Being a Chartered Accountant and interacting with several entrepreneurs, I found that the most common question bothering startup founders is which business entity to form and what are the compliances of these entities. Hence, there is a need to summarize this essential information in a comprehensive manner and layman terms.
The three most preferred business entities in India – Private Limited Company, Limited Liability Partnership (LLP) and One Person Company (OPC) have some important differences in their compliance structure which affect their running costs as well. Continue reading “Compliances for Private Limited Company, LLP and OPC – a clear comparison”
Selection of the correct form of business entity is the most important decision taken by an entrepreneur. To make choices simpler and assist you in taking a well informed decision, here is a basic comparison chart of Private Limited Company vs LLP vs OPC – the three most common yet credible forms of business in today’s time. Continue reading “Private Limited Company vs LLP vs OPC”
Audit means an examination of books of accounts, statutory records, documents and vouchers conducted with the purpose of establishing the fact that the accounting records presents a true and fair view of the Organization. It is conducted by a party which is independent of that organization.
There are various kinds of audit being conducted under different laws such as statutory audit, internal audit, cost audit, stock audit etc. Continue reading “Difference Between Statutory Audit and Tax Audit”
Funding is key for any startup to expand its horizon of products and resources. Pitching for investments and getting a deal is one aspect, but the legal side is something that founders find complicated. I experienced this when I saw some of my clients panicking about how to go about funding compliances, once they received confirmation of funds from investors in India or abroad. Continue reading “Funding compliances for startups”
The most of common structures for Non-Profit Organization in India are Trust, Society and Section 8 Companies.
Trust: Trust is considered to be the oldest form of Charitable Organization. Trust can be either private or public. It is primarily created for the benefit of a section of people. Trust is governed by the Indian Trust Act 1882. The main instrument for Registration of Trust is Trust Deed. The creator of the Trust also appoints trustees. The trustees are given control or powers of administration of property in trust with a legal obligation to administer it solely for the purposes specified.
Society: Societies are governed under Society Registration Act 1860. It is generally formed by seven or more people who come together for a common charitable purpose. The main instrument for Registration of Society is the Memorandum of Association.
Section 8 Company: Section 8 companies are governed by Companies Act 2013. A company under this section can be formed for promoting charitable object relating to art, commerce, science, health and so on. These companies enjoy all the privileges and subject to all obligations of Limited Companies. Continue reading “Difference Between Trust, Society and Section 8 Company”