Startup

Start-Up as LLP – Limited Liability Partnership

Limited Liability Partnership is an amalgamation of a company and a partnership which incorporates the favourable features of both. It integrates the organizational and operational flexibility of a Partnership having benefits with the protection of limited liability but having a separate legal identity of as that of a Company. In India, the Limited Liability Partnership Act, 2008 was notified on 31stof March, 2009.It is governed under the Ministry of Corporate Affairs (MCA).

FEATURES:

• Separate Legal Entity:
  • Unlike partnership firm, LLP has a separate Legal Entity and existence from the owner.
  • Have rights to acquire assets or incur liability. It can sue or be sued.

• Limited Liability:
  • Unlike partnership firm, LLP as the name suggests has limited liability.
  • The personal assets of the owner can not be ceased in case of paying of the incurred debts.

• Amalgamation of Benefits:
  • LLP has mixture of the benefits of a company and a Partnership firm.

• Perpetual Succession:
  • LLP continues to exist even if the owner dies, become insolvent or suffer illness.
  • LLP cannot wound up, until all the annual returns are filed in order to avoid any invitation to penalties.

• Less Risk Involved:
  • In LLP, there is lesser chance of the firm suffering upon the wrong doings of some partner. One may not suffer, due to another.

• Lesser Compliances to be adhered:
  • It take less amount of requirements to open an LLP than a Private Limited Company.
  • However, much more requirements needed than a Partnership Firm.

ANNUAL RETURN FILING:

An LLP essentially files two types of MCA annual

Form 8

Form 8 must be filed within 30 days from the end of 6 months of the financial year along with the prescribed fee. It must be digitally signed by two designated partners and must be certified by a chartered accountant/company secretary/cost accountant. Form 8 has two parts:

• Part A – Statement of Solvency
• Part B – Statement of Accounts, Statement of Income Expenditure

Penalty applicable for not filing form is Rs.100, until it is compiled with.

Form 11

Form 11 contains details of the number of partners, total number of partners, total contribution received by all partners, details of body corporate as partners and summary of partners. All LLPs should file this form within 60 days from the closure of the financial year with the prescribed fee. The due date for filing LLP Form 11 is 30th of May, each year.

STEPS FOR REGISTRATION PROCESS:

1. Obtain Digital Signature Certificate for all the partners constituting Limited Liability Partnership.
2. Apply for DIN Number on MCA Portal.
3. Apply for Name Approval on MCA Portal.
4. Register the LLP after the approval of Name.
5. The partners enter into LLP Agreement by filling of Form 3 online on MCA Portal.
6. Submit all the required documents to the Registrar.
7. Get the LLP Incorporation Certificate.
8. Apply for Company PAN and TAN with the NDSL.

We at Tax Avatar, will help you to attain your goal with a bundle of new and valid approach to shape your idea well in the market. As per your requirement and understanding, we can guide you thoroughly towards your journey to step up in such competitive market, so that you can finally chase your dream and pass on with flying colours. Its always a pleasure found in self attained satisfaction, when

Sole Proprietor

A sole proprietorship firm is one which has only one individual owner and all of its affairs are managed by the owner, along with owning assets and the liabilities stated under the account of the firm.

It is always presumed that for any start-up, which is in testing phase, one should always opt for sole proprietorship type of entity for the business, in order to understand the nuisances of the idea, without incurring of heavy losses. However, like every coin has two sides, this type of firm too come up with its own pros and cons which are discussed thoroughly as follows:-

Therefore, depending upon the idea, funds and available resources, one can go for sole proprietorship firm, by analysing the pros and cons in depth for the same. It would help the person to prosper the idea more explicably and then turn the chances of being a mere employed individual to a self employed person, from being the job seeker to job maker. We, at Tax Avatar will provide you with such initiatives. We may guide and support your breakthrough idea to do wonders the market and you will be able to fulfil your dream of being own boss, in a subtle and calculated approach. Provide us to help with such enthusiasm in your own idea, so that it's a sure shot success for you to be rewarded with.

Understanding the worth of opening such small start-ups, the honourable Government undertook the initiative to launch Pradhan Mantri Mudra Yojana for Start-ups, where MUDRA stands for Micro Units Development & Refinance Agency.It is a financial institution setup to provide financial assistance to small businesses to borrow loans from banks up to ₹1,000,000, without any collateral, through the channel of Banks, NBFC etc.

Start-up As Partnership Firm

Partnership is an association of two or more individuals who agree to share the profits of a lawful business which is managed and carried on either by all or by any, or some of them acting for all. Persons from similar background or persons of different ability and skills, may join together to carry on a business. Each member of such a group is individually known as 'partner' and collectively the members are known as a 'partnership firm'. These firms are governed by the Indian Partnership Act, 1932.

Features of Partnership Firm:-

• Formation:
  • Minimum of two persons are required to start a partnership business.
  • Maximum membership limit is 10 in case of banking business and 20 in case of all other types of business.
• ContractualRelationship:
  • Relation between the partners is created by contract.
  • Partners enter into partnership through an agreement which may be verbal, written or implied.
  • Written agreementis known as a Partnership Deed.
• Competence Of Partners:
  • Any individual who is a minor i.e. below 18 Years if age or lunatic or insolvent is incompetent to be a partner.
  • Minor can be admitted to the benefits of partnership i.e. he can have a share in the profits only.
• Sharing of Profits/Losses:
  • Partners can share profit in any ratio as agreed.
  • In the absence of such agreement, they share it equally.
• Legal Status:
  • No separate legal identity.
  • Relationship between partners and the partnership firm is non-distinguishable.
• Registration:
  • Registration of partnership is not mandatory.
  • If registered, any partner can file a case against other partners, or a firm can file a suit against outsiders in case of disputes, claims, disagreements, etc.
• Unlimited Liability:
  • Partners are liable jointly and severally for the debts and obligations of the firm. Personal assets could be used to pay off incurred debts.
  • The liability of a minor is, however, limited to the extent of his share in the profits, in case of dissolution of a firm.
• Transfer of Interest:
  • No partner can sell or transfer his interest in the firm to anyone without the consent of other partners.
• Principal-Agent Relationship:
  • Business in a partnership firm may be carried on by all the partners or any one of them acting for all.
  • Every partner is an agent when he is acting on behalf of others and he is a principal when others act on his behalf.
• Dissolution:
  • Includes any change in the existing agreement among the partners due to a change in the number of partners.

Types of Partners:

• Active/Working Partner is one who contributes capital to the business and takes active part in its management.
• Sleeping/Dormant/Financing Partner is one who contributes only capital to the business, but does not takes part in its management.
• Nominal Partner is one who neither contribute capital nor takes an active part in the management. His contribution in a partnership is limited to allowing the other partners to make use of his name.
• Partner by Estoppel/Holding Out is not a partner of the firm but by his words and conduct he leads the outsiders to believe that he is also a partner of the firm.
• Minor as Partner is one whose liability extent of his capital contribution. Such a partner can be allowed to share the benefits of the firm only.
• Sub-Partner has no direct contact with the firm. He is only next to a partner.
• Partner in Profit becomes a partner whenever the firm earns profit but holds unlimited liability.

Documents Required For Registration of the Firm:

• Prescribed registration form for incorporation of the firm
• Identity proof/Address proof of Partners
• Certifiedcopy of the Partnership Deed
• Proof of the principal place of business

We at Tax Avatar, will help you to attain your goal with a bundle of new and valid approach to shape your idea well in the market. As per your requirement and understanding, we can guide you thoroughly towards your journey to step up in such competitive market, so that you can finally chase your dream and pass on with flying colours.