A559082153_22652_28_2019_lecture-4 company formation.ppt
- 1. Company Formation India/ How a factory can be established
- 2. Requirement for a private Limited Company The basic Requirement for a private Limited Company in India is as follows:- Minimum Two Directors of The company Minimum Two Shareholders of the Company Minimum Capital of the Company should be INR 100000/-
- 3. How long does the appropriate registration of the previous suggested legal entity take? Activity Days Taking Directors Identification Number (DIN) 1 Day Taking Digital Signature of Directors 1 Day Reservation of the name of the Company 5 Days Preparation of other Document such as Memorandum of Association ( MOA), Articles of Association(AOA), Forms etc 2 Days Filling of Documents with Authorities 1 Days Liaison with the authorities and Correction 3 Days Getting Final Certificate of Incorporation 2 Days Total Number of Days 15 Days
- 4. Formation Cost involved in the formation of the Above Company (For capital of INR 1 Lakh)? Activity Days Taking Directors Identification Number (DIN) INR 1500/- Each Director *2 Taking Digital Signature of Directors INR 5000/- Each Director*2 Reservation of the name of the Company INR 1000/- Filling fees of government for final documents* INR 6200/- Other Government Expenses INR 3000/- Total Cost INR 23200/- * Fees Changes with the amount of Capital of Company
- 5. Operating principles/ Legal requirements/ Accounting requirements of a foreign company operating in India Subsidiary of Foreign Company need to take RBI Approval for investment made in India. Company need to Maintain its books of Accounts. Company need to get its accounts audited every year. Company need to file its tax return annually. Company need to file annual account with authorities annually. Income tax rates applicable to Companies @30%. Company need to have various Business registration with authorities like PAN, TAN, VAT, CST, Services Tax, Profession Tax, Central Excise, Import Export Code, Shop Act etc depending on the applicability. Regular Monthly/Quarterly/Six Monthly Return shall be filled for above registration as per applicability.
- 6. Process on getting investment capital into the country… What are the pitfalls of this? Investment in India is governed by the Foreign Direct Investment Guidelines, Mainly the investment in India is allowed under two Method : Investment through Prior Approval : In certain nature of business the prior approval is required from the government of India and once the approval is received than the investment can be made in the Indian Company. Investment under Automatic Route : Most of the Business are allowed to invest under automatic route, Under automatic route the company can invest in Indian Company without prior approval. Once the capital is remitted in the Indian Company within 180 of the introduction of capital the company has to carry out all the necessary document filling with the RBI. Following are the documents. Filling intimation of receipt of Share Capital (within 30 Days) Filling FCGPR form (RBI related) with share allotment details and other information
- 7. Can another company be sole share holder & director of a Private Limited Company? As per the Basic requirement for the Company formation we need minimum 2 Shareholders and 2 Directors. Hence we need minimum two shareholders and directors. In order to fulfill your requirement we can form Company by giving just one share to the second shareholders. The second shareholder will hold the shares on behalf of the Company itself hence the ownership will be 100% with the Company. In respect of the directorship we need minimum two individual name to be acting as directors of the Company.
- 8. Do the directors need to be present in person in India to perform the formation? No, the directors need not be present to perform the formation of the Company, They can provide the documents through the courier to the office. Following are the documents which needs certification. Passport of the directors – Duly Notarised Proof of the Residential address of Directors – Duly Notarised Documents mentioning the father’s name of the directors. (Birth Certificate) Declaration of subscription of shares in the own handwriting of the shareholders or person authorised by Company. – Certified by Indian Consulate Resolution by the investor Company mentioning about investment in India and authorising any person to sign all documents on the investors behalf.
- 9. License For Factory Setup In India/ related laws, required licenses, steps involved in acquiring the license SSI (Small Scale Industry)/ MSME(Micro Small Medium Enterprise)/ DIC(District Industry Centre) Registration Every business registered in India is provided certain benefits by the government of India based on its classification in the type of entity it is i.e Small, Medium or Micro. When you register a Micro, Small and Medium Enterprise, you will get an MSME certificate (provisional or permanent). This MSME certificate helps you enjoy various benefits like priority sector lending (you get loans easily), differential rates of interest (you pay lesser interest on loans), various exemption under tax laws, get environmental clearances, etc When you are about to start your Micro, Small and Medium Enterprise, you should apply for a Provisional Registration. Once you are given the Provisional MSME Certificate and you start production you can apply for a Permanent Certificate, which opens up more benefits for you.
- 10. Provisional Registration Provisional registration is granted to a unit at its pre- investment period to enable it to take necessary steps to apply for financial credit, land or an industrial set, water, power or telephone connections, etc. Permanent / Final Registration A provisionally registered industrial unit when it is about to go into production is to apply for grant of Permanent / Final Registration. An existing and functioning industrial unit is eligible to apply for Permanent / Final Registration without going into provisional registration processes.
- 11. Permanent / Final Registration No. Type of Enterprise Manufacturing Industry (Investment in Plant and Machinery) Service Industry (Investment in Equipments) 1 Micro Does not exceed Rs. 25 Lakh Does not exceed Rs. 10 Lakh 2 Small Exceeds Rs. 25 Lakh but does not exceed Rs. 5 Crore Exceeds Rs. 10 Lakh but does not exceed Rs. 2 Crore 3 Medium Exceeds Rs. 5 Crore but does not exceed Rs. 10 Crore Exceeds Rs. 2 Crore but does not exceed Rs. 5 Crore
- 12. Pollution Control Board Consent (PCB Concent) Setting up a manufacturing unit in India attracts many types of licenses from Indian Government i.e both State and Central, One of such license is for the Pollution Licenses. Any industry, which discharge sewage or effluent into the environment or emit any pollution in air will have to obtain consent of the State Pollution Control Board. Similarly any industry / process generating, storing, transporting, disposing or handling hazardous waste are required to obtain authorization from MPC Board.
- 13. There are two types of consent Consent to Establish All the industries and activities needing consent must obtain consent to establish before actual commencement of the works for establishing the industry/activity. Consent to Operate This consent needs to be taken before actual commencement of production including trial production. This consent is valid for certain duration. Documents required to get the consent to establish Site plan/index Topographical Map Detailed layout plant of different processes and point sources of effluent discharge/emissions and position of stack and documents including D.G. set capacity in KVA. Details of Water Pollution Control/Air Pollution Control devices proposed to be provided. Ambient Air Quality Report (if available) SSI Certificate/NOC from Directorate of Industries Government of Maharashtra. D.G.T.D. Registration. ( if applicable ) Details of chemical reactions with mass balance. Consent fees in the form of D.D. drawn on favour of MPCB. Local body NOC. Under taking on Rs. 20 stamp paper or Chartered Accountant certificate about proposed Capital Investment ( Land, building, and machineries.
- 14. Documents required for consent to operate/renewal Detailed layout plant of different processes and point sources of effluent discharge/emissions and position of stack and documents including D.G. set capacity in KVA. Process flow sheet. Latest analysis report of effluent, fuel gases, solid waste & hazardous wastes. Details of Water Pollution Control/Air Pollution Control devices provided. Ambient Air Quality Report (if available) SSI Certificate/NOC from Directorate of Industries Government of Maharashtra. D.G.T.D. Registration. (if applicable ) Details of chemical reactions with mass balance. Consent fees in the form of D.D. drawn on favour of MPCB. Xerox copy of previous consent (for renewal only). Xerox copy of Environmental Clearance of Government of Maharashtra or Government of India in case of 1st consent to operate in case of industries/process requiring environmental clearance.
- 15. Factory Licence The factory owners are required to notify and also register their premises with the local governing authority before the beginning of operations. This helps in facilitating the risk management at workplace and the total implementation of Safety and Health Management Systems in factory premises.
- 16. Documents Required Application Form For the Consent. DD For the statuary Fees Amounted. Lease Agreement copy with owner Or 7/12 Copy. Grampanchayat NOC copy in name of Company. Final drawing copy of factory and layout copy. Declaration for the investment and Project profile by Chartered accountant. Water Budget means input water, uses, applications, losses, recycled, Effluent. Manufacturing process of each product with flow diagram. SSI Registration copy Or IEM Registration. Copy. Process flow diagram. M.O.A. Copy. List of Raw Material With monthly or annual consumption. List of manufacturing Products with monthly or annul consumption. Details of the Generators or boilers. Details of the Stack and the chimney. Details of hazardous and non hazardous waste, treatment and disposal. ETP/STP scheme, process and diagram.