounting tasks, an enterprise can save on precious resources like time and money.

These are some of the top reasons to outsource accounting services. Whether you need financial reports or bookkeeping service for your firm, outsourcing them is the best option available in various circumstances. Click here to know more benefits of outsourcing accounting services.

The Ease of Doing Business in India in 2019

December 4, 2019 by aishagarg, posted in Business

Coupled with the objective to boost the ease of doing business in India, the Ministry of Corporate Affairs (MCA) has taken some initiatives. In this article, we shall understand these reforms more clearly.

Exemption of minimum paid-up capital

The paid-up capital: the amount accumulated by the sales of the company’s shares.
The MCA has exempted the requirement of minimum paid-up capital for private companies through the Companies (Amendment) Act 2015.
Private companies no longer need to adhere to minimum paid-up capital.
This step will increase the ease of doing business significantly.

The inception of Central Registration Centre (CRC)

Precisely, in an initiative of Government Process Re-engineering (GPR) to provide speedy incorporation related services and to increase the ease of doing business in line with global best practices, the MCA has established a Central Registration Centre (CRC) under Section 396 of the Companies Act 2013(Act) vide notification dated 22-01-2016.
The main objective behind the formation of CRC was to process and complete the application for name reservation and incorporation of the company on the day of confirmation of payment or the day following it.
The CRC processed applications for name availability through e-form INC1 in the first phase, while it started processing e-forms for the incorporation of companies in the second phase.

The SPICe e-Form

In the place of INC29, the MCA has introduced the Simplified Proforma for Incorporating Company Electronically (SPICe), as an e-Form to certainly improve the ease of doing business.

Under SPICe, the MCA has integrated the MCA21 system with the CBDT for the issue of PAN and TAN to a company incorporated using SPICe.
At the time of submitting applications for incorporation using SPICe, stakeholders can also submit applications for PAN and TAN.
The certificate of incorporation of the company now comes affixed with PAN and TAN issued by the Income Tax Department.
SPICe can also be used by the stakeholders to apply for DIN (Director Identification Number) for up to three directors. SPICe has resulted in a reduced number of processes and time to establish a business in India.
The SPICe e-form will now include a declaration, in place of Affidavit which was earlier an attachment.
According to notification no. 411 (E) dated 07-06-2019, the MCA has amended the incorporation rules for section 8 companies as per which the application for license and incorporation of the said companies will be required to be submitted in SPICe. Previously, e-form INC-12 was required for obtaining such a license from respective ROCs/RDs. It is now merged with SPICe and is made centralized.
Introduction of SPICe has reduced the timeline for section 8 companies incorporation.
According to notification G.S.R. no. 275 (E) dated 29-03-2019, the MCA has amended the Companies (Incorporation) Rules, 2014 and inserted Rule 38A to facilitate the integration of the MCA21 system with the registration of EPFO, ESIC, GST at the time of incorporation of companies in SPICe e-Form.
This step is going to considerably affect the ease of doing business in India.

The Initiation of R.U.N.

Previously, business names were reserved using INC1. Now ‘Reserve Unique Name’ (R.U.N.) a web-based service has replaced INC1 to further increase the ease of business.

The introduction of RUN has also removed the requirement to use a Digital Signature Certificate(DSC) during name reservations. This has also brought significant improvement to the ease of doing business in India.
The MCA has simplified the Name Availability Rules through Companies (Incorporation) Fifth Amendment Rules, 2019. These amended rules provide sufficient illustration to avoid confusion in name reservations.
Thereupon, the time taken for approval has reduced and the name rejection rate has fallen. This has also resulted in greater transparency, uniformity, and eradication of discretion.
Also, the MCA has amended the LLP Rules 2009 through Limited Liability Partnership (Second Amendment) Rules, 2018 notified on 18.09.2018 and effective from 02.10.2018.
In the place of LLP Form 1, the mentioned amendment has introduced the RUN-LLP Form for reserving the name and FiLLiP Form in place of LLP Form 2 for incorporation. The government has made this process centralized to keep it at par with companies and as a part of starting a business in India.

Exemption of fees for capital up to INR 15,00,000

According to notification G.S.R. no. 180 (E) dated 06-03-2019, the MCA has amended the rule 38(2) of the Companies (Incorporation) Rules, 2014.
Following the issue of this notification, the MCA will charge zero fees for all incorporations with an authorized capital up to INR 15,00,000.

The government is viewing these changes as a big hope for the much-needed ease of doing business in India. Read this article to know why every business should get udyog Aadhar registration certificate.