ONLINE TRAINING ON PRECEPTS AND TRADE-68

Starting a Business in India

Registration Requirements:

Procedure 1.

Obtain director identification number (DIN)
on-line

Time to complete:

1 day

Cost to complete:

INR 100

Comment:

The
process to obtain the Director Identification Number (DIN) is as
follows: 1) Obtain the provisional DIN by filing application Form DIN-1
online. This form is on the Ministry of Corporate Affairs 21st Century
(MCA 21) portal www.mca.gov.in . The provisional DIN is immediately
issued. The application form must then be printed and signed and sent
for approval to the ministry by courier along with proof of identity and
address: A. Identity Proof (Any one) • PAN Card • Driving License •
Passport • Voter Id Card B. Residence Proof (Any one) • Driving License • Passport •
Voter Id Card • Telephone Bill • Ration Card • Electricity Bill • Bank
Statement 2) The concerned authority verifies all the documents and,
upon approval, issues a permanent DIN. The process takes about 4 weeks.

Procedure 2.

Obtain digital signature certificate on-line

Time to complete:

1-6 days

Cost to complete:

INR 400 to INR 2650

Comment:

To
use the new electronic filing system under MCA 21, the applicant must
obtain a Class-II Digital Signature Certificate. The digital signature
certificate can be obtained from one of six private agencies authorized by MCA 21 such as Tata Consultancy Services. Company
directors submit the prescribed application form along with proof of
identity and address. Each agency has its own fee structure, ranging
from INR 400 to INR 2650.

Procedure 3.

Reserve the company name with the Registrar of Companies (ROC) on-line

Time to complete:

2-3 days

Cost to complete:

INR 500

Comment:

Company
name approval must be done electronically. Under e-filing for name
approval, the applicant can check the availability of the desired
company name on the MCA 21 Web site. The RoC in Mumbai has staff members
working full time on name reservations (approximately 3 but more if the
demand increases). A maximum of 6 suggested names can be submitted,
they are then checked by RoC staff for any similarities with all other
names in India. The MCA receives approximately 50-60 applications a day.
After being cleared by the junior officer, the name requests are sent
to the senior officer for approval. Once approved, the selected name
appears on the website. Applicants need to keep consulting the website
to confirm that one of their submitted names was approved. In practice,
it takes 2 days for obtaining a clearance of the name if the proposed
name is available and conforms to the naming standards established by
the Company Act (1 day for submission of the name and 1 day for it to
appear on the MCA website).

Procedure 4.

Stamp the company documents either at the Superintendent or an authorized bank

Time to complete:

1 day

Cost to complete:

Rs. 200 (for MOA) +Rs. 1000 (for AOA) for every
Rs.500,000/- or part thereof +Rs. 100 (stamp paper for declaration Form 1)

Comment:

The
request for stamping the incorporation documents should be accompanied
by unsigned copies of the memorandum and articles of association and the
payment receipt. The company must ensure that the copies submitted to
the Superintendent of Stamps or to the authorized bank for stamping are
unsigned and that no promoter or subscriber has written anything on it
by hand. The Superintendent returns the copies, one of which is duly
stamped, signed, and embossed, showing payment of the requisite stamp
duty. The rate of stamp duty varies from state to state. According to
Article 10 and Article 39 of the Indian Stamp Act (1899), the stamp duty
payable on the memorandum and articles of association for company
incorporation in Mumbai, Maharashtra, is as follows: - Articles of
association: INR 1000/- for every INR 500,000/- of share capital (or
part thereof), subject to a maximum of INR 50,000,000. - Memorandum of
association: INR 200. - Form-1 (declaration of compliance): INR 100.
Once the memorandum and articles of association have been stamped, they
must be signed and dated by the company promoters, including the company
name and the description of its activities and purpose, father’s name,
address, occupation, and the number of shares subscribed. This
information must be in the applicant’s handwriting and duly witnessed.

Procedure 5.

Present
the required documents along with the registration fee to the Registrar
of Companies to get the certificate of incorporation

Time to complete:

3-7 days

Cost to complete:

see comments

Comment:

The
following forms are required to be electronically filed on the website
of the Ministry of Company Affairs: (a) e-form 1; (b) e-form 18; and (c)
e-form 32. Along with these documents, scanned copies of the consent of
the initial directors, and also of the signed and stamped form of the
Memorandum and Articles of Association, must be attached to Form 1; -
The fees for registering a company can be paid online by using a credit
card or by payment in cash at certain authorized banks; - One copy of
the Memorandum of Association, Articles of Association, Form 1, Form 32,
Form 18 and the original name approval letter, consent of directors and
stamped power of attorney must be physically submitted before the
Registrar of Companies; and - The certificate of incorporation is sent automatically
to the registered office of the company by registered or speed post. The
registration fees paid to the Registrar are scaled according to the
company’s authorized capital (as stated in its memorandum): - INR
100,000 or less: INR 4,000. If the nominal share capital is over INR 100,000, additional fees based the
amount of nominal capital apply to the base registration fee of INR
4,000: - For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 1,00,000, up to INR 500,000: INR 300. - For
every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 500,000, up to INR
5,000,000: INR 200. - For every INR 10,000 of nominal share capital or
part of INR 10,000 after the first INR 5,000,000, up to INR 1
10,000,000: INR 100. - For every INR 10,000 of nominal share capital or
part of INR 10,000 after the first INR 10,000,000: INR 50. The payment
of fees can be made either (1) offline; one can upload all incorporation
documents and generate the payment Chalan. Against this Chalan, the
applicant has to obtain a demand draft for filing fees amount in favor
of “Pay & Accounts Office, Ministry of Corporate Affairs, New Delhi”
and this demand draft is payable at Mumbai. The applicant has to visit
the specified branches of certain banks to make the payments. Upon the receipt of the
payments, it takes around one week for clearance of payment. Only after
the clearance of payment does the RoC accept the documents for
verification and approvals (2) online; the applicant makes the payment
through credit cards and the system accepts the documents immediately.
Please note that in Mumbai, RoC requests for pre-scrutiny of documents
for any correction thereon, before the documents are uploaded, so that
once the documents have been uploaded, it can be approved without any
further correction. The online filing mechanism requires only one copy of scanned documents to be filed (including
stamped MOA, AOA, and POA). Schedule of Registrar filing fees for the
articles and for the other forms (l, 18, and 32): - INR 200 for a
company with authorized share capital of more than INR 100,000 but less
than INR 500,000. - INR 300 for a company with nominal share capital of
INR 500,000 or more but less than INR 2,500,000. - INR 500 for a company
with nominal share capital of INR 2,500,000 or more.

Procedure 6.

Make a seal

Time to complete:

1 day

Cost to complete:

INR 350

Comment:

Although
making a seal is not a legal requirement for the company to be
incorporated, companies require a company seal to issue share
certificates and other documents.

Procedure 7.

Visit
an authorized franchise or agent appointed by National Securities
Depository Services Limited (NSDL) or Unit Trust of India (UTI)
Investors Services Ltd to obtain a Permanent Account Number (PAN)

Time to complete:

7 days

Cost to complete:

INR 66 for Fee and INR 5 for Application Form, (if not downloaded)

Comment:

Under
the Income Tax Act, 1961, each person must quote his or her permanent
account number (PAN) for tax payment purposes and the tax deduction and
collection account number (TAN) for depositing tax deducted at source. The Central Board of Direct Taxes (CBDT) has
instructed banks not to accept any form for tax payment (Chalan) without
the PAN or TAN, as applicable. The PAN is a 10-digit alphanumeric
number issued on a laminated card by an assessing officer of the Income
Tax Department. In order to improve PAN related services, the Income Tax
department (effective July 2003) outsourced their operations pertaining to allotment of PAN and issue of
PAN cards to UTI Investor Services Ltd, which was authorized to set up
and manage IT PAN Service Centers in all cities where there is an Income
Tax office. The National Securities Depository Limited (NSDL) has also
launched PAN operations effective June 2004, setting up TIN Facilitation
Centers. The PAN application is made through the above mentioned
service centers on Form 49A, with a certified copy of the certificate of
registration, issued by the Registrar of Companies, along with proof of
company address and personal identity. A fee of INR 60 (plus applicable
taxes) applies for processing the PAN application. IT PAN Service
Centers or TIN Facilitation Centers will supply PAN application forms
(Form 49A), assist the applicant in filling up the form, collect filled form and issue acknowledgement slip. After
obtaining PAN from the Income Tax department, UTIISL or NSDL as the case
may be, will print the PAN card and deliver it to the applicant. The
application for PAN can also be made online but the documents still need
to be physically dropped off for verification with the authorized agent. For more details (www.incometaxindia.gov.in , www.utiisl.co.in , www.tin.nsdl.co.in )

Procedure 8.

Obtain a tax account bumber for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department

Time to complete:

7 days, simultaneously with Procedure 7

Cost to complete:

INR 55

Comment:

The
tax deduction and collection account number (TAN) is a 10-digit
alphanumeric number required by all persons responsible for deducting or
collecting tax. The provisions of Section 203A of the Income Tax Act
require that all persons who deduct or collect tax at the source
must apply for a TAN. The section also makes it mandatory for the TAN to
be quoted in all tax-deducted-at-source (TDS) and
tax-collected-at-source (TCS) returns, all TDS/TCS payment Chalans, and
all TDS/TCS certificates issued. Failure to apply for a TAN or to comply
with any of the other provisions of the section is subject to a penalty
of INR 10,000/- . The application for allotment of a TAN must be filed
using Form 49B and submitted at any TIN Facilitation Center authorized
to receive e-TDS returns. Locations of TIN Facilitation Centers are at www.incometaxindia.gov.in and http://tin.nsdl.com The processing fee for
both applications (a new TAN or a change request) is INR 50 (plus
applicable taxes). After verification of application, the same is sent
to Income Tax Department and upon satisfaction the department issues the
TAN to the applicant. The national government levies the income tax. Since outsourcing, any
authorized franchise or agent appointed by National Securities
Depository Services Limited (NSDL) can accept and process the TAN
application. The application for TAN can be made either online TAN can
be through the NSDL website www.tin-nsdl.com or offline. However, after
the payment of the fee by credit card, the hard copy of the application
must beUpon payment of the fee through credit card, the hard copy of the
application is required to be physically filed with NSDL.

Procedure 9.

Register with Mumbai Shops and Establishment Act, 1948

Time to complete:

2 days, simultaneous with procedure 8

Cost to complete:

INR 1,500 + 3 times registration fee for Trade Refuse Charges

Comment:

A
statement containing the employer’s and manager’s name and the
establishment’s name (if any), postal address, and category must be sent
to the local shop inspector with the applicable fees. According to
Section 7 of the Bombay Shops and Establishments Act, 1948, the
establishment must be registered as follows: - Under Section 7(4), the
employer must register the establishment in the prescribed manner within
30 days of the date on which the establishment commences its work. -
Under Section 7(1), the establishment must submit to the local shop
inspector Form A and the prescribed fees for registering the
establishment. - Under Section 7(2), after the statement in Form A and
the prescribed fees are received and the correctness of the statement is
satisfactorily audited, the certificate for the registration of the
establishment is issued in Form D, according to the provisions of
Rule 6 of the Maharashtra Shops and Establishments Rules of 1961. Since
the amendments in the Maharashtra Shops & Establishment (Amendment)
Rules, 2003 dated 15th December 2003, the Schedule for fees for
registration & renewal of registration (as per Rule 5) is as
follows: 0 employees: INR 100 1 to 5
employees: NR 300 6 to 10 employees : INR 600 11 to 20 employees: INR
1000 21 to 50 employees : INR 2000 51 to 100 employees : INR 3500 101 or
more:- INR 4500 Hence in the given case the registration fees would be
INR 2000, as there are 50 employees In addition, an annual fee (three
times the registration and renewal fees) is charged as trade refuse
charges (TRC), under the Mumbai Municipal Corporation Act, 1888.

Procedure 10.

Register for VAT before the Sales Tax Officer of the ward in which the company is located

Time to complete:

12 days, simultaneous with previous procedure

Cost to complete:

INR 5000 (Registration Fee) + INR 100 (Stamp Duty)

Comment:

Beginning
April 1, 2005, the sales tax was replaced by the VAT, which requires
registration by filing Form 101. The authorized representative signing
the application must be available at the Sales Tax Office on the day of
application verification. The applicant goes to the Sales Tax Office and
enters the registration counter. The clerk at the counter reviews that
the applicant has all the required documents and gives the applicant a
token (waiting number). After a short wait, the applicant’s
number gets called and the applicant goes to the desk of a sales tax
officer. There, all the information on Form 101 is manually entered into
the system by the officer. Within 10 minutes, the system generates a
Tax Identification Number (TIN) Thereafter, the company is considered
fully registered to pay taxes. However, the applicant must wait between
10 to 15 days to receive the VAT registration certificate by post. In
addition to Form 101, other accompanying documentation includes: 1)
Certified true copy of the memorandum and articles of association of the
company. 2) Proof of permanent residential address. At least 2 of the
following documents must be submitted: copy of passport, copy of driving
license, copy of election photo identity card, copy of property card or
latest receipt of property tax of Municipal Corporation, copy of latest
paid electricity bill in the name of the applicant. 3) Proof of place
of
business (for an owner, the case of Doing Business): Proof of ownership
of premises viz. copy of property card or ownership deed or agreement
with the builder or any other relevant documents 4) One recent passport
size photograph of the applicant 5) Copy of Income Tax Assessment Order
having PAN or copy of PAN card 6) Chalan in Form No. 210 (original)
showing payment of registration fee at INR 5000/in case of voluntary RC
and INR 500/in other cases Future Reform: The whole process will be put
online by the spring of 2009. This means that rather
than physically having to go to the office, companies will fill in all
their details on-line for Form 101 and then go the office only so that
the Sales Tax Office can verify the above listed documentation.

Procedure 11.

Register for profession tax

Time to complete:

2 days, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

According
to section 5 of the Profession Tax Act, every employer (not being an
officer of the government is liable to pay tax and shall obtain a
certificate of registration from the prescribed  authority. The company
is required to apply in Form I to the registering authority. The
registration authority for Mumbai Area is situated at Vikarikar Bhavan,
Mazgaon in Mumbai. Depending on the nature of the business, the
application should be supported with such documents as address proof,
details of company registration number under Indian Companies Act
(1956), details of head office (if the company is a branch of company
registered outside the state), company deed, certificates under any
other act, and so forth.

Procedure 12.

Register with Employees’ Provident Fund Organization

Time to complete:

12 days, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

The
Employees Provident Funds & Miscellaneous Provisions Act, 1952
applies to an establishment, employing 20 or more persons and engaged in
any of the 183 Industries and Classes of business establishments,
throughout India excluding the State of Jammu and Kashmir. The applicant
fills in an application and is then allotted a social security number.
The Provident Fund registration focuses on delinquent reporting,
underreporting, or non-reporting of workforce size. Provident Fund
registration is optional if workforce size is not more than 20. The employer is
required to provide necessary information to the concerned regional
Provident Fund Organization (EPFO) in prescribed manner for allotment of
Establishment Code Number. No separate registration is required for the
employees. Nevertheless all eligible employees are required to become
members of the Fund and individual account number is allotted by the
employer in prescribed manner. As per an internal circular, the code
number is to be allotted within 3 days from the date of submission, if
the application is complete in all respects. However, in many cases
applicants have received the intimation letter with the code number in
12 to 15 days. An online application facility is not provided so far

Procedure 13.

Register for medical insurance (ESIC)

Time to complete:

9 day, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

Registration
is the process by which every employer/factory and every employee
employed for wages are identified for the purpose of the medical
insurance scheme and their individual records are set up for them. As
per the Employees’ State Insurance (General), Form 01 is the form
required to be submitted by Employer for registration. It takes 3 days
to a week for the Employer Code Number to be issued. The “intimation
letter” containing the Code Number is sent by post to the employer by
post and that takes an additional couple of days. The Employee’s
individual insurance is a separate process and occurs after Employer’s
registration. The Employer is responsible for submitting the required
Declaration Form and employees are responsible for providing correct
information to the employer. The employee temporary cards (ESI Cards)
are issued on the spot by the local offices in many places. The
temporary cards are valid for 13 weeks from the date of appointment of
the employees. It takes about 4 to 5 weeks to get a
permanent ESI card.

CM requests to give opportunity to Justice P.D. Dinakaran to put his own version in cases related with him Natural justice being overlooked in the case of Justice Dinakaran —Mayawati

CM writes letter to Prime Minister

Lucknow: 19 December 2009
The Uttar Pradesh Chief Minister Ms. Mayawati has written a letter to the Prime Minister Dr. Manmohan Singh today to give an opportunity to the Chief Justice of Karnataka High Court Mr. Justice P.D. Dinakaran so that he can put his version in the matters related with him. She said that the theory of natural justice was being overlooked in his case, which was not correct in any way. She said that he should be given an opportunity to put his version in the cases related with him before considering any action against him.

Ms. Mayawati said that this was a very important case and demanded immediate intervention in this case. She said that according to the theory of natural justice the accused person is given an opportunity to put his version before taking any decision. She said that the way Justice Dinakaran’s case was being handled was not justified, as he was not being given any opportunity to put his version and consider it with full seriousness, the action was being taken, which was not correct.

The CM requested the Prime Minister that Mr. Dinakaran should be given an opportunity to put his version and after that all the facts should be considered seriously and impartially and thereafter any
decision should be taken.

Karnataka
State BSP under the leadership of Marasandra Muniappa have come out
against the impeachment motion moved against Justice P D Dinakaran,
chief justice of Karnataka High Court, alleging that he was being
persecuted for being from the Scheduled Castes.

On
26-12-2009 the BSP in front of Basaveswara statue came out strongly
against the impeachment move which, incidentally, has been admitted in
Rajya Sabha.

Mr. Gopinath, R.Muniappa, Muniswamy, Chikkanna, Advocate Nagaraj,
Chengappa, Lakshiminarayan Calling it “discrimination”, the leaders
passed a resolution condemning the discriminative attitude of the
Manuvadis, the Karnataka Bar Association, Advocates, Shanth Bushan,
Jetmalani and others.During Rajiv Gandhi’s tenure no action was taken on
Military personnel who leaked out vital secrets, George Fernandez was
not impeached for his activities.to give an opportunity

To the Chief Justice of Karnataka High Court Mr. Justice P.D. Dinakaran so that he can put his version in the matters related with him. They said that the theory of natural justice was being overlooked in his case, which was not correct in any way.

Mr. Dinakaran should begiven an opportunity to put his version and after that all the facts should be considered seriously and impartially and thereafter any decision should be taken.

After the rally they submitted a memorandum to the Governor of Karnataka. Chief Justice was thankful to BSP for their support.