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LLP Settlement Scheme, 2020

LLP Settlement Scheme, 2020 – A sigh of relief for Defaulters

A Limited Liability Partnership has become one of the most sought-after businesses these days. Just as the name implies, it exhibits the blend of both partnership and corporation by offering the advantage of Limited Liability of a company and flexibility of a partnership. All LLPs are administered under the Limited Liability Partnership Act of 2008.

Reasons to initiate the scheme
It had been observed lately that a vast number of LLPs have defaulted in the filing of documents or statutory returns due to numerous reasons. Furthermore, the applicability of additional fees of INR 100/- per day for every day created … Read more

Formation, Registration and Taxation of NGOs

Formation, Registration and Taxation of NGOs

Charity denotes a selfless act. Charity means giving something to those in needs without expecting anything back in return. It is doing something good to others without any expectations in return. People form Non-Government Organizations (NGOs) for doing the charities and social welfare.

NGO’s are formed with the aim to help the society in many different ways. NGO’s mainly have charitable objects and objects to advancement of general public utility. These organizations do not operate with the motive of earning profit. There are many NGO’s operating in India with the aim of welfare of society some are registered and some … Read more

Petty Cash

Petty Cash

Petty cash fund or simply petty cash may be defined as a small amount of money available for making payments related to small expenses without writing a check. It is also known as imprest cash sometimes. A separate general ledger account is generally prepared to record the petty expenses being incurred and report the available petty cash of the company. A petty cash voucher (for each expense incurred) is generally made for controlling the petty cash.

As far as the presentation of petty cash is concerned, it is presented in the current assets section of the balance sheet. Since petty … Read more

Micro, Small and Medium Enterprises

MSME- Micro, Small and Medium Enterprises

Introduction
A Micro, Small and Medium Enterprises Development Act, 2006 became operational on October 02, 2006. The act facilitates / boosts the promotion, development and enhancing the competitiveness of micro, small and medium enterprises.

Earlier, MSME’s were classified into two categories on the basis of amount of investment i.e., Manufacturing & Service Enterprises but now according to the revision made in October 2019 by Union Minister Nitin Gadkari, the proposed basis for categorizing MSME’s will be on the amount of turnover. Also, there will be no distinction between the manufacturing and service sectors.

Applicability
Previously (On the basis of the … Read more

Authorized push payment fraud

Authorized push payment fraud

Authorized push payment fraud (or usually abbreviated as an APP Fraud) can be defined as a fraud in which victims are exploited in such a manner that they enter into making real-time payments to persons acting as shams. This kind of fraud is usually carried out in various ways which may include: social engineering attacks involving impersonation acts.

This kind of fraud came into light through a very recent incident that happened in the United Kingdom where fraud victims had authorized the payments fallaciously even after knowing the fact that such payments are not going to be reimbursed by their … Read more

What are Fringe Benefits?

Fringe benefits-Definition, Types, Examples and Tax treatment with an illustration

Fringe benefits may be defined as the additional benefits that are meant for supplementing the money wage or salary of an employee. There are certain fringe benefits that are offered to the entire workforce working in the company while there are specific fringe benefits that are only meant for offering to only those who are working at executive levels. It thereby means that some fringe benefits are statutory in nature while certain fringe benefits are provided voluntarily by the employer.

There are various types of fringe benefits that are generally offered to the employees which may include health insurance, subsidies … Read more

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Collaboration Agreement

A collaboration agreement is an agreement between 2 or more parties looking to work together on a commercial project on a collaborative or cooperative basis. It involves participation by at least two parties who agree to share resources, such as finances, knowledge, and people. The essence of collaboration is for all parties to mutually benefit from working together. Collaboration agreement illustrates certain terms and conditions (T&C) of the parties’ working relationship including the allocation of responsibilities and division of revenues derived from the exploitation of the work. The agreement is made among the involved parties.

It is generally done when … Read more

Related Party transactions

Related Party transactions

A related party is a party related to a body corporate /company in any other way other than by the companies own transactions. It means that a special relationship persists between the parties even before the transaction takes place. Section 2(76) of the Companies Act, 2013 (“the Act”), defines a related party with reference to a company

  • director or a key managerial person or their relatives or,
  • a firm, private company in which the partner, director / manager or his relative is a partner or,
  • a private company or a public company in which a director or manager is a
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Labor Laws in India

In India, we have numerous laws which regulate the labor in the country and ensure to provide high degree of workers protection and manage the rules relating to the same. This blog describes the basic introduction and applicability of two most common and important funds to various organizations in order to ensure proper working of the system. These are Employee State Insurance (ESI) and Employee Provident Fund (EPF) schemes. ESI is a contributory fund whereby the employees in India are benefited through self-financing and healthcare insurance fund contributed by them and their employer. This scheme is administered and regulated as Read more

Latest norms of differential voting rights

Latest norms of differential voting rights

In a fillip to startups, the Ministry of Corporate Affairs (MCA) recently amended the Companies (Share Capital and Debentures) Rules, 2014 (SCAD Rules) which are relaxed norms for shares with Differential Voting Rights (DVR) that will help such companies to retain control while raising equity capital. A differential voting right share is one with higher or lower voting rights but the same economic interest as ordinary shares. Shares with higher voting rights have been used by entrepreneurs around the world to retain control of their companies even while selling ordinary equity to investors to raise capital. The MCA move was … Read more

Union Budget of India (2019-20)

Union Budget of India (2019-20)

Ms. Nirmala Sitharaman, Minister for Finance and Corporate Affairs, Government of India announced the Union Budget for 2019-20, in Parliament on July 05, 2019. The budget aimed at boosting infrastructure and foreign investment, the first since the Bharatiya Janata Party led by Prime Minister Narendra Modi returned for a second term in power. The main focus of this budget is reducing red tape, making best use of technology, building social infrastructure, digital India, pollution free India, make in India, job creation in Micro, Small and Medium Enterprises (MSMEs) and investing heavily in infrastructure making India, a US$ 3 trillion economy … Read more

RBI reporting for Foreign Direct Investment

RBI reporting for Foreign Direct Investment

Foreign Direct Investment (FDI) means investment through capital instruments (equity shares, debentures, preference shares and share warrants) by a person resident outside India in an unlisted Indian company or in 10% or more of the post issue paid-up capital on a fully diluted basis of a listed Indian company.

FDI under various sectors is permitted either by an Automatic route or Government route. Under Automatic route, the non-resident or Indian company does not require any approval from Government of India. Whereas, under the Government route the approval from the Government is required prior to investment. Proposals are considered by the … Read more

RBI eases External Commercial Borrowings

RBI eases External Commercial Borrowings

India has always encouraged capital inflows as a part of the development policy. Deficient domestic capital and reduction in the current account compelled the government historically to go after foreign capital. Foreign capital is money obtained from foreign countries to make investment domestically. The major category is foreign investment including FDI (Foreign Direct Investment) and FPI (Foreign Portfolio Investment). Likewise, there are other types of foreign capital like trade credit, NRI Deposits and the most important one for India – the External Commercial Borrowings (ECB).

ECB is a loan which is being availed by an Indian entity from a non- … Read more

Payroll processing services

Illuminating facts of payroll processing

For any organization, one of the most crucial tasks is payroll processing with complications paving way as tax regulations as well as compliances. Also, incorrect computation of worker benefits can wreck the timing and accuracy of one’s payroll system. Payroll is a list of particulars of employees of the company including the amount they are to be paid. Human resource, for any organization, is the paramount resource and paying them for the work performed by them is not a choice but an obligation for the organization.

Nonetheless, it is paradoxical not to encounter any challenges when an in-house payroll system … Read more

Concept of permanent establishment (PE)

Concept of permanent establishment (PE)

In this contemporary world, initiation of globalization has lubricated great technological advancement. All this has facilitated easy access as well as real-time communication among various countries notwithstanding the physical distance. Currently, the world is a ‘global hub’ where no destination is secluded. Subsequently, corporates around the world have become global in their operations and have been expanding their businesses beyond the boundaries of their countries into new markets in their quest to achieve growth and economies of scale.

Over time, two type of cross border transactions have emerged

  • Conducting business activities with a country – Residents of a country transacting
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highlights of Amendment

Highlights of Companies (Amendment) Ordinance, 2019

The ever-changing environment demands frequent adjustments to be made in the laws of land for efficient and effective management of both business as well as non-business activities. Government has just introduced the Companies (Amendment) Ordinance, 2019 thereby, bringing relevant alterations in Companies Act, 2013 (”Act”). This action has provided an affirmative action that any violation in complying with the set standards will lead to stringent repercussions for both the company and its management.

With the objective of promoting ease of doing business and improving corporate compliances, President has disseminated the Companies (Amendment) Ordinance, 2019 which came into effect in November … Read more

Overseas Direct Investment (ODI)

Overseas Direct Investment (ODI)

Foreign direct investments are investments made in Indian organizations for improved returns by foreigner nationals. Any Indian person or organization can invest funds in foreign countries via direct means. These are however, subject to Indian Taxation laws.

These ODI opportunities are great avenues for Indian entities to diversify and grow their companies in foreign countries. They can take the form of joint ventures (JV), wholly owned subsidiaries (WOS), share acquisitions, etc. Portfolio investments however, do not fall under the ODI umbrella.

Rules regarding ODI
The complete set of guidelines for ODI is provided by Reserve Bank of India (RBI) and … Read more

Highlights of interim budget 2019

Highlights of interim budget 2019

  • Individual taxpayers with annual income up to INR 5 lakhs to get full tax rebate.
  • Individuals with gross income up to INR 6.5 lakhs will not need to pay any tax if they make investments in provident funds and prescribed equities.
  • Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to 2 crores; can be exercised once in a lifetime.
  • Benefits under section 80(i)BA being extended for one more year for all housing projects approved till the end of 2019-20.
Read more
filing on financial statement

Filing of financial statement

Financial statements of a company are necessarily required to be filed with Ministry of Corporate Affairs (MCA) annually. The form for filing such financial statements with MCA is AOC – 4. All the companies fall under this category and are compulsorily required to file form AOC – 4. However, few Companies are covered under Extensible Business Reporting Language (XBRL) and are required to upload the financial statements on MCA portal in XBRL format as per the Companies (Filing of documents & Forms in Extensible Business Reporting Language) Rules, 2015. In this case the requirement of signing under hand is not … Read more

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Extensible Business Reporting Language (XBRL)

Developed by XBRL International Inc. (XII), XBRL is defined in Rule 2 of Companies (Filing of documents and forms in XBRL) Rules, 2015 as a standardized language for communication in electronic form to express, report or file financial information by the companies under the Act. It is a language for communicating electronically, financial and business data for business reporting. It has facilitated the process of creating, transmitting, using or analyzing such information.

Companies filing financial statements in AOC-4
With reference to Companies (Filing of documents and forms in XBRL) Rules, 2015 following companies are required to file their financial statements … Read more