Choice of a Business Organisation Learning Objectives Choice of Business Organisation Factors governing the decisions for suitable form of organization Nature of business activity Scale of operations Capital requirements Managerial Ability Degree of control and management Degree of risk and liability Stability of business Flexibility of administration Division of profit Costs, procedure, and government regulation Tax implication Geographical mobility Transferability of ownership Managerial Needs Secrecy Independence Types of Companies Learning Objectives Introduction Classification of Companies Private Company Characteristics of Private Limited Company Incorporation of a Private Company Privileges and Exemptions of Private Company Public Company Characteristics of Public Company Incorporation of a Public Company One Person Company (OPC) Background of OPC Status of OPC in other countries Incorporation of OPC Difference between a Sole Proprietorship and an OPC Position of OPC in India under the Companies Act, 2013 Rule 3 of Companies (Incorporation) Rules, 2014 – One Person Company Contract by One Person Company Privileges of One Person Company Benefits of One Person Company NIDHI Companies Origin of the Concept in India Prevailing Regulatory Aspects of NIDHI Incorporation of NIDHI Requirements for minimum number of members and net owned funds Return of statutory compliances by NIDHI Companies General restrictions or prohibitions Share capital and allotment Membership of NIDHI Branches of NIDHI Acceptance of Deposits Un-encumbered term deposits by NIDHI Loans by NIDHI Rate of interest on any loan given by a NIDHI Directors in a NIDHI Company Dividend Appointment of Auditor Auditor’s certificate Filing of half yearly return Power of Registrar to enforce compliance Certain provisions of RBI Act not applied to Notified NBFCs Exceptions, modification and adaptations to Nidhi Companies Producer Companies Objects of Producer Companies Foreign Companies Initial Procedure Charter Documents of Companies Learning Objectives Memorandum of Association Form of Memorandum of Association Contents of Memorandum Name Clause Situation Clause Publication of Name and Address of the Company Object Clause Liability Clause Capital Clause Declaration for Subscription Articles of Association Nature of Articles Articles Subordinate to Memorandum Registration of Articles Entrenchment Provisions Statutory Requirements Contents of Articles Consistency of Articles of Association with Companies Act, 2013 Doctrine of Ultra Vires Loans, Borrowings, Guarantees and Ultra Vires Rule Implied Powers Powers which are not implied Shareholder’s right in respect of ultra vires Acts Effects of ultra vires Transactions Doctrine of indoor Management Case Laws under erstwhile Companies Act Relation of company with Members and Outsiders Forgery and Incompetent Scts Directors not aware of their Disqualification Exceptions to the Doctrine of Indoor Management Constructive Notice of Memorandum and Articles Monies Payable by Members is a Debt [Sub-Section (2) of Section 10] Interpretation of Memorandum and Articles Doctrine of Alter Ego Distinction between Memorandum and Articles Legal Effect of the Memorandum and Articles Members Bound to the Company Company Bound to the Members Member Bound to Member Company not Bound to Outsiders Alteration of Charter Documents Learning Objectives Introduction Alteration of Memorandum of Association (MOA) Applicable section for Alteration of MOA Alteration of MOA due to change in Name Clause [Section 13 (2) and (3)] Methods of changing the name Procedure for Alteration in Name Clause of Memorandum Name change requirement under regulation 45 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Effect of Change Alteration of situation of Registered Office Clause in the MOA [Section 13 (4) (5) And (7)] Change of Registered office from one State to another Rule 30-31 of Companies (Incorporation) Rules 2014 Steps after obtaining new certificate from ROC Employees’ right to object in case of shifting of registered office from one state to another – Some legal cases Alteration of MOA due to change in Object Clause [Section 13 (8) And (9)] Registration of Alteration Alteration of Liability Clause Alteration of Capital Clause in MOA [Section 61 read with section 64] Alteration of Articles of Association of a Company Manner of altering AOA Key Considerations Procedure for alteration of AOA under Section 14 Effect of Altered Articles Alterations of Memorandum or Articles to be noted in every copy Sample Board Resolution for Change in the Name of the Company Sample Shareholder’s Resolution to be passed in the general meeting for Change in the Name Clause of MOA Sample Board Resolution for Changing the situation of Registered Office Clause in MOA Sample Shareholder’s Resolution to be passed in the general meeting for shifting of registered office of the company from one state to another Explanatory Statement pursuant to Section 102 of the Companies Act 2013 Sample Board Resolution for alteration of Object Clause in MOA Sample Shareholder’s Resolution to be passed in the General Meeting for alteration of Object Clause in MOA Explanatory Statement Pursuant to Section 102 of the Companies Act, 2013 Sample Board Resolution for alteration of Capital Clause in MOA Sample Shareholders’ Resolution to be passed in the General Meeting Special Business Sample Board Resolution for alteration of Articles of Association of the Company Sample Shareholders Resolution For Alteration Of Articles Explanatory Statement Pursuant To Section 102 Of The Companies Act, 2013 Legal Status of Registered Company Learning Objectives Corporate Personality Limited Liability Perpetual Succession Separate Property Transferability of Shares Capacity to Sue or be Sued Provisions Relating to Certain Types of Companies Small Company Advantages of a Small Company Holding Company Provisions in the Companies Act, 2013 relating to holding Company Subsidiary Company Associate Company Additional compliances if a company has an Associate Company Sub section (76) of section 2 Inactive Company/Dormant Company Government Company Annual General Meeting: (sub section 2 of section 96) Appointment of more than 15 Directors Independent Director Appointment of Key Managerial Personnel (203) Provisions relating to Auditor Auditor Report in a Government Company [sub-section (5) of section 143] Supplementary Audit Ordered by C & AG [sub section (6) of section 143] Annual Report of Government Company (section 394) Formation of LLP Learning Objectives Concept of LLP Step by Step Proedure to Register a Limited Liability Partnership LLP Agreement How to Draft LLP Agreement How to Prepare LLP Agreement Essential Clauses to be included in the LLP agreement Alteration to the LLP Agreement Change in Partner /Designated Partner Documents to be Attached with Form 4 Change of Name Procedure for Changing the Name of the LLP Shifting of Registered Office Checklist for Shifting of Registered Office Annual Compliances of LLP Filing of Statement of the Accounts or Financial Statements Filing of Income Tax Returns Event Based Compliances for LLP Draft LLP Agreement Admission of New Partner Rights of Partner Duties of Partners Duties of Designated Partner Cessation of Existing Partners Different Forms of Business Organisations and its Registration Learning Objectives Introduction Sole Proprietorship Merits of Sole Proprietorship Limitations of Sole Proprietorship Partnership Dissolution of a Firm Features of Partnership Types of Partnership Types of Partners Minor Admitted into the Benefits of partnership Merits of Partnership Limitations of Partnership Partnership Deed Hindu Undivided Family(HUF) Meaning of Joint Hindu Family Business Characteristics of a Joint Hindu Family Business Benefits of HUF Multi State Co-Operative Society Benefits of Multi State Co-Operative Society Procedure for Formation of Different Types of Business Organisations Procedure for Formation of a Partnership Registration Procedure Registration under Income Tax Key Points in creation of HUF and format of Deed for creation of HUF Formation of Multi State Co-Operative Society Formation and Registration of NGO’s Learning Objectives Section 8 Company Features of a Section 8 Company Exemptions available to Section 8 Company Trust Persons who can create a Trust Persons who can be a Trustee Difference between Public Trust and Private Trust Exemptions available to Trusts Tax exemptions under Section 11 of Income Tax Act, 1961 Tax Exemption under Section 12 of the Income Tax Act, 1961 Tax exemptions for a Private Trust Society Definition Advantages of Society Disadvantages of Society Consequences of Registration / Non-Registration of a Society Accounts and Audits Litigation Benefits of Forming a Society Procedure for Registration of NGO’s Section 8 Company Application for incorporation Certificate of Incorporation Formation OF Trust Formation of a Society Steps for Registering a Society In India Selection of a Name Memorandum of Association Financial Services Organisation and its Registration Process Learning Objectives Introduction Non Banking Financial Company Types/Categories of NBFC’s Benefits of Incorporating an NBFC Incorporation of NBFC’s Registration Process with Reserve Bank of India Procedure for filing Application with Reserve Bank of India Housing Finance Companies Benefits of incorporating a Housing Finance Company Housing Finance Company : Registration Process Asset Reconstruction Company(ARC) Benefits of incorporating an Asset Reconstruction Company(ARC) Asset Reconstruction Company – the Registration Process Micro Finance Institutions(MFI) Characteristics of a Micro Finance Institution Incorporation of MFI Nidhi Companies Characteristics of a Nidhi Company General Restrictions or Prohibitions on Nidhis (Rule 6) Benefits of incorporating a Nidhi Company Incorporation of a Nidhi Company Payment Banks Regulations Startups and its Registration Learning Objectives Startups Evolution Startup India Policy Process of Recognition of Startup Key points Indian States with startup policies Exemptions for Startups Tax Exemptions for the Startups, Effective from 2017-18 Benefits/Exemptions to Start-ups under Companies Act, 2013 Registration Steps Financing Options Available for Startup Companies Seed Capital Funding Procedure Sources of capital Structure Things to Know when Raising a ‘Series A Round’: Debt Financing Mudra Banks Procedure for Loan Mudra Card Joint Ventures Collaboration and Special Purpose Vehicles Learning Objectives Joint Venture Definition Advantages of forming Joint Venture: Strategies of Joint Venture Formation of Joint Ventures Equity Joint Venture Circumstances indicating SPV: Contractual Joint Venture Restrictions under FDI Policy of Government of India LLP Firm as a Special Purpose Vehicle Documents for Joint Ventures Essential Features of a Shareholders’ Agreement(SHA) /Joint Venture Agreement / LLP Partnership Agreement (PA) Essential components of a Joint Venture Agreement Special Purpose Vehicle (SPV) Meaning of Special Purpose Vehicle (SPV) Benefits of Special Purpose Vehicle Purpose of Special Purpose Vehicle LESSON ROUND-UP Setting up of Business outside India and Issues Relating Thereto Learning Objectives A Structure and the Process Involved Introduction Some of the major overseas investments by Indian companies A1 Foreign Exchange Management Act, 1999 A2 Eligibility (Entities are Referred to as “Indian Party”) A3 Prohibitions A4 Automatic Route A5 Method Of Funding A6 Investments not under Automatic Routea and that require Approval of the Reserve Bank B Issues in choosing Location outside India B1 Geographical Location of the Business B2 Economic Aspects B3 Political Aspects B4 Social Aspects B5 Technological Aspects Procedure of Conversion of Business Entities Learning Objectives Introduction Conversion of a Private Company into a Public Company Procedure for Conversion of a Private Limited Company into a Public Limited Scrutiny of documents by ROC Conversion of a Public Company into a Private Limited Procedure for Conversion of a Public Limited Company into a Private Limited Holding of Board Meeting Holding of General Meeting Filing of MGT-14 with ROC Second Step: Preparation of Petition Third Step: Preparation of Documents to be filed with Petition in NCLT-1 Fourth Step: Publication and Service of application Fifth Step: Hearing by Tribunal Sixth Step: Filing of Form with ROC Seventh Step: New Certificate of Incorporation from ROC Conversion of Section 8 Company into any other Kind Rule 21 of Companies (Incorporation) Rules, 2014 Rule 22 of Companies (Incorporation) Rules, 2014 Conversion Of Company Into LLP Conversion of LLP Into Company Process for Conversion Approval of name Securing DSC and DIN Filing form no URC – 1 Memorandum of Association & Articles of Association E-form INC-32 (SPICE) Conversion of One Person Company to Private Company Conversion of Private Company into One Person Company Procedure/Steps for conversion of Private Company into One Person Company Penalty Incorporation of Part XXI Companies Various Initial Registrations and Licenses Learning Objectives Introduction Mandatory Registration PAN Significance of PAN for Setting up of Business Application and Registration of PAN TAN Types of TAN Applications Procedure to Apply Where to get the Physical Application Forms Communication Status Track Fee GST Compulsory Registration Persons not liable to register Procedure for Registration Cancellation of Registration Registration under Shops & Establishments Purpose of Shop and Establishment Act Meaning of an Establishment for the Purpose of the Act Meaning of a Shop for the Purpose of the Act Shop and Establishment Act License Registration of Shops & Establishments Communication of Change to the Inspector Closing of Establishment to be Communicated to Inspector SSI/MSME Objectives of the Registration Scheme Benefits of SSI/MSME Registration Micro and Small Enterprises Medium Enterprises Registration Process Procedure for Calculation & Fixation of Monetary Limits of Micro & Small Enterprises Validity Period of G P Registration Documents to be submitted by the Micro Small Enterprises at the Time of Fresh Registration Documentary Proof of the Status of the Firm Documents Required for Renewal of the Registration NSIC Registration Benefits of NSIC Registration Eligibility Application Registration Fee Other Compliances ESI Registration with Procedure & Benefits Benefits of ESI Registration for both Employer & Employee ESI Registration Procedure for both Employer & Employee Registration of Employee Wage Limit under ESI Registration: Provident Fund Meaning and Registration Procedure PF Registration Process Documents required to be submitted FCRA Registration Eligibility for obtaining FCRA Registration Criteria for grant of FCRA Registration Applying for FCRA Registration Pollution Other Registration as per requirement of sector IE Code Requirement of IE Code Application for IE Registration Documents Required for Import Export Code (IEC) Registration Features of the Import Export Code (IEC) Registration Drug License List of State Drugs Control Organization Requirement for obtaining Drug License Documents required for obtaining Drug License FSSAI FSSAI Registration FSSAI License Trademark Steps of Registration Form and Fees Copyright Copyright Registration Procedure Time for Processing Application Scope and Extent of Copyright Registration Fees Patent Filing Patent Application Design General Guidelines RBI Requirement of NBFC License with RBI Financial Companies exempt NBFC License Requirement for Obtaining NBFC License Calculating Net Owned Funds as per RBI Definition Types of NBFC License Applying for NBFC License Banking IRDA Functions and Duties of IRDAI Procedure of Granting of License to Companies to Start Insurance Business (Read with Amendments of 2015 placed below) IRDAI (Registration of Indian Insurance Companies) (Seventh Amendment)Regulations 2016 (Registration Amendment Regulations) Refusal of Registration Suspension of Registration Cancellation of Certificate of Registration Revival of Registration Telecom TRAI Scope and Functions OSP Registration in India Overview OSP Registration Applicability OSP Registration Requirement OSP Registration Compliance I & B Mandate of I & B Regulatory Regime of I & B Regulating and Certification Head under I & B MSME Registration Eligibility apply for Udyog Aadhar/MSME registration Criteria for applying for Udyog Aadhar/MSME Registration Stage to apply for MSME registration Udyog Aadhar Memorandum Industrial License Compulsory Licensing Small Scale Sector Policy Relating to Small Scale Undertakings Recent amendment to Industrial Licensing Rule Locational Restrictions Industrial Entrepreneurs Memorandum (IEM) Role of Directorate of Industries State Level Approval from the Respective State Industrial Department Green category of Polluting Industries Orange category of Polluting Industries Ordinary Red category Of Polluting Industries Special Red category of Polluting Industries Maintenance of Registers and Records Learning Objectives Introduction List of Register and Records Required to be Maintained by an Enterprise Place of Keeping the Records and Registers Inspection of Statutory Registers Suggested Method of Keeping Statutory Registers Identifying Laws applicable to Various Industries and their Initial Compliance Learning Objectives Compliance of Industry Specific Laws Applicable to an Entity at the time of Setting Up of the Enterprise Introduction Formalizing and Deciding the Business Structure Procedure for Setting up a Company Incorporation Form of a Company How to Register a Company under Companies Act, 2013 Procedure for Registration Procedure for approval of the proposed company name Check–List of Document before Submission of a Company Formalities to be followed while Incorporating a company Checklist for Compliances Applying for Business Licenses Understanding Taxation and Accounting Laws Adhering to Labour Laws Adherence to Laws relating to Intellectual Property Ensuring Effective Contract Manageent Procedure for Voluntary Winding Up Laws relating to Industries and Industries in Specific The Factories Act, 1948 The Plantation Labour Act, 1951 The Mines Act, 1952 The Shops and Establishments Act, 1953 The Motor Transport Workers Act, 1961 The Contract Labour (Regulation & Abolition) Act, 1970 Labour Welfare Funds for Social Assistance to Workers Intellectual Property laws (Provisions applicable for Setting up of Business) Learning Objectives Introduction Intellectual Property Regime in India IP Protection for Businesses: A Snapshot Points to Consider while Adopting a Trademark Enforcement of Trademark Rights Geographical indication of Goods (Registration and Protection) Act; 1999 Designs Act; 2000 Copyrights Rights of the Registrar of Copyrights Infringement of Copyright Patents Use of Technology or Invention Enforcement of Patent Rights Compliances under Labour Laws (Provisions applicable for Setting up of Business) Learning Objectives Introduction Factories Act; 1948 Applicability of the Act Registration & Renewal of Factories (Section 6) Minimum Wages Act; 1948 Payment of Wages Act; 1936 Employees’ State Insurance Act; 1948 Applicability of the Act Coverage of Factory/Establishment Employees’ Provident Funds and Miscellaneous Provisions Act; 1952 Payment of Bonus Act; 1965 Payment of Gratuity Act; 1972 (Payment of Gratuity in Consonance with State Rules) Employees Compensation Act; 1923 Contract Labour (Regulation and Abolition) Act; 1970 Registers of Contractors Industrial Disputes Act; 1947 Objective of the Act Procedure of Strikes Procedure of Lockouts Trade Unions Act; 1926 Maternity Relief Act; 1961 along with Maternity Benefit (Amendment) Act, 2017 Maternity Benefit (Amendment) Act, 2017 Key highlights of the Amendment Child and Adolescent Labour (Prohibition and Regulation) Act; 1986 Prevention and early Detection of Disabilities Prevention of Sexual Harassment of Women at Workplace (Prevention; Prohibition and Redressal) Act; 2013 Compliances relating to Environmental Laws (Provisions applicable for setting up of Business) Learning Objectives Introduction Environmental Regulations in India: A Bird’s Eye View Water (Prevention and Control of Pollution) Act, 1974 Air (Prevention and Control of Pollution) Act, 1981 Environment Protection Act, 1986 Public Liability Insurance Act 1991 National Green Tribunal Act, 2010 Objectives of National Green Tribunal Dormant Company Learning Objectives Introduction Obtaining Dormant Status Procedure to obtain the Status of a Dormant Company Benefits / Exemptions Provided to a Dormant Company Compliance Requirements by Dormant Company Legal Framework Dealing with the Provision of Seeking the Status of Active Company from Dormant Company Procedure to Obtain the Status of an Active Company from Dormant Company LESSON ROUND UP Strike Off and Restoration of Name of the Company and LLP Learning Objectives Introduction Ways of Stinking off of Companies Legal Framework dealing with the Provisions of Striking off Strike Off BY ROC Suo Motu Case Law Strike off by Way of Filing an Application by the Company Type of Companies which cannot be Removed under these Provisions Situations in which Company can’t apply for Strike Off Procedure of Striking Off of the Name of the Company by way of an Application to ROC No Objection Certificate from Appropriate Regulatory Authority Status of Strike Off Company Fraudulent Application for Removal of Name Liabilities of Directors, Managers, Officers and Members to be continue Restoration of the Company Appeal to NCLT for Restoration of the Name of the Company Application to NCLT by ROC for Restoration of the Name of the Company Application to NCLT for Restoration of the Name of the Company by Company or any Member or Creditor or Workmen Procedure for making an Appeal /Application to NCLT Striking of the Name of the Limited Liability Partnership (LLP) from the Register of Limited Liability Partnerships Legal Framework Dealing with the Provision of Striking off Strike Off by ROC Suo Motu Strike Off by way of FILING an APPLICATION by the LLP Procedure of Striking Off of the Name of the LLP by way of an Application to ROC Liabilities of Partners to be Continue after Striking Off Restoration of the LLP Procedure for Making an Application to NCLT Corporate Insolvency Resolution Process, Liquidation and Winding Up: An Overview Learning Objectives Applicability Important Definitions Important Rules and Regulations Persons who may Initiate Corporate Insolvency Resolution Process Resolution Process Time Limit of Corporate Insolvency Resolution Process Moratorium Interim Resolution Professional Resolution Professional Committee of Creditors Resolution Plan Liquidation Process Voluntarily Liquidation Waterfall Arrangement Dissolution of Corporate Debtor Winding Up Object and Scope of the Law Meaning of Winding Up Difference between ‘Winding Up’ and ‘Dissolution’