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Every entrepreneur is excited about the first step of starting a business, which is giving it a legal identity by getting a company registered. Companies are governed through legal documents that pan out the do’s and don’ts for it. Commonly known as company charter, Memorandum of Association (MOA) and Articles of Association (AOA) define company’s scope of work and its internal management. Drafting of these documents is one of the most critical steps in Private Limited Company registration process.

Memorandum and Articles are supreme legal documents forming the company’s constitution. They are indispensable, and the foundation of a company stands on it. Therefore, drafting them requires utmost precision and clarity.

What are MoA and AoA?

MoA is an abbreviation for Memorandum of Association, and AoA stands for Articles of Association. They safeguard and structure your business, helping in establishing the company’s identity, working methodology, and goal.

Memorandum of Association

As per the Companies Act, 2013, a memorandum covers the following essentials;

A. Name Clause
  • Is usually written in the opening paragraph of the article.
  • States the name under which the company functions.
  • States whether the company is a private limited or a public limited.

Now, there are certain key points to keep in mind while choosing the name of the company. They are;

  • Having a unique name and not identical to an existing company.
  • Not having any offensive words, connotations, or “sensitive” expressions that may offend any cultural or religious community.
  • Not indicating a connection with the government or local authorities unless you have a permission to do so.
B. Situation clause

This clause mentions the State in which a company has its registered office. If the future demands changing of registered office address, then the same must be updated in it.

C. Object Clause

This clause defines the purpose for company formation. This is usually not altered or changed. Hence drafting of this clause is very crucial and should be done with precision and expertise. The company cannot carry on any activity that is not part of object clause of MOA. Such activities are called Ultra Virus (beyond powers) and cannot be ratified even by members.

D. Liability clause

This clause states the liability of members of the company. It can be limited either by shares or guarantee. This clause is omitted in case of an unlimited liability.

E. Capital Clause

This clause specifies the maximum amount of capital a company can raise along with its distribution into shares. The company can only secure a specified capital amount mentioned in this clause. Any special rights or privileges are given to shareholders are mentioned here.

F. Subscription clause

This clause has the names, addresses and the details of its first subscribers. A private limited company needs at least two members. Public limited companies will have a minimum of seven members. It is mandatory for these subscribers to take at least one share.

Articles of association

This is the secondary document playing a vital role in defining the company’s internal workings, their rights, duties and management. It contains the by-laws and other rules & regulations that a company runs by. The contents of AoA remain in sync with the MoA and the Companies Act.

Contents of Articles of Association: A. Details regarding the shares of a company
  • Classes and valuation of shares.
  • Transfer, conversion, Lien, and forfeiture of shares.
  • Rights attached to the shares and rules about the alteration of capital.
  • Rules regarding the minimum subscription and conversion of fully paid shares into stock.
B. Details regarding directors’ rights, duties, and their removal
  • Directors appointment, powers, and duties. Borrowing rights of the Board of Directors and the procedure to remove them.
C. Details regarding holding and conducting meetings
  • Conducting Meetings, maintaining minutes, and sending out notices. It also states rules regarding voting rights and proxy that includes quorum required with the percentage of votes with directors. It mentions the accounts & audit, and appointment and remuneration of auditors.
D. Process and rules regarding winding up of the company

It is possible to make alterations in the articles if that benefits the company. But that should not be in contradiction with any third-party contracts. This alteration is done by passing a special resolution by filing a copy of it with the Registrar, within 30 days of its passing. Such alteration should not, in any way, increase the liabilities of its existing members.

Difference between MoA & AoA

MoA AoA
1. Defines the constitution of a company. A set of rule and regulations governing the company’s working.
2. Defines the objectives, powers and constraints of the organization. Describe powers, duties, rights and liabilities of individuals associated with the organization.
3. Six clauses are mandatory. Its drafting is as per the requirements of the organization.
4. It is a mandatory document for all the companies. Can opt for Table A instead of AoA in public limited company by shares.
5. Filing at the time of company registration. Filing at the time of company registration is optional.
6. A supreme legal document for company and subordinate to Companies Act. A subordinate to the MoA.
7. A dominant document that helps drafting AoA. Any article in this document that contradicts to the MoA is considered null and void.
8. Cannot be amended with retrospective effect. Can be amended retrospectively.
9. Section 2 (28) of the Companies Act 1956 defines it. Section 2 (2) of the Companies Act 1956 defines it.
10. It is subordinate to the Companies Act. Subordinate to the Companies Act, as well as is memorandum.
11. Defines the objectives of a company. Defines regulations with which the company will achieve objectives defined in MOA.

Conclusion

Memorandum of Association and Articles of Association are very important documents. They help the owners to run the company with ease and helps in streamlining the business.

Properly defined functions and rules increase efficiency and transparency. Hence, they are indispensable for any private or public limited company.

The post Meaning, Difference and Importance of MoA and AoA appeared first on LegaWiz.in.

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The hustlin genergy to create an impact in the universe is something that every entrepreneur carries while starting up. It is highly possible to lose focus and get yourmind confused with a lot of things that a startup journey has to offer. Thefirst-time entrepreneurs might want to consider knowing a few things before heading for a new business but regardless of experience, there are a few things that no one talks about startup.

And since I have beenthrough the startup process myself, I can clearly express that there is noshortcut to success. From an idea of a startup to registering a company and all theway to getting your first share of profit is a sure-shot roller coaster ride. Andwhen on the ride, there are things that you MUST know about starting up. Have alook at it.

1. A lone journey towards breaking the silos

Loneliness and entrepreneurship go hand-in-hand during the early stages. This is because you work tirelessly out of your passion with (sometimes) no acknowledgement of time. And this is why startups require you to break the silos and move things faster and smoother taking others to your stride.

Share work. Get the right resources. Partner wherever you can. Try associating yourself with other people who could contribute to your business on symbiotic terms. Having a network of entrepreneurs work as a fuel and that goes a long way.

Be the smart startup founder and don’t try to do everything on by your own as that leads to a faster burnout. Partner with established companies and people to lend you support and break that loneliness myth.

2. Raising funds is not an end goal. It’s a milestone.

Most of the startups find bootstrapping as an ideal way to go minimal on finances while starting a new business. The bootstrap philosophy works best not only when you pull finances from your own pockets and your closed ones, but also when you raise funds. Getting funds is tempting and keeping a certain belief to raise funds from the initial period is natural enough. But raising funds should not remain as an end goal. Startups must consider funding as a milestone from where the business pace up the growth game.

The habit of bootstrapping goes a long way because even funds burn out. And, having a mechanism to make the most out of available resources pays off well in a startup. Efficient fund management is an art that every startup need to cultivate for a better growth.

3. Time and Timing can define the success.

Time and timing are two different things where the first stands for the productive hours that you put up in your startup while timing relates to the market scenario and competition. Both are crucial to the success of your startup.

  • Time: The number of productive hours vs. non-productive (research, learning, meetings, discussions, etc.) should be tracked well enough. Most of the startups during the early stage get carried away by the ideas and discussions to get the ball rolling pretty fast. Measure your productive time that can directly create the impact. Put efforts that drive results with the philosophy of ‘minimum efforts, maximum impact’.
  • Timing: Idea is important, but timing is something that can have the icing on the cake. What matters is when the idea is timed. Consider Uber when it came out. An implausible company, fresh business model, and that blended with tremendous execution. But then it was timing that it perfected for their need to get drivers into the system. From an employment perspective too, taxi drivers were finding issues to grab passengers and they were always in need of some extra money. Drivers were looking for extra money; it was very, very important.

Another case is of YouTube. The codec problem to view online videos existed till 2004-2005. Adobe Flash offered a solution to that problem and coincidentally during the same time, the broadband penetration jumped over 50% in America. Here’s where the timing did wonders for YouTube’s launch.

4. Networking is the key

Time and again, entrepreneurs have confessed or at least mentioned the importance of networking within the startup community. For sure it plays a vital role in the success during the initial days. A recent study also suggests that informal professional networks and communities can greatly contribute for the entrepreneurial success. This means, it positively contributes more than the formal structures like accelerators, incubators and others.

The entrepreneurial ride is something that can have you go through all the ups and downs. This includes problems related to complex regulations, lack of financing, non-supportive government, or even the fear of failing. One can have their aspiration crushed all over when there is no one around to mentor, look up to, or even to share things about business life. And therefore, relying on someone’s guidance who have been through the process is a great feeling. This also opens up new opportunities, especially for the partnership and collaborations.

5. Seeking help won’t hurt your business

When getting help from others does well to your business, then personal egos and differences should step aside. There is always some inspiration around you, be it other startup founders, fellow co-founder, social circle, or even the employees and consultants. Getting employees’ and team views before taking some crucial decisions will help you win the team’s faith and may also add to your perspective.

It’s a totally different thing to have the information over the blogs, articles, YouTube videos, and even get inspired by other entrepreneurs. But then, having people who could help you with your efforts, resources, or even guidance is nothing less than a boon. To have someone from your own team to guide you through the thick and thin matters the most. No one will come and approach you since it is implied that you know a lot better than the rest. But, that’s clearly not the case.

Having an organized approach helps the most when you need inputs from your own people. So after a certain point in time, I did the following to seek help from my key people;

  • Getting out on a team lunch to break an ice. Such informal environment got my key employees involved and they would open up to me.
  • Organizing a day out with games and outdoor activities. This is where I got friendly with my consultants and they would share their genuine inputs from where I learned so much.

Taking the right steps in the right direction can sail your startup farther. It is best to know a few things about startups before venturing out in new avenues. Everyone will have their unique share in the journey and experience with starting up. The key is to know as much as you can and certainly do more than you know. Because hey, that’s how you start.


The post 5 Things that no one told you about startups appeared first on LegaWiz.in.

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Any person registered under GST must file Annual Return once a year. The first financial year is completed since the implementation of GST in last March. And so you are required to be ready with the data to file Annual Return. While writing this, an extension in due date for F.Y. 2017-18 is expected. With a press release, the extended date is informed as 31st March, 2019. However, official order is yet to be released.

If you have already subscribed for GST return filing services with LegalWiz.in, you need not to worry. We would ensure to comply on time. If not, you would like to know what Annual Return under GST is.

What is GSTR-9?

GST Annual return is file once in a year by every GST registered person in form GSTR-9. The compliance applies to every GST registrant even if registered under Composition scheme.

It requires the registrants to provide the details of supplies made and received during the reporting year. The taxes of all heads i.e. CGST, SGST and IGST are reported with consolidated data of all returns filed during the year. (Monthly/ quarterly)

What is the Last Date for GSTR 9 Filing?

The taxpayers are required to file GST Annual Return latest by 31st December of the next Financial Year. For the last Financial Year 2017-18, the due date was 31st December, 2018. From an official order dated 08th December, 2018, the due date is duly extended till 31st March, 2019 i.e. by 3 months.

Due to various ambiguities in the utility model, the said extension was quite expected. The online utility for filing is not available even today. The request for extension was made from CA association of Karnataka State and many traders based on various grounds. Even the large taxpayers are finding difficulties to understand many nuances. However, the extension should not be a reason for you to delay the compliance.

Upon failure to comply, you are required to pay penalty on daily basis. Therefore, connect with LegalWiz.in experts to be compliant ready. Write to us at support@legalwiz.in to request a call back for personalised assistance.

What is the Penalty for late filing of GSTR-9?

The government has announced a penalty on daily basis under respective tax heads. If you are filing the return after the due date, the late fee is INR 100 per day per act. Further, a maximum cap for late fee is provided. It is an amount calculated at a quarter per cent (0.25%) of the taxpayer turnover in the state or union territory.

Thus, the late fee is INR 100 under CGST and INR 100 under SGST, totalling INR 200 per day of default. The sweetener is there no late fee under IGST. You should take note that compliance is one of the determinants of GST compliance rating. So, instead of waiting for due dates, it is likely to complete return filing before time to maintain the ratings.

Who is required to file the Annual Return (GSTR-9)?

Every registered person is required to file GSTR-9 but following persons fall under an exception:

  • A person registered as Casual Taxable Person
  • Input service distributors
  • Non-resident taxable persons
  • Persons paying TDS under section 51 of GST Act
Know which type of GSTR 9 applies to you:

Four types of GSTR 9 are provided below along with applicability to concerned taxpayers.

  1. GSTR 9: This form is filed by the regular taxpayers who are filing GSTR 1, GSTR 2 and GSTR 3.
  2. GSTR 9A: If you have opted for composition scheme, you are required to file GSTR 9A as an annual return.
  3. GSTR 9B: If you are an e-commerce operator and have filed GSTR 8 during the financial year, you are required for file GSTR 9B.
  4. GSTR 9C: This form is applicable if your annual turnover exceeds INR 2 crores during the financial year. GSTR 9C is filed in along with the annual return in above-mentioned form.

Here, the requirement of GST audit is also levied. Therefore, a copy of audited annual accounts is filed. Additionally, reconciliation statement of already paid tax and tax payable as per audited accounts is filed.

As you have now learned about the basics, let’s see which data is reported under this return.

What are the details required under GSTR-9?

The details are filled in respective GSTR 9 format. GST Annual Return typically divided into 6 parts as provided below.

Part Required Details
I Part I is typically auto-populated. It requires the details of the taxpayer.
II In this part, details of inward and outward supplies during the FY are provided. This detail must be picked up by consolidating summary from all GST returns filed during the FY.
III It requires details of ITC declared. It is summarised values from all the GST returns filed during the F.Y.
IV It requires the details declared for taxes paid during the F.Y. This section also includes details of cess, interest, late fees, etc.
V This section requires Particulars of the transactions for the previous FY declared in returns of April to September of current FY (2018-19) or up to the date of filing of annual returns of previous FY whichever is earlier.
VI Part VI contains other information. This section comprises details of
  • GST demands and refunds;
  • HSN wise summary details of inward and outward supplies;
  • details of late fees;
  • Information on supplied received from different categories of taxpayers.

The GSTR 9 format released previously had many ambiguities, most of which were later resolved by updating the form. However, few issues are still persisting which are being resolved by updating the offline utility on a periodic basis.

How LegalWiz.in can help you?

As filing GST Annual Return with LegalWiz.in is easy. You are only required to provide us the details in specified format and rest will be taken care of by our experts. The GST return filing services are handled by Chartered Accountant with personalised services to taxpayers. For more information, connect with us on support@legalwiz.in. Also, subscribe to our blog to be updated on GST Annual Return filing.

The post CBIC to extend GSTR 9 Date: Know all about GST Annual Return appeared first on LegaWiz.in.

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Business is where you want to continuously expand your boundaries. The expansion can be in same business vertical or a different one. Expansion of business and taxes comes hand to hand. In these cases, you might have to get GST registration again. Here, we are addressing the frequently asked question “Do I need a separate GST registration for branch?”

Establishment of New Branch:

By using word branch, we consider having a physical business place for same business in India. Do not confuse this with supply in other States. There is no need for registration if you do not have a physical place of business in other State. In said case, the Integrated GST is workable.

The need of registration depends on the State in question. Let’s consider these scenarios for details.

1. GST Registration for Branches in the Same State:

Ideally, there is no need for the separate registration. You do not need to follow the whole process of registration for an individual branch. But, the details of the branch must be added in the registration certificate of the main office.

How to change Registration Certificate?

An application to modify GST registration certificate is made to add branch address. The change will fall under core field amendments, the window for which is open now. The application will be made in form GST REG-14. Know here how to apply for core field amendments.

For the purpose of addition of branch details, there is no addition documentary proof required to be submitted. However, the said modification is subject to verification and approval of the department. Upon approval, the details will be updated in the system accordingly.

2. GST Registration for Branches in Other State(s):

As you see the structure of a GST Number, the first two digits represent the State code, where GST has been obtained. Therefore, as the State changes, a fresh registration is sought.

Here is how you obtain new registration:

Obtaining new registration is as similar to the first registration. The application is made in GST REG-01 on the GSTN portal, acknowledgement of which is generated in Form GST REG-02. Upon verification, the GSTN is allotted to the applicant in Form GST REG-06. Having same PAN in the allotted number, the State code will be changed in the new GSTIN.

New Business Vertical:

Obtaining GST registration for a business vertical is voluntary and upon the discretion of a person. Therefore, it is up to you whether you need the separate registration or not. The business verticals are identified separately primarily because of different level of risks and returns. Therefore, in my opinion, a separate registration should be preferred for the easy administration of business and its financial data.

Subject to having different business vertical as defined below, you can obtain separate registrations in the same State with the following conditions:

(a) If you have obtained the registration as composition dealer under section 9, you may not register as a normal dealer under section 10 of Act;
(b) In case of supplies made by one to another business vertical, said vertical shall pay tax and also issue a tax invoice for such supply.

Let’s understand if your new business field can be termed as business vertical. Business vertical is defined under Section 2(18) of the Central Goods and Services (CGST) Act. It defines business vertical as a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.

Here, to determine whether goods or services are related, the following factors are considered:

(a) the nature of the goods or services;
(b) the nature of the production processes;
(c) the type or class of customers for the goods or services;
(d) the methods used to distribute the goods or supply of services; and
(e) the nature of the regulatory environment (wherever applicable), including banking, insurance, or public utilities;

If you identify it as business vertical, you may apply for new GST registration as per the conditions. If your business vertical is established in another State where prior registration is obtained, there will be no question to identify it as business vertical. A fresh registration will be compulsory for it being established in another State.

Registration for New Business vertical:

The new registration will again be similar to the first registration. Upon registration of business vertical is the same State, new GST Identification Number (GSTIN) will be allotted with a change in entity code. The 13th digit of GSTIN i.e. the number followed by PAN is the entity code, which represents the number of registration within a State.

PAN-based GST Search:

All the GST registrations obtained under same PAN can be checked on the GST website. You simply need to put your Permanent Account Number in the search field and the list of the registrations will open. Here is the link for PAN-based GST search.

Conclusion:

If you are already having unregistered multiple branches or business verticals, within or outside State, the applicability of GST will be decided based on the total turnover of all. As you register the business in the first place and plan for its growth, you need to understand the need of being compliant. Being compliant in GST is not only mandatory but necessary for business growth in long term. This also applies to any other regulation for your business.

About LegalWiz.in:

LegalWiz.in is a premier online legal service provider that serves the consumers with the simple, transparent and affordable services. A team of experienced CA, CS and Lawyers assist the customers starting from business set-up, its registrations, brand protection and also with Tax and return filings.

If you are planning for the business expansion or GST registration in India, get in touch with LegalWiz.in for expert assistance. You can also write us at support@legalwiz.in to request a call back from the team.

The post How to obtain Branch Registration under GST appeared first on LegaWiz.in.

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The world we live in is driven by innovation. The research and development projects are going global. Talking of India and its tryst with innovation, KPMG Survey (2018) honored India as the 3rd largest tech innovation leader in the world. This presents a reality regarding the significance of intellectual property and its contribution in promotion and growth of innovation and research projects around the world.

The Intellectual Property Law has been the fastest growing legal field in recent years. It is pretty obvious that without having the assurance of security regarding one’s innovation, creative works or a brand, it is unlikely that companies or individuals will be willing to give their time, effort and money into such projects. Hence, strong Intellectual Property Laws and growth in innovation work in tandem.

The domain of intellectual property is vast. But it’s essential to have a good understanding of the most common rights that are offered through IP protection. The most commonly applied for are:

  • TRADEMARK
  • COPYRIGHT
  • PATENT

It is observed that people get confused between the different types of available IP rights. This article will help you gain some clarity on these terms through a comparative analysis. We start off with understanding the difference between Copyright, Patent and Trademark.

Protect originally created content and artwork through Copyright Registration

Copyright is an exclusive right that protects original works of authorship; covering both unpublished and published works including literary, dramatic, musical, artistic works, cinematographed film and sound recordings. It gives the copyright holder the right to reproduce, license, to distribute copies or phonorecords of the copyrighted work. It also means that one can display the copyrighted work publicly or perform the copyrighted work publicly. In the case of works made for hire, the employer and not the employee is considered to be the author i.e. a situation where a graphic designer is employed to prepare and design products for a company and he/she does this work within the scope of their employment, the copyright over the graphical illustrations or designs would be the company’s property.

The right subsists with the owner from the moment the work is created in a fixed form. It protects mainly the form of expression and is not much focused on just content. For example: If a movie is made by adopting a story from a book, both the creators i.e. the author of the book and the person who makes the movie, both will have the exclusive rights for their individual works. Copyrights rule the entertainment industry all around the world, creating a space for artists to explore their talents and earn from them.

Under the copyright law, works that are not fixed in a tangible form of expression like a choreographic work that is not recorded or noted in any form, names, listing of ingredients, procedures, concepts, ideas etc. are not eligible for protection under the copyright law. In addition to that, works consisting commonly available information to all and devoid of any original authorship, like calendar’s, height/weight charts that can be retrieved from public documents or other common sources etc. are also not protected.

Copyright registration is not mandatory for protection. Regardless of that, registration is encouraged due to the many inducements that it offers. This includes prima facie evidence of authorship, a legal formality intended to make a public record of the basic facts of a particular copyright etc. Generally, the protection provided under the copyright law is for the lifetime of the author or creator and an additional sixty years after his/her death. After which the copyright comes under the public domain and anyone can use it without any restrictions.

Secure your logo and brand identity through Trademark Registration

A trademark is a word, group of words, symbol or combination of these that distinguishes the products of one competitor from the products of other competitors in the marketplace. It has to be unique, distinct, and capable of being represented graphically. Also, should be capable of distinguishing the goods or services of one person from those of others a brand can be registered under the trademark law.

It protects and helps in the creation of the brand which is eminently important to a company’s growth. The first thing that a consumer recognizes is the brand through its distinct identity i.e. its name. The finest example to back this up is the fashion industry. It has opened new avenues in the way marketing is done and acts as a tool to earn and make huge profits. Hence keeping the name’s exclusiveness and uniqueness secured is the primary objective of a company, which is exactly what trademark protection does. Trademark registration secures the brand owners from unfair competitors, such as counterfeiters from copying and using similar names/logos to market their inferior or different products or services. Thus, it encourages fair competition and makes it easier for consumers to make informed decisions while buying goods/services from a particular company or a brand.

The owner of a registered trademark is granted the exclusive right to prevent all third parties from using the owner’s trademark without his/her permission. This holds true when both are dealing with the similar or identical goods or services and there is a possibility that such use would result in a likelihood of confusion. The registration also gives owner the authority to allow the third party to use the same in return for a payment. Trademark protection in India is perpetual, subject to renewal of the registration after every 10 years. The application for renewal can be filed six months before the expiry of the validity period of the trademark.

Innovations and Inventions are protected through Patent Registration

The patent is one of the most important intellectual property rights that act as a stimulus for people to invent. They not only aid the inventor to make money but also the country in which the patented invention is made. Giving the country a boost in the growth and development front. It is basically giving the inventor a monopoly grant through which the inventor monitors and controls the availability of the invention to the public. One can do so based on its demand or by deciding the price of the patented product and make money through it. Being a property right it can be gifted, inherited, assigned, sold or licensed.

An invention needs to be novel, non-obvious and most importantly it needs to have some sort of utility. It cannot be a mere model or an idea. The patent owner holds the exclusive right for 20 years from the date of registration. Unlike copyright, registration is a must and without it, no rights regarding the intellectual property can be claimed, unless it proves itself as a prior art and claim rights through passing off.

The inventor is usually the owner of the patent but not when it is made during the course of his employment as part of his/her job then the employee or the organization in which the individual is working becomes the original owner.

Copyright vs Trademark vs Patent
CATEGORIES COPYRIGHT TRADEMARK PATENT
Governed Under The Copyright Act, 1957 Trade Marks Act, 1999 The Patents Act, 1970
Types of Protection & Works Protection of original creative expressions like literary works, artistic works, dramatic works etc. Protection of unique name that makes a brand distinct from other. Can include name, slogans, logo, shape, colour etc. Protection of inventions that are novel, original and has industrial utility.
Validity and Reach Valid for life time of the author + 60 years after his/her death.

Protection available in most of the countries in the world.

Validity for 10 years can be made perpetual by renewing the trademark every 10 years. Territorial in nature to claim rights should be applied to each country individually. Validity for 20 years starting from the day the application is first made. It is also a territorial right and therefore it is effective only within the territory of India. Separate patents required to be filed for each country where protection is required.
Secures Copyright secures Creative or intellectual creations. Trademarks secure the branding under which products and services are sold. Patent secures inventions that are useful for the world and has some use.

E.g. New invention in pharmaceutical industry.

Right comes into Existence Exclusive rights over the copyright are created the moment the authorship creates the work. Once the trademark gets registered the applicant of the mark can claim complete right over the said mark. Registration usually takes 12-18 months. Patent registration takes about 2-3 years in all. But the owner can stop anyone else from claiming right over a particular patent the moment he applies for provisional patent.
Provisional Application Requirement No provisional application required. Trademark registration does not include provisional application, but it requires a trademark search. A provisional application gets you 12 months of time to file a complete specification, and a priority date claim.
Symbolic Representation No symbolic representation to show registration. Used when registration is in process: ™

Used when registration is complete: ®

No symbolic representation to show registration.
Conclusion

Over the years a sharp rise is observed in awareness of intellectual property laws amongst the people. Almost every business touches IP rights and requires its protection as it safeguards the valuable assets of a company/business. From the company’s brand name, any invention it has made, to the website it owns; Patent, trademark and copyright not only secure the rights, but they also prove as an incentive for better creative expression and are a major stimulus for inspiring people to invest into research and development of projects worldwide. Intellectual property is a wealth-creating machine giving an individual/company a legitimate ownership with an image of a trustworthy organization. Every business house today relies on intellectual property rights, spending millions of dollars to secure their intellectual properties.

About LegalWiz.in

LegalWiz.in is leading online legal service provider committed in offering simplified and hassle-free solutions to businesses and corporates across India. From company registration to IPR protection, we make managing and protecting the business simpler.

LegalWiz.in can help you with registration of your brand name, file your patent or copyright your work in India online at an affordable cost. If you are seeking assistance from experts regarding registration of your IP, feel free to get in touch with our expert at support@legalwiz.in.

The post IPR in India: Difference between Copyright, Patent & Trademark appeared first on LegaWiz.in.

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Partnership is created when two or more individuals decide to come together and start a business or a venture by contributing assets in form of investments. This said arrangement is exclusively created with an aim to make profit. These individuals are called partners and the business venture is collectively called as a partnership firm.

Partnership Act, 1932 defines the structure of a Partnership firm by providing all the necessary provisions to run the same. Further, the business operations, share of profits or loss and investments are primarily directed by the Partnership Deed entered while Partnership Firm registration or any changes thereafter. The Act provides different types of partnership firms and its partners that we are discussing here to understand how you can structure your partnership firm while its registration.

Types of Partnerships in India

The most used partnership types are listed here with their distinct features to allow you choosing the suitable type. 

General Partnership:

In this type of partnership, each partner has right to take decision about the working and management of the firm. Downside being that the partner’s liability is unlimited and in case of a financial error / loss incurred by the act of a single partner the personal assets of all the partners can be taken away to pay back the debts and creditors’ claims.

General partnership is further bifurcated into two categories: 

  1. Partnership at will: Usually when a partnership is created, it is upon the partners to decide till when they want the partnership to exist. Hence, whenever a partnership is created without a specific time limit of its closure, its termed as partnership at will. The dissolution of partnership is the matter of mutual consideration when need arises and is not pre-decided. It is upon the partners to decide mutually till what period of time they want the partnership to be functioning. 
  1. Particular partnerships: This is the type of partnership that is created with an aim to carry out a specific undertaking. When partnership is created for a project of a temporary contract-based work or a specific business only, they are termed as particular partnerships. Once the objective of the business is achieved or the act for which the partnership was created in fulfilled, the partnership will be dissolved. However, the partners have the discretion to come to an agreement in case they wish to continue the said partnership. But in the absence of this, the partnership ends when the task is complete. For example, a partnership for the construction of a building or partnership for producing a movie.
Limited Liability Partnership (LLP):

A limited partnership unlike general partnership is a corporate form of business organization. Here, the liabilities are limited to each partner according to their agreed contribution to the business. The personal property of a partner cannot be attached to pay back the firms debts. This hybrid organization is governed under the Limited Liability Partnership Act, 2008 and not under Partnership Act. 

Based on Partnership Registration Status:

The Partnership Act does not mandate the registration of partnership firm. Both, registered and unregistered firms are valid and recognised under law.

  1. Unregistered Partnership Firm:

An unregistered firm is established by execution of an agreement by the partners. The unregistered partnership firm allows the Partners to carry on the business in manner stated and provided in the agreement.

  1. Registered Partnership Firm:

The Partnership Firm is to be registered with the Registrar of Firm (RoF) having jurisdiction over the place of business of the Firm.  The registration application involved payment of registration fee to RoF, varied from state to state according to the State Law. The registered partnership firm is preferred in many cases due to the benefits offered by a registered partnership firm.

 Based on the types of partnership discussed above, it is up to partners to decide which type of partnership is required to address their purpose and business requirements. 

Types of Partners

The partnership is formed with its partners and their roles and responsibility may also be changed. Based on their participation and roles in the firm, here are the types of partners in Partnership Firm. 

Active or Working Partner:

This is the partner that is actively involved in the management and other important functional aspects of the partnership firm. He bares unlimited liability in case of debts. An active partner decides how the firm operates with his active participation and contribution as a partner. In case the active partner chooses to retire, he must give a public notice of his retirement. In situations where an active partner fails to do so, he will remain liable for the acts of other partners, post his retirement. Any action taken by the active partner in ordinary course of business is binding on the firm and the partners. Subject to clause in partnership deed, the active partner can withdraw remuneration from the firm.

Dormant or Sleeping Partners:

As the name suggests a dormant partner is the one that is not interested in daily management or functional aspects of the partnership firm, but he may be consulted while taking major decisions for the firm. The partnership of this partner may not be known to the outsiders, but they invest in the firm by contributing a chunk of capital to the firm. In case of a debt he is liable to clear it out on behalf of the firm. A dormant partner is not required to file a public notice to announce his retirement. As he is not participating in the operations, he is cannot withdraw remuneration. If the partnership deed provides the clause of remuneration to sleeping partner, it is not deductible under Income Tax Act. (Read: What is allowable remuneration to partners?)

 Nominal Partner:

A person who does not have any real interest in the business or the working of the firm nor he has any rights in the profits is a nominal partner of the firm. He also does not usually have any say in the management and working of the business, but he is liable to outsiders as an actual partner. He just lends his name to the firm, so that it could advantage from his/her reputation and name and is treated like an actual partner. For example: a partnership is executed with a celebrity or a business tycoon for value addition or for promoting a brand with that person’s good will and fame. 

Partner by estoppel or holding out:

If a person expressly declares by his words or conduct, holds out to another that he is a partner, he would not be able to back out from it later. Hence such a person would thus become liable to third parties in clearing out the debts of the firm when a situation arises.

There are two essential conditions for the principle of holding out:

  • the person to be held out must have made the representation, by words written or spoken or by conduct, that he was a partner; and
  • the other party must prove that he had knowledge of the representation and acted on it, for instance, gave the credit. 
Partner in profits only:

In certain situations, a partner joins the partnership firm with a clarification that he/she would share only profits as a partner and would not be liable for any losses. However, he shall be liable like all other partners since the liability of the partners is joint and several. So if the firm incurs any loss and the other partners become insolvent, the third party may hold this partner liable. As the arrangement of sharing only profits is an internal arrangement among the partners, the third partner may not be concerned about it. The said partner can then reimburse the contribution made to the third party for the arrangement. 

Sub-partner:

When a partner agrees to share his profits derived from the firm with a third party, that person is known as a sub- partner. He cannot represent himself as a partner in the original firm. He does not have any rights against the original firm neither he is liable for the acts of the firm. He can claim the agreed share of profits form the contracting partner only. 

Minor as a partner:

Partnerships are created by a mutual agreement between two or more parties which is a contract. Minors are incapable of entering into contracts. But under the Indian Partnership Act, a minor can be introduced as a partner as long as it is only to enjoy the benefits. A minor partner has access to the accounts of the firm and is entitled to share his profits. They do not hold the right to file suit against the partners as long as he is in the firm. Private property of the minor cannot be attached by the creditors.

As you have now learned about the types of firms and its partners, let’s know about establishment of a partnership is India. If you are yet confused to find a right kind of partnership, feel free to connect with LegalWiz.in experts at support@legalwiz.in. The experts will guide you through the process and other requirements of the registration.

The post Types of Partnership Firm and its Partners in India appeared first on LegaWiz.in.

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Certain businesses are regulated by special authorities based on their activities. For an instance, the business entities dealing with any kind of financial securities requires approval from Securities and Exchange Board of India (SEBI) whereas to setup a NBFC, prior approval of RBI is required. Here, we are dealing with which business activity requires prior approval of SEBI and how to obtain it.

SEBI is a body regulating the intermediaries associated with the securities market. Therefore, any person or entity performing such activities requires prior approval of SEBI to start a business. This includes stock brokers, sub brokers, investment advisors, merchant bankers, RTA, mutual fund, venture capital fund, portfolio managers, asset management companies, etc. Let’s know at what stage you require this approval for company registration.

Prior to filing application for online company registration, one must reserve a company name by application in form called RUN. The applicants and Registrar of Companies (ROC) are required to abide by the guidelines for availability of the name. If the proposed company name includes words such as Stock Exchange, Venture Capital, Asset Management, Mutual Fund, etc., then these entities are required to obtain approval in the proposed name of the company from SEBI and attach the same with the application for company name reservation. The said approval should also accompany the application for incorporation.

How to Register a Company with SEBI?

SEBI has prescribed difference rules or regulations and eligibility criteria for different kind of entities based on its activity. First, based on the activity, we need to find the applicable compliance and the exact process of obtaining approval. Here, we have generalised the process for obtaining prior approval from SEBI. After ensuring that the applicant fulfils the eligibility criteria, the applicant may make an application for NOC.

SEBI has launched the digital platform to ease the process of application for registration or renewal. First, the applicant is required to register itself on this platform for intermediaries (https://siportal.sebi.gov.in).

Application filing
  • The applicant must furnish complete application in the prescribed form along with supporting documents to obtain the No Objection Certificate (NOC) from SEBI.
  • At this stage the applicant is advised to go through the SEBI Regulation for their respective business activity which will help accelerate the process.
  • The applicant has to fill a form which requires details such as company name, organisation structure, business plan, capital structure, place of incorporation and other details based on the activity.
  • In the covering letter, the applicant is supposed to mention whether they are registering with SEBI for the first time or are already registered with SEBI for any of the intermediary activity.
  • A duly filed application form is filed online by payment of prescribed application fee on the digital platform itself. The application fee is not refundable even in case of rejection.
  • SEBI will respond to the application made within 25-30 working days (depending on business activity) in form of reply.
On-site due diligence

In some cases, SEBI may conduct inspection of the businesses to check the infrastructure for client servicing and complaint handling. Mostly the due diligence is conducted for Mutual Funds or Credit Rating Agency.

Grant of certificate
  • SEBI considers grant of certificate by taking into account the requirements specified in respective Regulations.
  • On thoroughly verifying whether the applicant complies with the requirements, SEBI approves the application and informs the applicant on grant of certificate, receipt of payment of registration fees subject to terms and conditions as the Board may deem fit.
  • On receipt of approval from SEBI, the applicant must make the payment of registration fees by way of draft in favour of “The Securities and Exchange Board of India” payable at Mumbai. Registration fees stands different for corporate and individuals, they are high for corporate.
  • Once the receipt of payment is acknowledged, SEBI grants the No Objection Certificate.
Post registration compliances
  • Once registered the entity must observe the requirements as specified by SEBI on timely basis.
  • The entity must keep the track of SEBI website for any updates, circulars or guidelines with respect to their particular business activity.
  • Also, the entity must acknowledge SEBI whenever there is any change in the details furnished.

Once the entity is registered with SEBI, they can proceed with other steps of online company registration and start their business. If the entity fails to register with SEBI then it may so happen that Ministry of Corporate Affairs (MCA) may not consider the application for company registration. Thus, registration with SEBI stands mandatory for businesses dealing with any kind financial securities, mutual funds, venture capital or other financial asset management activities.

About LegalWiz.in:

LegalWiz.in is the online portal catering the needs of the consumers such as registering a company, trademark registration, government registrations and filings and other legal compliances.

Our team of experts will guide you through the process of company registration and set up your business. To get personalized service write us on support@legalwiz.in and we will get back to you.

The post How to obtain SEBI Approval for Company Registration? appeared first on LegaWiz.in.

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