The process of selecting the form of business organization plays a very important role in setting up of business, as various factors like flexibility, business requirement, taxation etc are required to be considered and a wrong decision may hamper your future business plan. As its long term plan which need to be rationalized based on the pros and cons on the type of organization.
At B.C.Shetty & Co., we provide option to choose the right kind of business form and therefore we can help you in understanding the technicalities and positives that lies behind each form, to enable you to take a right and informed business setup decision.We can help you in setting the following form of business such as
It is an unincorporated business owned by a single person who is responsible for its assets and liabilities and entitled to earned profits and enjoying the benefit of business environment.
A sole proprietorship form of business organization is suitable to the following types of business houses where:
A sole proprietorship offers the least amount of complication in terms of start-up requirements for the different business organizations (i.e. corporation, partnership, etc.)
|In India, partnership organization is formed and managed by Indian Partnership Act, 1932.
Section 4 of Partnership Act defines partnership as the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.
Minimum Requirement:- Minimum of 2 persons are required to form a partnership and maximum of 10 persons in case of banking and 20 in case of others.
The relation of partners is based on the contract.
At least 2 persons are required for the formation of partnership firm
There must be some undertaking of business.
The objective must be to earn profits and share among partners.
Law of agency applies.
Partner's liability is unlimited.
Mutual trust and confidence is the basis of partnership.
Every partner can be a principal or agent of other partners during the
Consensus i.e. mutual consent is required for all important decisions.
Restriction on transfer of share.
No relation between contribution of capital and share of profits.
Life span of partnership depends upon the will of partners.
Formation of partnership is easy as it does not involve too many legal formalities.
Flexibility in the operations of the business.
Registration of partnership form of organization is not compulsory as in the case of company.
All major decisions are taken by mutual trust, which results in better decision making.
Sharing of risk helps in formation of capital.
Relation of effort and reward.
Unlimited liability helps in more credit worthiness.
It protects the interest of minority as mutual consent i.e. consensus is required to take all the major decisions.
Easy to maintain secrecy as partnership firm is not under an obligation to disclose its annual accounts.
No legal formalities for dissolution.
Unlimited liability increases the risk; this hinders the growth of business.
Limited resources for generating capital.
No perpetual succession i.e. sudden death or retirement of any one of the partners dissolves the partnership.
Lack of good faith and confidence among partners causes great limitations.
No transfer of shares.
Burden of law of agency.
Due to non-disclosure of accounts there is always a lack of public confidence
For service industry:- Accounting, Medical, Legal, Transportation, Warehousing etc.
For distribution of profits.
|Partnership - Key Requirement|
A group of people formed as a separate organization and which has as a stated purpose some charitable or benevolent purpose either in regards to the public at-large or in regards to the common interests of the members, and which operates as nearly as possible at cost.
Any group of persons can form a cooperative society of their own if they so like to act jointly for the common benefit of each other. But that is not the legal way of formation the cooperative society. All societies must be formed under the Cooperative Societies Act, 1912 or under the relevant state cooperative laws.
For formation of a cooperative society at least 10 persons are required. They must have the common objective to serve each other by forming a society. They have to contribute capital in form of share capital and decide to take up any one or more activities. They form a managing committee from and among the members who looks after the management of the society and implements the decisions of the members. As our Constitution is wedded to a socialistic pattern of society, it is a part of the Government policy to promote and encourage establishment of cooperative societies.
Therefore, co-operative societies enjoy several benefits provided by the Government from time to time. But in order to avail those benefits the society must have to register under the Cooperative Societies Act. The procedure for registration are as follow :
Apply for registration of the association as cooperative society in a prescribed proforma available with the Registrar of Cooperative Societies with requisite information like -
List of members, their individual addresses
Name and objectives of the society for which it has been formed
Collection of funds - share capital or loan fund with their utilization process
Office bearers as managing committee and their powers
Admission and retirement of members
Bye-law of the society
Trust created for advancement of education, promotion of public health and comfort, relief of poverty, furtherance of religion, or any other purpose regarded as charitable in law. Benevolent and philanthropic purposes are not necessarily charitable unless they are solely and exclusively for the benefit of public or a class or section of it. Charitable trusts(unlike private or non-charitable trust) can have perpetual existence and are not subject to laws against perpetuity. They are wholly or partially exempt from almost all taxes.Benefits:
But subject in each case to the law for the time being in force as to the circumstances and extent in and to which the Author of the Trust may dispose of the Trust property.A person competent to contract is defined in section 11 of the Indian Contract Act as a person who is of the age of majority according to the law to which he is subject and who is of sound mind and is not disqualified from contracting by any law to which he is subject. Thus, generally speaking, any person competent to contract and competent to deal with property can form a trust. Besides individuals, a body of individuals or an artificial person such as an association of persons, an institution, a limited company, a Hindu undivided family through it's Karta, can also form a trust.
It may, however, be noted that the Indian Trusts Act does not apply to public trusts which can be formed by any person under general law. Under the Hindu Law, any Hindu can create a Hindu endowment and under the Muslim law, any Muslim can create a public wakf. Public Trusts are essentially of charitable or religious nature, and can be constituted by any person.REGISTRATION OF CHARITABLE TRUST:-
In India, the law of LLP is new. The Limited Liability Partnership Bill, 2008 and The LLP Act 2008 became operational on 31st March 2009.
The Limited Liability Partnership Rules 2009 ('the LLP Rules') notified on 01st April 2009 and brought into force from that date, except the Rules pertaining to conversion of existing partnership firms, private limited and unlisted public limited companies into LLP, which are brought into force from 31st May 2009.
As per the LLP Act any two persons can incorporate a LLP.
Every LLP shall have two designated partners (i.e. partners responsible for compliance of law of LLP) and one of the two designated partners, shall be resident in India.
LLP shall have a registered office and optionally one other address for serving of documents by the Government and others.
Audit of books of accounts of LLP by an Indian Chartered Accountant is mandatory, except for small LLPs. As per Rule 24(8) of the LLP Rules 2009 -where turnover of LLP does not exceed Rs. 4 million (Rs. forty lakhs) in any financial year or contribution of partners in LLP does not exceed Rs. 2.5 million (Rs. Twenty Five lakhs) need not get their accounts audited.
Annual filing of statement of accounts (by 30 September) and annual return (by 30 May).
Procedure in brief:
|Applicant's Name||First Name||Middle Name||Last Name|
|Father's Name||First Name||Middle Name||Last Name|
|Date of Birth||Date||Month||Year|
|Place of Birth|
|Phone / Cell Number|
Our scope of services covers the end to end service which includes preparing all the documentation till the incorporation of your business entity and routine compliance.
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