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accounting (35)

Friday, 31 March 2017 13:14

Company Law Services

Foreign Company Incorporation & Company Law Services
We are a well recognized chartered accountant firm, providing consultations and services in Company Law Matters. Our services are customized in accordance to your specific requirements. We assist you from the very initial processes of company establishment to company maintenance process, etc. Our services include:

  • Formation & Registration of Company
  • Setting up a Liaison Office
  • Setting up a Branch Office
  • Setting up a 100% Subsidiary Company
  • Setting up a Project Office
  • E- Filing of Documents with MCA.
  • Compliance under Companies Act, 2013
  • Getting the Company name changed.
  • Formation of Section 25 Company (Non profit making organization)
  • Getting Charge Registered
  • Liaison with Registrar of Companies & Regional Directors
  • Getting Director Identification Number (DIN)
  • Maintenance of statutory records prescribed under Companies Act, 2013.
  • Winding up proceedings of companies, trusts and societies
  • Getting public & private limited companies declared defunct

Merger & Acquisition

Our merger & acquisition team consists of tax, accounting and consulting professionals who provide corporate and private equity buyers with a broad range of accounting, tax and business advisory services to support mergers, business acquisitions, investment and financing structures, disposition alternatives and post-transaction activities.

Our team of advisers has in-depth knowledge and represents clients of different sizes in a variety of industries. Each adviser is committed to serving our clients professionally, confidentially and honestly to enable our clients to maximize their business opportunities.

Whether our clients are planning to buy or merge with another business (joint venture), we have the experience and the expertise to meet their specific requirements. The business acquisition services provide total solutions. Some of the procedures include identification of potential acquisitions, negotiations with the commercial elements of the transaction and forecasting the future of the business. Services offered under the above categories are:

  • A review of goals and objectives
  • Due diligence
  • Business forecasting
  • Advice on potential pitfalls and rewards involved in a merger
  • Assistance in purchase negotiations
  • Advice on financing
  • Assistance with preparation of a business plan
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Friday, 31 March 2017 13:07

OUTSOURCING & STATUTORY COMPLIANCES

We are one of the leading names in the field of offering service support for handling ‘Outsourcing Facilities.’ Here, our team of experts effectively handles Business Process Outsourcing services that are based on listening to our clients needs as well as developing innovative ways towards meeting their needs. Working closely with management, we assist clients in reaching their goals.

We provide financial services for quick and hassle free working. We deal with banks, investment banks, insurance companies, credit rating companies and stock brokers on behalf of our clients and assist them to expend their business and operate it carefully.

Some of the key factors that aid us in successfully supporting the Outsourcing of a Business Process include:

  • Thoroughly analysis of process so clients know the involved costs and can determine cost savings of outsourcing over specific time period
  • Defining roles & responsibilities in outsourcing partnership to ensure there are no surprises and goals & expectations are clear to both parties
  • Establish measurable performance objectives including speed of transactions, time period to close books and others with establishment of performance incentives including rewards and penalties for meeting those objectives
  • Developing detailed transition plan for ensuring smooth hand-off where outsourcing is major undertaking benefitting from careful advanced planning
  • Establishing clear dispute-resolution process for handling issues as they arise, thus making for smoother operations and ensuring there is no contractual or legal problem
  • Monitoring results for bringing continuous improvements thorough arranging long-term contracts on yearly renewal basis that allows annual review of outsourcer’s performance

Our range of services include:

  • Maintenance of accounting and book-keeping records
  • Payroll management services & Pay-roll records
  • Management Information Systems (MIS) reporting and statutory compliances including income tax, tax deducting at source (TDS), withholding tax, service tax, company law, RBI rules & regulations and secretarial compliance on regular basis

Outsource Bookkeeping Services to A.Chandak & Co.
For small or medium businesses marinating up-to-date bookkeeping is probably the most important part of the daily routine. The establishment of an accounting division, hiring and training bookkeeping personnel and buying bookkeeping software is costly.

Such companies, whose core competency is not bookkeeping, can benefit by outsourcing to A.Chandak & Co. Outsourcing bookkeeping services to A.Chandak & Co. will eliminate the need to have an accounting division while at the same time your organization can get access to professional bookkeeping services at just 40%-50% of the cost. A.Chandak & Co. has an impeccable record of delivering remote bookkeeping services to growing and changing businesses in all industries. A.Chandak & Co.’s outsourcing services are focused at helping customers with the accounting requirements and significantly reducing the operating costs of their finance department.

Why outsource bookkeeping services to A.Chandak & Co.?
By choosing A.Chandak & Co. as your bookkeeping outsourcing partner, you can get access to several benefits such as:

  • Save upto 50% on bookkeeping expenses
  • Save upto 50% on bookkeeping expenses
  • Focus more on your business
  • Get access to complete financial management from bookkeeping to tax returns
  • Hire a dedicated online bookkeeper with complete loyalty
  • Round-the-clock access to accounts
  • No need to hire/train accountants
  • Realtime online bookkeeping
  • Complete confidentiality and data security with the latest encryption technologies, remote servers and physical security systems

Our financial and accounting outsource team have the depth and breadth to understand, analyze, and provide critical solutions to all your accounting and financial issues. By using our accounting and financial outsource solutions you can save 30-50% of your total cost and can improve your overall operational efficiency of your entire accounting processes.

Outsourcing has transformed the whole industry. Globalization and modern economic policies of developed countries have also boosted the whole process of outsourcing. Now the cheap and best resources of one country are used by other countries where the cost of similar work is higher in comparison. By this way both the companies are benefitted equally, one will get the best price according to its resources and other will get the work done within time and cost limits.

The key to Outsourcing, however, is finding a right outsourcing partner who can be trusted for the entire process of work. We believes in high quality and cost effective solutions to clients. We have been involved in handling outsourcing business from long time. We have adequate infrastructure, functional experience, flexibility and scalability to cater our foreign and domestic clients.

Outsource Payroll processing to A.Chandak & Co.
At A.Chandak & Co., we make sure that there is timely payment in your organization keeping in mind your compensation policies. Apart from this our unique features in providing payroll services are:

  • At A.Chandak & Co., we make sure that there is timely payment in your organization keeping in mind your compensation policies. Apart from this our unique features in providing payroll services are:
  • We systemize and simplify the process of payrolls. Set up cost is reduced significantly and also the processing time and error.
  • Experts ensure accuracy and efficiency in carrying out the functions.
  • We also reconcile the errors while maintaining calculations and thus maintaining accuracy.
  • We manage calculations of multiple groups of employees satisfying every organizations specific need.
  • Systematized and sophisticated software is used to have error free and accurate calculations. The information for tax filling is also provided in time.
  • Perfect confidentiality is maintained. The company accounts, reports, finances etc, all information regarding these are treated as private and confidential.

We give you the entire gamut of services from time and attendance system, employees insurance deductions, reporting and filing to direct statutory deposit payments.

Outsource Statutory Compliances to A.Chandak & Co.
Once a business is registered, some expert services are required to comply with day to day statutory and regulatory compliances. A.Chandak & Co.’s team is expert enough to take care of following statutory compliances of your organisation.

  • Income Tax Compliance Service
  • Withholding Tax Compliance Service
  • Filing of Annual Return with Registrar of Companies
  • Filing of forms with Registrar of Companies for intimating any changes in director/ address.
  • VAT Compliance like monthly return, annual return etc
  • Service Tax Compliance Service
  • Customs & Central Excise Compliance Service
  • Provident Fund Compliance Service
  • ESI Compliance Service
  • Profession Tax Compliance Service
  • Industry specific regulatory Compliance Service
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Friday, 31 March 2017 12:53

SERVICES TO MNC NRI & FOREIGN NATIONAL

We facilitate multinational organizations in exploring opportunities and setting up business also assists them in complying with legal formalities applicable in India. We brief them taxation system and allied procedures relating to the business which they are planning to set up.

This includes feasibility studies, obtaining statutory approvals from government departments, accounting services, human resource procurement, legal services and other services listed below:

Highlights of our services:

  • Setting up accounting systems, internal controls, procedures and accounting manuals
  • Guidance on registration with the Software Technology Park of India for 100% export oriented software companies & with the Customs & Central Excise Departments regarding custom bonding of STP/EOU units
  • Assistance in obtaining IEC code and guidance on import/export policies and procedures
  • Financial & management restructuring of overseas corporate and joint venture collaborations
  • Incorporation of companies and offices for multinational clients in India
  • Managing back office operations covering accounting and statutory compliances
  • Statutory approvals from Government of India
  • Financial restructuring of overseas companies
  • Joint venture collaborations
  • Vetting of commercial agreements
  • Internal audit & Stock Audit
  • Transfer Pricing, determining arm length pricing for transaction between sister concern in accordance with Transfer Pricing rules and regulations.

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

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Friday, 31 March 2017 12:40

Corporate Advisory Services

A.Chandak & Co.’s Corporate Advisory Service provides the intelligence you need to incorporate the latest developments in industry trends, best practices, supply chain management, asset and product lifecycle management, production management and plant automation. A.Chandak & Co.’s Corporate Advisory Service delivers the strategic information you need to assess change, and provides an extension to your staff for help with your unique needs. You will have the knowledge needed to move down the learning curve and improve operational performance. Our corporate advisory solutions range from providing project advisory services to start up projects (both green field and brown field) to providing Mergers & Acquisition advisory, financial structuring services, refinancing, hedging and risk management services

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

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Friday, 31 March 2017 12:16

Management Consultancy

Through this process we are able to develop a customized approach, develop innovative solutions, make recommendations for improvement and offer assistance with, or take full responsibility for the implementation of each activity.

Management Consultancy Services
At A.Chandak & Co. Management Consulting Services is a client service oriented consultancy offering time-tested solutions to your firm's operations, financial and project management systems concerns.

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

Published in accounting
Be the first to comment!
Read more...
Friday, 31 March 2017 12:02

Auditing Services

we offer tailor-made accounting systems. In the modern jet age there is fierce competition in the trade and industry. Entrepreneurs are vying with one another in competitive edge to stay ahead of others. This being the business scenario it is most imperative for the CEOS and other junior staff to keep them fully updated with the statistics of the working of a business house and its current affairs required for planning and formulations of policies of the Company.

This can only be possible if the accounts are maintained in an elaborate manner and kept up to date minute to minute. We at A. Chandak & Co. keep the most competent and efficient staff to meet with this important requirement of our clients and readily furnish every data and information as and when required. This is our specialty, time is the essence of business and we are fully seized of this secret of success.

Whether it is a full service accounting and book-keeping plan or quarterly updates and financial statement preparation, we provide accurate and timely services that include:

  • Book-keeping.
  • Payroll reconciliation.
  • Partnership accounting.
  • Account reconciliation.
  • Accounts receivable/Payable reconciliation.
  • Capital planning and Investment management.
  • Separate currency and Investment gain/loss accounting.
  • Daily on line access and timely reporting via internet (in PDF or Excel format)
  • Preparation of management accounts and statutory accounts.
  • Data Entry/Comparison of data from hard copy to soft copy & vice versa.

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

Published in accounting
Be the first to comment!
Read more...
Friday, 31 March 2017 11:52

AUDITING SERVICES

When faced with a swiftly changing economic and regulatory landscape, the need for timely, high-quality audits is critical. We approach client’s audit with a deep understanding of their business, the industry in which they operate, the risks that client faces and the latest regulatory laws. Our commitment to delivering high-quality assurance services is at the heart of what we do. We provide comprehensive audit and assurance services designed to deliver real value and underpin investor confidence. Explore the services we offer :

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.
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Friday, 31 March 2017 11:41

TAXATION

Enhancing a stakeholder value is a fundamental concept, which drives every management effort in the modern business environment. Progressive and bottom – line focused managements have realized that taxes should be viewed as a dynamic item of cost, rather than a passive charge on the profits.

Indeed, an effective tax – cost management provides a distinct competitive advantage, which requires the application of appropriate tax strategies, proactively identified and scrupulously implemented.

In the modern day world all businesses are engaged in multinational transactions and operations, they are continually challenged to manage the impact of multiple and ever-changing tax -jurisprudence.

A.Chandak & Co. provides comprehensive and sophisticated tax assistance in effectively managing the impact of taxation. We help address, domestic and international tax issues.

Cross Border Taxation

  • Double Tax Avoidance Advisory
  • Transfer Pricing

Direct Taxation Advisory

Taxation Litigation Services

Tax Connect Services

  • Strategic Business Decisions
  • Succession Planning
  • Tax Review (Due Diligence)
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Friday, 31 March 2017 11:17

SERVICE TAX & COMPLIANCE SERVICES

Service Tax has now become one of the major sources of yielding revenue to the exchequer. It has been extended to several items with enhanced rates. The rules and regulations and various procedures laid down under service tax are very cumbersome, tedious and best with the problem of interpretation , disputes and litigation all its provisions have to be completed with very strictly . Even minor lathes can land you in soup. The tax has to be deposited in treasury with in the stipulated period and various returns are to be filed on prescribed forms with in specified dates failing which return penal action in called for.

We have with us extensive experience in handling the demands of Service Tax Consultancy services that comprise areas like:

  • Service Tax Registration
  • Consultancy on Services as per the applicability of Service tax Act
  • Filing of Service Tax returns in ST-3
  • Consultancy on deposit of monthly service tax of corporate and individuals
  • Maintenance of Service Tax Records
  • Liasioning with respective Authorities
  • Preparation of returns & challans
  • Handling departmental audit
  • Regarding credit claims

Here, our rich experience allows us to successfully handle all matters pertaining to services including handling of departmental audits. Working in close relation with client organizations, we analyze their needs and based on that perform execution of services, thus ensuring best possible service support is offered from our end. Some of the factors that distinguish us from others include:

  • Rich experience in the field
  • Capability to offer prompt and reliable services

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

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Friday, 31 March 2017 10:51

INCOME TAX

Holding many years of experience in a wide array of industries, our staff works to stay abreast of developments in our ever-changing state and federal tax laws. Our full line of tax services includes preparation of tax returns for individuals, corporations, partnerships and for other enterprises. We offer:

  • Business and individual tax planning, projections, and valuations.
  • NRI Taxations and foreign company's tax matters
  • e-Filing of Income Tax Returns
  • E-filing of TDS Returns
  • Consultancy on Income Tax Matters
  • Consultancy on Tax Planning & Savings
  • Consultancy on Double Taxation.
  • Consultancy on International Taxation
  • Global compliance services
  • Liaison with Income Tax Authorities
  • Getting Permanent Account Number (PAN)
  • Getting Tax deduction account numbers (TAN)
  • Services related to withholding taxes / Tax Deducted at Source (TDS)
  • Representation before taxing authorities.
  • Support for business acquisition, reorganizations, mergers, and incorporations.
  • Handling Search & Survey Cases.
  • Determining the Arm Length Pricing, Preparation of Transfer Pricing Report & Conducting Transfer Pricing Audit.

Taxation presents arguably the most dynamic and complex challenge in the context of financial planning. Ever changing legislation and rules are matched only by the new methods devised to make the discharging of tax liabilities as efficient as possible. When it comes to tax planning and strategy, every case is unique. Our approach remains versatile with an awareness that individual issues must be dealt with on their own merits but with the overall, long-term considerations always in mind.

Whether you are the tax director of a multi-national group, an owner manager, an individual setting up a company or in receipt of a income, an employee or a Public Benefit Organisation, we make sure you don’t pay more tax than is necessary and that your activities remain tax efficient.

We also value the importance of relationships, especially over the long-term. Getting to know your needs over time means we will become more knowledgeable of your affairs and can react proactively to changing tax requirements in line with your own special circumstances. A.Chandak & Co.’s tax services cover a number of broad areas.

Proprietorship Concern

Proprietorship concern is a business structure in which an individual and his/her company are considered a single entity for tax and liability purposes. A proprietorship is a company which is not registered with the state as a limited liability company or corporation. The owner does not pay income tax separately for the company, but reports business income or losses on his/her individual income tax return. The owner is inseparable from the proprietorship, so he/she is liable for any business debts. This form of entity is not permitted for foreign company or overseas citizens.

One Person Company (OPC)

An One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea...You own it!

Incorporate your OPC

  • The process of incorporating the OPC is almost similar to that of a private limited company with minor differences.
  • OPC will be formed as a ‘Private Limited Company’.
  • It will have only one person as member. Memorandum of Association of such a company will mandatorily prescribe the name of the person, who in the event of death or disability of the subscriber shall assume his position.
  • The member of the OPC will have the right to change the nominee at any time with due intimation to the Registrar.
  • OPC can be formed as company limited by share capital or limited by guarantee or unlimited company.
  • The words ‘One Person Company’ will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.
  • One person can form only one OPCs.

Relaxations available to OPCs in comparison to general private limited companies

  • Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to an OPC.
  • An OPC should have a minimum of one director and a maximum of fifteen 15 directors.
  • In case the Board consists of only one director, then the OPC is exempted from the requirement of conducting a Board Meeting as well.
  • It will be deemed to have complied with the provisions relating to Board meetings, if at least one meeting is conducted in each half of the calendar year.
  • However, the gap between the two meetings should not be less than ninety 90 days.
  • There is no requirement of appointing a first director for the company. The sole member is deemed to be the first director.
  • The OPC is also exempt from provisions relating to notices of the meetings, statement to be annexed to notice, Quorum for Meetings, Appointment of Chairman of Meeting, Proxies, Restriction on Voting Rights, Voting by show of hands, Voting by Electronic Means, Demand for Poll, Postal Ballot and Circulation of Member’s Resolution.

How is OPC different from sole-proprietorship?

  • First and foremost, simply because OPC has a separate legal entity from its owners. In case of sole proprietorship, there is no distinction between the two entities. This means that the liability of the owner is separate from the entity. Or in other words, the threat of lien on personal property in case of unmet liabilities is non-existent.
  • Personal financial trustworthiness and credit ratings of the owner does not affect the ratings of the OPC, at least not directly.
  • Owing to the feature of it having a separate legal entity from its owners, the OPC is taxed separately, unlike a sole proprietorship.
  • Undoubtedly, the compliances in an OPC are a bit more tedious as compared to sole proprietorship.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?


In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

Partnership Concern

Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:-

  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

Advantages

  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

Disadvantages

  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Limited Liability Partnership

A corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
Owing to flexibility in its structure and operation, it would be useful for small and medium enterprises, in general, and for the enterprises in services sector, in particular. Internationally, LLPs are the preferred vehicle of business, particularly for service industry or for activities involving professionals.


LLP is governed by the provisions of the Limited Liability Partnership Act 2008, the salient features of which are as follows: -

  • The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit, may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership. The LLP will have perpetual succession.
  • The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008 . The act provides flexibility to devise the agreement as per their choice.
  • The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature. No partner would be liable on account of the independent or un-authorized actions of other partners or their misconduct. The liabilities of the LLP and partners who are found to have acted with intent to defraud creditors or for any fraudulent purpose shall be unlimited for all or any of the debts or other liabilities of the LLP.
  • Every LLP shall have at least two partners and shall also have at least two individuals as Designated Partners, of whom at least one shall be resident in India. The duties and obligations of Designated Partners shall be as provided in the law.
  • The LLP shall be under an obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A statement of accounts and solvency shall be filed by every LLP with the Registrar every year.
  • The Indian Partnership Act, 1932 shall not be applicable to Limited Liability Partnerships.
Private Limited Company

A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited, the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. Its main features are :-

  • It has an independent legal existence. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
  • The liability of its members is limited.
  • The shares allotted to it's members are also not freely transferable between them. These companies are not allowed to invite public to subscribe to its shares and debentures.
  • It enjoys continuity of existence i.e. it continues to exist even if all its members die or desert it.
  • Hence, a private company is preferred by those who wish to take the advantage of limited liability but at the same time desire to keep control over the business within a limited circle and maintain the privacy of their business.

Advantages

  • Continuity of existence
  • Limited liability
  • Less legal restrictions

Disadvantages

  • Shares are not freely transferable
  • Not allowed to invite public to subscribe to its shares
  • Scope for promotional frauds
  • Undemocratic control
Limited Company

A public limited company is a voluntary association of members which is incorporated and, therefore has a separate legal existence and the liability of whose members is limited. Its main features are :-

  • The company has a separate legal existence apart from its members who compose it
  • Its formation, working and its winding up, in fact, all its activities are strictly governed by laws, rules and regulations. Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a public limited company.
  • A company must have a minimum of seven members but there is no limit as regards the maximum number.
  • The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.
  • The liability of a member of a company is limited to the face value of the shares he owns. Once he has paid the whole of the face value, he has no obligation to contribute anything to pay off the creditors of the company.
  • The shareholders of a company do not have the right to participate in the day-to-day management of the business of a company. This ensures separation of ownership from management. The power of decision making in a company is vested in the Board of Directors, and all policy decisions are taken at the Board level by the majority rule. This ensures a unity of direction in management.
  • As a company is an independent legal person, its existence is not affected by the death, retirement or insolvency of any of its shareholders.

Advantages

  • Continuity of existence
  • Larger amount of capital
  • Unity of direction
  • Efficient management
  • Limited liability

Disadvantages

  • Scope for promotional frauds
  • Undemocratic control
  • Scope for directors for personal profit
  • Subjected to strict regulations

The major difference between Private Limited Company & Limited :

  • In Private Limited Company the shareholders comprise of close group of friends and relatives.
  • A Private Limited company cannot make an offer for public to subscribe its shares. Whereas a Limited Company can give an advertisement and invite general public to subscribe for its shares.
  • Basically a Private Limited company is a corporate version of partnership firm where as a Public Limited company is a full-fledged corporate body.
  • For a Private Limited company minimum 2 shareholders are required whereas for Public Limited Company minimum 7 shareholders are required.
  • A shareholder of a Public Limited company can transfer his shares freely at the stock exchange where the shares are listed whereas in a Private Limited Company a shareholder cannot transfer his shares without the consent of other shareholders.
  • Also shares of the Private Limited company cannot be listed on stock exchanges and hence cannot be traded there like shares of a Public Limited company.

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