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Procedures to Change the Name of Private Limited Company

Procedures to Change the Name of Private Limited Company

There are several reasons as to why the name of a private limited company could be changed. Most of the times, these names are changed because of business-related purposes. It could also be that a private limited company is attempting to rebrand with a new name or maybe it is trying to indicate that there has been a change in its management with the new name.

As it is said, Company has all in the name!

There are some reasons, companies they aspire to change their name. In many cases, they want to make the name as a big brand.

One of the measure things of a company is that after getting huge name and fame, if they think we are doing well, competing with the world brands and our name should be unique one; they can go for this. Company Names can also be changed when the aim and objects of the Company they want to change, if any name of the activity included in the name.

Here you can take a look at the examples of some big brand companies that originally had different names but changed to new one.

For example: some famous companies have also changed their original name to new distinctive one like, BackRub to Google, Brad's Drink to Pepsi, Blue Ribbon Sports to Nike, PC's Limited to DELL, Computing Tabulating Recording Corporation to IBM, Jerry's Guide to the World Wide Web to YAHOO and etc.

No matter what the objective is, a private limited company can change its name but for this at it needs. At the very least, the approval of its shareholders is must required. Apart from that, such a company also needs to get necessary permission in this regard from MCA (Ministry of Corporate Affairs). It also needs to be noted in this regard that the name change of a private limited company does not have any effect as such on its existence as a legal entity.

So before you change your company name, you need to follow the process that holds all the key points and prospects which carry out the whole process for changing the company name. Here are the following steps to lift up your spirit for name change.

These 6 steps are involved in company name change process:

  1. Hold Board Meeting and Pass Board Resolution for Name Change
  2. File INC-1 to MCA for Name Change Availability
  3. Pass Special Resolution in EGM for Name Change and File MGT-14
  4. Application to ROC for Name Changing in INC-24
  5. If ROC satisfied with your application, then Registrar will issue a new Incorporation Certificate in INC-25
  6. Make Changes in Company MOA and AOA

In short, we explained here below the name changing process of a company where you can gather the overall idea for your knowledge base.

1. Passing a board resolution

The first step is that you need to take in order to change the name of your private limited company is to take a resolution regarding that effect at the board of directors’ level. For decisions such as these a board meeting has to be called so that a resolution to change the name of the company could be passed.

At the same meeting a director needs to be given the necessary authority to apply to MCA. This is done to check whether the proposed new name is available or not. The same board meeting can also be used to take a decision in order to call an extraordinary general meeting, where the name of the company would be changed and alterations would be made to the MOA (memorandum of association) and AOA (articles of association).

2. Checking if the name of a company is available or not

Once a company passes a resolution whereby the proposed new name is said to be available the director, who has been authorized to do so, can apply to MCA in order to procure said name. The procedure that is followed over here is the same as the one, which is followed when a private limited company is incorporated.

This means that the new name must be decided on according to the guidelines that have been set in the naming guidelines of the Companies Act, 2013.

3. Passing a special resolution to change the name of a company

As soon as approval for the name can be procured from MCA the company needs to organize an extraordinary general meeting yet again. This needs to be done in order to pass a special resolution in order to change the name of a company. In this meeting some necessary changes also need to be made to MOA and AOA as well.

4. Application for approving the name change of a company

Once a company has passed a special resolution in order to change its name it must file an application with the Registrar of Companies whereby it seeks approval for changing its name. This application needs to be made in Form 1B and the necessary fee needs to be paid along with it as well.

5. Issuing a new certificate of incorporation

Upon being satisfied with the application for changing the name of the company the Registrar of Companies (ROC) will issue a fresh certificate of incorporation. When this certificate is issued, it can be said for sure that the process of name change is finally complete.

6. Making changes to the AOA and MOA

After the new certificate of incorporation has been issued, this steps have to be taken so that the new name could be incorporated properly in each and every copy of MOA and AOA.


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Guideline to Choose the Company Name

Guideline to Choose the Company Name

As far as India is concerned there are certain rules and regulations for choosing the name of a company. They have been mentioned in the draft rules under the Companies Act, 2013. These guidelines are applicable for different kinds of companies in India such as private limited companies, limited companies, and one person companies. The Act states pretty clearly that the name has to be approved so that a new company can be incorporated. Ideally, the name should be a unique one and desirable one.

The proposed name should never be exactly the same as another company

In order to make sure that the name of your company is absolutely unique you need to keep track of a few things.

It should not be the plural version of another company’s name. For example if a company’s name is Vick and you make yours Vicks then it would not be considered sufficiently unique. If you think that you would take another company’s name and tweak its type, spacing, letter case, and punctuation mark, and it would become a unique name you are wrong as well. For example if a company is named Arvind and you name yours ARVIND your name would be rejected for sure. Similarly, if you thought that just joining the words in another company’s name or separating them would be good enough you are wrong yet again. Doing this does not make the name of your company a unique one. This means that the name Bal Ram will not be considered unique enough if a company by the name of Balram exists already.   

You might think that by changing the number or tense of the words in a company’s name would give you a unique name but you are wrong as well. It will not make your company’s name a unique one. You might also be under the impression that by changing the phonetic spelling or by using some other spelling variation of a company’s name you would get a unique name for your company. The result of such an effort would not be considered a unique one too. Similarly, if you willingly misspell the name of a company and think that you have got a new name for your company you are wrong as well.

A lot of people may think that by adding or changing the internet extension they would get a new name for their company. That is a wrong thought as well. Similarly, if you thought that by adding a name or a place name to another company’s name you would get a unique name for your company you are wrong too. You will also not be allowed to translate or use various combinations of words present in another company’s name in order to create a name for your own company.

It should not be undesirable

There are certain conditions in which the proposed name of a company is deemed to be undesirable. If the name violates section 3 of the Emblems Act 1950 it would be regarded as an undesirable name. If the proposed name of your company is in contravention of trademark owned by another company then it would be deemed unacceptable as well. Similarly, if a trademark is subject to an 8 application for the purpose of registration it cannot be violated as well. In this case you would need the permission of the applicant or the owner of said trademark.

Your proposed company name would most definitely be deemed inappropriate if it contained offensive words, ones which can hurt the sentiments of any section of people in the country.  

Some other conditions to be kept in mind

Your name should ideally be consonant with the main object of your business that you have mentioned in your company’s memorandum of association. If your company is in the financial services industry then the name should indicate that as well. If your name indicates your business constitution such a name would not be passed for sure. The words British India should definitely not be there in your company’s name. If your proposed name shows that you are associated in any way with an embassy, a foreign government, or a consulate it would be disallowed as well.

If your name shows any kind of patronage of a national celebrity or someone who occupies an important place in the government then it would not be allowed to stand. Similarly, abbreviated or vague names would not be allowed. If the proposed name of your company is just the same as one that has been dissolved because of liquidation then it would not be allowed as well. In case, the proposed name of your company is the same as one that has been deleted from record books the name would not be allowed too.

If the name of your company is just the same as that of a limited liability partnership then it would be disallowed as well. In case, the name of your company requires to be approved by a regulator such as IRDA, SEBI, RBI, and MCA then you would have to declare that your name is in accordance with the norms set by the regulator in question. This is mostly applicable for companies looking to work in the financial services sector. If you are a private company the word state would not be allowed in your name. Generic names or ones that include names of other countries would not be allowed in India. In certain cases you would need to get approval from the central government to get the name of your company approved.


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Highlights of Indian Union Budget 2018-19

Highlights of Indian Union Budget 2018-19

Finance Minister Arun Jaitley presented the Union Budget 2018-19 in Parliament on Thursday. In this budget; they are mainly focused on rural economy and creating opportunity for farmers development, the government is proposed a string of measures for agriculture sector and also announced a new national health insurance scheme where it is said to be the largest progamme in the world funded by the government which will cover 10 crore insurance for poor and marginalized families to 50 crore beneficiaries.

The budget was mostly guided by the mission to strengthen agriculture, rural development, healthcare, education, employment, MSME and infrastructure sectors. As said by the Government, this series of structural reformation will help to drive forward the people and India will be the fastest growing economies country in the world.

Here take an overview of key highlights of Budget 2018-19

  • No changes in personal income tax slabs.
  • Salaried tax-payers to get a standard deduction of Rs. 40,000 in lieu of transport allowance and "other medical expenses".
  • Rs. 2,000-crore fund for development of agri markets.
  • Health and education cess has been increased to 4 per cent
  • All senior citizens will now be able to claim benefit of a deduction of Rs. 50,000 for any medical insurance.
  • For critical illnesses, the deduction has been increased to Rs. 1,00,000
  • Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000
  • Free power connections to 4 crore homes under Saubhagya Yojana.
  • Eight crore free gas connections for poor women through Ujjwala Yojana.
  • 5 lakh WiFi hotspots will be setup in rural areas to provide easy internet access
  • Govt. announces Amrut program to focus on water supply to all households in 500 cities
  • Govt. to implement minimum support price for all crops; It is hiked to 1.5 times of production costs.
  • Govt. to contribute 12% of wages of new employees for all sectors.
  • Mobile phones set to be costlier as custom duty increased by 20 per cent
  • New flagship is introduced as National Health Protection Scheme, providing a health insurance cover of Rs. 5 lakh per family per year announced.
  • Railway capital expenditure for 2018-19 set at Rs. 1.48 lakh crore.
  • Disinvestment target for this year set at Rs. 80,000 crore.
  • Automatic revision of emoluments parliamentarians every five years, pegged to inflation.
  • Rs. 5.97 lakh crore allocation for infrastructure
  • 10 prominent sites to be developed as Iconic tourist destinations
  • NITI Aayog to initiate a national programme on Artificial Intelligence (AI)
  • Centers of excellence to be set up on robotics, AI, Internet of things etc
  • 100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
  • Proposal to extend reduced rate of 25 percent tax currently available for companies with turnover of less than 50 crore (in Financial Year 2015-16), to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17, it’s a benefit to micro, small and medium enterprises.
  • MSME enterprises are a major element for growth
  • More concessions for International Financial Services Centre (IFSC), to promote their trade in stock exchanges located in IFSC.
  • To control cash economy, payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed and would be subject to tax.
  • Infrastructure is the growth driver of economy
  • Target 3 lakh crore for lending under PM Mudra Yojana
  • Govt. will setup 2 new Schools of Planning and Architecture

At a glance, this budget for the year 2018-19 is largely focused on upliftment of agriculture sector along with major push to healthcare and education sectors in the country.

To know more details about the budget Click Here for Full Report

Highlights on Zero Government Fees for Company Registration

Highlights on Zero Government Fees for Company Registration

The Ministry of Corporate Affairs has changed the company incorporation process form 26th Jan, 2018 on the occasion of 69th Republic Day. This is a new step taken by the government of India to make it easier and faster for getting the company name approval with less data based information.

Accordingly, you will have to reserve your company name through the RUN (Reserve Unique Name) service and don't required DSC and DIN; but thing is that you have to choose only one name, there is no option for others. And for each and every name you have to pay Rs. 1000, it may or may not be approve.

They are thinking it will take less time to incorporate a company in India by this easier process. If your company name is approved, it will be kept for 20 days to incorporate the company within that time you have to register your company otherwise it will be invalid but earlier it was 60 days. But one thing we want to clear here as said by the MCA department; the name applied for company may be approved or rejected according to the guideline, you should follow the unique and not resemblance to any other existed business.  

If once it is rejected, for every fresh name application you should have to pay the fees infavour of new name suggestion.

Free of Cost Service to all Companies

Here we are giving hint what is free?

You will get free of cost charge only in Company Registration that will be apply for every type of company including Private Limited Company, Limited Liability Partnership (LLP), Public Limited Company, One Person Company (OPC) etc.

So now, the government is waived the company registration charge, means you will not pay for any single money in company registration that you had paid some thousands earlier towards to your company incorporation.

Benefits to Startups

  • Simple Process for Name Approval
  • Zero Fees on Company Registration
  • Reserve Company Name Fast
  • Fast Track Process

Cost to Bear for Company Registration

But other cost you have to pay related to your company registration

Though the government has waived the fees for company registration final forms, but still there will be some cost which a person will need to bear which are as follows:

  • Name Approval
  • Director Identification Number for Director (DIN)
  • Digital Signature Certificate (DSC)
  • State Stamp duty which comes around between Rs.200 to Rs.10,000/- (Rs.10,00 stamp duty is for Punjab).
  • Professional fees Comes around Rs.5,999 to Rs.9,999 /- (Depends upon number of members)
  • Stamp paper and miscellaneous cost comes around to Rs.1000 to Rs.2500/- (Depends upon number of members)
  • Authorized capital fess depends on Authorized capital

Let’s be update for new information on company matters.


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New Company Registration Process – 2018

New Company Registration Procedure - Jan, 2018

New Company Registration Procedure - Jan, 2018

The Ministry of Corporate Affairs (MCA) has now made it simpler for you to register your company and limited liability partnership (LLP) from 26 January 2018, which incidentally also happens to be the 69th Republic Day of the country. This can easily be called a giant step of sorts even as the government has rolled out a number of process changes to make it happen. The government is now letting you incorporate your company without any fee. This is part of a new service named Reserve Unique Name (RUN). Now there is no need any longer for you to file a form or even use a DSC (digital signature certificate) as such.

Thanks to this program you would also be able to file the e-form named SPICe without DIN (director identification number). Apart from the fact that the entire process has been made a lot simpler and there is no fee involved in the same the new process takes a lot less time as well.

RUN Form

Now, you can incorporate a company without seeking prior approval for the name or even using the SPICe form as such. And now, we want to inform one thing that the name will be reserved for 20 days as per new rule; however, earlier it was reserved for 60 days and this is a point that they reduced the time period of name reservation for a company to make the business do faster and easier with greater degree of simplifying process. As part of SPICe the incorporation certificate is only provided if MCA approves of the name of the new company.

Now, if you, as an entrepreneur, want to incorporate a company with a name that is unique you can do so for filing directly for incorporation by using the SPICe form. As has been said already, this will help you save plenty of money and time. If an entrepreneur however wishes to incorporate a company that has a name, which is same as that of a company that already exists, an existing trademark, or a current LLP, then they can do so as well but they would need to get the permission of MCA in order to be able to use that name.

What happened before RUN was introduced?

Before RUN (Reserve Unique Name) had been introduced companies had to apply to reserve their names through Form INC-1. At the most they had six choices from which they needed to pick their names. Applicants also needed to furnish at least one DSC and a brace of DINs.

How will the process be now?

Now, thanks to RUN; companies would be able to reserve their names only one in a shorter span of time and with a greater degree of ease process. Even they (entrepreneurs or business owners) would be able receive the name approval before they have received their DSC.

However, the applicant would not be able to opt for more than one name at a time. Right now, companies need to pay INR 1000 for reserving the name of their company using the web form RUN. Each and every time they do this; they would have to pay said amount. It does not really matter if the name has received approval or not. So we suggest that before applying for a name, you may like to be familiar with the Companies (Incorporation) Rules 2014, as amended, and conduct your own Name and Trade Mark search; for which you might not be pay again and again for acquiring the company name.

In order to apply for a name a company would first need to open an account at the MCA website. After that they would have to choose the kind of company that they wish to register and then they would have to provide their chosen name.

After this, they would have to check the name with the database of LLP and company names at the disposal of MCA. It needs to be noted in this context that the MCA database would run a check only to see if a proposed name is exactly identical to a company or LLP that already exists. However, as per the rules and regulations mentioned in the Companies Incorporation Rules, 2014 the proposed name of a company cannot even be similar to an existing one, let alone be an exact replica.

Here we are just showing you an overview of company registration process in present days as related to earlier days and from this you will get a basic knowledge on previous and recent process

Take a look on the new company registration process as on Jan, 2018

1. Get Name Approval from MCA by using RUN service

2. Obtain DSC (Digital Signature Certificate) from any Certifying Authorities (CA)

3. State Stamp Duty Fees

4. Incorporate Company with DIN, PAN & TAN with the help of SPICe e-Form

5. Appointment Directors, CEO, CFO to the Company

Here’s a quick look at earlier company registration process before 2018

1. Obtaining DSC

2. Obtaining DIN

3. Get Name Approval from MCA by filing INC-1 Form

4. Upload Various Forms in MCA using Spice

5. Certain Stamp Duty Fees

6. Company Incorporation Certificate along with PAN and TAN


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Highlights on New Company Registration with Zero Fees

Procedure Involved to Incorporate a Company in India

Partnership Firms - The Important Features

Partnership Firms - The Important Features

In India the Indian Partnership Act, 1932 governs the partnership firms. A partnership firm has been defined clearly in Section-4 of the act where a partnership has been said to be the relation between individuals who have consented to sharing the profits accrued from a business. By definition, this essentially must be a business where they are all involved to various extents.

Thus, if we go by the above definition, there are five things that should definitely be there in a partnership firm – a contract; the contract should be between at least two people; they should agree to do business together; they should have the common aim of sharing the profits; and they should all be involved in that business.

Contract for a partnership

Any and every partnership happens because there is a contract to that end. It does not happen because of factors such as status, inheritance, or operation of any law as such. This means that in case a partner in such a company passes away his or her daughter and son can definitely lay claim to a certain share in the property owned by that partnership but cannot become a partner immediately. For that she or he needs to enter a similar agreement that her or his deceased parent signed on.

The maximum number of partners in such a company

Normally, the highest number of people that can be there in a company such as this one is 20. A partnership is basically the aftermath of a contract and as such you need a minimum of two people to start one.

There is nothing mentioned as such in the Indian Partnership Act, 1932 regarding the highest number of people that can be there in a partnership.

However, the Companies Act has stated that you cannot have more than 10 people in case of a banking business and more than 20 in case of all other kinds of businesses.

Advantages of a partnership firm

One of the biggest advantages in a partnership is that the risk factor is always divided since there are plenty of people involved in the same. It is always easier to establish a startup as such since it does not cost you a whole lot of money to start one. Since there are more people pooling in money in a partnership; such a firm always has easier access to capital. It is also easier to borrow as a partnership because the capacity is much better.

With a partnership you can easily make a highly skilled employee your partner. There is always the possibility that you would be able to split your earnings. As a result of this a partnership is able to get tax related benefits as well.

How to register a partnership firm?

The first thing that you need to do in this regard is choose a name for your partnership firm. The next step is choosing a partnership deed or agreement. For this you can seek the help of professionals who specialize in work such as this.

The third step that you need to take in order to register a partnership company is to apply for a PAN (permanent account number) card, which will be issued in the name of your partnership firm. Once you get a PAN card, as well as the registered partnership deed, you need to open a current bank account for your partnership company.

There are certain documents that come in handy in cases such as these. The first of them is copy of an address proof cum ID card such as PAN card, Aadhaar card, voter ID card, and driving license of the partners.

Steps are taken for partnership firm registration in India

Here are the key steps we took to register a Partnership Firm in Bangalore, Karnataka or any other cities in India; to accomplish this, you need to follow the below 4 steps:

  1. Select Your Partnership Firm Name
  2. Draft the Partnership Deed/Agreement
  3. Apply for PAN Card
  4. Open a Business Current Account

Accordingly, here we explained briefly the steps of partnership registration; take a look over at this for gathering a little knowledge.

Step-1: Choose a Suitable Name of Your Partnership Firm – The partners have the right to choose a correct name for their business, cause they are the owners of the company and before choosing partnership firm name, they should keep it in mind that the name should not be violate the rules and regulations of Indian Partnership Act, 1932; according to the Section 58. And the name should not be identical to the existing one, otherwise it will be crucial to get name approval from District Registrar of Firms.

Step-2: Draft/Form a Partnership Agreement or Deed with the Help of Experienced Consultants – Partnership Dead/ Agreement/ Contract is a primary legal document which carries the objectives of nature of the business, capital contributed by each partner and their rights, roles, responsibilities and obligations to the firm, Managing Partner, registered office address, and etc.

To produce a partnership agreement or deed, you need to visit your nearest regional Sub-Registrar and register the Partnership Deed. Remember, partnership deed has to be notarized and it requires a stamp duty. The minimum value of stamp duty for partnership agreement/deed in Bengaluru Karnataka is Rs. 2000 and it varies from state to state as per their States Government Rules.

After verifying all the details of the Partnership Deed and partners documents, if the Registrar is being satisfied with your novelty then he shall enter your record of statements into Register of Firms and issue an acknowledgement of registration for your Partnership Firm, according to the Section-58(1) of the Indian Partnership Act.

The essential characteristics of Partnership Deed Agreement are as follows:

  • Minimum number of members is 2 and maximum 20 as Indian Partnership Act.
  • Partnership firm it stands on contract as operation of the law or inheritance.
  • The partnership firm business should be carried on by al the partners or anyone acting them for all.
  • The partnership firm registered to carry on the business and share the profits as per agreed in the partnership deed.

 Required below mentioned details while preparing the Partnership Deed is as follows:

  • Names of the firm
  • Registered Office address of the firm
  • Nature of business of the firm
  • Address of partners
  • Capital contribution by the each partner
  • Profit sharing ratio among the partners
  • Interest on capital, if any to be paid to partners
  • Loans and advances by partners to the firm
  • Who is the Managing Partner
  • Who will be the auditor of the firm
  • Whether or not to pay salary or commission to partners.
  • Methods of Maintaining bank accounts
  • The mode of admission and retirement of partners
  • How to manage or adjust the value of goodwill on admission, retirement and death of a partner during the business process
  • Introduce provisions for arbitration to solve the problem in case of disputes arise
  • Specify the methods of dissolution of your partnership firm
  • Mention the settlement procedure of accounts between the partners, in case firm dissolution happens
  • Who is the sleeping partner and benefits, if any

Step-3: Apply PAN card online for Partnership Firm – After receiving Acknowledgement of Registration of firm or Certificate of Registration for partnership, you can proceed to apply PAN for partnership firm.

Documents required for applying PAN card for partnership firm

  • Copy of Partnership Deed/Agreement.
  • Copy of Certificate of Registration of partnership firm issued by Registrar of Firms.

Step-4: Open a Current Bank Account for your Company based on the Firm PAN card and Registered Partnership Deed – You can apply for a Current Account for your partnership firm with the help of PAN card, Partnership Deed and  Certificate of Registration where all the transaction of firm accounts are to be kept here for future financial purpose.

Documents required for applying Current Account for partnership firm

  • PAN card of the Partnership Firm
  • Certificate of Registration of Partnership Firm
  • Copy of Partnership Deed

The minimum essential documents required for Partnership Registration are as follows:

  • Self attested PAN Card of all the partners.
  •  Self attested Address Proof – Aadhaar Card/Voter ID/Driving License/Passport of all the partners
  •  2 passport size digital photographs of each partner.
  • Rental agreement of office address from the owner of the building
  • Electricity bill of office address, which is not older than 1 month; if rented premises
  • Take No Objection Certificate (NOC) from the owner of property/building for official context.
  • Received BBMP tax paid receipt copy

Partnership firm business is the most popular type of business organization in India since the early days of business because it is easy to form, has no complicated legal formalities and less compliances as compared to private limited company, limited liability partnership and one person company. But each and every business entity has the special unique features to carry out the business.

Whenever entrepreneurs or the innovators are thinking about to setup a business entity, they are more likely to intend to start a partnership business rather than others; because it creates more trustworthy to their clients for its bonding nature and characteristics.

Only two partners of the company can run the business; if they want to grow their business, they can add more partners and invest capital to expand their business by implementing with some creative ideas and better customer services. Journey starts from here towards your goal.


Also Read:

Procedure and Steps to Incorporate a Company in India

New Company Registration Procedure Through RUN Service

GST E-Way Bill – What You Need to Know?

GST E-Way Bill – What You Need to Know?

What is e-way bill?

The e-way bill is basically an electronic way bill that deals with movement of goods. The bills can be generated at the portal that has been specifically created for this purpose. As per laws, goods worth in excess of INR 50,000 can only be transported in India by a registered individual who has the e-way bill. The bill can be generated, as well as canceled, via SMS (short message service). When you generate such a bill you get an e-way bill number (EBN), which happens to be a unique number, is generated. This number is only made available to the suppliers, the transporters, and the recipients.        

Who should generate an e-way bill and why?

A person registered under GST must generate an e-way bill when she or he is moving goods that are worth more than INR 50,000. It could be moved from another registered person or to such an individual. However, a registered person, as well as a transporter, might also generate such a bill and carry it even if the value of goods being transported is less than INR 50,000. For this they need to fill up Part A of the Form GST EWB-01. This needs to be done before the goods are moved.

If the registered person is a consignor or consignee, or even the recipient of goods, then before moving the goods she or he would need to fill up Part B of Form GST EWB-01. The mode of transport in this case could be hired or owned. In case the registered person is a consignee or consignor and the goods are just being handed over to the transporter the Part B of said form would have to be filled up. In this case the registered person would need to provide information regarding the transport being done. This needs to be done in Part B of Form GST EWB-01.

Unregistered people would also need to generate an e-way bill. However, if in this case the supply is being made to a registered person the receiver will need to make sure that all the compliance related to these matters are properly met. In that case, she or he would have to act as if she or he is the supplier. However, if the goods are being transported within a distance of 10 km and that too in the same union territory or state and it is being done just so that the goods could be transported further the supplier would not need to fill up Part B of Form GST EWB-01.

However, if the supply is being made via air, railways, or ship then the Part A of Form GST EWB-01 needs to be filled up, either by the recipient or the consignor.

In case the supplier has failed to generate an e-way bill it is the duty of the transporter to generate the same, especially if the goods are being carried by road, rail, or air. This needs to be done before the goods are moved. The e-way bill in this case can be generated based on the information provided by the registered person in Part A of Form GST EWB-01.

When should an e-way bill be generated?

An e-way bill has to be generated when goods worth more than INR 50,000 are being moved. It could be for a supply or even for a return. It could also be because of inward supply being done by an unregistered person. In this case, the term supply could be defined as a transaction that may be done for some consideration – money for example – during the course of the business or later on. It could also be a supply without any consideration. This means, selling of goods in lieu of payments, transferring goods between branches, or even barter or exchange where goods – and not money – are being exchanged.

Purpose of e-way bills

E-way bills are being done with the aim of making sure that all the goods being transported are compliant with the laws of GST. It is also highly effective when it comes to tracking movement of goods as well as limiting tax evasion.

Validity of e-way bills

The validity of e-way bills depends on the distance that is being traveled by the goods. Normally the bases of calculation are the time and the date at which the bill was generated. In case the distance traveled is less than 100 km then it would remain valid for a day. However, for every 100 km and less after this an extra day would be added to the period.

What happens if the goods cannot be transported within the validity period?

If due to exceptional circumstances the transporter is unable to take the goods to the desired location then it can generate a new e-way bill. However, it would also need to update the relevant details in Part B of Form GST EWB-01.

When is an e-way bill not needed?

If the goods are being delivered through a non-motor vehicle then an e-way bill will not be necessary. Similarly, an e-way bill would not be applicable for goods that are being transported from ports, air cargo complexes, airports, and land customs stations to container freight stations (CFSs) and inland container depots (ICDs) so that the Customs could clear them. If the goods are being transported over a distance of less than 10 km and that too within the same state then the bill will not be necessary. The e-way bill is also not necessary in case of certain specified goods.

Non Banking Financial Company – What it is and How to Apply for it?

Non Banking Financial Company – What it is and How to Apply for it?

A non banking financial company (NBFC) can be defined as a financial institution that is known to provide some financial services that are provided by the banks as well, the major difference being that they do not have a banking license as such. Normally, these institutions do not have the right to take deposits from common people.

This means that they are not under the purview of the oversight and regulation that you need traditionally for banks. NBFCs are allowed to offer banking services such as credit facilities and loans as well as retirement planning products. It can operate in money markets and can underwrite. It is allowed to perform merger activities too.

A little more information on NBFCs

In the United States of America (USA); it was under the Dodd-Frank Act that the NBFCs were formally classified as companies. They are basically supposed to take part in financial activities but for this to happen at least 85 per cent of their consolidated assets or yearly gross revenues have to be financial in nature. In fact, a lot of companies can be classified as NBFCs. This includes the following:

  • Credit Unions
  • Private Equity Firms
  • Insurance Companies
  • Mobile Payment Firms
  • Money Market Funds
  • Microlenders
  • Asset Managers
  • Peer to Peer Lenders
  • Hedge Funds

How to start such an organization in India?

In India, the workings of an NBFC are regulated by the Reserve Bank of India (RBI); which also happens to be the apex financial institution of the country. Their main business is lending and acquiring shares, bonds, and stocks. They also do work such as hire purchase and financial leasing.

Normally as per the laws, in India an organization is thought to be a financial service provider when the financial assets of a company are more than 50 per cent of the aggregate asset base – similarly when earnings from financial assets make up more than 50 per cent of a company’s gross income.

If a company fulfills both these requirements it would need to have an NBFC license. In fact, the test needed to get such a license is known popularly as the 50-50 test. In India, these companies are not supposed to need an NBFC license:

  • Agricultural Operations
  • Providing Purchases and Services
  • Industrial Activities
  • Building and Selling Immovable Property – this could be the main business as well
  • Selling and Buying Goods
  • Any Small Financial Activity

Registration process is being simplified for new NBFC in India

Nowadays RBI made easy to register a new NBFC (Non Banking Financial Company) in India by minimizing the application form and checklist of documents. Earlier it was taking 45 numbers of documents to be submitted for registering a Non-Banking Financial Company but, now the applicant can submit approximately seven to eight documents during the revised application process.

Now the registration process of Non Banking Financial Companies (NBFCs) is just become easy and smoother, as said by the Reserve Bank of India (RBI).

As said by the RBI, there are two distinct types of requisition context for non-deposit taking organization/NBFCs (NBFC-ND) based on the source of funds and customer interact (interaction between the customer and organization).

Types of NBFC companies

Here you can find the two different types of NBFCs functions are categorized into First Type and Second Type. The first type is referred to Type-I (not accepting deposits) and second type as Type-II (accepting deposits).

In Type-I, the NBFC-ND will not accept the funds from public and also have not to make customer interface for their future intention.

If the Type-I companies wants to avail funds from public or intend to make interaction to their customer for future purpose, they must have to take acceptance from the Department of Non-Banking Regulation under Reserve Bank of India.

In Type-II, the NBFC-D (the Non Banking Financial Company with deposits) will accept the public funds and also can make interaction with the customer for their future scope intention.

How to apply for an NBFC license?

If you want to get NBFC license, you would have to submit your application both offline and online at the regional office of the RBI. You would need to provide the latest information about the management of the company. You would have to provide certified copies of the Certificate of Incorporation.

In case, you are already a public limited company or wish to operate as one you would have to provide a certificate of commencement of business. You would also have to provide certified copies of the latest articles and memorandum of association of your company.

You would also need to provide the latest details of various clauses in said memorandum that may be related to your financial business. You would also need to provide a copy of your PAN (permanent account number) or CIN (corporate identity number) that has been allocated for your company. 

You would also need to provide information regarding the director’s profile, which has to be filled up and signed separately by each and everyone on the board of directors of your company. If the directors already have experience of working in NBFCs they would need to provide certificates from those.

Essential documents required for getting NBFC license

These are the main documents required for NBFC registration in India:

  • Certified copy of company incorporation certificate
  • Certified copy of company MOA and AOA
  • Detail information of all directors and shareholders of the company
  • Board resolution in favour of NBFC registration
  • Bank Account with minimum paid-up capital INR 2 Crores of the company
  • A comprehensive action plan and activities about the company and proposed NBFC
  • Financial statements of the company
  • Director’s report and Auditor’s report
  • PAN of the company
  • Highest qualification of all the directors of the company
  • We may request you, if any relevant document is required

Procedure to Apply for Getting NBFC License

To get your NBFC Company registration certificate form RBI, you need to apply the proposed company for NBFC license online and after the application process is completed, you have to submit the physical copy of application to the Regional Office of the Reserve Bank of India along with the essential documents.

A brief note on application process:

  • First setup a Private or Public Limited Company
  • Prepare a business plan with clear documentation
  • Submit application online through COSMOS official portal
  • Submit applied physical copy of application to RBI
  • Track the status of application

So, here you can follow the steps of application process as explained below:

  1. First log on to the RBI secure site for NBFC application
  2. Click the “Click here” link for NBFC company registration which is just below the Username and Password. Don’t get confused by seeing the Username and Password section, that doesn’t required for NBFC, it is for other purposes. After clicking the Click Here link, a new window will open, bearing with the Excel Application Form for NBFC and SCRC.
  3. Now you can download the suitable Application Form (NBFC or SCRC) according to your need and filled it properly. Remember, during the filling of Excel Form; indicate the correct name of the RBI Regional Office in the field “C-8” of the “Annex-I Identification Particulars”.
  4. Upload the filled form by selecting the correct Type of Company in the same window upload section. After uploading the file, then you would get a Company Application Reference Number for the application of Certificate of Registration (CoR) for your company to be filed online. After this, you will have to submit your hard copy of application form of the company along with the necessary documents, mentioning that this is our company online application reference number at the concerned RBI Regional Office.
  5. You can check your status of the application on the same site address by inputting your acknowledgement number. Usually, the timelines for NBFC registration takes 45 days to get approval from the regulatory authority.

Timeline and expert help on NBFC

As you know, obtaining NBFC registration in India is completely depends on the RBI permission. And you can acquire your NBFC registration certificate from RBI in 90-120 days (3-4 months). And we will help you in this regard. As we are specialized in legal and financial advisory services in Bangalore and offer dedicated legal, incorporation, taxation and compliance services to startups, small and medium sized businesses in all over India. Our goal is to provide class-one solutions to all in one-stop shop.

If you want to know any more about on NBFC, then do touch with our experts, they can assist you at any moment during the office working time.


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How to Open a SEBI Registered Portfolio Management Company

How to Open a SEBI Registered Portfolio Management Company

A certain procedure needs to be followed in order to start a portfolio management company in India. First of all, you need to register it with SEBI (Securities and Exchange Board of India). The applicant needs to pay an application fee that amounts to INR 1 lakh and happens to be non refundable as well.

The money has to be paid through a demand draft in favor of SEBI and the amount needs to be paid in Mumbai. The application contains a form – Form A – and the applicants need to provide some extra information with it as well.

This extra information can be found at the official website of SEBI – The applicants need to send the application at the address given below:

Head Office (HO) Address of SEBI at Mumbai, Maharashtra

Investment Management Department - Division of Funds- 1

Securities and Exchange Board of India

SEBI Bhavan, 3rd Floor A Wing,

Plot No. C4-A, ‘G’ Block,

Bandra-Kurla Complex,

Bandra (E), Mumbai - 400 051

Tel: +91-22-26449000 / 40459000

Fax: +91-22-26449019-22 / 40459019-22


Toll Free Investor Helpline: 1800 22 7575

This consumer helpline number is working through the Interactive Voice Response System (IVRS) technology as communication takes place through computerized voice of interaction.

If you are looking for any information relating to SEBI in your local regional office in Bangalore, then you can contact us or visit this address below:

SEBI Bengaluru Local Office, Karnataka

Securities and Exchange Board of India

2nd Floor, Jeevan Mangal Building,

No. 4, Residency Road, Bengaluru – 560025,

Karnataka, India

Tel: +91-080-22222262/ +91-080-22222264/ +91-080-22222283


Capital adequacy requirements and some other things to be kept in mind

In order to become a portfolio manager in Bangalore India, the base net-worth of an applicant/ portfolio professional manager has to be INR 5 crore (previously it was Rs 2 crore, now increased to Rs 5 crore) and it is going to implement from January 2o2o. It also needs to pay a registration fee of INR 10 lakh. This needs to be paid when SEBI grants it the certificate of registration.

Validity & renewal of certificate

The certificate is supposed to remain valid for a period of 3 years. The applicant would have to apply for renewal at around 3 months before of its expiry date, if he/she wishes to continue as a registered portfolio manager.

For renew of its registration, the applicant has to pay Rs. 5 lakhs to SEBI as renewal fee.

Laws regarding contracts between portfolio managers and clients

SEBI specifies that before a portfolio manager takes up any assignment to manage funds or a portfolio of securities as a representative of its client they both must enter a contract. This agreement has to be reached in writing. This agreement would define clearly the relationship that both of them would share.

It would also mention clearly their mutual rights, obligations, and liabilities that are connected to managing the portfolio of securities and funds. The Schedule IV of SEBI (Portfolio Managers) Regulations, 1993 mentions some details regarding such agreements and they have to be there in said agreement.

What fees can be charged by a portfolio manager?

SEBI has not fixed any upper limit – or even any scale for that matter – as far as the fees to be charged by portfolio managers in India is concerned. However, the regulations also mention that the portfolio manager should charge the fee that has been specified in the contract between it and its client.

The fee could be anything – it could be a certain fee or a fee that is based on returns. Even a combination of both is allowed as well. The portfolio manager however needs to seek permission from the client before charging the fee. The portfolio manager may provide its service directly or indirectly. The term indirectly implies that it is outsourced to another similar entity. Even then, it can charge a fee for its work.

Value of funds and securities

As per the rules and regulations of SEBI, a portfolio management services in India would not be allowed to work with funds lesser than INR 5 lakh or securities whose value is lower than that particular figure. Also, a portfolio manager is not allowed to borrow money on behalf of its clients. It can only invest their money.

It also needs to be kept in mind that if an investor wants to put its money on listed securities under a recognized stock exchange then he/she would have to open one demat (dematerialization) account for PMS services.

The account also needs to be opened in its own name and give power of attorny to portfolio money manager in favor PMS to manage the funds. A portfolio manager is also supposed to provide regular reports as agreed to in the contract reached with the client.

Client expects reports from portfolio manager

As per the agreement in the contract, the portfolio manager shall provide the report to the client at a regular occuring interval and it should not be exceeding more than six months.

Can investors allowed to withdraw their premature funds/securities?

Yes, the funds or securities can be withdrawn by the investors before the maturity of contract. But, it depends upon both the investor and portfolio manager’s agreement regarding premature withdrawal.   

Can a portfolio manager offers guaranteed returns?

No, a portfolio manager can’t promise to offer a guaranteed return on client’s investment.

Minimum investment amount required for investor in PMS

Recently, SEBI has increased the minimum investment limit for investor in a portfolio management service (PMS) to Rs 50 lakh from Rs 25 lakh earlier and it would be applicable from January 1, 2020 onwards. So the investors need to bring Rs 50 lakh to invest in a PMS.


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