Business registration is the process of obtaining legal authorization to conduct business within your chosen jurisdiction. It is a legal obligation of most jurisdictions and ensures that a business is operating under the lawful obligations of its control. There are a number of formalities that must be completed prior to completion of the business registration stage. The first important stage in business registration is deciding upon which jurisdiction to establish your business in. Business registration is very important as it establishes the business as a legal entity. Without business registration, your company cannot be legally considered and will not be protected under any grievance procedures etc. In addition, it will not be protected by the jurisdiction from any economic, legal or social instability.
A proprietor is an individual who owns a business establishment or sole proprietorship. This person has legal use of the assets and their operations.
In business, the term proprietor comes from the sole proprietorship business entity type. This form of company is unincorporated and only has one owner, the sole proprietor.
Although this type of entity is easy to setup and operate, it isn’t preferred for most businesses because it doesn’t provide any liability protection. All of the income and losses are attached to the owner, personally. Thus, if a customer sues the company, he can affectively sue the owner for his personal assets.
The Indian Partnership Act, 1932, Section 4, defined partnership as “the relation between persons who have agreed to share the profits of business carried on by all or any of them acting for all”. The Uniform Partnership Act of the USA defined a partnership “as an association of two or more persons to carry on as co-owners a business for profit”.
According to J. L. Hanson, “a partnership is a form of business organisation in which two or more persons up to a maximum of twenty join together to undertake some form of business activity”. Now, we can define partnership as an association of two or more persons who have agreed to share the profits of a business which they run together. This business may be carried on by all or anyone of them acting for all.
The persons who own the partnership business are individually called ‘partners’ and collectively they are called as ‘firm’ or ‘partnership firm’. The name under which partnership business is carried on is called ‘Firm Name’. In a way, the firm is nothing but an abbreviation for partners.
Private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them. This is the basic criterion that differentiates private companies from public companies.
Almost 93 percent of the companies incorporated in India are registered as Private Limited Companies.
Ministry of Corporate Affairs is the governing body in India which regulates all Private Limited Companies in India. The Companies Act of India is now called as Companies Act, 2013.
Earlier, the shareholders had to pay a minimum of ₹ 1 lakh as a subscription amount to incorporate a private limited company. Now, there is no such requirement.
limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner's misconduct or negligence. each partner has joint and several liability. In an LLP, some or all partners have a form of limited liability similar to that of the shareholders of a corporation. Unlike corporate shareholders, the partners have the right to manage the business directly. Corporate shareholders must elect a board of directors under the laws of various state charters. The board organizes itself (also under the laws of the various state charters) and hires corporate officers who then have as "corporate" individuals the legal responsibility to manage the corporation in the corporation's best interest. An LLP also contains a different level of tax liability from that of a corporation.
Limited liability partnerships are distinct from limited partnerships in some countries, which may allow all LLP partners to have limited liability, while a limited partnership may require at least one unlimited partner and allow others to assume the role of a passive and limited liability investor. As a result, in these countries, the LLP is more suited for businesses in which all investors wish to take an active role in management.
It is mandatory to register GST when annual turnover exceeds ₹20/10 lakhs or supply goods and services inter-state or through e-commerce platform. The Tax rates of GST are varying from 0% to 28% depends on the type of goods & nature of services you are selling. Every GST registrant requires filing monthly/quarterly returns and one annual return. GST registration will help you for getting your business recognized as a legal registrant but also opens a number of opportunities for your business. You will become more competitive in comparison to your unregistered competitors since you will carry valid tax registration.
The Karnataka Shops and Establishment Act regulates the operations of shops and commercial establishments. The Karnataka Shops and Establishment Act was introduced to regulate the hours of work, annual leave with wages, wages and compensation, employment of women and children and other aspects of a shops or commercial establishment.
”shop” means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop fall within the scope of the Factories Act, 1948.”
”commercial establishment means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafe or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such establishments as the State Government may by notification declared to be a commercial establishment for the purposes of this Act;”
The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under: Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:
Profession tax is the tax levied and collected by the state governments in . It is a direct tax. A person earning an income from salary or anyone practicing a profession such as chartered accountant, company secretary, lawyer, doctor etc. are required to pay this professional tax.
Profession tax is levied and collected by the Commercial Taxes Department of State Governments, in some states by particular Municipal Corporations and majority of the Indian states are collecting this tax. It is a source of revenue for the government. The maximum amount payable per year is INR 2,500 and in line with tax payer's salary, there are predetermined slabs. It is also payable by members of staff employed in private companies. It is deducted by the employer from their employee every month and remitted to state exchequer and in some states sent to the Municipal Corporation. It is mandatory to pay professional tax. The tax payer is eligible for income tax deduction for this payment.
Employee’s Provident Fund (EPF) is a retirement benefit scheme that’s available to all salaried employees. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO) and any company with over 20 employees is required by law to register with the EPFO. It’s a savings platform that helps employees save a fraction of their salary every month that can be used in the event that you are rendered unable to work, or upon retirement.
As an employee working in a corporate set-up, there are several things one would like to know about the Employees Provident Fund (EPF). EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 . The scheme is managed under the aegis of Employees' Provident Fund Organisation (EPFO). It covers every establishment in which 20 or more persons are employed and certain organisations are covered, subject to certain conditions and exemptions even if they employ less than 20 persons each.
As per the rules, in EPF, employee whose ‘pay’ is more than Rs. 15,000 per month at the time of joining, is not eligible and is called non-eligible employee. Employees drawing less than Rs 15000 per month have to mandatorily become members of the EPF. However, an employee who is drawing ‘pay’ above prescribed limit (at present Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.
The promulgation of Employees’ State Insurance Act, 1948 envisaged an integrated need based social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity. The Act also guarantees reasonably good medical care to workers and their immediate dependents. Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation to administer the Scheme.
For all employees earning ₹21,000 or less per month as wages, the employer contributes 3.25% and the employee contributes 0.75%, total share 4%. This fund is managed by the ESI Corporation (ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of medical and cash benefits to the employees and their family. ESI scheme is a type of social security scheme for employees in the organised sector.
The employees registered under the scheme are entitled to medical treatment for themselves and their dependents, unemployment cash benefit in certain contingencies and maternity benefit in case of women employees. In case of employment-related disablement or death, there is provision for a disablement benefit and a family pension respectively. Outpatient medical facilities are available in 1418 ESI dispensaries and through 1,678 registered medical practitioners. Inpatient care is available in 145 ESI hospitals and 42 hospital annexes with a total of 19,387 beds. In addition, several state government hospitals also have beds for the exclusive use of ESI Beneficiaries. Cash benefits can be availed in any of 830 ESI centres throughout India.
TAN is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. Under Section 203A of the Income Tax Act, 1961, it is mandatory to quote Tax Deduction Account Number (TAN) allotted by the Income Tax Department (ITD) on all TDS returns.
A permanent account number (PAN) is a ten-character alphanumeric identifier, issued in the form of a laminated "PAN card", by the Indian Income Tax Department, to any "person" who applies for it or to whom the department allots the number without an application. A PAN is a unique identifier issued to all judicial entities identifiable under the Indian Income Tax Act, 1961. The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.
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