Tag Archives: LLP

Start up

START-UP INDIA –A GOVERNMENT INITIATIVE

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Start-up India campaign is based on an action plan aimed at promoting bank financing for start-up ventures to boost entrepreneurship and encourage start-ups with jobs creation. The campaign was first announced by Prime Minister Narendra Modi on 15th August 2015. It is focused on to restrict hindrances like land permissions, foreign investment proposal, environmental clearances etc. which are the major problems faced by people while starting a venture. Start-up India was organized by Department of Industrial Policy and Promotion According to the campaign a start-up is an entity that is headquartered in India, was started less than five years ago and has an annual turnover less than ₹25 crore. Further On January 16, Prime Minister Narendra Modi unveiled a 16-point action plan for start-up enterprises in India. He also announced a self-certification scheme related to nine labour and environment laws. He also said that there would be no inspection of the enterprises during the first three years of the operation. The main focus of the campaign is to provide the following facilities for the growth of start-ups:

  1. Self-certification: The start-ups will adopt self-certification to reduce the regulatory liabilities. The self-certification will apply to laws including payment of gratuity, labour contract, provident fund management, water and air pollution acts.
  2. Start-up India hub: An all-India hub will be created as a single contact point for start-up foundations in India, which will help the entrepreneurs to exchange knowledge and access financial aid.
  3. Register through app: An online portal, in the shape of a mobile application, will be launched to help start-up founders to easily register. The app is scheduled to be launched on April 1.
  4. Patent protection: A fast-track system for patent examination at lower costs is being conceptualised by the central government. The system will promote awareness and adoption of the Intellectual Property Rights (IPRs) by the start-up foundations.
  5. Rs. 10,000 crore fund: The government will develop a fund with an initial corpus of Rs 2,500 crore and a total corpus of Rs 10,000 crore over four years, to support upcoming start-up enterprises.
  6. National Credit Guarantee Trust Company: A National Credit Guarantee Trust Company (NCGTC) is being conceptualised with a budget of Rs 500 crore per year for the next four years to support the flow of funds to start-ups.
  7. No Capital Gains Tax: At present, investments by venture capital funds are exempt from the Capital Gains Tax. The same policy is being implemented on primary-level investments in start-ups.
  8. No Income Tax for three years: Start-ups would not pay Income Tax for three years. This policy would revolutionise the pace with which start-ups would grow in the future.
  9. Tax exemption for investments of higher value: In case of an investment of higher value than the market price, it will be exempt from paying tax
  10. Building entrepreneurs: Innovation-related study plans for students in over 5 lakh schools. Besides, there will also be an annual incubator grand challenge to develop world class incubators.
  11. Atal Innovation Mission: The Atal Innovation Mission will be launched to boost innovation and encourage talented youths. The government will introduce innovation-related programmes for students in over 5 lakh schools.
  12. Setting up incubators: A private-public partnership model is being considered for 35 new incubators and 31 innovation centres at national institutes.
  13. Legal support: A panel of facilitators will provide legal support and assistance in submitting patent applications and other official documents.
  14. Rebate: A rebate amount of 80 percent of the total value will be provided to the entrepreneurs on filing patent applications.
  15. Easy rules: Norms of public procurement and rules of trading have been simplified for the start-ups.
  16. Faster exit: If a start-up fails, the government will also assist the entrepreneurs to find suitable solutions for their problems. If they fail again, the government will provide an easy way out.
Business Incorporation

LLP, PRIVATE LIMITED COMPANY & OPC

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Benefits of Incorporating a LIMITED LIABILITY PARTNERSHIP/PRIVATE LIMITED COMPANY/ONE PERSON COMPANY

 

A Limited Liability Partnership (LLP) is a partnership firm in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. Section 2(62) of the Act, defines a “One Person Company” as a company which has only one person as a member. OPC is a Private Limited Company with only 1 shareholder, similar to a Proprietorship firm, where firm is owned and managed by an individual. A private limited company, is a type of privately held business entity. This type of business entity limits owner liability to their shares, limits the number of shareholders to 200, and restricts shareholders from publicly trading shares. All three of the above are registered under the Ministry of Corporate Affairs. And all these entities are incorporated and registered under respective laws and are distinct from their shareholders/owners.

 

Raising Capital

Incorporate your business for investment opportunities. Whereas sole proprietorships and standard partnerships are limited as to how they can raise capital for their business, a corporation can raise capital through selling of corporate stock, or interest, in the company. Investors are more readily attracted to a business opportunity where their exposure to liability is at a minimum. Today, Angel Investors or Venture Capitalists or other investors prefer investing in an incorporated entity, to feel safe and assured while investing in any new business.

 

Credibility

Credibility is another benefit attached to an entity that is incorporated. Customers and other businesses usually feel more secure engaging in transactions with a corporate legal entity because it instills a feeling of confidence in the company. For investors and lenders to a business, it gives them knowledge that their investment assets are afforded better legal protections.

 

Perpetual Duration

The incorporated business has perpetual duration unless stated otherwise in the articles of incorporation. This unlimited life allows the entity to continue to exist and conduct business, even following the untimely death of an owner, or the decision by individual owners to discontinue their stake in the entity.

 

Liability Protection

In order to enjoy maximum liability protection from lawsuits, the company or corporation must be established, operated, and maintained properly, with all of the “operating formalities” properly implemented and adhered to. Since the shareholders are not personally responsible for the corporation’s obligations, they can be protected from corporate litigation. Thus, if the company is involved in a lawsuit, the shareholders’ personal homes or assets would not be at risk.

 

Tax Savings

Incorporate your business for tax benefits. There are substantial advantages, and savings, available to an incorporated business. One can also write off all his medical expenses, including prescriptions, through his corporation and one is able to write off 100% of his insurance premiums versus the mere 30% write-off available to partnerships or sole proprietorships. These are just a glimpse of the types of advantages available by establishing your company as a corporation.