Opening a Private Limited Company in India

What happens when a person in India considers starting his own company?- He gets puzzled at the first by the do’s and don’ts and all the procedural intricacies irritate him a lot. My post will answer questions that answer how to open a company in India. It will describe approximately all the required rules and procedures.

These are the basic steps involved in starting a business in Maharashtra. However in some states or cities one may have to go through some additional processes that one will have to find out.

Step 1: Obtain DIN (Director Identification Number) 

Method: Can be done online from the website of Ministry of Corporate Affairs government of India.

Website: http://www.mca.gov.in/

Time Taken: 1 Day

Cost:  INR 100

Process: The provisional DIN will be issued immediately. The applicant will have to get the application form printed and signed and sent for approval to the ministry by courier along with the proof of identity and address.

 Step 2:  Obtain DSC (Digital Signature Certificate)

Method: Can be done online from private agencies authorized by Ministry of Corporate Affairs government of India.

Time Taken: 4 Days

Cost: INR 1500

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

Step 3: Reserve the company name online with the registrar of companies.(ROC)

Time:  1 Day

Cost: 500

Process: The applicant can check the availability of desired company name online (website: http://www.mca.gov.in/). ROC suggests to provide them at least 6 company names. Then they are checked by the ROC staff for any similarities with all other names in India. Once when a company name gets confirmed it is displayed on the MCA website. 

Step 4: Stamp the company documents at the state treasury (State) or authorized bank (Private)

Time Taken: 1 Day

Cost: Depends on the state. (Rate of stamp duty varies from state to state)

Process: The applicant will have to submit the documents accompanied by unsigned copies of the Memorandum and Articles of Association and the payment receipt. Applicant will have to ensure that the document submitted to Superintendent of Stamps or to the authorized back for stamping are unsigned and that no promoter or subscriber has written anything on it.

Step 5: Getting the certificate of incorporation from the Registrar of Companies.

Time Taken: 5 days.

Process: This process requires filing the forms from the website of Ministry of Company Affairs along with the documents, scanned copies of the consent of the directors. This can be done online and offline.

Step 6: Make a seal

Time Taken:  1 Day

Cost:  INR 350 (Cost depends on the number of seals required and the time period for delivery)

Process: For the company to be incorporated making a seal is not a legal requirement.

Step 7: Obtain a PAN (Permanent Account Number) from an authorized organization.

Cost:  INR 67

Time Taken: 7 days

Process:  An applicant will have to reach any authorized franchise or agent appointed by NSDL    (National Securities Depository Limited) or the UTI (Unit Trust of India) Investor Services Ltd. as outsourced by Income Tax Department. Applicant’s physical presence is important for document verification.

Step 8: Obtain a Tax Account Number (TAN)

Cost: 57

Time Taken: 7 days

Process:  The application for allotment of a TAN must be filed using Form 49B and submitted at any TIN Facilitation Center authorized to receive e-TDS returns. The list of TIN Facilitation Centers can be found at www.incometaxindia.gov.in. The hard copy of the application must be physically filed with the NSDL.

Step 9: Register with the Office of Inspector. Shops and Establishment Act (State/ Municipal)

Time Taken: 2 Days

Cost:  INR 6000

Process: A statement containing the employer-"s and manager-"s names and the establishment’s name (if any), postal address, and category must be sent to the local shop inspector with the applicable fees.  

Step 10: Register for Value Added Tax (VAT) at the State Commercial Tax Office

Cost: INR 5100

Time Taken: 12 Days

Process: The authorized representative signing the application must be available at the Sales-Tax Office on the day of application verification. The applicant goes to the Sales-Tax Office and up to the registration counter. The clerk at the counter verifies that the applicant has all the required documents and gives the applicant a token (waiting number). After a short wait, the applicant-"s number is called and the applicant approaches the desk of a sales-tax officer.

Step 11: Register for Profession at Profession Tax Office.

Time Taken: 2 Days

Cost: Nothing

Process: According to section 5 of the Profession Tax Act, every employer (not being an officer of the government) is liable to taxation and shall obtain a certificate of registration from the prescribed authority. The company is required to apply to the registering authority using Form 1.

    

Step 12: Register with Employees’ Provident Fund Organization (National)

Time Taken: 12 Days

Cost: Nothing

Process: The Employees Provident Funds and Miscellaneous Provisions Act (1952) applies to an establishment, employing 20 or more persons and engaged in any of the 183 industries and classes of business establishments, throughout India excluding the State of Jammu and Kashmir.

The applicant fills in an application and is then allotted a social security number. The Provident Fund registration focuses on delinquent reporting, underreporting, or non-reporting of workforce size. Provident Fund registration is optional if the workforce size is not more than 20. The employer is required to provide necessary information to the concerned regional Provident Fund Organization (EPFO) in the prescribed manner for allotment of Establishment Code Number. No separate registration is required for the employees.

Nevertheless, all eligible employees are required to become members of the Fund and individual account number is allotted by the employer in the prescribed manner. As per an internal circular, the code number is to be allotted within 3 days of submission, if the application is complete in all respects. However, in many cases applicants have received the intimation letter with the code number in 12 to 15 days. An online application facility is not provided so far.

Step 13: Register for medical insurance at the regional office of the Employees’ State Insurance Corporation

Cost: Nothing

Time Taken: 9 Days

Process: As per the Employees’ State Insurance (General), Form 01 must be submitted by the employer for registration. It takes 3 days to a week for the Employer Code Number to be issued. The-" "intimation letter""- containing the Code Number is mailed to the employer and that takes an additional couple of days.

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The Making of a Lawyer

- Shared by Shreya Singh

What happens when you destroy everything you ever wished for with your very own hands? What do you do then?  What happens precisely one day after your life is  attacked?  I, like most of the people over-ridden by guilt and despair go into mindless “pashtyataap” and in the world of law-students it means joining an internship a day after your exams get over . an internship where you are certainly not invited and got in because the advocate was returning a favour to your uncle who got you in. He takes me in and now my uncle has to admit the advocate’s nephew in his medical college. It’s a circle of favors…our whole society is entwined in this circle its more like the barbed wires used as a security boundary   in old safer times when thieves weren’t so smart and cattle wasn’t so hungry. Pricky.

          So, I entered another room of the MDS( male dominated society). It was a whole new room for me. Fresh after one year of Law School I could with pride and dignity declare openly that I had absolutely no clue what a profession of law was all about. Being from a family of Engineers and Businessmen and the first years being taught nothing except new ways and resources of CCP and Ten Ways to Waste your time while under the pretence of Preparing for Grand Intra, i was like a blank cheque eager to be filled and cashed.

         Everybody there was middle-aged age, so needless to say, I had nothing in common with them except the fact that we all faced the same doom of being in the profession of law in a country with over-riding ideals and under-payed jobs, needless to say a very conflicting combination.

         For the first few days they refused to acknowledge my presence. sometimes trying too hard in the process, I would drop a huge file and my pen would fly in air for quite a few dramatic moments before landing  on someone or something and they wouldn’t even look up from their work. It was a bit too much. I added to my misery by offering to intern both in the court and the chamber and that’s when things started looking better.

         The only way to be taken seriously at work is to be serious about work. So, I would never be late for work,  read all the important files in chamber for the next day’s court  session. Ask questions –most importantly, and listen carefully to whatever was being told to me even if it was for just 2 minutes in the whole day. I would go and ask—something, anything but commute regularly. Soon after 10-12 days the associates would themselves come to me and tell me about the various judgments being delivered in court while they were standing outside waiting for their case, at the chamber they would give me work, from trivial things like numbering the cases and annexures to taking notes and forming notes for the cases, it all happened slowly. Advocates would give me research work and till now I have never been able to actually help them in any solid way but yes I did learn many things all the times I failed to help.

Also, a very important thing in this profession is the ego. I have till date not met a single advocate, judge, teacher, law student, anyone who if good at what he/she does is also humble about it. Experience in the field of law is something so bragged about that sometimes it felt nauseous to be in the presence of such “eminent beings” . There were some rather “unique” people I encountered during this one month I had spent in the Raw-Law world. People like senior advocate gulabbo, the jumpy judge, the bench- judge who snored and stared, the same guy who came for three different cases in two days, the seventy six year old daughter whose siblings declared her an outsider after their ninety year old father died, just for property, the fifty-something man who cried in full public view when he lost everything he had earned in life just because the advocate did not turn up, the clerk of forty two years age who was finishing third year of LL.B because he still dared to dream, the associate-father to three college going kids- who even after so many years chose to remain an associate because he was scared he could not make it on his own. These and many more…which judge uses natural justice , which written law and most importantly I saw justice being delivered in one case and the better case winning , even when guilty, in another. I saw all that we read in those big fat books which take four pages to explain what coud have been explained in four lines. It was eye-opening  and exciting on one side and some times it made me promise myself to never enter the world of litigation.

   But whether you like it or not, litigation has this certain charisma attached to it for some people. The courtrooms are small in the U.P. HC and lawyers too many, you can actually smell 10 different kinds of sweat at the same time and you have to wear cloaks and blazers even in the blazing May heat.  It is uncertain, risky, needs immense confidence and skill, and it is the perfect example of the survival instinct we associate with human beings. Standing and faking sincerity in front of a person who has already faked it for decades and knows it all requires skill. Convincing them and proving the right- wrong and most importantly the right-right is a twisted and immensely difficult task and your bread and butter depends on how good a liar you are and how good are your instincts. How quick can you think? How much of your literature do you remember? How can you fathom the loophole in a case and satisfy your client and most importantly make him believe that you can help him and save him. We get three weeks to prepare for a moot and solve and crack the case given to us. There in the chamber a prospective client would come sit in front of you tell you his case and ask then and there whether there is hope for you to help him out and you don’t get to open a book and refer to sections  and get any help whatsoever -- you have to listen, think and catch the broken link and work on it and convince your client that they have a case . All in the moment-- one miss and 100% guarantee that the client will not come back to you and tell ten other people that you are no good. You lose ten clients when you fail once and when you succeed once that client will stay with you forever and also recommend you . You need courage and confidence and lots of hard work to make it on your own in this black and white world. Because the judge will incinerate your ego,  the client will doubt your credibility and your colleagues will snatch away your clients right under your nose.

This,  as we were told before we joined Law school, was the last option for students graduating from the elite National Law Universities went for. Initially I thought it was because the other jobs paid more but I think the real reason is because surviving and winning in this field needs a lot of gut and has immense risks and we Indians refrain from. You need to struggle and work hard every day  but on the brighter side-it would get easier as you gain experience. If you survived the first few years and get recognized then you have sealed a fortune for yourself ,because,  breaking laws is second nature to human beings and they all want justice and they are ready to pay for it. A vast number of the best and well known people in this world have been and will be Lawyers.

Policing the Police

I had never bothered about policemen and their ways before. Surely we criticize them, we know they are not exactly the supercops we see in the movies, but since it does not affecting us, its just talk. We've heard stories of how indifferently the policemen treat the aam janta, but I came face to face with the indifference and apathy with my first experience with filing an FIR (First Information Report).

A friend of mine lost his cellphone and was required to file an FIR in order to get his SIM card blocked from mobile companies. Now, in India, once a mobile is lost, or any electronic item for that matter, is lost, it is gone for good. Surveillance or any other similar technical tactic used by Police in order to recover these items is virtually unheard of, especially here in Uttar Pradesh. The Police doesn't bother to find it, and being a tolerant nation that we are, generally the owner (now ex-owner) considers it lost and moves on. The maximum to be done is to get an FIR lodged and block the SIM to prevent any misuse of the phone. This is the maximum we expect out of our policemen- get us our FIR on time! Later I discovered, even this bare minimum task is very hard for our policemen to keep up with.

The event took place at Thana Talkatora , Rajajipuram, Lucknow. My friend n myself, entered the Police Station, partly in anticipation, partly in fear. This was our first visit to any Police Station. We enter a room and I found it to be exactly in consonance with the typical police station I had imagined. Two policemen eating gutka slouched on their chairs, chewing paan in a manner that somehow reminded me of a buffalo chewing the cud. One look at the corner of the wall, and it was clear where the pan masala went after they were through with it.

 I asked him, trying to be polite, "Sir, my friend lost his phone and now he wants to file an FIR regarding this issue." For the reaction (or the lack of it) that I received, I could have been speaking to the pan-stained wall behind him. He pretended I didn't exist. I repeated my sentence, now in an increased volume. He glared at me as if I had committed some criminal offence, almost as if I had stolen my friend's cellphone. He finally replied in a slighting tone, "Pay me 100 bucks which will be used in making the affidavit and come the day after tomorrow to take the FIR copy or get it done from court yourself and give it to me." Now, I am a law student alright, but I wasn't aware of the intricate legal procedures yet, at the end of a year. I asked him weather this affidavit from court is necessary. He replied in a the typical policemen tone, "What do you think I am doing here? Just get it done and submit it here." I am a teenager, and not a very aggressive one, at that. His tone threatened me. Assuming that further curiosity may grant me some physical pain, I decided to give up. I was feeling helpless. It moved me. I felt a strong surge of anger at this part red-tapism and part indifference. So much for a simple FIR?

We came outside, slightly irked and did what we do whenever we are rendered helpless- we criticized. We wondered whether it is only the UP Police which is so easy-going about its duties or was it the same all over the country. It was sad for our nation as a whole. Now my friend had an  uncle who  was a policeman in UP in a different district. Moved by the mistreatment, I suggested him to ring him up and ask for suggestions. He called him up and reported to him the ill-behaviour we had just received. His uncle asked us to give him the mobile phone number of the Station Incharge, which is given outside every police station and asked to wait there. We followed the instructions and stood there waiting in anticipation for what was going to follow.

 We didn't have wait for long. After about 2 minutes, a very changed policemen came to greet us -  "Ohh!! Why didn't you tell us before that your uncle is a policeman." We were invited into his office, offered tea while the same man who dismissed us offhand wrote the application himself. All he required was the IMEI no. and address and  the copy of the FIR was handed to us within seconds. He smiled his sycophantic smile and left us with this parting advice, "If you have any policeman in your family, whenever you are coming to a police station for  any reason, its your responsibility to give your 'proper introduction' first. As we left the police station, my friend was rather pleased with what connections could do and I was stunned.

Later that night, in a pensive mood, when I replayed the incident in my head, I was slightly disturbed. Is this the way they are supposed to behave with the 'ordinary' man? We rely on them considering them to be people who enforce the law - who protect the citizens and have the duty to redress our day to day problems. Does a person who does not have 'proper' introduction to give not have the right to get his problem solved? This was just a little incident for an FIR for a misplaced SIM card. A merely procedural formality. I shuddered to think of what this inactivity would do to victims of crime who knocked their doors for justice. The problem suddenly felt really big, and I begun to realize the seriousness of the stories I had heard. After seeing this I feel a great sense of  pity on the society and this state.