Jindalas.com

J&A Bulletin

Volume 1, Issue 10 For private circulation only. January 2000

Knowledge Updation

Details regarding incorporating a Company

1. In India Companies are governed by The Companies Act, 1956.

2. Companies are of following types:

A. Company having Share Capital: further classified as -

a. Private Limited Company: A company having following three conditions:

i. restricts the right to transfer its shares.

ii. limits the number of its members to fifty excluding persons in employment of the company.

iii. prohibits any invitation to the public to subscribe for any shares in or debentures of the company.

b. Public Limited Company: A Company which is not a private limited company.

B. Company not having share capital but limited by guarantee: these are formed for non- profit motives.

C. Company limited by guarantee and having a share capital: each member will also be liable upto a guaranteed amount as defined in memorandum of association.

D. Unlimited Company: The liability of the members is unlimited.

NOTE: In general Private Limited and Public Limited companies are formed, as in these the member's liability is restricted only upto the value of the shares he purchases. THE FOLLOWING ARE THE DETAILS AS APPLICABLE FOR THE PRIVATE LIMITED AND PUBLIC LIMITED COMPANIES.

3. The cost to incorporate a company have following elements:

a. Name Availability Fees : for the purpose to know which one of the proposed name(s) is available - Rs. 500/-

b. Stamping Charges : To get the Memorandum of Association and Articles of Association stamped - varies from one State to another State (like for Delhi if authorised capital < Rs.1,00,000/- fee Rs. 80/- else fee Rs. 120/-, for Uttar Pradesh, Rs 1,000/- )

c. Registration Fees : Based on the Authorised Capital of the company as follows:

Authorised Capital (Rs.) Fee(Rs.)

Upto Rs. 20,000/- 400

Additional fees for every additional Rs. 10,000/- or part thereof -

after Rs. 20,000/- to Rs. 50,000/- 200

after Rs. 50,000/- to Rs. 5,00,000/- 100

after Rs. 5,00,000/- to Rs. 10,00,000/- 60

after Rs. 10,00,000/- to Rs. 25,00,000/- 40

after Rs. 25,00,000/- 30

(The Additional Fee shall not be more than Rs. 80,00,000/-)

d. Filing Fees : for filing the papers/ documents with the Registrar of Companies : based on Authorised capital of the company (approx. 4 documents are required to be submitted), calculated as follows:

Authorised Capital (Rs.) Fees (Rs. Per document)

Less than Rs. 1,00,000/- 30

from 1,00,000/- to less than 5,00,000/- 60

from 5,00,000/- to less than 25,00,000/- 100

Rs. 25,00,000/- or more 120

e. Printing & Stationary Charges: like for printing of Memorandum and Articles of Association, Shares Certificates, Statutory Registers etc.: Approx. Rs. 5,000/-

f. Misc. Exps.: approx. Rs. 2,500/-

g. Professional Charges: Vary according to work involved.

4. The registrar of companies (ROC) office, to whom the documents are to be submitted is of the state within which the Registered Office of the company will be situated.

5. A Private Limited Company enjoys some privileges over the public limited company, like less documentations etc.

6. To form a Private Limited Company initially minimum two share holders (Proposed) and two directors (Proposed) (who can be same) are required, and for forming a public limited company minimum requirement is seven share holders (Proposed) and three directors (Proposed).

7. A private limited company on contravention of any of the three conditions, becomes a public company. A private limited company on the basis of specific share holding pattern or having an average annual turnover of last three years of more than Rs. 250 million (250,000,000/-) becomes deemed public company. A deemed public company enjoys some of the privileges of the private limited company.

Contd ……..

For Your Information

  • Government reduced interest rate on PPF by 1% from 12% to 11% p.a., to be effective from 15.01.2000.

15.01.2000-TimesOfIndia-1

  • Industrial Park/ Industrial Model Town Scheme Notified.

153-Taxation-126(St.)

  • Conditions for carrying forward or set-off of accumulated loss and unabsorbed depreciation allowance in case of amalgamation, Notified. 154-Taxation-52(St.)

  • The Prevention of Money-Laundering Bill, 1999, introduced.

154-Taxation-1(St.)

  • The Foreign Exchange Management Bill, 1999, introduced.

Jan2000-CS-74

  • The Companies (Second Amendment) Bill, 1999, introduced.

Jan2000-CS-43

  • Circular as to Amendments to Exchange Control Manual - Investment in non-convertible debenture by NRIs/ OBCs on non-repatriation/ repatriation basis. 22-SCL-331

  • Circular as to Indian Direct Direct Investment in JV/ Wholly Owned Subsidiaries Abroad. 22-SCL-339

  • Committee constituted to consider applications filed for issue of 'Essential Certificate for Project Import". 22-SCL-348

  • Information Technology Bill, 1999 introduced. 22-SCL-353

  • Export House status to all service providers. 14-ELT-A222

  • Appeal not to be dismissed in default of appearance of appellant's Counsel - S.C. 114-ELT-779

  • SSI Exemption - Registration as SSI unit for the same product not necessary. 114-ELT-1037

  • New Excise Audit System by February 2000. 115-ELT-A54

  • Exemption when not to be denied even if the Modvat inputs used in the manufacture of exempted goods-S.C.

115-ELT-30

  • Valuation- Process not amounting to manufacture still cost thereof includible if it adds to the intrinsic value of the product - S.C. 115-ELT-32

  • Valuation- Reasonable Trade discount to buyers in different regions permissible - S.C. 115-ELT-40

  • Trade/ Public Notice issued by one Custom House binding on all Customs authorities - Revenue authorities cannot take one stand in one State and another stand in another State-S.C.

115-ELT-42

HAPPY

NEW YEAR

Market Watch

 

BSE Sensex

Dow Jones

Gold (10gm.)(Rs.)

Silver (1Kg.)(Rs.)

US$ (Rs.)

 

4691 (14.12.99)

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4440 (14.12.99)

8060 (14.12.99)

43.52 (14.12.99)

 

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43.52 (14.01.00)

(Change)

+16.62%

+03.78%

+00.90%

+00.06%

00.00%

Contd …..

8. It takes about 2-3 months time to get the company incorporated, a private limited company can start its business at any time after it is incorporated. However for a public limited company (after its incorporation) the certificate of commencement of business is also required to commence its business, which further takes about one month.

o

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