Legal Formalities

8/3/2019 Legal Formalities

1/18

Legal Aspects of Business

Submitted By

Chetna

MFM 3rd

SEM

NIFT Jodhpur


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CONTENTS

S.No. Topic Page No.

1 Introduction 2

2 Name Approval 2

3 DIN 3

4 DSC 4

5 Memorandum & articles of Association 5

6 PAN 6

7 TAN 7

8 VAT 7

9 Profession tax 9

10 Service Tax 12

11 Shops & Establishment Act 14

12 Employees Provident Fund Organization 15

13 Employees State Insurance Corporation 15

14 Importer Exporter Code 16

15 References 17


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INTRODUCTION

Starting a new business is not rocket science if one keeps the basic legal requirements in mind.The present article lists down the main legal formalities required to start a Company form of

business in India.

There are many forms in which a business can be organized. Usually, the following models arepopular:

Sole Proprietorship

Partnership ,including Limited Liability Partnerships called (LLP)

CompanyPublic/Private

While there are certain processes that are common to any form of business organization, each

one of the above has certain peculiar requirements. This article analyzes the requirements forstarting a Company. These may vary from State to State and may change from time to time. Also

a business may require additional (or not all of the below mentioned) registrations, complianceand certifications.

1. Name ApprovalThe first step in getting your company registered is the approval of name for the Company.

Generally, it takes about seven days to get the approval. The following steps are required forname approval:

You have to file an application in Form No. 1A with the Registrar of Companies (ROC) of theState in which the Registered Office of the Company is proposed to be situated. The application

is to be signed by one of the promoters and must contain the following details:

Minimum 2 alternative names for the proposed Company. (The name can be coinednames from the objects of the Company or the names of the directors, etc. but should

definitely be indicative of the main object of the Company. Justification for the nameneeds to be specified along with the application).

Names and address of the members (minimum 7 for a public Company and 2 for a privateCompany).

Authorized Capital of the Company (Minimum Rs.5 Lac for a public Company and

Rs.1 lakh for a private Company)

Main objects of the Company

On submitting the application, the ROC scrutinizes the same and sends the approval/objectionsin about 10 days to the applicant.


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2. Director Identification NumberThe concept of a Director Identification Number (DIN) has been introduced for the first time

with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, allthe existing and intending Directors have to obtain DIN within the prescribed time-frame as

notified.

Step by step Process

Step by step process to be followed by the applicant is as under:

As per the revised procedure for DIN Allotment, any person intending to apply for DIN shallhave to make an application in e-Form DIN 1 and should follow the following procedure:

1. e-Form DIN-1 has to follow the offline e--Filing process. For more details regarding the samevisit e-Filing FAQ's.

2. Attach the photograph and scanned copy of supporting documents i.e. proof of identity, andproof of residence as per the guidelines. Physical documents are not required to submit at DIN

cell.

3. Along with the supporting documents, verification by the applicant for applying for allotment

of Director Identification Number (DIN) shall also be attached. This shall contain the Name,

Fathers name, date of birth and text of declaration and physical signature of the applicant.

4. The e-Form shall have to be digitally signed and shall be uploaded on MCA21 portal.

5. Upon upload, pay the fees for DIN1 e-Form. Only electronic payment of the fees shall beallowed (I.e. Net banking / Credit Card). No challan payment will be accepted under revised

procedure of DIN allotment.

The applicant is required to get himself/herself registered on the MCA21 Portal to obtain loginid, which is necessary for payment of the fees. After obtaining the login-id, Login to the MCA21

portal and click on 'e-Form upload' link available under the 'e-Forms' tab for uploading the e-

Form DIN 1. E-Form DIN-1 will be processed only after the DIN application fee is paid.

6. Upon upload and successful payment,

In case Form DIN 1 is signed by a practicing professional and details have not beenidentified as potential duplicate, Approved DIN shall be generated and if the details have

been identified as potential duplicate, Provisional DIN shall be generated.

In case Form DIN 1 is signed by an applicant or by the Managing Director/ existingdirector of the Company in which the applicant is a Director or the Company Secretary in

full time employment of the Company, or details have been identified as a potential

duplicate, provisional DIN shall be generated.


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7. Processing of e Form DIN 1

In case, DIN 1 gets certified by the professional (i.e. CA/ CS/ CWA in whole time practice), the

DIN will be approved by the system immediately online (in case it is not potential duplicate). In

case of signing by any other signatory (i.e. director/ Managing Director/ secretary of the

company with which applicant is to be associated), the MCA DIN cell will examine the e FormDIN 1 and same shall be disposed of within one or two days.

8. Intimate approved DIN to your Companies

On approval of DIN, intimate your DIN to all the company (ies) (within a period of 30 days from

the date of approval) in which you are a Director, in form DIN-2. Form DIN-2 can be

downloaded and printed from the 'DIN' link on the homepage of MCA portal.

9. Company to intimate your DIN to ROC

After the Director has intimated the DIN allotted to the company(ies). The Company(ies) is/arethen required to intimate the DINs of its directors to the ROC in Form DIN-3 within a period of

seven days of receiving form DIN-2.(Filing of DIN-3 is applicable only in cases, where the dateof appointment of director(s) in such company(ies), is prior to September 1 , 2007)

10. Post-approval changes in particulars of DIN-1

If there is any change in the particulars submitted in form DIN-1, applicant can submit e-formDIN-4 online. For instance in the event of change of address of a director, he/ she is required tointimate this change by submitting e-form DIN-4 along with the required attested documents.

3. Digital Signature Certificate Directors for an Indian company, both Indian and foreigners, are also required to get

Digital Signature Certificate (DSC). DSC is required for all Directors or authorizedrepresentatives of any Company as well as the professionals who will sign ROC forms or

documents.

A digital signature authenticates electronic documents in a similar manner a

handwritten signature authenticates printed documents. This signature cannot be forged and itasserts that a named person wrote or otherwise agreed to the document to which the signature is

attached. The recipient of a digitally signed message can verify that the message originated

from the person whose signature is attached to the document and that the message has not been

altered either intentionally or accidentally since it was signed. Also, the signer of a documentcannot later disown it by claiming that the signature was forged. In other words, digital

signatures enable the "authentication" and non-repudiation of digital messages, assuring the

recipient of a digital message of both the identity of the sender and the integrity of the message.

A digital signature is issued by a Certification Authority (CA) and is signed with the

CA's private key. A digital signature typically contains the: Owner's public key, the Owner'sname, Expiration date of the public key, the Name of the issuer (the CA that issued the Digital


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ID), Serial number of the digital signature, and the digital signature of the issuer. Digital

signatures deploy the Public Key Infrastructure (PKI) technology.

4. Memorandum and Articles of Association (Memorandum and Articles

respectively)

While the Memorandum states the main, ancillary/subsidiary and other objects of the Company,

the Articles contain the rules and procedures for the routine conduct of the Company. The

Memorandum also states the authorized share capital of the Company and the names of its firstdirectors.

Memorandum and Articles also need to be stamped. The stamp duty depends on the authorized

share capital.

Documents Required to be Filed with ROC

The following documents are required to be submitted to the ROC:

1. Memorandum and Articles - These are required to be executed by the promoters intheir own hand in the presence of a witness in quadruplicate stating their full name,

fathers name, residential address, occupation, number of shares subscribed etc.a. Form No. 1 - This is a declaration to be executed on a non-judicial Rs 20 stamp paper by

one of the directors of the Company or other specified persons such as attorneys or

advocates stating that all the requirements of the incorporation have been complied with.

b. Form No. 18 - This is to be filed by one of the directors of the Company informing theROC of the registered office of the Company.

c. Form No. 29 - This is the consent obtained from all the proposed directors of theCompany to act as directors of the Company. (Not required in case of Private Company).

d. Form No. 32 - This states the appointment of the proposed directors on the board ofdirectors from the date of incorporation of the Company and is signed by one of the

proposed directors.

2 Name approval letter in original

Power of Attorney signed by all the subscribers to Memorandum authorizing one of the

subscribers or any other person to act on their behalf for the purpose of incorporation and

accepting the certificate of incorporation.

Power of Attorney in case of a subscriber who has appointed another person to sign theMemorandum on his behalf.

These documents need to be filed online first and then a physical copy should be submitted to the

ROC.

3. Certificate of IncorporationAfter the above documents are filed, the ROC calls the attorney on a specified date for scrutiny


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and making corrections, if any in the Memorandum and Articles filed. On complying with the

same, the certificate of incorporation is sent by post to the registered office of the newlyregistered company.

5. Permanent Account Number

Permanent Account Number (PAN) is unique alphanumeric combination issued to all juristic

entities identifiable under the Indian Income Tax Act 1961. It is issued by the Indian Income Tax

Department under the supervision of the Central Board for Direct Taxes (CBDT) and is almostequivalent to a national identification number. It also serves as an important ID proof.

This number is almost mandatory for financial transactions such as opening a bank account,

receiving taxable salary or professional fees, sale or purchase of assets above specified limits.

The primary purpose of PAN is to bring a universal identification key factor for all financial

transactions and indirectly prevent tax evasion by keeping a track of monetary transactions of

high net worth individuals.The PAN is unique, national, and permanent. It is unaffected by a change of address, even

between states.

Structure & validation of PAN

PAN structure is as follows: AAAAA9999A: First five characters are letters, next 4

numerals, last character letter

Each assesse is uniquely identified by the PAN

If the PAN does not follow the above structure, then the PAN will be shown invalid

The fourth character of the PAN must be one of the following, depending on the type of

assesse:CCompany

PPerson

HHUF (Hindu Undivided Family)

FFirm

AAssociation of Persons (AOP)

TAOP (Trust)

BBody of Individuals (BOI)

LLocal Authority

JArtificial Juridical Person

GGovernment

The fifth character of the PAN is the first character

(a) of the surname / last name of the person, in the case of a "Personal" PAN card,

where the fourth character is "P" or


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(b) of the name of the Entity/ Trust/ Society/ Organization in the case of Company/

HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Juridical Person/ Govt, where thefourth character is "C","H","F","A","T","B","L","J","G".

Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand

side of the photo on the PAN card.

6. Tax Deduction Account Number

Tax Deduction Account Number (TAN) is an alphanumeric number issued to individuals who

are required to deduct tax on payments made by them under the Indian Income Tax Act, 1961.

Applying for TAN

TAN should apply through Form No 49B (prescribed under Income Tax Law). Such form can be

submitted online at NSDL website. OR can also be submitted at Tax Information Network

Facilitation Center (TIN-FC). These centers are established by NSDL (which is an appointed

intermediary by the Government) across India.

TAN Application should accompany a 'proof of identity' and a 'proof of address' (photocopies) of

the deduct or. In case, the application is made online, these documents need to be sent over mail

(post/courier) to NSDL - TAN Application division.

Once NSDL receives the TAN application along with said documents (either through TIN FC /

Online), the details are verified and then sent to Income Tax Department. Once approved,

Income Tax Department will allocate a unique number, and indicate the applicant through

NSDL.

7. Value Added Tax

Value Added Tax (VAT) is nothing but a general consumption tax that is assessed on the valueadded to goods & services. It is the indirect tax on the consumption of the goods, paid by its

original producers upon the change in goods or upon the transfer of the goods to its ultimate

consumers. It is based on the value of the goods, added by the transferor. It is the tax in relationto the difference of the value added by the transferor and not just a profit.

All over the world, VAT is payable on the goods and services as they form a part of nationalGDP. More than130 countries worldwide have introduced VAT over the past 3 decades; India

being amongst the last few to introduce it.

It means every seller of goods and service providers charges the tax after availing the input tax

credit. It is the form of collecting sales tax under which tax is collected in each stage on the value

added of the goods. In practice, the dealer charges the tax on the full price of the goods, sold to

the consumer and at every end of the tax period reduces the tax collected on sale and tax chargedto him by the dealers from whom he purchased the goods and deposits such amount of tax in

government treasury.


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VAT is a multi-stage tax, levied only on value that is added at each stage in the cycle of

production of goods and services with the provision of a set-off for the tax paid at earlier stagesin the cycle/chain. The aim is to avoid 'cascading', which can have a snowballing effect on the

prices. It is assumed that because of cross-checking in a multi-staged tax; tax evasion would be

checked, hence resulting in higher revenues to the government.

Importance of VAT in India

India, particularly being a trading community, has always believed in accepting and adopting

loopholes in any system administered by State or Centre. If a well-administered system comes in,

it will not only close options for traders and businessmen to evade paying their taxes, but alsomake sure that they'll be compelled to keep proper records of sales and purchases.

Under the VAT system, no exemptions are given and a tax will be levied at every stage ofmanufacture of a product. At every stage of value-addition, the tax that is levied on the inputs

can be claimed back from tax authorities.

At a macro level, two issues make the introduction of VAT critical for India

Industry watchers believe that the VAT system, if enforced properly, will form part of the fiscal

consolidation strategy for the country. It could, in fact, help address issues like fiscal deficit

problem. Also the revenues estimated to be collected can actually mean lowering of fiscal deficit

burden for the government.

International Monetary Fund (IMF), in the semi-annual World Economic Outlook expressed its

concern for India's large fiscal deficit - at 10 per cent of GDP.

Moreover any globally accepted tax administrative system would only help India integrate betterin the World Trade Organization regime.

Advantages of VAT

1. Coverage If the tax is considered on a retail level, it offers all the economic advantagesof a tax of the entire retail price within its scope. The direct payment of tax spreads outover a large number of firms instead of being concentrated only on particular groups,

such as wholesalers & retailers.

2. Revenue Security - Under VAT only buyers at the final stage have an interest inundervaluing their purchases, as the deduction system ensures that buyers at earlier stages

are refunded the taxes on their purchases. Therefore, tax losses due to undervaluation willbe limited to the value added at the last stage.

Secondly, under VAT, if the payment of tax is avoided at one stage nothing will be lost if

it is picked up at later stage. Even if it is not picked up later, the government will at least

have collected the VAT paid at previous stages. Where as if evasion takes place at thefinal/last stage the state will lose only tax on the value added at that particular point.


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3. Selectivity - VAT is selectively applied to specific goods & business entities. In addition,VAT does not burden capital goods because of the consumption-type. VAT gives fullcredit for tax included on purchases of capital goods.

4. Co-ordination of VAT with direct taxation - Most taxpayers cheat on sales not toevade VAT but to evade their personal and corporate income taxes. Operation of VAT

resembles that of the income tax and an effective VAT greatly helps in income taxadministration and revenue collection.

Disadvantages of VAT

1. VAT is regressive2. VAT is difficult to operate from position of both administration and business3. VAT is inflationary4. VAT favors capital intensive firms

Items covered under VAT

All business transactions that are carried on within a State by individuals/partnerships/

companies etc. will be covered under VAT.

More than 550 items are covered under the new Indian VAT regime out of which 46natural & unprocessed local products will be exempt from VAT

Nearly 270 items including drugs and medicines, all industrial and agricultural inputs,capital goods as well as declared goods would attract 4 % VAT in India.

The remaining items would attract 12.5 % VAT. Precious metals such as gold and

bullion will be taxed at 1%.

Petrol and diesel are kept out of the VAT regime in India.

8. Professional Tax

1. Employee" means a person employed on salary and includes,

1) A Government servant receiving pay from the revenue of the Central

Government or any State Government;

2) a person in the service of a body whether incorporated or not, which is

owned or controlled by the Central Government or any State Government,

where, such body operates within the municipal limit even though its

headquarters may be outside the municipal limit; and

3) A person engaged in any employment by an employer not covered bysub-clauses (i) and (ii);

2. "employer" in relation to an employee earning any salary on a regular basis under hismeans, the person or the officer who is responsible for disbursement of such salary andincludes the head of the office or any establishment as well as the Manager or Agent of

the employer;


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3. "half-year" shall be from the 1st

day of April to the 30th

day of September and from

the 1st

day of October to the 31st

day of March of a year;

4. "Month" means a calendar month;

5. "Person" means any person who is engaged actively or otherwise in any profession,trade, calling or employment in the State of

Tamil Nadu and includes a Hindu undivided family, firm, company, corporation or other

corporate body, any society, club, body of persons or association, so engaged, but doesnot include any person employed on a casual basis;

6. "Tax" means the tax on profession, trade, calling and employment levied under this

Chapter.

Levy of Profession tax:

1) There shall be levied by the Municipal Council a tax on profession, trade calling

and employment.

2) Every company which transacts business and every person, who is engaged activelyor otherwise in any profession, trade, calling or employment with in the Town Panchayat

on the first day of the half-year for which return is filed, shall pay half-yearly tax at the

rates specified in the Table below in such manner as may be prescribed:

THE TABLE

Sl. No. Six months income (Rs.) Old Tax (Rs) New Tax (Rs)1 up to 21,000 - -

2 21,00130,000 75 100

3 30,00145,000 188 235

4 45,00160,000 390 510

5 60,00175,000 585 760

6 75,001 and above 810 1095

Profession Tax Collectable from the salary of August (1st Quarter) and January (2ndQuarter)

3) The rate of tax payable under sub-section (2) shall be published by the executiveauthority in such manner as may be prescribed.

4) Where a company or person proves that it or he has paid the sum due to account of the

tax levied under this chapter or any tax of the nature of a profession tax imposed under the


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Cantonments Act, 1924 for the same half-year to any local authority or cantonment authority

in the State of Tamil Nadu such company or person shall not be liable by reason merely ofchange of place of business, exercise of profession, trade, calling or employment or

residence, to pay the tax to any other local authority or cantonment authority. (Central Act

II of 1924)

5) The tax livable from a firm, association or Hindu undivided family may be levied on

any adult member of the firm, association or family.

6) Where a person doing the same business in the same name in one or more places

within the Town Panchayat, the income of such business in all places within the TownPanchayat shall be computed for the purpose of levy of tax and such person shall pay the tax

in accordance with the provisions of this Chapter.

7) Where any company, corporate body, society, firm, body of persons or association,

pays the tax under this chapter, any director, partner or member as the case may be, of such

company, corporate body, society, firm, body of persons or association shall not be liable topay tax under this Chapter for the income derived by such director partner or member form

such company, corporate body, society, firm, body of persons or associations.

8) Every person who is liable to pay tax, other than a person earning a salary or wage

shall furnish to the executive authority a return in such form, for such period and within suchdate and in such manner as may be prescribed .

Provided that subject to the provisions of sub-sections (10) and (11), such person may make a

self-assessment on the basis of average half-yearly income of the previous financial year andthe return filed by him shall be accepted without calling for the accounts and without any

inspection.

9) Every such return shall accompany with the proof of payment of the full amount of

tax due according to the return and a return without such proof of payment shall not be

deemed to have been duly filed.

10) Notwithstanding anything contained in the proviso to sub-section (8), the executive

authority may select the percent of the total number of such assessment in such manner asmay be prescribed for the purpose of detailed scrutiny regarding the correctness of the return

submitted by a person in this connection and in such cases final assessment order shall be

passed in accordance with provisions of this Chapter.

11) If no return is submitted by any person under sub-section (8) within the prescribed

period or if the return submitted by him appears to the executive authority to be incomplete or

incorrect, the executive authority shall, after making such enquiry as we may considernecessary assess such person to the best of his judgment.


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Provided that before taking action under this sub-section, the person shall be given

a reasonable opportunity of proving the correctness or completeness of any return submittedby him

12) Every person who is liable to pay tax under this section, other than a person earning

salary or wage:-

(a) shall be issued with a pass book containing such details relating to such payment of

tax as may be prescribed and if the pass book is lost or accidentally destroyed the executive

authority may, on an application made by the person accompanied by such fee as may be

fixed by the municipal council, issue to such person a duplicate of the pass book.

(b) Shall be allotted a permanent account number and such person shall -

(I) quote such number in all his returns to, or correspondence with the executive authority;

(ii) Quote such number in all chaplains for the payment of any sum due under this chapter.

(13) The rate of tax specified under sub-section (2) shall be revised by the municipal councilonce in every five years and such revision of tax shall be increased not less than twenty-five

percent and not more than thirty-five percent of the tax levied immediately before the date of

revision.

Rules - The Tamil Nadu Town Panchayats, Municipalities and Municipal Corporations(Collection of Arrears of Tax on Profession, Trades, Calling and Employment's) Rules, 1998- Issued.

9. Service Tax

Dr. Manmohan Singh, the then Union Finance Minister, in his Budget speech for the year 1994-

95 introduced the new concept of Service Tax and stated that '' There is no sound reason for

exempting services from taxation, therefore, I propose to make a modest effort in this direction

by imposing a tax on services of telephones, non-life insurance and stock brokers.''

Service Tax has been introduced in order to explore new avenues for taxation and to bring morepeople into the tax net. Service Tax generated revenue of Rs 2612 crores in 2000-2001. In 2001-

2002 it is estimated at 3600 crores.

Bringing services under taxation is not simple as the services are intangible and are provided bylarge groups of organized as well as unorganized service providers including retailers who are

scattered across the country. Further, there are several services, which are of intermediate nature.

The low level of education of service providers also poses difficulties to both-tax administrationand assesses.


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The Service Tax assesse is the person/firm who provides the service. Hence, the Service

Tax must be paid by the person/firm providing the service.

As stated earlier, service tax was introduced in India for the first time in 1994. Chapter V of

the Finance Act, 1994 (32 of 1994) (Sections 64 to 96) deals with imposition of Service

Tax interalia on-

a. Service rendered by the telegraph authorities to the subscribers in relation to telephoneconnections.

b. Service provided by the insurer to the policy-holder in relation to general insurancebusiness.

c. Service provided by a stockbroker.

The Finance Acts of 1996, 1997, 1998, 2001, 2002 and 2003 added more services to tax net by

way of amendments to Finance Act, 1994. At present total number of services on which Service

Tax is levied have gone up to 58 despite withdrawal of certain Services from the tax net or grant

of exemptions (Goods Transport Operators, Outdoor Caterers, Pandal and Shamiana Contractors,and Mechanized Slaughter Houses).

Service tax Includes

Service tax is a form of indirect tax that is applicable to the services that are taxable in nature.

This tax came into existence as government wants an easy option that is transparent in nature thatcan generate revenue for the nation in an easy way. In past few years service tax is applied on

various new services. Unlike value added tax that is applicable on goods and commodities, this

tax is imposed on various services that is provided by the financial institutions such as banks,

stock exchange, colleges, transaction providers, telecom providers. Banks are the first thatcharges service tax to its customer since inception often they termed service charges as

processing fees. The responsibility of collecting the tax lies with the Central Board of Excise and

Customs (CBEC) its a body under the Ministry of Finance. This body formulates the tax

structure in the country.

Service tax was imposed first in India in July 1994. The service tax is applicable all over Indiahowever due to the national interest and for the betterment of the people of Jammu and Kashmir

it is waved off. In 2006- 2007 service tax was increased from 10% to 12% however it was again

reduced from 12% to 10% in the Union budget of 2009. It is often noticed that there is a lack

of service tax information among the people. Government has gradually increased the list of

taxable services to increase the revenue. Lets have a look at the major services that comes underthe scanner of service tax:

- Telecommunication

- Traveling agencies (air,

road and railway services)

- Architects

- Management consultants

- Cargo and

shipping

- Telegraph services

- Hospitals and

health care services

- Event

managements

- Beauty parlors

- Dry cleaning

services

- Customer service

units

- Technical support

advising firms

- Tourists services

- Security

agencies

- Transport of

goods by air

- Health clubs


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- Universities, colleges and

schools

- Credit rating agencies

- Market research analyst

- Broadcasting services

(television and radio)- Banking and other

financial services

- Authorized service stations

- Export import unit

- Storage and

warehousing

services

- Maintenance and

repair services

- Franchise owner- Retail stores

- Transportation of

goods

- Packaging

services

- Airport services

- Cable operators

- Real estate

agents

- Consultants of

different services

- Insurance

underwritingagencies

- Stock broker

- Passport services

- Immigration

services

- Legal advising

units

- Chartered

accountant firms

- Automobile

service stations

- Electronic and

electrical service

stations

- Human resourceservices

- Membership of

clubs and

association

- Share and stock

transfer agent

- Survey and

exploration of

minerals

- Cost accountant

- Internet telephony

services

- Pager services

- Real estate

agent

- Ship

management

services- Port services

- Custom house

agent

- General

insurance

services

- Containers by

rail

- Postal services

10.Shops and Establishment Act

The Shops and Establishment Act is a state legislation act and each state has framed its own rules

for the Act. The object of this Act is to provide statutory obligation and rights to employees and

employers in the unauthorized sector of employment, i.e., shops and establishments. This Act is

applicable to all persons employed in an establishment with or without wages, except the

members of the employers family.

This Act lays down the following rules:

Working hours per day and week.

Guidelines for spread-over, rest interval, opening and closing hours, closed days, national

and religious holidays, overtime work.

Employment of children, young persons and women.

Rules for annual leave, maternity leave, sickness and casual leave, etc.

Rules for employment and termination of service.

Registration of Shop & establishment Act is necessary because:

Under this Act, registration of shop / establishment is necessary within thirty days of

commencement of work.


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Fifteen days of notice is required to be served before the closing of the establishment State

government can exempt, either permanently or for specified period, any establishments from

all or any provisions of this Act.

11.

Employees Provident Fund Organization

The Employees' Provident Fund Organization (EPFO) is a statutory body of the Government ofIndia under the Ministry of Labor and Employment. It administers a compulsory contributoryProvident Fund Scheme, Pension Scheme and an Insurance Scheme. It is one of the largestsocial security organizations in the world in terms of the number of covered beneficiaries andthe volume of financial transactions undertaken.

Structure

The EPFO has the dual role of being the enforcement agency to oversee the implementation of

the EPF& MP Act and as a service provider for the covered beneficiaries throughout the country.

To this end, the Commissioners of the Organization are vested with vast powers under the statuteconferring quasi- judicial authority for search and seizure of records, assessment of financial

liability on the employer, levy of damages, attachment and auction of a defaulter's property,

prosecution and arrest and detention in civil prison.

Administratively, the Organization is organized into Zones which are headed by an Additional

Central Provident Fund Commissioner for each of the political states in the country. The states

have either one or more than one Regional Offices (R.O.) headed by Regional P.F.

Commissioners (Grade I) which are further sub- divided into Sub- Regions (S.R.O.) headed by

Regional P.F. Commissioners (Grade II). To assist them are Assistant P.F. Commissioners. Most

of the districts in the country have small district offices where an Enforcement Officer isstationed to inspect the local establishments and attend to grievances.

The total manpower of the EPFO is at present about 20000 including all levels. The

Commissioner cadre numbering 815 are recruited directly, competitively, through the Union

Public Service Commission of India as well as through promotion from lower ranks. Subordinate

Officers (Enforcement Officers/ Accounts Officers) are also recruited directly in addition to

promotion from the staff cadre of social security assistants.

12. Employees State Insurance Corporation (ESIC)Employees State Insurance Scheme of India is a multidimensional social security system

tailored to provide socio-economic protection to worker population and their dependants covered

under the scheme. Besides full medical care for self and dependants, that is admissible from day

one of insurable employment, the insured persons are also entitled to a variety of cash benefits in

times of physical distress due to sickness, temporary or permanent disablement etc. resulting in

loss of earning capacity, the confinement in respect of insured women, dependants of insured


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persons who die in industrial accidents or because of employment injury or occupational hazard

are entitled to a monthly pension called the dependants benefit.

The ESI Act, (1948) applies to the following categories of factories and establishments in the

implemented areas:-

Non-seasonal factories using power and employing ten (10) or more persons.

Non-seasonal and non-power using factories and establishments employing twenty (20) or more

persons.

The employer is required to provide necessary information to the concerned regional ESI department in

the prescribed form for allotment of Establishment Code Number.

13. Importer Exporter Code (IEC)

Any individual, firm or company requires an Importer-Exporter Code (IEC) to indulge in anyimport/export activities of a commercial nature. IEC is also required for remittance of money to a

foreign country for any import. Your banker will not remit money to a foreign entity without an

IEC code. Each legal entity (for ex. partnership) can have only one IEC.

Anybody can apply for an IEC code and there is no need to go to a Chartered Account/Company

Secretary/Lawyer for it. Applications can be made online at the DGFT site.

Documents

PANCard - Both sides

3 Photographs Net banking account with one of the designated banks (HDFC/ICICI/Bank of

India/SBI/Central Bank of India/PNB/IDBI/Axis/Union Bank of India). The banker will give

a certificate in a specified format which needs to be submitted with the IEC application.

RBI approval letter for NRIs

Residential Address Proof of applicant

Self Addressed Envelope with Rs 30/- Stamps

Procedure

1. After the application the 10 digit unique IEC number is generated within 1-2 days by thelocal DGFT office and appears online.

2. You will receive an e-mail notification within 1-2 days.

3. The soft copy of the IEC is enough to start an outward remittance for imports throughyour banker. The IEC is "Online" within 1-2 days and is valid for usage for remittances,

imports, customs etc

4. A hard copy will arrive in 12-14 days
http://www.wikifyindia.com/wiki/PAN_Cardhttp://www.wikifyindia.com/wiki/PAN_Cardhttp://www.wikifyindia.com/wiki/PAN_Card


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REFRENCES

1. http://www.wikifyindia.com/wiki/Importer_Exporter_Code2. http://wiki.edeskonline.com/Shops_and_Establishment_Act3. http://www.tax4india.com/vat/vat.html4. http://www.tax4india.com/tds-indian-taxes/tax-deduction-account-number.html5. http://en.wikipedia.org/wiki/Tax_Deduction_Account_Number6. http://en.wikipedia.org/wiki/Permanent_account_number7. https://incometaxindiaefiling.gov.in/portal/faq_signature.do8. http://en.wikipedia.org/wiki/Tax_Deduction_Account_Number9. http://www.epfindia.nic.in/EPFAT/epfat.html10.http://esic.nic.in/
http://esic.nic.in/http://esic.nic.in/http://esic.nic.in/http://esic.nic.in/

Legal Formalities

Documents

Transcript of Legal Formalities