Key points to the new formation of a company in India in ‘SPICE+’

New company Regulations Under Form SPICe Plus for the company incorporation in India

www.carajput.com; SPIC

www.carajput.com; SPIC

SPICe+ Simplification Company Formation process in India

Spice+ is a modern web-based form instead of the Spice form. MCA also introduced a new web-based form spice+ and extra authentication along with the form to make the company’s incorporation process simpler. The business will also apply for EPFO / ESI, GST numbers as well as this single window form. It is compulsory for all businesses in compliance with the Guidelines of the Ministry of Corporate Affairs on the issue of PAN, TAN, EPFO, ESIC, Qualified Tax (Maharashtra) and the opening of the bank account.

 Key Points to be recognized with respect to the company’s formation in India i.e ‘SPICE+’

  1. Both forms (Incorporation, AOA, MOA, AGILE-PRO) have to be filled out in a web-based facility and then copied, digitally signed and posted as before.
  2. “Check Form,” “Pre-Scrutiny” to be performed on a web-based database, so no modifications can be made to the downloaded files.
  3. “INC-9” (declaration by first subscriber) must always be submitted by a web-based facility only.
  4. “AGILE-PRO” is to be digitally signed only by a person who has signed the “Spice+” form and no other director will sign the same form.
  5. If you continue to apply for “Name Reservation” first, you should opt for 2 Proposed Names otherwise you might also proceed to the “Name with Incorporation” facility and then you can only propose One Name
  6. The GSTIN status applied through AGILE-PRO can be checked at the GST Portal from the MCA Forms SRN.
  7. Companies that enroll ESI and PF inside the SPICE+ package do not require compliance with the ESI and PF laws until the deadline for application is set.

Available features of “SPICe Plus Form” at MCA

Recently, the government has published the full significant features of the SPICe Plus form (SPICe+) in order to make clear the value of the form as well as the campaign for good visibility. SPICe Plus form (MCA Form SPICe+) is said to devote 10 services across 3 central government ministries and departments (Ministry of Labor & Department of Revenue in the Ministry of Finance, Ministry of Corporate Affairs). The new SPICe form is said to save precious time and procedure for the management of the individuals concerned and has been introduced with all existing companies since 23 February.

Emergence to the web-based SPICe + MCA Filing Form

SPICe+ Online form is a post-login system and current registered users will need to sign in to their account using their credentials. New users must first build a login account before using the service.

Apart from being an improved variant of the current SPICe, the form is capable of fulfilling multiple requirements such as name reservation, inclusion, DIN distribution, compulsory issue of PAN, TAN, EPFO, ESIC, qualified tax (Maharashtra) and bank account opening. You can also buy the GSTIN through the SPICe+ form.

Now the Reserve Special Name of RUN is only significant if the corporation wishes to replace its existing name with a new one.

MCA SPICe INC 32 V / S SPICe Plus

SPICe INC 32 – Single Code Helps:

  • Name reservation

  • Incorporation of a new company
  • Applying for Director Identity Number (DIN) designation

Form SPICe+ (SPICe Plus) – A Single Application Helps in:

  1. Name reservation
  2. Incorporation of a new company
  3. Applying for DIN allotment]
  4. Profession Tax (Maharashtra)
  5. Bank Account Opening
  6. TAN
  7. EPFO
  8. ESIC
  9. GSTIN

Features of SPICe+ make Simplification New Company Formation process in India

  • SPICe+ would be an integrated Web Form.
  • SPICe+ would have two parts viz.: Part A-for Name reservation for new companies and Part B offering a bouquet of services viz.
    (i) Incorporation
    (ii) DIN allotment
    (iii) Mandatory issue of PAN
    (iv) Mandatory issue of TAN
    (v) Mandatory issue of EPFO registration
    (vi) Mandatory issue of ESIC registration
    (vii) Mandatory issue of Profession Tax registration(Maharashtra)
    (viii) Mandatory Opening of Bank Account for the Company and
    (ix) Allotment of GSTIN (if so applied for).
  • Readers may choose whether to submit Part-A for reserve of a name first and then submit Part B for incorporation & other services or file Parts A and B together in one go for the incorporation of a new company and the use of a range of services as defined above.
  • A modern and user-friendly front-office interface for client integration applications (SPICe+ and related forms as applicable) is being developed.
  • Applications for incorporation (Part B) after name reservation (Part A) can be submitted as a streamlined phase in the continuation of Section A of SPICe+. Stakeholders will not be required to enter the approved name SRN as the approved name will be prominently displayed on the Dashboard and a click on it will take the user to continue the application via a hyperlink that will be available on the SRN / application number in the new dashboard.
  • Resubmission of applications for business name reservation and/or registration shall now be done by means of the form number / Name applied for on the new dashboard.
  • From 15 February 2020 onwards, the RUN service will only refer to the ‘change of name’ of an established company. 8. The new web form will allow on-screen file and validation of real-time data for the transparent incorporation of corporations.
  • The approved name and related incorporation information as set out in Part A will be immediately pre-filled in all linked forms, including AGILE-PRO, eMoA, eAoA, URC1, INC-9 (as applicable)
  • In order to ensure ease of processing, SPICe+ will be divided into various parts.
  • Information once entered can be saved and modified.
  • All Check Form and Pre-Scrutiny Validations (except DSC Validation) must take place on the web page itself.
  • After the SPICe+ has been filled in with all the necessary information, the same will have to be translated to a PDF file, with only a click of the mouse button, to show the DSCs.
  • All digitally signed documents will then be submitted along with the related forms as part of the current procedure.
  • Changes/modifications to SPICe+ (even after creating pdf and affixing DSCs) can also be rendered by modifying the same web form code that has been saved, producing and uploading modified PDFs to DSCs.
  • DSC authentication and other validations must take place at Upload Stage.
  • Enrollment for EPFO and ESIC shall be compulsory for all new companies established as of 15 February 2020 and no EPFO & ESIC registry numbers shall be issued separately by the respective agencies.
  • register for professional tax is also compulsory for all startup companies incorporated in the State of Maharashtra as of 15 February 2020.
  • All startups incorporated through SPICe+ (we.e.f. 15 February 2020) would also be required to obey for the establishment of the bank account of the company through the secure website linked to AGILE-PRO.
  • The declaration of all subscribers and first directors in INC-9 shall be self-generated in PDF format and shall only be submitted in electronic form in all cases, except where:
    • The overall number of subscribers and/or directors is more than 20 and/or more than 20.
    • Any such subscriber and/or director shall have neither DIN nor PAN.

Note: New companies formed by SPICe+ and thus acquired EPFO / ESI number would only have to file legal returns if they exceed the thresholds set by the applicable Laws.

Thus, we can state that New company Laws regulation under the SPICe Plus form easy for the company to be registered in India. 8. Concluding The EODB steps taken by the Government over the last few years have substantially accelerated the process of business incorporation. Their aim of a smooth and simple process is gradually becoming a reality. That, in the past, was a tiring process requiring months of work and labor. However, by making the best possible use of technology, a company can now be incorporated in a couple of days, making millions of dreams a true in an hour’s time.

Benefits of Private Limited Company Registration- BENEFITS 

Limited liability of shareholders

Management and Ownership Separation

Quick Fund Rising

The separate existence of legislation

BEST BUSINESS STARTUP CONSULTANCY SERVICES AT ONE CLICK  : 

We Help All kinds of corporate companies or become their implementation partner so because they get to stay focused at their key areas and are not needed to concern about their compliance requirements.

We have the following services for the start-up:-

  • • Incorporation of the Company/LPL/OPC/Partnership etc.
  • • Establishment of a corporate organization such as a partnership, sole owner, etc.
  • • Registration under the Export-Import Code
  • • Receiving the export-import code
  • • Registration of trademarks
  • • ISO Certification
  • • Registration of MSME
  • • Registrations for ESI and PF

Also, read the relevant blog mentioned below:

On Rajput Jain & Associates :

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

FORM NO. INC.22A

Introduction about FORM NO. INC.22A

www.carajput.com;MCA E-FORM INC_22A

www.carajput.com; MCA E-FORM INC_22A

Active Company Tagging Identities and Verification is a new concept that is introduced by the Ministry of Corporate Affairs on 21-02-2019 by notifying Companies (Incorporation) Amendment Rules, 2019. It also introduces the new E-FORM ACTIVE (INC-22A).

It is an attempt by the Ministry of Corporate Affairs in order to identify the Active Companies and to verify their Registered Office.

Rule 25A:

A new rule has been inserted in Companies Incorporation Rules, 2014 under Verification of Registered Office.

Rule 25A states that-Every a company Incorporated on or before the 31st December 2017 shall file the particulars of the company and its registered office in e-form ACTIVE (Active Company Tagging Identities and Verification) on or before 25.04.2019. 

Every Company* Incorporated on or before 31st December 2017 is required to file this e-form.

So, we can say that all these companies are required to file e-Form Active i.e. INC-22A

  1. Public Company (whether listed or not)
  2. Private Company

iii. Government Company

  1. One Person Company

The following Companies are not required to file this form:-

  1. Companies which have been struck off
  2. Companies that are under the process of Striking off.

iii. Companies that are under Liquidation.

  1. Companies which has been dissolved or amalgamated.

As per the register maintained by the Ministry of Corporate Affairs.

The following Companies will not be allowed by the Ministry of Corporate Affairs to file this e-form Active are:-

  1. A company which has not filed its due financial statements under Section 137 i.e. Not Filled AOC-4
  2. A company which has not filed its Annual Returns under section 92 i.e. Not Filled MGT-7

iii. A company who’s any of the director/s has not filled DIR 3 KYC form or is disqualified under section 164 of the Companies Act, 2013.

Consequences of nonfilling of this e-form Active

Company will be marked with “Active- Noncompliant” at the portal of MINISTRY OF CORPORATE AFFAIRS and due to this, the company will not be allowed to carry on some transactions such as:-

  1. Change in Authorised Capital
  2. Change in Paid-up Capital

iii. Changes in Director Accept Cessation,

  1. Change in Registered Office.
  2. Amalgamation, De-merger

Consequences of Filing e-form Active after the due date .i.e. 25-04-2019

A penalty will be charged from those companies who will file this form after the due date and the amount of penalty is Rs. 10,000/- as inserted by Companies (Registration Offices and Fees) Amendment Rules, 2019.

In INC22A, the company is required to submit the following information:-

  1. Name of the Company and CIN
  2. Registered Address of the Company
  3. Two Photographs of the registered office of the company. The first photo of the registered office shall be taken from outside of the premises, whereas the second photo needs to be taken from within the registered office premises showing at least one director / KMP who shall be signing the e-form INC-22A.
  4. Location of registered office on Map defining Latitude / Longitude
  5. Email ID of the company
  6. Email for OTP verification
  7. Whether the company is listed (Yes or No)
  8. Details of:
  • List of all Directors of the company with Active status of DIN. if any Director on Board of the Company who does not have the Active DIN Status, the company will not be able to file Form 22A.
  • Name of all the Directors of the Company, if it is more than 15 then Details of Special resolution passed for such an appointment will be required. However, in the case of Government Company details of such resolution will not be required as there is no limit of directors in Government Company. Kindly check that all the Directors have filled the DIR-3 KYC Form or They are not disqualified under section 164 of the Companies Act, 2013.
  1. Details of Statutory Auditor.
  • Name of the Auditor/Firm.
  • PAN No. of the Auditor/ Firm.
  • Membership No. or Firm’s Regn. No.
  • Period for which the Auditor has been appointed.
  1. Details of Cost Auditor
  • Name and No. of Cost Auditor Appointed
  • Membership no.
  • Period for which Appointed.
  • Financial Year to be covered by the cost auditor.
  1. Details of Company Secretary.
  • Name of the Company Secretary of the Company.
  • PAN No.
  • Membership No.
  • CEO or Managing Director (if applicable)
  • CFO (if applicable)
  • SRN Number of AOC 4 / MGT 7 For FY 17-18 SRN of AOC-4/AOC-4 XBRL SRN of MGT-7

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Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 2,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 2,2016

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Direct Tax

  • Unless and until the capital asset is used as a tool for carrying out the business of the assessee and the assessee becomes the owner this Tribunal is of the considered opinion that the assessee may not be eligible for depreciation – Tri – M/s Hinduja Foundries Ltd. (formerly known as M/s Ennore Foundries Ltd.) Versus The Assistant Commissioner of Income Tax – 2016 (2) TMI 706 – ITAT CHENNAI
  • Controlled by Delhi based CA firm held as resident in India [2016]283 (Delhi)Commissioner of Income-tax, Delhi v. Mansarovar Commercial (P.) Ltd.
  • IT: CPU alone cannot be described as computer; routers and switches being input/output devices, are integral part of computer and, hence, entitled to higher rate of depreciation at 60 per cent[2016]239 (Mumbai – Trib.) IBAHN India (P.) Ltd. v. DCIT
  • Investment in house property need not be sourced from capital gains only for availing of sec. 54F relief
  • IT : For availing exemption under section 54F, amount invested in new asset need not be entirely sourced from capital gain [2016] 191 (Punjab & Haryana) CIT v. Kapil Kumar Agarwal
  • Deemed dividend addition u/s. 2(22)(e) – loan or advance to a non-shareholder cannot be taxed as Deemed Dividend in the hands of a non-shareholder. Since the Assessee in the present case is not a shareholder in the lender company addition to be deleted. – Tri – M/s. Jet Age Securities Pvt. Ltd. Versus D.C.I.T., Circle-7 (1) , Kolkata – 2016 (2) TMI 703 – ITAT KOLKATA
  • CL: Sales tax dues of company-in-liquidation could not be termed as taxes in relation to property hence, Appellants who had purchased property of company-in-liquidation in court auction were not required to pay same[2016] 220 (Gujarat) Readymix Concrete Ltd. v. Official Liquidator of Beclawat of India Ltd.
  • Controlled by Delhi based CA firm held as resident in India.

Indirect Tax

  • Demand of service tax on Management Maintenance or Repair service collected from Flat owners. – In this fact the appellant is not liable for service tax – Tri – M/s Omega Associates Versus Commissioner of Service Tax, Mumbai – 2016 (2) TMI 690 – CESTAT MUMBAI
  • Valuation – Business auxiliary service (BAS) – inclusion of reimbursement of expenses – the entire amount received from M/s Indian Oil Corporation is liable to be taxed – Tri – Sanjeev Chaudhari Versus Commissioner of Central Excise Chandigarh – 2016 (2) TMI 688 – CESTAT NEW DELHI
  • Purchaser of assets of liquidating -co. in a auction wasn’t liable to pay sales taxes dues of such Co.- HC
  • Cenvat credit available of Service tax paid on construction of commercial complex used for renting of immovable property.

Company Law

Query: In a Private Limited Company, there are two directors since the date of incorporation of the company in around 1985. Now both the director’s age is more than 70 years. Is directors are disqualified or any forms need to be filed with ROC.

Answer: No provision on age limit has been prescribed in the Companies Act 2013 regarding the appointment or disqualification of directors.

However in case of Managing director/Whole-time director/Manager, Section 196(3) of the Companies Act 2013 provides that –“No company shall appoint or continue the employment of any person as MD/WTD/Manager who is below the age of 21 years or has attained the age of 70 years. Provided the appointment of person who has attained the age of 70 years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person.”

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 955555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

NAMING AND REGISTERING A BUSINESS IN OF COMPANY

NAMING AND REGISTERING A BUSINESS IN FORM OF COMPANY

1COMPANIES ACT 2013

In India, incorporation of a company is governed by the Companies Act 2013. It is the most important piece of legislation that empowers the Central Government to regulate the formation, financing, functioning, and winding up of companies. It applies to the whole of India and to all types of companies, whether registered under this Act or an earlier Act. But it does not apply to universities, co-operative societies, unincorporated trading, scientific and other societies.

The Act is administered by the Central Government through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) controls the task of incorporation of new companies and the administration of running companies.

The Official Liquidators who are attached to the various High Courts functioning in the country are also under the overall administrative control of the Ministry. The set-up at the Headquarters includes the Company Law Board, a quasi-judicial body, having the principal Bench at New Delhi, an additional principal bench for Southern Region at Chennai and four Regional Benches located at New Delhi, Mumbai, Kolkata, and Chennai. The organization at the Headquarters also includes two Directors of Inspection and Investigation with a complement of staff, an Economic Adviser for Research and Statistics, and other Officials providing expertise on legal, accounting, economic and statistical matters.

The four Regional Directors, who are in charge of the respective regions, comprising a number of States and Union Territories, interalia, supervise the working of the Offices of Registrars of Companies and the Official Liquidators working in their regions. They also maintain liaison with the respective State Governments and the Central Government in matters relating to the administration of the Companies Act, 1956.

Registrar of Companies (ROCs) appointed under Section 609 of the Companies Act, covering various States and Union Territories, are vested with the primary duty of registering companies floated in the respective States and the Union Territories and ensuring that such companies comply with the statutory requirements under the Act. Their offices function as registry of records relating to the companies registered with them.

For registration and incorporation of a company, an application has to be filed with Registrar of companies. Application for registration of a company accompanied by the selected names, Memorandum of Association and Articles of Association and other necessary documents is to be filed with the Registrar of companies of the State in which the company is proposed to be incorporated.

Under the Companies Act, an entrepreneur can form two types of companies, namely a private company or a public company.

A Private Company is one, the articles whereof contains the following restrictions:-

  • Restricts the minimum paid-up share capital to such an amount as may be prescribed but which shall not be less than rupees one lakh;
  • Restricts the rights of members to transfer its shares if any;
  • Limits the number of its members to fifty excluding the past or present employees of the company who are members of the company;
  • Prohibits any invitation to the public to subscribe for any shares or debentures of the company;
  • Does not invite or accept any deposits from persons other than its members, directors or their relatives
  • Also, the minimum number of members in a private company is two and such a company must have the words ‘Pvt Ltd’ as the last part of its name.

A Public Company, as defined in the Companies Act, has the following features:-

  • Its shares are freely transferable;
  • There is no ceiling on its membership;
  • It can invite the general public to subscribe to its shares;
  • It has a minimum paid-up capital of Rs. 5 lakhs or such higher paid-up capital as may be prescribed;
  • It is a private company which is a subsidiary of a public company.
  • Also, the minimum number of members in a public company is seven and such a company must have the word ‘Ltd’ as the last part of its name.
  • Procedures for Registration of a Business
  • List of offices of Registrar of Companies
  • Registration Forms
  • FAQs by Ministry of Corporate Affairs
  • Guidelines by the Ministry of Corporate Affairs
  • Instruction kit for filling eForms

WHAT IS FINANCIAL REPORTING?

Financial reporting includes the following:

  • the external financial statements (balance sheet, income statement, statement of cash flows, and statement of  stockholders’ equity)
  • The notes to the financial statements
  • Quarterly and annual reports to stockholders
  • Press releases and conference calls regarding quarterly earnings and related information
  • Financial information posted on a corporation’s website
  • Financial reports to governmental agencies including quarterly and annual reports to the Securities and Exchange Board of India (Fema) ROC/ Income Tax / Banks / Investors / Money Lenders.
  • Prospectuses pertaining to the issuance of common stock and other securities

For query or help, contact: info@carajput.com or call at 9555555480

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

PROCEDURES FOR CONVERSION OF PARTNERSHIP FIRM TO PRIVATE COMPANY

PROCEDURES FOR CONVERSION OF PARTNERSHIP FIRM TO PRIVATE COMPANY 

www.carajput.com;Income Tax Updates

www.carajput.com;Income Tax Updates

STEP 1

HOLD A MEETING OF THE PARTNERS TO TRANSACT THE FOLLOWING BUSINESS

  • Assent of majority of its members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose of registering the firm under the Companies Act, 2013. Since the liability of the members of the firm is unlimited, when a firm desires to register itself as a company as a limited company, the majority required to assent as aforesaid shall consist of not less than ¾ of the members as are present in person or where proxies are allowed, by proxy, at a general meeting summoned for the purpose.
  • To authorize one or more partners to take all steps necessary and to execute all papers, deeds, documents etc. pursuant to registration of the firm as a Company.
  • To execute a supplementary Partnership Deed to align it with the requirements as under:
    • THERE MUST BE AT LEAST 7 PARTNERS IN THE PARTNERSHIP FIRM;
    • The firm may be registered with the Registrar of Firms;
    • There must be a fixed capital divided into units ;
    • There must be provision of converting a firm into company.
    • There must be an agreement by the partners to convert the partnership to a company. This can be done by a contract in writing to this effect to which the partner’s resolution for conversion can be attached as annexure.
    • Execute a settlement deed.

(If the above requirement is not fulfilled by the firm, then the Partnership deed should be altered)

 STEP 2

APPLICATION FOR DIRECTOR’S IDENTIFICATION NUMBER AND DIGITAL SIGNATURERS CERTIFICATE 

STEP 3

NAME APPROVAL

  • An application in Form needs to be filed with the Registrar of Companies (ROC) with following annexure(s) stating the fact that the partnership firm pro­posed to be converted under the Companies Act. (Annexure 1).
  • Certified true copy of Partnership Deed.
  • Certified true copy of the latest balance sheet of the partnership.
  • Certified true copy of the latest income tax assessment order/return.
  • Consent of all the partners stating that they have agreed to register the partnership firm as a Company.
  • Certified True Copy of the resolution passed by the firm in this regard.
  • The application is required to be digitally signed by one of the promoters.

Other steps in Conversion of a Partnership firm into a Company are similar to steps involved in formation of an Indian Private Limited Company (Except processing of few additional forms.

KEY BENEFITS:

Automatic Transfer

All the assets and liabilities of the firm immediately before the conversion become the assets and liabilities of the company.

No Stamp Duty

All movable and immovable properties of the firm automatically vest in the Company. No instrument of transfer is required to be executed and hence no stamp duty is required to be paid.

No Capital Gain Tax

No Capital Gains tax shall be charged on transfer of property from Partnership firm to Company.

Continuation of Brand Value

The goodwill of the Partnership firm and its brand value is kept intact and continues to enjoy the previous success story with a better legal recognition.

Carry forward and Set off Losses and Unabsorbed Depreciation

The accumulated loss and unabsorbed depreciation of Partnership firm is deemed to be loss/ depreciation of the successor company for the previous year in which conversion was effected. Thus such loss can be carried for further eight years in the hands of the successor company.

KEY CONDITIONS TO GET SUCH BENEFITS:

  • All partners of the partnership firm shall become shareholders of the company in the same proportion in which their capital accounts stood in the books of the firm on the date of the conversion.
  • The partners receive consideration only by way of allotment of shares in company and the partners shareholding in the company in aggregate is 50% or more of its total voting power and continue to be as such for 5 years from the date of conversion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 011-23343333

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)