GST Registration, GST Registration Procedure,IEC Registration, TDS Return filing, MSME Registration, Drug License, Tax Audit, trade license, RERA Registration, NGO Registration,Shareholders Agreement, Investor Pictch Deck, memorandum of understanding, Franchise Agreement, Joint Venture Agreement, founders agreement, investment term sheet, share purchase agreement, master service agreement, service level agreement, vendor agreement, consulting agreement, legal notice, gift deed, rental agreement, sale deed, non disclosure agreement, will document,business plan Consultant,EPF Registration,ESIC Registration,section 8 company registration,society registration,income tax return filing,eating house license,Political Party Registration
It is a 10-digit unique code obtained from Directorate General of Foreign Trade (DGFT) under Ministry of Commerce and Industry, Government of India with a permanent validity for importing and exporting goods and services and thereby taking your business at a global level.
Who is required Import Export Code In case of import:
There are some categories defined by DGFT, which are exempted from taking this code.
Who Can Apply for IEC Registration
IE code once allotted is valid for ever and no requirement to renew. Surrender of IEC IEC holder has not an option when he is not interested in operating it, he can surrender the same by informing the authority. On receipt of such intimation, the authority shall immediately cancel it. Requirement for Obtaining IEC
Yes. An IE code allotted can be modified by making an application to the issuing authority CHANGES IN IEC WITH THE INTRODUCTION OF GST With the Implementation of GST, Government of India through DGFT, in its effort for ease of doing business in India and keeping the identity of person uniform, vide its notification dated 12th June 2017, notified that any person having GSTIN can import or export, into or from India, by declaring the GSTIN at the time of import or export. Additionally, for the entities who are not registered under GST registration because of its threshold limit, may use their PAN as their IEC for which application should be made to DGFT for authorizing PAN of Applicant as IEC. Further, for the existing IEC holders, necessary changes in the system are being carried out by DGFT so that their PAN becomes their IEC. So, IEC holders are supposed to quote their PAN for all the documentation done w.e.f. , 12th June 2017.
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Ubi Jus Ibi Remedium is Latin for “For every wrong, the law provides a remedy”.
If a right is provided by the law, then you may approach the court if it is infringed or invaded. The court shall meet the ends of justice and provide relief in the most appropriate manner. In day to day transactions, we come across situations where we feel our legal rights have been infringed. Such situations may be of various natures, for example:
A Legal Demand Notice is a formal communication to any person or entity informing about the infringement of the legal right and the intent of recoursing to legal forum against them if the required steps are not undertaken within a reasonable time as mentioned. It serves as both an opportunity and a warning. A Legal Notice is of great importance and evidentiary value before the Courts, if they approached for resolving the dispute. What details should a Legal Notice constitute? The legal notice must be complete, detailed and correct in all respects to give appropriate information to the served party.
Memorandum of Understanding (MoU) is an agreement between two or more parties laying down the terms and conditions of the transaction, also mentioning the rights and obligations of the parties. It forms a part of the initial discussions of the party with respect to the transaction. It constitutes the major features of the oral discussions and negotiations between the parties. It may also include other aspects like financial, authorizations, duration etc.
What are the basic features of Memorandum of Understanding?
According to the Indian Contract Act, 1882, all agreements are not contracts. An agreement becomes a contract only when it fulfills the following:
Such distinction has t be drawn whether the parties intend MoU to be an informal agreement, an agreement to contract or a legally binding agreement. Parties shall be bound by it only when MoU intends to create such obligations. A specific clause as to binding or non-binding nature of the MoU is considered best for explaining the enforceability and binding nature. This article is meant for the ‘startups’ who wish to enter into the market after having the sound business plan and wants to raise the funds for bringing their plans into reality. But the first step in order to approach is preparing the ‘Investor pitch deck’.
What is “Investor pitch deck”? Have you completed with market research and ready to start with the innovative idea AND Feel that you’re ready to raise funds for your business Alright! Now you need to prepare your sound business model and realistic future plans and showcase your company’s ideas, product, and technology through presentation to the investors in support of your need for investment. Startups prepare a “pitch deck” to present their business plan to prospective venture capital investors. Investors who will be ready to invest in your business will also raise questions such as:
Why startups needs to prepare pitch deck If you need to raise funding from Venture capitalists for your startup, the first step is to create a pitch deck i.e., a brief presentation that provides investors with an overview of your business modelso it is imperative for the startups to be strategic in their approach and must have deep understanding of dynamic market and competition For plunging into the market for startups,funds are needed to turn their business ideas into reality. Funds requirement may vary but mainly funds are required for setting up office, increasing their range of products and services, buying machineries, paying rents, etc. Generally new business has to face entry barriers like government policies, competition, economies of scale etc. So, funding from the venture capitalists in India can really make their way. Preparing Investor Pitch Decks According to market statistics, nine out of 10 startups fail, because of not being able to have sound business model and lack of presentation. So below are some of the crucial points to remember for framing the precise Investor Pitch deck.
If you are planning to operate any business/ project or provide services in future it is preferable to execute Master Service Agreement (MSA) which is created between two or more parties where both parties agree to most of the terms that govern the future transactions. It stands as strong foundation for a business to be conducted in the future.
There are various sectors/ areas under which this type of agreement can be executed such as HR, Finance, Marketing etc. Typically, the MSA outlines the business relations in general terms which focuses more on terms of payment, description of services, duration, dispute resolution etc,. Purpose of this agreement A Master Service Agreement is generally a long-term agreement which outlines the scope of services and other related terms in detail in a ‘Statement of Work’ before starting the business. Benefit of MSA § Execution of Master Service Agreement is one of the time effective method as the terms specified in the agreement related to work is not repetitively negotiated § It maintains a business relationship between the parties which results in consistent work without any hassle in future. § Written description of the services is always a welcome option to avoid the disputes § By inserting the liability clause, it protects the latter parties from loss caused by the fisrt party What Does A Master Service Agreement Usually Cover? Before entering into Master Service Agreement, first of all the parties need to focus on the below factors:
1. Scope of the services and statement of work This is one of the important clause that must be incorporated in MSA which defines what services will be provided and not provided as defined precisely in the statement of work. The more detailed consulting contract is, the lesser will be the chances of dispute in the future. 2. Terms of Payment: Parties agree to a certain amount of price as a compensation of service in the statement of work avoids the situation which could lead to disputes in future 3. Reimbursement of Expenses While executing a agreement ensure for incorporating a clause for reimbursement of all the expenses reasonably incurred in the performance of the services provided by the consultant. 4. Duration and it renewal The time duration of the project upto which the parties will complete should be provided which can be renewed on mutually acceptable terms. 5. Dispute resolution or mediation The parties should always pay careful attention to insert a dispute resolution clause in MSA that requires both the parties to pursue mediation and dispute resolution mechanism in case of dispute arises in future. 6. Liability Clause This clause if stated clarifies that to what extend parties will be liable for the misconduct because of their carelessness or negligence. 7. Termination Clause In case of situation of breach of confidentiality, or conduct of illegal activity, the services will be terminated. Also willful termination can occur with a prior written notice by the parties. By inserting this clause the parties shall be relieved from future performance of their rights and obligations under this agreement . 8. Confidentiality This is the most important clause of any agreement which clearly spells out that all confidential information related to financial status, projections etc of the company shall not be disclosed without their knowledge and consent. In case if disclosed under the requirement of law/regulation or any order of any court/ authority it should be clearly specified in the agreement. 9. Governing Law Agreement must provide that the agreement shall be governed by and interpreted in accordance with the laws prevailing and subsisting in India. Source url - https://enterslice.puzl.com/_news/Master-Service-Agreement/118099 A service level agreement is a formal agreement executed between two parties. This agreement will clarify the services which shall be provided by the service provider. SLA is mainly a contract between a service provider and other party (its customer) which describes the services and performance standards.
Service Level Agreement Components Service Level Agreements (SLAs) will consist the following elements:
Business entities usually outsource wide range of services. At the time services are outsourced, business entity enters into a Service Level Agreement (SLA) which explains the relationship among both the parties. SLA covers everything related to business relationship. SLA can be entered with the consultant or freelancers. It is very beneficial up to the services are rendered. SLAs are periodically reviewed and updated by the Service providers which explain if there is any addition made or modification of existing services or if there is any change in regulatory environment. Source url - https://enterslice.puzl.com/_news/What-is-the-necessity-of-service-level-Agreement/118097 Execution of shareholders agreement fills the gaps in the clauses not covered under the company’s constitution, through which corporate assign personal rights to Shareholders
Execution of shareholders agreement is always a good idea to prevent and resolve problems between shareholders and the company. In a properly-executed shareholder agreement it is clarified as to what extent they can enjoy the rights and makes clear what managements’ role is. Learning about Shareholders agreement Shareholders agreement is an agreement between the sellers (Company) and buyers (Shareholders) of the shares that confer rights and impose obligations over and above those provided by the regulatory laws. The Shareholders agreements provide for matters such as restrictions on transfer of shares, forced transfers of shares, nomination of directors for representation on boards, quorum requirements, majority rights available to certain shareholders at the board level or the shareholder level. Shareholders agreements are important because it sets out all the terms of sale into writing which prevents misunderstandings. Benefits of entering into Shareholders Agreement · Shareholders agreement provides specific information on the transfer of shares and rules governing the transfers. · Executing agreements allows businesses to raise revenue for the organization. · Shareholders agreement explains special tax treatments the shareholders may receive for the transfer. · Executing shareholders agreements allows the purchaser to claim dividends on their investment. · A dispute over various issues could be resolved between the purchaser and seller by executing shareholders agreement. How the shareholders agreement can well drafted? It is essential that some consideration be given in deciding the terms of agreement. Your shareholders agreement should contain at least some of the following provisions: 1.Information And Inspection Rights: The shareholders should be given the right to have access with the information related to company’s financials. In addition to the information and materials to be provided, shareholders should be provided with the right to visit the office for inspection at its own cost 2.Nomination of Directors The holders of certain percentage of shares should be given the right to nominate Director on the Board or any committees of Board 3.Management related matters: The holders of certain percentage of shares should be given the right to make the decisions with respect to control of the management like setting up the quorum for the board and shareholders meeting, passing of board and shareholders resolutions. 4.Representation & Warranties While executing the agreement the company should set out some of the representation- § like the agreement is legal, valid and binding; § the company will notify of any material changes made in the agreement or § approvals for the execution of this agreement have been obtained from the Governmental Authorities 5.Right of first refusal Entering this clause in an agreement is useful in case where the existing shareholder in the Company decides to leave, other shareholders will have the option to purchase the shares before they're sold to the outsiders. 6.Buy-back Rights: These give the company the right to claim back the shares of a certain shareholder on withdrawal or death of the shareholder. 7.Liquidation preference The same clause used by venture capitalists in their term sheet, should also be a part of shareholders agreement where on the occurrence of an Exit Event of the company, the proceeds will be distributed first to the Investors before the other shareholders in order to recover their investment. 8.Exit Options The Company shall provide an exit option to the Investors in the agreement. 9.Confidentiality This is the most important clause of any agreement which clearly spells out that contents of the Transaction Documents shall not be disclosed to any outsider without their knowledge and consent. In case if disclosed under the requirement of law/regulation or any order of any court/ authority it should be clearly specified in the agreement. It is to be mentioned that the above clause of shareholders agreement are not exhaustive and totally varies according to the industry. The first and most important step before making investment into the company is to decide: What terms should be covered in my Term Sheet?
There is always a dilemma in the preparation of the term sheet as to whether to draft a negotiated, detailed, précised term sheet, or to draft a term sheet where significant terms will be negotiated at the time of due diligence. What is term sheet? A term sheet is a document which sets out the broad parameters of an investment made by an angel investor or venture capital investor to the startups The term sheet compiles up the discussions and defines the terms on which the startup owner and investors have agreed to informally. Binding Provisions of Term Sheet Nothing in the term sheet is legally binding on the parties except for the covenant of ‘Confidentiality and No-Shop Provisions. Confidentiality: This is the most important clause of the term sheet where all the financial data related to investment is disclosed to the investors. Therefore, insertion of this clause protect the company’s sensitive information from being revealed by the potential investor to third parties. “No-Shop” Provisions : A “No-Shop” provision prohibits the company from exploring alternate financing with any third party for a short span of time. Further, company must make sure that this provision should not be are too restrictive or extend for too long a period of time, especially when the company is in need of funds. Basic Provision of Term Sheet Term Sheet reflects the following:
ii. Post-money valuation: the expected value of the company after investment of the proposed funds.
Below are the List of the Key Terms of A Term Sheet1. Consideration for the money invested: The investors often prefer to invest in convertible preferred stock. It gives them a preference over common shareholders in respect of dividends and upon a sale of the company gives them the option of converting into common stock if the company is successful. 2. Type of stock given: The stock allotted to the investor must be defined clearly in the term sheet. The investors are more preferable to invest in preferred shares that entitles them to vote and will receive preference in the payment for their stock in the event of the company’s liquidation which is why the investors found it as an attractive investment. 3. Non-solicitation: Most of the venture capital investors insist on inserting a lock-up period clause where the company would be prohibited from accepting an investment or acquisition proposal from any other party during the preparation process of term sheet. 4. Involvement of Board of Directors: The investors insist on the right to appoint at least one member to the company’s board who are responsible for setting company policies, approving financing etc, in return for its capital investment. So, it is necessary to include the details of involvement of investors in board of the company. 5. Prevention of Equity Dilution: The venture capital firms will require an anti-dilution clause insertion to the term sheet to protect them from future sales of shares at a lower value. 6. Tranches: In cases where the investors’ invest in tranches to the startup then the period of tranches must be specified in the term sheet as it reduces both the founders and investor's risk. 7. Right to buy shares back: Venture capital investors always want to protect their financial interests in a company. Therefore Venture capital investors normally insist to include right of first refusal (ROFR) clauses in their term sheets. This clause allows existing owners to reclaim shares that are about to be sold to a new investor and prevent ownership division in company. Source url - https://enterslice.hatenadiary.com/entry/investment-term-sheet Share purchase is an agreement between the sellers (Company) and buyers (Shareholders) of the shares that confer rights and impose obligations over and above those provided by the regulatory laws.
The Share purchase agreements provide for matters such as restrictions on transfer of shares, forced transfers of shares, nomination of directors for representation on boards, quorum requirements, majority rights available to certain shareholders at the board level or the shareholder level. Why is a Share Purchase Agreement Important?Share purchase agreements are important because it sets out all the terms of sale into writing which prevents misunderstandings. Benefits of entering into Share Purchase Agreement · Share purchase agreement provides specific information on the transfer of shares and rules governing the transfers. · Executing agreements allows businesses to raise revenue for the organization. · Share purchase agreement explains special tax treatments the shareholders may receive for the transfer. · Executing share purchase agreements allows the purchaser to claim dividends on their investment. · A dispute over various issues could be resolved between the purchaser and seller by executing share purchase agreement. Clause of agreement It is essential that some consideration be given in deciding the terms of agreement. Your share purchase agreement should contain at least some of the following provisions: 1.Information And Inspection Rights: The shareholders should be given the right to have access with the information related to company’s financials. In addition to the information and materials to be provided, shareholders should be provided with the right to visit the office for inspection at its own cost 2.Nomination of Directors The holders of certain percentage of shares should be given the right to nominate Director on the Board or any committees of Board 3.Management related matters: The holders of certain percentage of shares should be given the right to make the decisions with respect to control of the management like setting up the quorum for the board and shareholders meeting, passing of board and shareholders resolutions. 4.Representation & Warranties While executing the agreement the company should set out some of the representation- § like the agreement is legal, valid and binding; § the company will notify of any material changes made in the agreement or § approvals for the execution of share purchase agreement have been obtained from the Governmental Authorities 5.Right of first refusal Entering this clause in an agreement is useful in case where the existing shareholder in the Company decides to leave, other shareholders will have the option to purchase the shares before they're sold to the outsiders. 6.Buy-back Rights: These give the company the right to claim back the shares of a certain shareholder on withdrawal or death of the shareholder. 7.Liquidation preference The same clause used by venture capitalists in their term sheet, should also be a part of share purchase agreement where on the occurrence of an Exit Event of the company, the proceeds will be distributed first to the Investors before the other shareholders in order to recover their investment. 8.Exit Options The Company shall provide an exit option to the Investors in the agreement. 9.Confidentiality This is the most important clause of any agreement which clearly spells out that contents of the Transaction Documents shall not be disclosed to any outsider without their knowledge and consent. In case if disclosed under the requirement of law/regulation or any order of any court/ authority, it should be clearly specified in the agreement. It is to be mentioned that the above clause of share purchase agreement are not exhaustive and totally varies according to the industry. Source url - http://entersliceindia.blogspot.com/2018/06/share-purchase-agreement.html Introduction: If you are doing a business you require goods and services to run your own business on a daily basis. Any purchase is it from the e-commerce website, raw material for your product, buying the goods for supply, would be considered a vendor or service provider for your business.
Requirement of Vendor Agreement Defining the terms and conditions between your business and the vendor in respect of the goods/ services provided, there comes a need of a vendor agreement. Vendor Agreement is an agreement between the goods or service provider to company or individual. Vendor agreement is important when you tie up for selling the products because it brings all the terms of sale and purchase into writing. The basic purpose of entering into such agreement is to describe the rights and obligations of the both the parties and hence avoiding the risk of dispute in future between them. Benefits of entering into Vendor Agreement Execution of standard agreement is an important tool for managing a vendor business. Vendor agreements varies depending upon the type of business and type of service provided Written description of the services is always a welcome option to avoid the disputes Written agreement provides clarity between the parties because it states the stipulation of the work to be performed Executing agreement between the parties before entering into services sets the expectations and avoid the confusion of what type and quality of services to be provided or not to be provided What Does A Vendor Agreement Usually Cover? Vendor agreements can be drafted of different forms depending upon the type of business you are engaged in. However, there are certain general terms that should be incorporated into any vendor agreement to avoid the uncertainties in future. So below are some of the general clauses that should be specifically included: 1. Scope of the services or goods This is one of the important clauses that must be incorporated with clarity in any vendor agreement that defines the exact scope, quality and type of goods/ services provided and not provided for their business. The more detailed vendor contract is, the lesser wil be the chances of dispute in the future. 2. Terms of Payment: Next most important provision after the above clause is mentioning the payment provision in a vendor agreement. By defining that whether payment is to be in lump sum or made in installments, you are avoiding the situation which could lead to disputes in future 3. Representations & warranties: While executing the agreement the vendor should set out some of the representation that he has the necessary qualification to provide such service and he has not infrigined the intellectual property right of the other party 4. Dispute resolution or mediation The parties should always pay careful attention to insert a dispute resolution clause in your vendor agreement that requires both the parties to pursue mediation and dispute resolution mechanism in case of dispute before proceeding for legal action. 5. Liability Clause This clause must be stated as to what extend the vendor will be liable to the loss caused due to his carelessness and negligence. 6. Termination Clause A termination clause must be a part of the contract where either of the party has an option to terminate the contract in case of breach of confidentiality, or conduct of illegal activity by giving a notice period. 7. Indemnity clause The vendor agreement should also cover up the indemnity clause for making good the loss caused by the breach of terms of agreement or loss caused due to the negligence of vendor 8. Confidentiality This is the most important clause of any agreement which clearly spells out is that all information shall be kept confidential and cannot be shared without the knowledge and consent of company. Source url - http://entersliceindia.blogspot.com/2018/06/what-is-vendor-agreement.html Micro, Small and Medium Enterprises (MSME) has been a backbone of the economic growth over the last few decades. MSMEs play a crucial role in providing large employment opportunities on low investments thereby reducing the major employment problems and also help in industrialization of rural & backward areas.
ORGANIZATIONS CONSIDERED AS ‘MSME’ MSME are classified in two classes:
It proposes to define SSI Registration on the basis of annual sales turnover rather than on investment basis which results in no distinction between manufacturing and service unit. The proposed thresholds are:
Before proceeding with registration, one should have a clear roadmap of setting up of MSME ROADMAP FOR SETTING UP ‘MSME’
REGISTERATION REQUIREMENT UNDER MSME Though the MSME registration Process is not mandatory for the enterprises, it is always advisable to get registered as MSME under MSMED Act, 2006 because the government has provided numerous benefits to the MSME since it is contributing in the growth of economy in terms of output, exports and employment opportunities. Also, in recent years the MSME sector has been consistently grooming in comparison to the overall industrial sector and in order to promote it government regularly announces various schemes for its growth. Registration process for MSME is simplest by filling up only one page i.e., Udhyog aadhaar memorandum through online mode. The only information is required is Aadhaar number and name of owner. **Note:
TAX AUDIT is review of accounts of the business organization or an individual in respect of income and deductions. Section 44AB under Income tax contains the provision for conducting the TAX AUDIT which aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit is conducted by the chartered accountant and his observations are recorded in tax audit report.
Who are Entitled to Get Tax Audited AUDIT FOR BUSINESSES Any person carrying on a business whose total sales, turnover or gross receipts exceeds Rs.1 crore in previous year AUDIT FOR PROFESSION Any person carrying on whose gross receipts exceeds Rs. 50 lakhs in previous year Objectives of Tax Audit Tax audit is being conducted to achieve the following:
Tax on Presumptive Basis (w.e.f., a.y. 2017-18) To give relief to small taxpayers from this tedious work of maintenance of books of accounts and also from getting the accounts audited, the Income-tax Act has framed the ‘presumptive taxation scheme’ for person engaged in business or profession which we will discuss below. PRESUMPTIVE TAXATION SCHEME FOR BUSINESSES Eligible person whose turnover is upto 2 crores can opt for presumptive taxation scheme where income is computed on presumptive basis at the rate of 8% of the turnover of the eligible business for the year. However, in order to promote digital transactions, if turnover is received through digital payments income shall be computed at the rate of 6% instead of 8%w.e.f., the A.Y. 2017-18 Note: The presumptive taxation scheme can be adopted by following persons : 1) Resident Individual 2) Resident Hindu Undivided Family 3) Resident Partnership Firm (not Limited Liability Partnership Firm) Except the following
PRESUMPTIVE TAXATION SCHEME FOR PROFESSION Eligible person whose turnover is upto 50 lakhs crores can opt for presumptive taxation scheme where income is computed on presumptive basis at the rate of 50% of the turnover of the profession for the year. Note: A person resident in India who is engaged in following professions can opt for presumptive taxation scheme 1) Legal 2) Medical 3) Engineering or architectural 4) Accountancy 5) Technical consultancy 6) Interior decoration 7) Any other profession as notified by CBDT CONSEQUENCE OF VOILATING PRESUMPTIVE TAXATION SCHEME OF SECTION 44AD If a person opts for presumptive taxation scheme then he is also require to follow the same scheme for next 5 years. If he failed to do so, then he will not be eligible to claim benefit of presumptive taxation scheme for him for next 5 years. Further, he is required to keep and maintain books of account and he is also liable for tax audit if income exceeds the exemption limits as per section 44AB from the AY in which he violates th4e provison of presumptive taxation scheme Due Date for Getting Account Audited A person required to get audited should get its account audited on or before 30th September of relevant assessment year by submitting tax audit report to the Income-tax Department prepared by chartered accountant Penalty for Non-Compliance If any person who is required to comply with section 44AB, does not do so, as per the prescribed manner, a penalty may be imposed by the Assessing Officer which may be: (a) 0.5% of the total turnover, sales or gross receipts, in business, or of the gross receipts in profession of an individual, in such year or years as under scrutiny, OR (b) Rs. 1,50,000. Whichever is lower However, Income tax also contains the provision that if there is a reasonable and bonafide cause penalty may not be imposed. Source url - http://entersliceindia.blogspot.com/2018/06/detail-explanation-about-tax-audit.html Whenever you want to run any business there are various licenses issued by the Government depending on the sector it deals in. But today we are going to brief on one of the license required before setting up the premises is Trade License.
Shop and Establishment Act governs the issue of trade license. A license which is issued by the Local Government (Municipals) signifies the Identification proof of any business trade. As it has provided the legal sanctity and also confirm that the trade is within the permissible rules and regulations of specific state.However, trade license cannot be misunderstood as the ownership certificate on the premises where such business is carried on. Business categories for which trade license is required:
Procedure to apply for trade license: The process of obtaining trade license has been relaxed by the Government over the period of time and the same can be done through online portal of respective states since it’s a subject matter. But the general procedure to be followed
Amendment to Certificate If any kind of changes made in the certificate the owner will have to intimate about it within 15 days from date of change Some important notes on legal technicality of trade license:
If you taken a trade license make sure that it is not a one-time license. It needs to be renewed periodically. The trade license renewal period starts from 1st January to 31st March every year. In some states annual fees needs to be paid for the continuity of the license. The application for renewal shall be made atleast 30 days before the commencement of the year for which application is sought for. Consequence in Delay of License Renewal If you have made any delay in trade license renewal process fine of 50% of the license fees is levied. Documents Submitted At Time of Renewal
Franchising a business allows an opportunity to individual/ corporates to start a business by legally using another individual/ corporates business under the same name, trademark and goodwill.
Franchises extends to no. of industries including automotive, medical, coffee stores, supermarkets, hotels, etc Some of the successful franchises around the world which has largely expanded its business are
What is a Franchise Agreement? Franchise Agreement is an agreement between a franchisor and franchisee whereby the franchisor allows the franchisee to use the premises for the purpose of carrying business in return of remuneration. Basic features of entering into Franchise Agreement 1. The agreement between franchisor and franchisee offers the right to franchisee for operating the business under the same trademark, goodwill and benefits 2. The license to operate is in the hands of franchisor though right to use is transferred 3. Investment for expansion of business and outlets after the execution of agreement is done by franchisee 4. Franchising helps in expanding the business operations in wide areas 5. Franchise is the independent business. It operates on its own. Clauses of Franchise Agreement Some of the basic provisions covered under Franchise Agreement. Though the terms of this agreement varies from industry to industry.
i. Upfront lumpsum fee: Initial payment made by franchisee for starting the franchise. This fee includes the cost of setting up the outlet, legal costs, training of franchisee costs ii. Ongoing fee: This payment is regular which is paid either monthly, quarterly or annually depending on the turnover of the business iii. Fixed payment for promotion: Fixed percentage of turnover is regularly made for the advertisement and promotion purpose of franchise
Two of the most common questions that startups and small business founders before investment are boggled by:
What is Term Sheet? A term sheet is a document which sets out the broad parameters of an investment made by an angel investor or venture capital investor to the startups The term sheet compiles up the discussions and defines the terms on which the startup owner and investors have agreed to informally. Nothing in the term sheet is legally binding on the parties except for the covenant of ‘Confidentiality’ The terms and conditions included in a Term Sheet is confidential information and cannot be disclosed by the parties to any third party without investor's prior approval. What does term sheet contain? Term Sheet reflects the following:
ii. Post-money valuation: the expected value of the company after investment of the proposed funds. iii. Capitalization table: indicates the ownership of both founder and investor, equity dilution and equity value in each round of financing. iv. Price per share: the per share value of the company stock. 2. Amount of the investment 3. Ownership claims the investor receives in exchange for the investment- The investors prefer to have the claims in return of the investment for their security which is why they invest in convertible preferred stock. It gives them a preference over other shareholders in terms of dividends and profit sharing at time of liquidation of Company. 4. Rights and responsibilities of each partyBelow are the List of the Key Terms of A Term Sheet 1. Consideration for the money invested: The investors often prefer to invest in convertible preferred stock. It gives them a preference over common shareholders in respect of dividends and upon a sale of the company gives them the option of converting into common stock if the company is successful. 2. Type of stock given: The stock allotted to the investor must be defined clearly in the term sheet. The investors are more preferable to invest in preferred shares which entitles them to vote and will receive preference in the payment for their stock in the event of the company’s liquidation. 3. Non-solicitation: Most of the venture capital investors insist on inserting a lock-up period clause where the company would be prohibited from accepting an investment or acquisition proposal from any other party during the preparation process of term sheet. 4. Involvement of Board of Directors: The investors insist on the right to appoint at least one member to the company’s board who are responsible for setting company policies, approving financing etc, in return for its capital investment. So, it is necessary to include the details of involvement of investors in board of the company. 5. Prevention of Equity Dilution: The venture capital firms will require an anti-dilution clause insertion to the term sheet to protect them from future sales of shares at a lower value. 6. Tranches: In cases where the investors’ invest in tranches to the startup then the period of tranches must be specified in the term sheet as it reduces both the founders and investor's risk. 7. Right to buy shares back: Venture capital investors always want to protect their financial interests in a company. Therefore Venture capital investors normally insist to include right of first refusal (ROFR) clauses in their term sheets. This clause allows existing owners to reclaim shares that are about to be sold to a new investor and prevent ownership division in company. In business world, we enter into so many transactions and relationship on a daily basis that requires disclosure of the confidential information between the parties. The option to maintain its secrecy is only by entering into a Non-disclosure agreement or the confidentiality agreement between the parties exchanging the confidential information. This articles explains benefits and some points to remember for entering into such kind of agreement.
What is Non-Disclosure Agreement A Non-disclosure agreement is a legal agreement between two parties where one party gives access to certain restricted information to the other party which shall not be disclosed to the outsider. Cases Where Execution of NDA are Necessary
Mutual Vs Non Mutual NDA There are 2 types of NDA: § Mutual non-disclosure agreement: Agreement where each party shares the information. This type of agreement is executed between businesses engaged in joint venture that involves sharing proprietary information § Non mutual or unilateral agreement: Agreement where only one side party will be sharing confidential information with the other side party. Importance of Entering Into NDA 1. Sometimes a non-disclosure agreement is entered into for the purpose of conducting due diligence or to protect confidential information. In such case in the absence of a non-disclosure agreement, due diligence may not take place. For example, a merger/takeover or the sale of a business. 2. Maintains the business relationship 3. It also defines the consequences for breaching of the terms of agreement Key Elements of Non-Disclosure Agreements A well-drafted non disclosure agreement specifies what information you don’t want the other party to disclose and what will be the consequences for breaching the agreement.
Source url- http://entersliceindia.webstarts.com/blog/post/introduction-of-non-disclosure-agreement First of all it will be defined as an agreement amongst the founders of the company which governs the nature and functioning of their business and also highlight the key issues that co founders might face in future in running a business. It’s just like an insurance which guard the founders in future uncertainties. Therefore, it is advisable to execute it at an early stage of incorporation of Company.
A Founders’ Agreement is an official contract that is signed between all the co-founders of a firm. This document states all the responsibilities, ownership, and initial investments made by each of the founders of the company. BENEFITS FOR ENTERING INTO FOUNDERS AGREEMENT
Some of the key points that the well-structured founders’ agreement must set out clearly:
Vesting means founders earn their equity ownership by contributing to the company with their valuable work and efforts for the company
The purpose of the formation of business can never be fulfilled if the founders are not aware of their roles and work responsibilities therefore, founder’s agreement must clearly define the roles of each co-founder to avoid any hassle.
Source url - https://enterslice1.wordpress.com/2018/06/01/what-is-founders-agreement/ Consulting Agreements is an engagement between a consultant and a client for availing certain specified services for a specified period of time. It sets out the services and obligations that exist between the company and the consultant.
This agreement will set out clearly that the consultant is not an employee of the company. The Consultant will provide only specific service to the business for the specified term. Once the contract term has expired the relationship will end. Benefits of entering into Consulting Agreement Execution of standard agreement is an important tool for managing a consulting business. Consulting agreements varies across different services and sectors. Written description of the services is always a welcome option to avoid the disputes Written agreement provides clarity between the parties in respect of the job and work assigned Executing agreement before performing prevents disappointment or confusion between the parties of what kind of work is to be don or not done Executing agreement helps in building relationship because Consulting Agreement clearly spells out that the consultant is an independent consultant and not an employee. Signing of Consulting Agreement Consulting Agreements are signed by the prospective consultant and an authorized representative of the company. What Does A Consultancy Agreement Usually Cover? Before entering into any kind of Agreement, parties needs to be cautious in order to avoid the uncertainties in future. So, following are the terms that should be incorporated into any consulting agreement at the initial level only. 1. Scope of the services This is one of the important clause that must be incorporated in a Consulting agreement which defines what services will be provided and not provided by the consultant for their business. It needs to specific. The more detailed consulting contract is, the lesser wil be the chances of dispute in the future. 2. Terms of Payment Everyone wants to be paid for their services. By clearly defining that whether payment is to be in lump sum or made in installments, you are avoiding the situation which could lead to disputes in future 3. Reimbursement of Expenses While executing an agreement ensure for incorporating a clause for reimbursement of all the expenses reasonably incurred in the performance of the services provided by the consultant. 4. Duration and it renewal The time from which the consultant will start providing the services should be clearly defined. It should also provide that the same may be renewed on mutually acceptable terms. 5. Dispute resolution or mediation The parties should always pay careful attention to insert a dispute resolution clause in your consulting agreement that requires both the parties to pursue mediation and dispute resolution mechanism in case of dispute before proceeding for legal action. 6. Liability Clause This clause must be stated in detail that to what extend the consultant will be liable to the misconduct due to his carelessness or negligence. 7. Termination Clause In case of breach of confidentiality, or conduct of illegal activity, the company/ client has a right to terminate the services of consultant by giving a notice period. By inserting this clause the parties shall be relieved from future performance of their rights and obligations under this agreement . 8. Confidentiality This is the most important clause of any agreement which clearly spells out on the part of consultant that all confidential information related to financial status, projections etc of the client shall be kept confidential without their knowledge and consent. In case if disclosed under the requirement of law/regulation or any order of any court/ authority it should be clearly specified in the agreement. 9. Governing Law Agreement must provide that the agreement shall be governed by and interpreted in accordance with the laws prevailing and subsisting in India Source url - http://entersliceindia.webstarts.com/blog/post/what-is-a-consulting-agreement A joint venture is generally understood as technical and financial collaboration for the purpose of some projects fulfillment with existing companies. Companies lacking in some aspects such as technology, knowledge, assets or reach to the market are generally involved in joint ventures with other company because they are not able to achieve its goal on its own. Collaboration allows the first party to have an access to the resources of the other party without any expenditure for obtaining it.
Indian joint ventures are usually formed by two or more individuals/companies, one of whom may be non-resident, who collaborate to form an Indian private/public limited company with mutual contribution in the share capital Joint ventures exist in the form of companies, partnerships or joint working agreements. Whether Approval is required from RBI for Investment in India? FDI up to 100% or certain percentage is allowed under automatic route in those sectors which are not defined in the FDI policy of Indian Government There are also some other sectors in which approval from the concerned Industry Ministry is required for investment. Before 24th May, 2017 all the approvals were handled by the Foreign Investment Promotion Board (FIPB). What is a Joint venture Agreement? A Joint Venture Agreement is a legal document where two or more entities combine to do business or undertake an economic activity together. The parties either agree to form an agreement without incorporation of new entity but with the common intention of running a business or create a new entity by contributing equity and share the revenues, expenses and control of the enterprise in the proportion of their capital contribution. Basic features of entering into Joint venture Agreement § Contribution by partners of money, property, effort, knowledge, skill or other assets to the common undertaking. § Right of mutual control or management of the property in enterprise. § Right to share in the profit and loss of the property Key questions that parties entering into Joint Venture Agreement should ask § What business will the new company / LLP Firm be engaged in? § How will the Board of Directors be constituted? § How will the Board of Directors decide matters – by majority vote / by consensus? § Who will be the Chairman, MD of the company and what will be there powers? § Finance decisions will be taken by? § What will be the Exit Route for one or both of the promoters / partners? § What happens after the promoters / partners fall out? § How to decide the price of equity shares / value of enterprise at the time of separation? Clauses of Joint Venture Agreement There is no legally prescribed format for a Joint Venture Agreement in India. However, it is advisable for a joint venture agreement to have the following clauses: · Object and scope of the Joint Venture · Equity participation clause of both the parties if joint venture is equity based · by local and foreign investors and agreement to a future issue of capital · Financial arrangements between both the parties · The composition of the board and management agreements · Specific obligations · Provisions for distribution of profits · Transferability of shares in certain circumstances · Termination of the agreement by exit of the parties · Restrictive covenants on the company and the participants · Appointment of CEO/MD · Anti-compete clause · Confidentiality · Indemnity Clause where both parties may indemnify each other against negligence, and violation of the JV agreement · Duration of the Agreement · Dispute Resolution · Applicable law · Force Majeure etc. The above list is not exhaustive. Company may vary the agreement. Source url - http://entersliceindia.webstarts.com/blog/post/what-is-joint-venture-agreement As the name suggests, these entities work towards the wellbeing of the society and bridges the gaps at places where Government can’t reach effectively due to many factors. Such organizations are known as non - profit organizations or non- government organizations (NGO).
NGO is non- profit organization of community, citizens, person for social service. NGO are registered under Government authorities but are managed and operated by its members on the policies governed by Government. REQUIREMENTS OF NGO REGISTRATION
NGO registration depends on the kind of NGO registration because it has 3 legal forms in India:
Below are the requirements for registration of Trusts:
2. SOCIETIES Trust registration in the form of Society is governed under Societies Registration Act, 1860 having a separate legal entity. It takes around 1-2 months to form a Society. Below are the requirements for registration of Society:
Procedure for incorporation is same as in case of a private or public company. The only difference is that a license is to be obtained from the office of Regional Director to form a company under section 8 of the companies Act 2013 Below are the requirements for registration of Section 8 Company:
Stuck with the compliances, permissions, license from the government?
There are various compliances for doing the same under different laws but herein this article we will discuss on import and export code registration i.e., obtaining IE Code What is import export code? It is a 10-digitunique code required to be obtained from Directorate General of Foreign Trade (DGFT) under Ministry of Commerce and Industry, Government of India with a permanent validity for taking your business at a global level. WHO IS REQUIRED TO APPLY FOR IE CODE REGSITRATION? In case of import:
Persons / Organizations dealing in Import & Export would require to apply for Import Export Code (IEC) registration. But there are some categories defined by DGFT, which are exempted from taking this code.
WHO IS REQUIRED IE CODE?
With the Implementation of GST, Government of India through DGFT, in its effort for ease of doing business in India and keeping the identity of person uniform, vide its notification dated 12th June 2017, notified that any person having GSTIN can import or export, into or from India,by declaring the GSTIN at the time of import or export. Additionally, for the entities who are not registered under GST because of its threshold limit, may use their PAN as their IECfor which application should be made to DGFT for authorizing PAN of Applicant as IEC. Further, for the existing IEC holders, necessary changes in the system are being carried out by DGFT so that their PAN becomes their IEC. So, IEC holders are supposed to quote their PAN for all the documentation done w.e.f,12th June 2017. Source url - http://enterslice.over-blog.com/2018/05/expanding-your-business-globally-by-importing-and-exporting-goods-and-services.html The residential rental agreement is usually defined as a written document that exists between the owner of a property and a renter who desires to own temporary possession of the property of the landlord.
It sets out the foundations between landlords and tenants who conform to follow in their rental relationship. It's a legal contract that is choked with crucial business details, like how long the tenant will reside within the property and also the amount of rent due every month. Types of Rental Agreement The agreement entered between landlord and tenant is of 2 types depending on the laws to abide by: 1.11 months Rental agreement One of the foremost common options which deal with getting into a property rental deal is that the prevalence of the eleven-month rental agreements. This kind of agreement is most preferable by landlord because of the laws which more in his favour. It is a comprehensive agreement, protecting the rights of each landlord. 11 months agreement is just like a license for the tenant to occupy the premises for a short duration. It provides the flexibility to landlord to take more measures to take in case of eviction of tenant from the property 2.Over 11 months Rental Agreement Rental Agreement that is over twelve months has to be compelled to abide by strict rent management laws that are largely favorable to the tenants, which is the reason due to which this type of agreement is not much preferable by landlord. Also, the right to ownership of the property gets transferred from the landlords to the tenants for an indefinite period which is why most of the tenants refuses to vacate and it becomes difficult for landlord to evict the tenant. However, at the expiration of the above agreement there is an option for both landlord and tenant to renew the agreement. What are the documents required for Residential Rental Agreement? Mainly Aadhar card and PAN card being valid proof shall be required of all parties (Landlord, Tenant and a pair of witnesses) for cross verification. What should a Rental Agreement contain? A rental agreement shall include the terms and conditions on which the property is rented. 1. TENURE OF PROPERTY: The tenure of the property for which it is made between landlord and tenant should be clearly specified 2. RENT VALUE AND DATE OF DEPOSIT: The amount which a tenant has agreed to pay to landlord every month should be clearly specified. Also the date upto which rent value should be deposited should be mentioned along with the penal charges, if not paid within term defined 3. SECURITY AMOUNT: Upon execution of the agreement, Tenant deposits with Landlord a security deposit which is refundable at the expiration of term. 4. REFRESHMENTS: The rent agreement could also mention the facilities, such as parking space or the usage of society’s gym, or other refreshments included in the rent. 5. MAINTENANCE CHARGE: There are additional monthly charges paid for the maintenance. A tenant should be well aware of the same. 6. NOTICE PERIOD: The agreement should also specify the notice period and penalty for cancelling the agreement without completing the specified period. 7. RENT ESCLATION CLAUSE: This clause should be checked by the tenant that landlord might increase the rent because of the increase in the rentals and at what certain percentage it would be increased. 8. SALE OF HOUSE: The agreement should also specify the clause for sale If the owner decides to sell the house during the term of the rent agreement. 9. ACCESS TO PROPERTY TAX: Tenant has a right to access the documents which state the property tax has been paid by the landlord. 10. NUMBER OF OCCUPANTS: This clause should specify in order to avoid the Tenant agrees that the House shall be occupied by no more than 11. UTILITIES: Tenant shall be responsible for paying for all minor repair work for installed electrical appliances required on the premises. 12. GOVERNING LAW: It is to be agreed by both the party that this agreement shall be governed by, construed, and enforced in accordance with the laws of the [State of Governing Law].The above list is not exhaustive. The terms of Rental Agreement varies. Source url - http://enterslice.blogrip.com/2018/05/29/what-is-a-residential-rental-agreement Micro, Small & Medium Enterprises Development (MSMED) Act, 2006, was introduced to encourage Micro, Small and Medium enterprises and facilitate their development in the competitive markets. The government through various schemes, subsidies and incentives tries to promote such enterprises. Through MSME registration is not mandatory but to avail those benefits MSME Registration is preferred.
What are the criteria for Micro, Small and Medium enterprises? As per the official notification in February 2018, the classification of the enterprises is now made through‘annual turnover’, unlike earlier which was according to the ‘investment in plant and machinery/ equipments’.
What are the benefits of MSME registration? 1) Collateral free loans up to a limit of 50 lakh. 2) Various government ministries hold development programs at utmost stage increasing the overall productivity of MSMEs. 3) Support is provided to new micro and small enterprises. Guidelines on how to start a business assessing loans from banks are also provided. 4) Government also provides financial assistance for reimbursement of part of one-time registration fee and annual recurring fee for first three years for using bar coding. 5) The rates of interest on loan offered to MSMEs are comparatively lower. 6) Businesses registered under MSME are able to obtain government license and certification quicker than the regular process. 7) MSME registered businesses enjoymultiple income taxes and capital gains tax subsidies from the government. 8) Enterprises that have MSME Registration Certificate are also eligible to claim for reimbursements of ISO Certification expenses. These are few benefits and there are plenty more available to MSME registered enterprises which makes the registration desirable for the eligible. Who is eligible to apply for MSME Registration? Following can apply for MSME registration:
The entity making the application for MSME/SSI registration has to submit following documents: 1) Proof of registered address a) Allotment letter, possession letter, lease deed or property tax receipt,or a municipal license in the business name or in the name of the proprietor, partner or director of the business, If the premise is self-owned. b) Rent receipts or utility bills and a no objection certificate from the landlord is required, If the premise is rented. 2) Copies of Sale Bill and Purchase Bill: a) Entity is required to submit copy of sale bill related to each end product that it will supply. b) For each raw material that it will purchase, a purchase bill has to be submitted. 3) Partnership Deed and Registration Certificate for a partnership firm 4) Incorporation Certificate, Copy of MoA and AoA, in case of Private Limited Company along with Board’s Resolution authorizing the director to sign the application 5) Copy of Licenses 6) Purchase bill of machinery installed 7) Bank Account Statement 8) An affidavit of Rs. 10/-non judicial stamp paper duly attested by Notary Public affixed providing the status of machinery installed, power requirement etc. Source url http://entersliceindia.blogspot.in/2018/05/what-is-msme-registration.html If you want to apply for GST but not aware about the concept of GST in India then let’s have a look as before applying for GST registration, one should clearly understand the new tax regime.
GST was implementing on 1St July 2017 in India. GST is a multi-stage and destination based tax in India on the consumption of goods and services. It has subsumed previous tax structure. It has been done for free flow of tax credit on inter/intra state levels. GST is levied on all stages from manufacturing level to the consumption level. Under this, credit of taxes is available as set off which have been paid at previous stages. We can say that tax will be charged on only value addition and final consumer will borne the tax burden. GST will be accrued to that authority which has jurisdiction over the place of supply. Every business which falls under the eligibility criteria has to apply for GST registration otherwise they would have to pay heavy penalties. *Note: Place of supply is the place of consumption GST subsumed previous tax structure: GST has subsumed center taxes such as
Commodities not under the purview of GST Alcoholic liquor for human consumption is outside the purview of GST as per Article 366(12A)of the Constitution of India whereas tobacco products will be subject to Central excise and GST. Tax on electricity consumption and sale fall under the purview of state and not under the GST according to entry 53 in list II of seventh schedule of constitution of India. Below mentioned petroleum products are temporarily out of the purview of GST:
GST Model in India GST act consist following:
CGST- Payable to Central Government. SGST- Payable to State Government. UTGST- Payable to administrator of Union Territory. *Note: CGST and SGST also applicable in union territories such as Delhi & Puducherry. SGST or UTGST also applicable on 12 nautical miles inside sea as it is a part of state or union territory. IGST is payable in case supply is in between 12 nautical miles and 200 nautical miles. IGST is applicable in case of inter-state supply of goods or services. IGST rates are equivalent to addition of CGST and SGST. It is levied by the central government and revenue generated from IGST is distributed among union and state. Source url - http://entersliceindia.blogspot.in/2018/05/concept-of-goods-service-tax-in-india.html Know more about our other services... TDS Return filing , Tax audit , iec Registration , rera registration , trade license , Drug License , msme registration , ngo registration , business plan , Investor pitch deck , shareholders agreement , service level agreement , share purchase agreement , master service agreement , rental agreement , memorandum of understanding , Franchise Agreement , Joint Venture Agreement , founders agreement , investment term sheet , vendor agreement , consulting agreement , legal notice , gift deed , sale deed , non disclosure agreement , will TAX AUDIT is review of accounts of the business organization or an individual in respect of income and deductions. Section 44AB under Income tax contains the provision for conducting the TAX AUDIT which aims to ascertain the compliance of various provisions of the Income-tax Law and the fulfillment of other requirements of the Income-tax Law. The audit is conducted by the chartered accountant and his observations are recorded in tax audit report.
Who are entitled to get tax audited? AUDIT FOR BUSINESSES Any person carrying on a business whose total sales, turnover or gross receipts exceeds Rs.1 crorein previous year AUDIT FOR PROFESSION Any person carrying on whose gross receipts exceeds Rs. 50 lakhs in previous year Turnover Limit for Audit (With effect from the finance act 2017) S.No Business Profession opting Presumptive opting Presumptive Income Scheme Income Scheme 50 lakhs 2 crores Not opting Presumptive Not opting Presumptive Income Scheme Income Scheme 50 lakhs 1 crores Objectives of Tax Audit Tax audit is being conducted to achieve the following:
A person required to get audited should get its account audited on or before 30th September of relevant assessment year. PENALTY FOR NON-COMPLIANCE If any person who is required to comply with section 44AB, does not do so, as per the prescribed manner, a penalty may be imposed by the Assessing Officer which may be: (a) 0.5% of the total turnover, sales or gross receipts, in business, or of the gross receipts in profession of an individual, in such year or years as under scrutiny, OR (b) Rs. 1,50,000. Whichever is lower However, Income tax also contain the provision that if there is a reasonable and bonafide cause penalty may not be imposed. Source url - http://entersliceindia.blogspot.in/2018/05/tax-audit-process.html |