The Companies Act, 2013 has laid down specific provisions relating to the flow of funds through any company. Directors act as agents of the company and they are responsible for running the entire company. They receive remuneration against their duties which becomes taxable in their hands. However, to ensure that the funds of the companies...
Equity shares are the most common share type issued by any company. However, apart from equity shares, the companies are also allowed to issue preference shares as per the Companies Act, 2013. The type of share capital issued by the company alters the rights of shareholders and their preferential status. Let’s understand the meaning of...
There’s a popular saying, ‘If you think compliance is expensive, try non-compliance’. This is very apt as the Income Tax Act, 1961 lays down explicit provisions regarding levy of penalty in case the assessee fails to comply with any of the provisions of the income tax law. However, in certain cases, the assessee can avail...
Many companies offer residential facilities on rent-free basis to their employees. As per income tax law, it is known as rent-free accommodation. It, being in the nature of perquisite for the employees, forms part of their income and therefore becomes taxable. However, how to value the rent-free accommodation to make it a part of the...
If you are operating or planning to start a food business in India, then you need to apply for the FSSAI license, also commonly called as food license. Keeping public health and safety in mind, the Government of India established the Food Safety and Standards Authority of India under the Ministry of Health and Family...
Independent directors have remained in the limelight of the Companies Act, 2013. They are distinct from ordinary directors in the sense that the latter is involved in the day-to-day operations and management of the company while the Independent Directors acts as a non-executive director. But who are independent directors under companies act 2013 and what...
The Foreign Exchange Management Act, 1999 (herein referred to as FEMA) regulates foreign and import transactions. Whenever a person undertakes an export transaction, FEMA lays down explicit conditions relating to the realization of export proceeds. However, it may happen that despite best efforts, an exporter is unable to realize the export receivables. In such a...
Auditors are responsible for expressing their opinion whether the financial statements of an entity present are true and fair to view its financial standing and performance. When it comes to companies, the Companies Act, 2013 lays down explicitly as to who can become auditors and how they should be appointed. However, there might arise certain...
Directors are like torchbearers of the company and they are responsible for the conduct and operations of the same. A private company should have at least 2 directors whereas a public company should have at least 3 directors. However, certain peculiar situations may arise whereby the company may decide to remove a director from the...
The government has bought a significant change in the Prevention of Money Laundering Act, 2002 (herein referred to as PMLA) placing responsibility and holding accountable professionals for certain transactions carried on behalf of the clients. In a bid to curb the money laundering transactions, the government has amended the provisions of PMLA by bringing Chartered Accountants...
In FY 2022-23, the stock market might have disappointed investors in terms of providing adequate returns. However, as per a recent publication by the Times of India, it has been notably a great year for the public share sale of small and medium enterprises (SMEs). Like regular listing of shares of the companies, SMEs too...
Most people fear the outcome and uncertainty. Stock market performance is the best example you can quote that truly reflects the uncertainties of life. The world has been through multiple recessions and stock market crashes in the last 100 years. When things went south, many investors fell prey to anxiety and exited the market. Only...
Like companies, partnership firms and LLPs, cooperative society is another common form of the constitution with legal validity. Eventually, the society may undertake certain charitable or other social activities at a scale and seek tax exemptions. However, such societies may face several challenges, including financial difficulties, governance issues and regulatory constraints. To overcome these challenges,...
While the partners in a partnership firm or LLP distribute profits in terms of a pre-determined profit-sharing ratio, the distribution of profits in the case of Companies is slightly different. Companies distribute profits by declaring dividends to the Shareholders of the Company. Companies can declare the following types of dividends in India: Interim Dividend: Interim dividend is...
Company is one of the most sought-after business models for growth and expansion. However, this growth and expansion often require capital infusion. Often companies resort to external funding either through debt from financial institutions or the public or through the issue of equity. When it comes to the issue of equity, following are some of...
Many people opt for Limited Liability Partnerships (LLPs) to benefit from lesser compliance while limiting their liabilities. However, as the business operations expand, incorporating a private limited company becomes a more lucrative option. This is also a reason why startups prefer the company format over any other business constitution format in India. However, can an...
Companies have multiple methods at their disposal for the issue of shares. Further, one may think that distributing dividends is the only way to distribute profits. But there’s one method that allows the company to issue new shares as well as distribute its profits to its shareholders. This is known as the bonus issue of...
Running your own business always comes with the uncertainty that someone might use your name or logo. This can lead to erosion of the customer base as another unauthorized person uses your goodwill for their gains. It takes years to build a good reputation and brand. Further, customers identify your business because of your brand...
In order to protect intellectual property rights, people can go for registrations under various authorities. Further, when it comes to people such as artists, writers, musicians, etc., their works and creations are their most valuable assets. Additionally, it can be easily copied and reproduced, and therefore, it is essential to protect their works, whether published...
There are multiple ways in which foreign investments can be attracted to India. One of the prominent ways is to raise investments by way of debt. This is commonly known as External Commercial Borrowings (ECB) and is subject to FEMA rules and regulations. What are ECBs and what are the key external commercial borrowing rules...
Due diligence basically involves the verification, investigation and audit of an entity or a potential deal or investment opportunity to verify and confirm all the relevant facts. It ensures that the organization undertaking due diligence knows all the details and gets confirmation about the genuineness of the other entity before proceeding with the same. When it...
What is NBFC? A Non-Banking Financial Company (NBFC) is akin to a banking company and engaged in the business of providing loans, accepting deposits (only certain NBFCs), leasing, hire purchase, acquisition of stocks, insurance, etc. Difference Between Bank and NBFC? NBFCs can’t accept demand deposits. However, certain NBFCs are allowed to accept term deposits. NBFC depositors cannot avail of...
Foreign Direct investment is the investment made by a person resident outside India in a business entity in India. Foreign Direct Investments (FDI) are important to channelise growth in various sectors. However, there are certain critical sectors where foreign investment needs to be regulated. Therefore, the government has provided two routes (Approval & Automatic Route...
The company law in India lays down explicit provisions governing the valuation. Section 247 of the Companies Act, 2013 governs the requirements of a registered valuer, his functions, and penalties. Further, various provisions of the Companies Act lay down the scenarios whereby valuation is required to be made by a registered valuer. Let’s understand some...
Social and environmental causes are gaining the attention of people. People and businesses are now not only focusing on profits but also on serving social and environmental causes. One of the most prevalent methods to serve these purposes is to directly contribute towards these causes, whether in cash or kind. However, are these contributions limited...
Credit risk and delay in payments are a common struggle in business, especially for Micro Small and Medium Enterprises (MSMEs). Therefore, the Ministry of Corporate Affairs (MCA) has released MSME Form-1 where instances of delays in payment beyond a specified period shall be reported to the ROC. What is MSME Form-1 and when it should be...
International transactions are gaining momentum and more companies are getting involved in foreign investments. Therefore, RBI has placed a mechanism whereby the onus has been put on companies undertaking such transactions to report their Foreign Liabilities and Assets. Foreign Liabilities and Assets (FLA) is an annual return that shall be filed by every company that...
Indian Accounting Standards largely converge with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). In order to assist prepares to overcome the practical difficulties of applying IFRS for the first time, IFRS 1 provides the basis on which entities will convert their financial statements. It lays down the ground...
External Commercial Borrowings (ECBs) are commercial loans raised by eligible resident entities from the recognised non-resident entities. ECBs can be raised under the automatic route as well as the approval route. Automatic Route means a route or a way of acquiring funds or raising commercial loans from the overseas market (i.e., the recognised non-resident lenders) with the...
The RBI has taken a noteworthy initiative of promoting global trade in INR. An additional arrangement has been put in place for invoicing, payments and international trade settlement in Indian Rupees. However, AD banks shall be required to obtain prior approval from the Foreign Exchange Department of Reserve Bank of India, Central Office (Mumbai) before...
The government introduced a major amendment in the companies appointment and qualification of directors rules 2014 vide Notification dated 1st June 2022 as an additional measure for the security of India. The amendments have been made applicable with immediate effect from 1st June 2022. The following are the major changes: Consent to act as director: The...
Mergers and acquisitions have been one of the most effective ways whether it’s about business expansion or eliminating competition. Also, strategic mergers with the intent to collaborate can help survive the cut-throat competition. However, mergers and acquisitions are complex transactions that involve multiple compliances under various laws. Here, we have covered compliances Checklist for merger and...
The business landscape is rapidly changing as new ways of conducting business are emerging. As the business complexities increased, the existing accounting standards lacked provisions to cater to these changes. This gave rise to the Indian Accounting Standards, popularly known as Ind AS. Ind AS are the Indian version of International Financial Reporting Standards (IFRS)...
India has definite laws to regulate the workforce in the industries. With various benefits put in place like gratuity, pension, insurance, etc., organizations are mandated to ensure multiple labour law compliances and procedural requirements to ensure social security of the workforce. Currently, there are various laws addressing the labour and employment scenario. However, their shortcomings...
A labour-intensive country like India requires proper regulations in place to safeguard and regulate labour and employment aspects. India is all set to introduce four New Labour Law Codes that will merge existing 29 laws governing employment and labour issues. These New Labour Law Codes includes: The Code on Wages, 2019 The Occupational Safety, Health and Working Conditions...
Listed Companies benefit in terms of better opportunities to raise ample amounts of funds from various categories of investors. This facilitates rapid expansion and modernization of operations. However, as public interest and money are involved, the government through various rules and regulations mandates these companies to ensure compliances all-round the year in order to ensure...
Foreign Exchange Management Act, 1999 is the regulatory statute that governs the foreign exchange in India. It replaced the erstwhile Foreign Exchange Regulatory Act (FERA) as FERA was more regulatory in nature and wasn’t sustainable in the post-liberalization regime. The redundance of FERA necessitated the implementation of the FEMA act 1999 that eased and provided...
Various regulations mandate valuation to bring out a clear picture of a particular event or a transaction undertaken or to be undertaken. By incorporating the valuation provisions, especially after its introduction under the Section 247 of the Companies Act, 2013, attempts were made to give structure and formalize the practice of valuation. Here’s a complete...
In order to widen the scope and increase clarity and transparency, certain amendments were made to the Companies (Significant Beneficial Ownership) Rules, 2018 vide Companies (Significant Beneficial Ownership) Amendment Rules, 2019 dated 08-02-2019. Following are the Significant Beneficial Ownership Compliance under the Companies Act, 2013. Meaning of Significant Beneficial Owner “Significant beneficial owner” in relation to a...
What is the condonation of Delay? Every law requires certain compliances to be adhered to like making of any application, filing of any document etc. If the parties fail to adhere to the compliances, a remedy is provided by the law where parties can pray for condonation of delay and proceed as if no delay has...
What is Due Diligence? Due Diligence can be described as an act of investigation, audit, inquiry, or review that is performed to confirm such facts, reality, or details of a matter that is under consideration for the conformity and accuracy of the potential seller and buyer. Generally, in the world of finance, it requires an examination...
Private Placement is an effective way to issue securities for raising capital by a company not intending to go public. The whole mechanism of the private placement is governed by Section 42 of the Companies Act 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014. What is Private Placement? A company,...
Startup India Seed Fund Scheme (SISFS): An Overview: This scheme is meant to provide financial assistance to start-ups in lines where a start-up has certain requisites such as proof of concept, prototype under development, commercial factors or any product under trials. The SISFS aims to disburse the seed funding via selected & eligible incubators whole primary role...
Multi-discipline collaboration always make synergy beyond standard expectations. Specially, when we talking about assurance and advisory, the different professional people like Chartered Accountants, Company Secretary, lawyers, Actuaries need to in-shrink as team in order to serve the service business. However, there are number of bottlenecks which barred the collaboration of different professionals in order to...
The need for insurance benefits has shown its importance nowadays, as the second wave of COVID-19 hit the country harder. These times have proven that safety means not only being safe from getting affected by the virus itself but also it is equally important to have a backup plan and being safe from financial calamities....
On account of difficulties faced by the stakeholders due to the resurgence of COVID-19, MCA has provided some relaxations in the compliances required to be undertaken under the provisions of Companies Act, 2013 and LLP Act, 2008 vide its General Circular No. 08/2021 and 06/2021. Circular 08/2021: MCA has extended the gap between two successive board...
The new labor reforms being introduced in 2019-2020 & being implemented in 2021, which are about to bring a wave of changes into the Work Sector. ASC Group would hereby like to introduce you to a brief walkaround of the new labor codes that are being introduced by the Government of India. As per the latest notification...
NEW DELHI: The finance ministry on Friday said banks have sanctioned loans of about Rs 1,20,099 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under economic slowdown caused by the COVID-19 pandemic. However, disbursements against this stood at Rs 61,987.90 crore till Thursday (July 9) under...
Claim Verification under IBC - As per IBC the Corporate Insolvency Resolution Process is for the protection of creditors from debtors through filing of an insolvency petition which is based on delayed and default of payments by the debtors even after various time buffers being provided but inability of the corporate debtor to repay the...
State-level stamp duties on loan deeds are discouraging micro, small and medium enterprises (MSMEs) from tapping the Union government’s 3 trillion liquidity programme, two people aware of the development said. In a meeting with finance minister Nirmala Sitharaman last week, lenders pointed out that many of these small firms were not using the facility as...
Micro, small, and medium (MSME) enterprises are perhaps facing their worst times in the last few years and the Covid-19 pandemic has exacerbated the situation, experts feel. They stress that there is an urgent need to bring such units on the government radar so that they are eligible for benefits. These units need to be...
The Government is making it mandatory for large companies to disclose their dues to MSMEs to ensure timely payments. Some of its features are as follows: Union MSME Minister Nitin Gadkari said that despite various interventions, including MSME firms that payments will be made by the Central Government & its undertakings within 45 days of delivery...
Days after announcing a new set of criteria to define micro, small and medium enterprises (MSMEs) on which various official benefits will be extended, the government is considering a proposal to widen the definition again — a crucial move that will potentially benefit several thousands of firms. Days after announcing a new set of criteria...
Q1: What is the revised rate of EPF contribution announced by the Central Govt. under the Atmanirbhar Bharat package? Ans: Under this package the statutory rate of EPF contribution of both employer and employee has been reduced to 10 percent of basic wages and dearness allowances from the existing rate of 12 percent for all class...
NEW DELHI: Many small businesses are wary of taking fresh loans even if they are backed by government guarantee, as they are not sure how much demand will be there for their products when they resume business activity. Micro, small and medium enterprises (MSMEs) expected a direct relief from the government in terms of waiving...
Key Highlights According to the earlier definition, MSMEs engaged in manufacturing based on their investment in plant and machinery FM Sitharaman has declared that there will be no difference between manufacturing and service enterprises. The investment limit for MSMEs has been revised upwards and an additional criterion of turnover has been introduced While enumerating the details of the economic...
In a nation with an estimated population of 1.37 billion people, an extensive range of social enterprises can make an impact. From public services to financial services, to technology, social enterprises can play a key role in a diverse economy like India. Ridley-Duff and Bull (2011) defined a social enterprise as an organization that applies...
Summarized features of the scheme - The Ministry has issued a general circular no 12/2020 dated. 30th March 2020 to revive the non -compliant companies. Under this scheme, the government has given one time opportunity to non – compliant companies to make a fresh start on a clean slate. This scheme enables the companies to...
1. As per Circular to clarify by CBEC-20/16/12/2020- GST in FAQ, it has been provided that: Once a business entity defaults certain threshold amount under the IBC, 2016, corporate Insolvency Resolution Process (CIRP) gets triggered and the management of such business entity or Corporate Debtor and its assets vests with an Interim Resolution Professional (“IRP”)...
The Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman today announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several sectors. Highlights of press conference are: INCOME TAX Date of filing ITR for FY 2018-19 is extended from 31st...
India reported its first novel Coronavirus case on January 30, 2020. Ever since, India, being the second most populated country of the world, has reported 415 cases of Coronavirus and seven reported deaths, as per the reports of Ministry of Health and Family Welfare. Considering the globally vast spread of Covid 19 virus, India has...
New Delhi: Union Finance Minister Nirmala Sitharaman today announced various statutory and regulatory compliance relief measures amid a complete shutdown almost all over the country to control the spread of the highly contagious coronavirus or Covid19 infection. The last date for filing belated income tax return (ITR) for the FY 201819 has been extended from...
Decriminalisation of Compoundable - The Company Law Committee, constituted by the Ministry of Corporate Affairs (MCA) vide order dated 18.09.2019, has submitted the first phase report to the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on 18th November, 2019, proposing amendments in the Companies Act, 2013 for further decriminalising the offences under the...
Secretarial Audit offers a broad check on compliances of Company under applicable acts including SEBI Act, Companies Act, Depositors Act, FEMA, and other industry-specific laws. Secretarial Compliance Report consists of the SEBI Act, its regulations and circulars issued thereunder. Secretarial audit guides you in dealing with the changes brought in to managerial burden and management...
MUMBAI: After forcing banks to link retail loans to an external benchmark, the RBI is looking at the way non-banking finance companies (NBFCs) and mortgage companies price their products. While an external benchmark might not be mandated for housing finance companies (HFCs), banking regulator wants to bring more transparency in their pricing. Meanwhile, the RBI...
The beginning of April brings with it a number of changes that every tax payer needs to be aware of to better understand their tax liabilities as well as the benefits that the Government is offering them. Let’s take a look at some of the major changes 1. Income tax Imagine if your social media profiles...
The real estate industry has always been shrouded in controversies considering many factors including bad loans, stay on construction, illegal constructions and grief for home buyer due to late payment. The Real Estate Regulatory Act was introduced in the hope of putting an end to a number of stagnant processes as well as to streamline...
Recently, the Indian Government proposed changes in tax rules for investments made in start-up and entrepreneurial ventures. A 30.9% tax levied on investments, however it is important to mention that the entire investment is not taxed, only the amount that is considered to be above ‘fair value’ valuations of a start-up; also classified as ‘income...
A recent tax ruling is changing the way companies in India operated for years. Converting a company to Limited Liability Partnership was a means to scale up, attract foreign investors as well as to distribute profits to partners without the fear of dividend distribution tax. This new ruling however puts things in perspective and makes the...
Compliance has become a very critical part of every organization's strategic plan whether its Financial services, banking or healthcare — all companies, beyond a certain volume, face a large number of compliance rules. Penalties for violating such compliance requirements can be massive, and non-compliance is practically an invitation to authorities, resulting in not only financial...
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