Incorporation of a Company

Steps to be taken to get a new company incorporated:

• Select, in order of preference, at least one suitable name upto a maximum of six names, indicative of the main objects of the company.
• Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal.
• Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has apply for a fresh name on the same application. (HENCE, ONE NEEDS TO GET DIGITAL SIGNATURE BEFORE GETTING THE COMPANY INCORPORATED).
• After the name approval the applicant can apply for registration of the new company by filing the required forms (that is Form 1, 18 and 32) within 60 days of name approval
• Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.
• Arrange for stamping of the memorandum and aticles with the appropriate stamp duty. (STAMP DUTY WILL BE APPLICABLE AS PER THE STATE LAWS WHERE THE COMPANY IS GOING TO BE INCORPORATED.)
• Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father's name, occupation, address and the number of shares subscribed for and witnessed by at least one person.
• Ensure that the Memorandum and Article is dated on a date after the date of stamping.
• Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm
  
  Declaration of compliance - Form-1
  Notice of situation of registered office of the company - Form-18.
  Particulars of the Director's, Manager or Secretary - Form-32.

Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees and send the physical copy of Memorandum and Article of Association to the RoC

• After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC.

Additional steps to be taken for formation of a Public Limited Company:
To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance

• File a declaration in eForm 20 and attach the statement in lieu of the prospectus(schedule III) OR
• File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
• Obtain the Certificate of Commencement of Business.

Additional steps to be taken for registration of a Part IX Company:
The Part IX Company is required to file eForm 37 and eForm 39 apart from filing eForm 1, 18 and 32.

The company is required to file eForm 1 first and then the company can file all the other eForms (18, 32, 37 and 39) simultaneously or separately

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VAT

VAT- Value Added Tax

Persons liable to pay tax under the VAT Acts of their respective States are required to register under the Act. On registration, a VAT number, known as VRN (VAT Registration Number) in common parlance is allotted to the applicant.

The following provisions are with reference to Punjab VAT Act, 2005:-

In addition to the regular registration, the Act allows a person to take voluntary registration for VAT, provided his turnover is above the specified threshold. However, Casual traders and persons dealing exclusively in tax-free goods are exempted from registration.

TOT: TURNOVER TAX

There is a composition scheme for small traders if they are doing business within the state only and are not registered under the Central Sales Tax Act. They can get registered for TOT (Turnover Tax).

A person registered under VAT is referred to as “Taxable Person” and a person registered under TOT is referred to as “Registered Person”. The registration number granted to person registered for VAT is referred to as “VRN/TIN ” and registration number granted to person registered for TOT is referred to as “TRN”.

LIABILITY TO VAT

Liability to VAT arises when gross turnover exceeds following:

1. Imports taxable goods for sale or use in manufacture or processing any goods in the State- Rs. 1

2. Receives goods on consignment/branch transfer from within or outside the State on which no tax is paid under the Act.-Rs. 1.

3. Is liable to pay purchase tax - Rs. 1

4. Is a manufacturer -Rs. 1,00,000
5. Is a person running a hotel / restaurant - Rs. 5,00,000
6. Is person running a bakery -Rs. 10,00,000
7. Desires voluntary registration -Rs. 5,00,000
8. Is not covered above -Rs. 50,00,000
9. Is registered under the Central Sales Tax Act -Zero

Note: A person is required to get himself registered within 30 days from the date he becomes liable to VAT under the Act.

TAXABLE QUANTUM TO TOT LIABLITY

Liability to TOT arises when gross turnover of a person in the preceding year is more than Rs. 5,00,000 but less than Rs. 50,00,000.

PROCEDURE FOR REGISTRATION

The procedure for registration is as follows:

An application for registration in Form VAT-1 is required to be filed with the designated officer in charge of the area, where business of the person seeking to obtain registration is located. The said application is to be filed within 30 days from the date when such person becomes liable to pay tax. Detailed instructions for filling up the form are contained in the form itself.

The application for registration is to be accompanied by the following:

1. Deposit receipt of Rs. 500/- towards fees for registration. Such deposit receipt (in Form VAT-2) is to be obtained from the appropriate treasury after payment of the fee amount

2. Security in the form of:

- Bank guarantee from a local scheduled commercial bank for the amount of security

                                                         Or

- Personal Bond with two solvent sureties to the satisfaction of the designated officer for the amount of security/additional security in Form VAT-3.

Note: Rs. 100000 (50000 for tax under PVAT Act and Rs 50000 for tax under  CST Act)). The security furnished by a person can be enhanced enhanced by the designated officer for proper realization of tax while the certificate is in force. Such additional security can be demanded upto a sum of Rs. 2 lacs.

3. Copy of the constitution document e.g. partnership deed for a partnership firm, Memorandum and Articles of Association for a company.

4. Board Resolution authorizing the signatory to sign the application in case of company.

5. Proof of identification of the authorized signatory e.g. voter identity card, passport, driving license.

6. Proof of principal place of business e.g. rent receipt, lease agreement, electricity bill.

7. Two photographs for VAT and Centre —

In case of proprietorship Concern – Two Photo of Proprietor.

In case of Partnership firm :-Two Photo of all the partners,

In case of Company – Two Photo of managing director.

8. List of following categories of goods:-

-Goods to be traded.

-Goods to be manufactured.

-Goods to be purchased for use in manufacture.

Note: Every Photostat copy should be attested to be a true copy by the proprietor./partner/director as the case may be.

On satisfaction about the accuracy and completion of the application for registration, the designated officer will issue a registration certificate in Form VAT- 4 within 30 days of the date of receipt of completed application. The registration certificate will be issued for the principal place of business and a copy each for additional place/s of business

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TAN- TAX DEDUCTION ACCOUNT NUMBER

Tax Deduction Account Number is an alphanumeric number issued to individuals who are required to deduct tax on payments made by them under the Indian Income Tax Act, 1961.

The Tax deducted at Source on payments made by assessees has to be deposited with Central Government under the following number.

Application for TAN

An application for allotment of TAN is to be filed in Form 49B and submitted to any TIN-FC. Addresses of TIN-FCs are available at www.tin-nsdl.com. Alternatively, you can apply for TAN online at the NSDL-TIN website.

No documents are required to be submitted along with the application for allotment of TAN. However, where the application is being made online, the signed acknowledgment which is generated after filling up the form should be forwarded to NSDL. Detailed guidelines for submission of application are available on NSDL-TIN website.

** TAN can be applied only if the assessee is holding a PAN, so before applying for TAN, PAN is required to be obtained from the Income Tax Department.

** TAN is also used for Tax collected at source purposes, so in case of TCS also one has to apply for TAN.

Structure and validation of TAN

•TAN structure is, e.g.: AAAA99999A: First four characters are letters, next 5 numerals, last character letter.

•Each tax deductor is uniquely identified by his TAN.

•If the TAN does not follow the above structure, then the TAN will be shown invalid.

•The first three characters represent the city or state where the TAN was issued.

•The fourth character of the TAN is the initial letter of the tax deductor:

Tracking TAN

TAN of an entity can be easily tracked by visiting the following link:

https://incometaxindiaefiling.gov.in/knowtan/knowtan.jsp

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All About PAN

PAN - PERMANENT ACCOUNT NUMBER

As per the common perception PAN is only a pre-requisite to file Income Tax Return. However, now a days, as per the guidelines of Reserve Bank of India and Income Tax Department, a number of financial transactions requires one to quote PAN.

Application for PAN

PAN can be applied at any of the authorised centers of UTITSL and NSDL, by filling up Form 49A. The form is available at all the centers of UTITSL and NSDL or can be downloaded from www.incometaxindia.gov.in.

Alternatively, PAN can be applied by filling up an online form by visiting the website of UTITSL (www.utitsl.co.in).

An identity proof and address proof of the applicant is also required to be submitted along with the duly signed form.

Know your PAN

PAN is generally a 10 digit alphanumeric number.

For example;

ABSPC1234X

where, first five digits are alphabets, next four are numeric digits and the last one is also an alphabet.

The fourth alphabet shows the Status of the assessees i.e.

P-Individual

F-Firm

C-Company

H-HUF

T-Trust

The fifth digit shows the First alphabet of Surname in case of an individual and of Name in case of other assessees.

For ex:

ABCPA1234X

An individual Sh. Raman Aggarwal

ABCFC1234A

A firm M/s Creative Ideas.

For more info, visit www.incometaxindia.gov.in.

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