Starting a Business in Maharashtra.pdf

2/24/2015 StartingaBusinessinMaharashtra

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StartingaBusinessinMaharashtraStandardisedcompanyLegalForm:PrivateLimitedCompanyCity:Mumbai

RegistrationRequirementsSummary:

S.No. Procedure TimetoComplete CosttoComplete

1 Obtaindirectoridentificationnumber(DIN)online 1day INR100

2 Obtaindigitalsignaturecertificateonline 1to6day INR400toINR2650

3 ReservethecompanynamewiththeRegistrarofCompanies(ROC)online 23days INR500

4 StampthecompanydocumentseitherattheSuperintendentoranauthorizedbank 1day

Rs.200(forMOA)+Rs.1000(forAOA)foreveryRs.500,000/orpartthereof+Rs.100(stamppaperfordeclarationForm1)

5PresenttherequireddocumentsalongwiththeregistrationfeetotheRegistrarofCompaniestogetthecertificateofincorporation

37days INR15,823

6 Makeaseal 1day INR350

7

VisitanauthorizedfranchiseoragentappointedbyNationalSecuritiesDepositoryServicesLimited(NSDL)orUnitTrustofIndia(UTI)InvestorsServicesLtdtoobtainaPermanentAccountNumber(PAN)

7daysINR66forFeeandINR5forApplicationForm,(ifnotdownloaded)

*8ObtainataxaccountnumberforincometaxesdeductedatsourcefromtheAssessingOfficeintheMumbaiIncomeTaxDepartment

7days,simultaneouslywithProcedure7

INR55

*9 RegisterwithOfficeofInspector,MumbaiShopsandEstablishmentAct2days,simultaneouswithprocedure8

INR1,500+3timesregistrationfeeforTradeRefuseCharges

*10 RegisterforVATbeforetheSalesTaxOfficerofthewardinwhichthecompanyislocated12days,simultaneouswithprocedure9

INR5000(RegistrationFee)+INR100(StampDuty)

*11 Registerforprofessiontax 2days,simultaneouswithprocedure10 Nocharge

*12 RegisterwithEmployees'ProvidentFundOrganization12days,simultaneouswithprocedure10 Nocharge

*13 Registerformedicalinsurance(ESIC) 9day,simultaneouswithprocedure10 Nocharge

*Takesplacesimultaneouslywithanotherprocedure.

RegistrationRequirementsDetailsProcedure1Obtaindirectoridentificationnumber(DIN)onlineTimetocomplete:1to6daysCosttocomplete:INR400toINR2650NameofAgency:MinistryofCorporateAffairs

TheprocesstoobtaintheDirectorIdentificationNumber(DIN)isasfollows:1)ObtaintheprovisionalDINbyfilingapplicationFormDIN1online.ThisformisontheMinistryofCorporateAffairs21stCentury(MCA21)portalwww.mca.gov.in.TheprovisionalDINisimmediatelyissued.Theapplicationformmustthenbeprintedandsignedandsentforapprovaltotheministrybycourieralongwithproofofidentityandaddress:

IdentityProof(Anyone) ResidenceProof(Anyone)

PANCard DrivingLicense

DrivingLicense Passport

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Passport VoterIDcard

VoterIDcard TelephoneBill

RationCard

ElectricityBill

BankStatement

2)Theconcernedauthorityverifiesallthedocumentsand,uponapproval,issuesapermanentDIN.Theprocesstakesabout4weeks.

Procedure2ObtaindigitalsignaturecertificateonlineTimetocomplete:1to6daysCosttocomplete:INR400toINR2650NameofAgency:PrivateagenciesauthorizedbyMCA21

Touse thenewelectronic filingsystemunderMCA21, theapplicantmustobtainaClassIIDigitalSignatureCertificate.Thedigitalsignature certificate can be obtained from one of six private agencies authorized byMCA 21 such as Tata Consultancy Services.Company directors submit the prescribed application form along with proof of identity and address. Each agency has its own feestructure,rangingfromINR400toINR2650.

Procedure3ReservethecompanynamewiththeRegistrarofCompanies(ROC)onlineTimetocomplete:23daysCosttocomplete:INR500NameofAgency:RegistrarofCompanies

Companynameapprovalmustbedoneelectronically.Underefilingfornameapproval,theapplicantcanchecktheavailabilityofthedesiredcompanynameontheMCA21Website.TheRoCinMumbaihasstaffmembersworkingfulltimeonnamereservations(approximately3butmoreifthedemandincreases).Amaximumof6suggestednamescanbesubmitted,theyarethencheckedbyRoCstaffforanysimilaritieswithallothernamesinIndia.TheMCAreceivesapproximately5060applicationsaday.Afterbeingclearedbythejuniorofficer,thenamerequestsaresenttotheseniorofficerforapproval.Onceapproved,theselectednameappearsonthewebsite.Applicantsneedtokeepconsultingthewebsitetoconfirmthatoneoftheirsubmittednameswasapproved.In practice, it takes 2 days for obtaining a clearance of the name if the proposed name is available and conforms to the namingstandardsestablishedbytheCompanyAct(1dayforsubmissionofthenameand1dayforittoappearontheMCAwebsite).

Procedure4StampthecompanydocumentseitherattheSuperintendentoranauthorizedbankTimetocomplete:1dayCosttocomplete:Rs.200(forMOA)+Rs.1000(forAOA)foreveryRs.500,000/orpartthereof+Rs.100(stamppaperfordeclarationForm1)NameofAgency:SuperintendentofStampsortotheauthorizedbank

Therequestforstampingtheincorporationdocumentsshouldbeaccompaniedbyunsignedcopiesofthememorandumandarticlesofassociationandthepaymentreceipt.The companymust ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping areunsignedandthatnopromoterorsubscriberhaswrittenanythingonitbyhand.TheSuperintendentreturnsthecopies,oneofwhichisdulystamped,signed,andembossed,showingpaymentoftherequisitestampduty.Therateofstampdutyvariesfromstatetostate.According toArticle10andArticle39of the IndianStampAct (1899), thestampdutypayableon thememorandumandarticlesofassociationforcompanyincorporationinMumbai,Maharashtra,isasfollows:Articlesofassociation:INR1000/foreveryINR500,000/ofsharecapital(orpartthereof),subjecttoamaximumofINR50,000,000.Memorandumofassociation:INR200.Form1(declarationofcompliance):INR100.Once thememorandumandarticlesofassociationhavebeenstamped, theymustbesignedanddatedby thecompanypromoters,includingthecompanynameandthedescriptionofitsactivitiesandpurpose,father'sname,address,occupation,andthenumberofsharessubscribed.Thisinformationmustbeintheapplicant'shandwritinganddulywitnessed.

Procedure5PresenttherequireddocumentsalongwiththeregistrationfeetotheRegistrarofCompaniestogetthecertificateofincorporationTimetocomplete:37daysCosttocomplete:INR15,823NameofAgency:MinistryofCompanyAffairs

ThefollowingformsarerequiredtobeelectronicallyfiledonthewebsiteoftheMinistryofCompanyAffairs:(a)eform1(b)eform18and (c) eform 32. Alongwith these documents, scanned copies of the consent of the initial directors, and also of the signed andstampedformoftheMemorandumandArticlesofAssociation,mustbeattachedtoForm1ThefeesforregisteringacompanycanbepaidonlinebyusingacreditcardorbypaymentincashatcertainauthorizedbanksOnecopyoftheMemorandumofAssociation,ArticlesofAssociation,Form1,Form32,Form18andtheoriginalnameapprovalletter,consentofdirectorsandstampedpowerofattorneymustbephysicallysubmittedbeforetheRegistrarofCompaniesandThecertificateofincorporationissentautomaticallytotheregisteredofficeofthecompanybyregisteredorspeedpost.The registration fees paid to the Registrar are scaled according to the companys authorized capital (as stated in its



memorandum):INR100,000orless:INR4,000.IfthenominalsharecapitalisoverINR100,000,additionalfeesbasedtheamountofnominalcapitalapplytothebaseregistrationfeeofINR4,000ForeveryINR10,000ofnominalsharecapitalorpartofINR10,000afterthefirstINR1,00,000,uptoINR500,000:INR300.ForeveryINR10,000ofnominalsharecapitalorpartofINR10,000afterthefirstINR500,000,uptoINR5,000,000:INR200.ForeveryINR10,000ofnominalsharecapitalorpartofINR10,000afterthefirstINR5,000,000,uptoINR110,000,000:INR100.ForeveryINR10,000ofnominalsharecapitalorpartofINR10,000afterthefirstINR10,000,000:INR50.Thepaymentoffeescanbemadeeither(1)Offline:onecanuploadallincorporationdocumentsandgeneratethepaymentChalan.AgainstthisChalan,theapplicanthastoobtainademanddraftforfilingfeesamountinfavorof"Pay&AccountsOffice,MinistryofCorporateAffairs,NewDelhi"andthisdemanddraftispayableatMumbai.Theapplicanthastovisitthespecifiedbranchesofcertainbankstomakethepayments.Uponthereceiptofthe payments, it takes around oneweek for clearance of payment. Only after the clearance of payment does theRoC accept thedocumentsforverificationandapprovals(2)Online:theapplicantmakesthepaymentthroughcreditcardsandthesystemacceptsthedocumentsimmediately.PleasenotethatinMumbai,RoCrequestsforprescrutinyofdocumentsforanycorrectionthereon,beforethedocumentsareuploaded,sothatoncethedocumentshavebeenuploaded,itcanbeapprovedwithoutanyfurthercorrection.Theonlinefilingmechanismrequiresonlyonecopyofscanneddocumentstobefiled(includingstampedMOA,AOA,andPOA).ScheduleofRegistrarfilingfeesforthearticlesandfortheotherforms(l,18,and32):INR200foracompanywithauthorizedsharecapitalofmorethanINR100,000butlessthanINR500,000.INR300foracompanywithnominalsharecapitalofINR500,000ormorebutlessthanINR2,500,000.INR500foracompanywithnominalsharecapitalofINR2,500,000ormore.

Procedure6MakeasealTimetocomplete:1dayCosttocomplete:INR350NameofAgency:Althoughmakingasealisnotalegalrequirementforthecompanytobeincorporated,companiesrequireacompanysealtoissuesharecertificatesandotherdocuments.

Procedure7ObtainaPermanentAccountNumber(PAN)Timetocomplete:7daysCosttocomplete:INR66forFeeandINR5forApplicationForm,(ifnotdownloaded)NameofAgency:IncomeTaxDepartment,agentappointedbyNationalSecuritiesDepositoryServicesLimited(NSDL)orUnitTrustofIndia(UTI)InvestorsServicesLtd.

UndertheIncomeTaxAct,1961,eachpersonmustquotehisorherpermanentaccountnumber(PAN)fortaxpaymentpurposesandthetaxdeductionandcollectionaccountnumber(TAN)fordepositingtaxdeductedatsource.TheCentralBoardofDirectTaxes(CBDT)hasinstructedbanksnottoacceptanyformfortaxpayment(Chalan)withoutthePANorTAN,asapplicable.ThePANisa10digitalphanumericnumberissuedonalaminatedcardbyanassessingofficeroftheIncomeTaxDepartment.InordertoimprovePANrelatedservices,theIncomeTaxdepartment(effectiveJuly2003)outsourcedtheiroperationspertainingtoallotmentofPANandissueofPANcardstoUTIInvestorServicesLtd,whichwasauthorizedtosetupandmanageITPANServiceCentersinallcitieswherethereisanIncomeTaxoffice.TheNationalSecuritiesDepositoryLimited(NSDL)hasalsolaunchedPANoperationseffectiveJune2004,settingupTINFacilitationCenters.ThePANapplicationismadethroughtheabovementionedservicecentersonForm49A,withacertifiedcopyofthecertificateofregistration,issuedbytheRegistrarofCompanies,alongwithproofofcompanyaddressandpersonalidentity.AfeeofINR60(plusapplicabletaxes)appliesforprocessingthePANapplication.ITPANServiceCentersorTINFacilitationCenterswillsupplyPANapplicationforms(Form49A),assisttheapplicantinfillinguptheform,collectfilledformandissueacknowledgementslip.AfterobtainingPANfromtheIncomeTaxdepartment,UTIISLorNSDLasthecasemaybe,willprintthePANcardanddeliverittotheapplicant.Theapplication forPANcanalsobemadeonlinebut thedocumentsstillneed tobephysicallydroppedoff forverificationwith theauthorizedagent.Formoredetails(www.incometaxindia.gov.in,www.utiisl.co.in,www.tin.nsdl.co.in)

Procedure8ObtainataxaccountbumberforincometaxesdeductedatsourcefromtheAssessingOfficeintheMumbaiIncomeTaxDepartmentTimetocomplete:7days,simultaneouslywithProcedure7Costtocomplete:INR55NameofAgency:IncomeTaxDepartment,anyauthorizedfranchiseoragentappointedbyNationalSecuritiesDepositoryServicesLimited(NSDL)

The taxdeductionandcollectionaccountnumber (TAN) isa10digitalphanumericnumber requiredbyallpersons responsible fordeductingorcollectingtax.TheprovisionsofSection203AoftheIncomeTaxActrequirethatallpersonswhodeductorcollecttaxatthesourcemustapplyforaTAN.ThesectionalsomakesitmandatoryfortheTANtobequotedinalltaxdeductedatsource(TDS)andtaxcollectedatsource(TCS)returns,allTDS/TCSpaymentChalans,andallTDS/TCScertificatesissued.FailuretoapplyforaTANortocomplywithanyoftheotherprovisionsofthesectionissubjecttoapenaltyofINR10,000/.TheapplicationforallotmentofaTANmustbefiledusingForm49BandsubmittedatanyTINFacilitationCenterauthorizedtoreceiveeTDSreturns.LocationsofTINFacilitationCentersareatwww.incometaxindia.gov.inandhttp://tin.nsdl.com.Theprocessingfeeforbothapplications(anewTANorachangerequest)isINR50(plusapplicabletaxes).Afterverificationofapplication,thesameissenttoIncomeTaxDepartmentanduponsatisfactionthedepartmentissuestheTANtotheapplicant.Thenationalgovernmentleviestheincometax.Sinceoutsourcing,anyauthorizedfranchiseoragentappointedbyNationalSecuritiesDepositoryServicesLimited(NSDL)canacceptandprocesstheTANapplication.TheapplicationforTANcanbemadeeitheronlineTANcanbethroughtheNSDLwebsitewww.tinnsdl.comoroffline.However,afterthepaymentofthefeebycreditcard,thehardcopyoftheapplicationmustbeuponpaymentofthefeethroughcreditcard,thehardcopyoftheapplicationisrequiredtobephysicallyfiledwithNSDL.



Procedure9RegisterwithOfficeofInspector,MumbaiShopsandEstablishmentActTimetocomplete:2days,simultaneouswithprocedure8Costtocomplete:INR1,500+3timesregistrationfeeforTradeRefuseChargesNameofAgency:Localshopinspector

Astatementcontainingtheemployersandmanagersnameandtheestablishmentsname(ifany),postaladdress,andcategorymustbesenttothelocalshopinspectorwiththeapplicablefees.AccordingtoSection7oftheBombayShopsandEstablishmentsAct,1948,theestablishmentmustberegisteredasfollows:UnderSection7(4),theemployermustregistertheestablishmentintheprescribedmannerwithin30daysofthedateonwhichtheestablishmentcommencesitswork.UnderSection7(1), theestablishmentmust submit to the local shop inspectorFormAand theprescribed fees for registering theestablishment. Under Section 7(2), after the statement in Form A and the prescribed fees are received and the correctness of the statement issatisfactorilyaudited,thecertificatefortheregistrationoftheestablishmentisissuedinFormD,accordingtotheprovisionsofRule6oftheMaharashtraShopsandEstablishmentsRulesof1961.Since theamendments in theMaharashtraShops&Establishment (Amendment)Rules,2003dated15thDecember2003, theScheduleforfeesforregistration&renewalofregistration(asperRule5)isasfollows:0employees:INR1001to5employees:NR3006to10employees:INR60011to20employees:INR100021to50employees:INR200051to100employees:INR3500101ormore:INR4500HenceinthegivencasetheregistrationfeeswouldbeINR2000,asthereare50employeesInaddition,anannualfee(threetimestheregistrationandrenewalfees)ischargedastraderefusecharges(TRC),undertheMumbaiMunicipalCorporationAct,1888.

Procedure10RegisterforVATbeforetheSalesTaxOfficerofthewardinwhichthecompanyislocatedTimetocomplete:12days,simultaneouswithprocedure9Costtocomplete:INR5000(RegistrationFee)+INR100(StampDuty)NameofAgency:SalesTaxOffice

Beginning April 1, 2005, the sales tax was replaced by the VAT, which requires registration by filing Form 101. The authorizedrepresentativesigningtheapplicationmustbeavailableattheSalesTaxOfficeonthedayofapplicationverification.TheapplicantgoestotheSalesTaxOfficeandenterstheregistrationcounter.Theclerkatthecounterreviewsthattheapplicanthasalltherequireddocumentsandgivestheapplicantatoken(waitingnumber).Afterashortwait,theapplicantsnumbergetscalledandtheapplicantgoestothedeskofasalestaxofficer.There,alltheinformationonForm101ismanuallyenteredintothesystembytheofficer.Within10minutes,thesystemgeneratesaTaxIdentificationNumber(TIN)thereafter,thecompanyisconsideredfullyregisteredtopaytaxes.However,theapplicantmustwaitbetween10to15daystoreceivetheVATregistrationcertificatebypost.InadditiontoForm101,otheraccompanyingdocumentationincludes:1)Certifiedtruecopyofthememorandumandarticlesofassociationofthecompany.2)Proofofpermanentresidentialaddress.Atleast2ofthefollowingdocumentsmustbesubmitted:copyofpassport,copyofdrivinglicense,copyofelectionphotoidentitycard,copyofpropertycardorlatestreceiptofpropertytaxofMunicipalCorporation,copyoflatestpaidelectricitybillinthenameoftheapplicant.3)Proofofplaceofbusiness(foranowner,thecaseofDoingBusiness):Proofofownershipofpremisesviz.copyofpropertycardorownershipdeedoragreementwiththebuilderoranyotherrelevantdocuments.4)Onerecentpassportsizephotographoftheapplicant.5)CopyofIncomeTaxAssessmentOrderhavingPANorcopyofPANcard.6)ChalaninFormNo.210(original)showingpaymentofregistrationfeeatINR5000/incaseofvoluntaryRCandINR500/inothercasesFutureReform:Thewholeprocesswillbeputonlinebythespringof2009.Thismeansthatratherthanphysicallyhavingtogototheoffice,companieswillfillinalltheirdetailsonlineforForm101andthengotheofficeonlysothattheSalesTaxOfficecanverifytheabovelisteddocumentation.

Procedure11RegisterforprofessiontaxTimetocomplete:2days,simultaneouswithprocedure10Costtocomplete:NochargeNameofAgency:ProfessionalTaxOffice

Accordingtosection5oftheProfessionTaxAct,everyemployer(notbeinganofficerofthegovernmentisliabletopaytaxandshallobtainacertificateofregistrationfromtheprescribedauthority.ThecompanyisrequiredtoapplyinFormItotheregisteringauthority.The registration authority for Mumbai Area is situated at Vikarikar Bhavan, Mazgaon in Mumbai. Depending on the nature of thebusiness,theapplicationshouldbesupportedwithsuchdocumentsasaddressproof,detailsofcompanyregistrationnumberunderIndianCompaniesAct(1956),detailsofheadoffice(ifthecompanyisabranchofcompanyregisteredoutsidethestate),companydeed,certificatesunderanyotheract,andsoforth.

Procedure12RegisterwithEmployees'ProvidentFundOrganizationTimetocomplete:12days,simultaneouswithprocedure10Costtocomplete:Nocharge



NameofAgency:ProvidentFundOrganization(EPFO)

TheEmployeesProvidentFunds&MiscellaneousProvisionsAct,1952appliestoanestablishment,employing20ormorepersonsandengaged inanyof the183 IndustriesandClassesofbusinessestablishments, throughout Indiaexcluding theStateof JammuandKashmir.Theapplicantfillsinanapplicationandisthenallottedasocialsecuritynumber.TheProvidentFundregistrationfocusesondelinquentreporting,underreporting,ornonreportingofworkforcesize.ProvidentFundregistrationisoptionalifworkforcesizeisnotmorethan20.TheemployerisrequiredtoprovidenecessaryinformationtotheconcernedregionalProvidentFundOrganization(EPFO)inprescribedmannerforallotmentofEstablishmentCodeNumber.Noseparateregistrationisrequiredfortheemployees.Neverthelessalleligibleemployeesare required to becomemembersof theFundand individual account number is allottedby theemployer in prescribedmanner.Asperaninternalcircular,thecodenumberistobeallottedwithin3daysfromthedateofsubmission,iftheapplicationiscompleteinallrespects.However,inmanycasesapplicantshavereceivedtheintimationletterwiththecodenumberin12to15days.Anonlineapplicationfacilityisnotprovidedsofar

Procedure13RegisterformedicalinsuranceTimetocomplete:9day,simultaneouswithprocedure10Costtocomplete:NochargeNameofAgency:EmployeesStateInsuranceCorporation(ESIC)

Registrationistheprocessbywhicheveryemployer/factoryandeveryemployeeemployedforwagesareidentifiedforthepurposeofthemedicalinsuranceschemeandtheirindividualrecordsaresetupforthem.AspertheEmployees'StateInsurance(General),Form01istheformrequiredtobesubmittedbyEmployerforregistration.Ittakes3daystoaweekfortheEmployerCodeNumbertobeissued.The"intimationletter"containingtheCodeNumberissentbyposttotheemployerbypostandthattakesanadditionalcoupleofdays.TheEmployeesindividualinsuranceisaseparateprocessandoccursafterEmployersregistration.TheEmployerisresponsibleforsubmitting the required Declaration Form and employees are responsible for providing correct information to the employer. Theemployeetemporarycards(ESICards)areissuedonthespotbythelocalofficesinmanyplaces.Thetemporarycardsarevalidfor13weeksfromthedateofappointmentoftheemployees.Ittakesabout4to5weekstogetapermanentESIcard.

AnindicativetableoncostofsettingupbusinessinMaharashtra

IdentityProof(Anyone) ResidenceProof(Anyone)

Industrialland(persqmt) Mumbai28.72Pune14.36

Officespacerent(persqftpermonth) Mumbai2.39VPune0.957

Residentialrent(fora2,000sqfthouse,permonth) Mumbai957Pune287

5starhotelroom(SingleOccupancy,pernight) Mumbai95.74263Pune95.74

Electricity(perkWh) 0.0957

Water(per1000litres) 0.287Note:US$1=INR47Source:MIDC,MSEB,PwCresearch

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Starting a Business in Maharashtra.pdf

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