Start Up Services
The expert team of consultants at DCS provides you the best possible business solutions which suit your needs the best. We assure quality services and opinions matching your queries.
Set Up Counseling
At DCS we help you know the best form of business as per your requirements. We help you with the entire set up consultancy and counseling throwing light on all the possible options for you. We befriend you in the initial days of insecurity of your business
Business Model Designing
The expert consultants design the apt business model depending on your area and size of operation. As per your requirements, you will be given the perfect idea of the most appropriate business form and model tailored specifically for your need.
Opinions on Tax Compliances and Registrations
In the current complex tax regime it is getting difficult to understand if any particular tax is leviable on your nature of business. But for you, the complexity ends as soon as you come to us. We define necessary compliances for your newly set up business and guide you the right path of tax.
Frequently Asked Questions
What are the various types of business organizations that can formed in India?
- Limited Liability Partnership
- Sole Proprietorship
What is the expected time that is required to establish business in India?
Generally the time required to establish your business depends upon the form of organization and nature of business. Keeping in view, Company form of business, it would take around 15-20 days to establish business excluding the time taken for preparing and signing the documents
What are the basic tax numbers that are generally required to for every business?
In India, basically there are two types of tax numbers, which are outlined below:
- General Tax Numbers: Tax Numbers like PAN & TAN are generally required to be obtained by all types of business.
- Specific Registration: These registration are required based on the nature of business carried by the organization for in case of business of trading, Value Added Tax number will be required subject to fulfillment of certain conditions .
What are tax numbers that are based on the nature of the business?
Following tax numbers are required based on the nature of the business:
- Service Tax Number: For providing specified taxable services.
- Value Added Tax Number: For making sales within particular state.
- Central Sales Tax Number: For making inter-state sale of goods.
- Excise Duty Number: For manufacturing excisable goods.
- Import & Export Number (IEC): For effecting import and export of goods and services.
Which form of business is more regulated?
In India, Company is the form of business that is highly regulated. Companies are governed by Companies Act 2013, which has more than 600 sections.
Which form of business is easy to close?
Partnership and Sole Proprietorship forms of business are the least regulated form of business and therefore it is most easy to close them. The closing does not involve the permission of any judicial authority like High Court.
Which form of business is suitable for carrying operations on medium or large scale?
Company is the most recommended form of organization for carrying business on medium or large scale due to the following:
- Highly recognized form of business
- Large sources of funds raising.
- Recognized by Financial Institutions and Investors for lending.
- Regulated form of business
What is LLP?
LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
What are the salient features of LLP?
- LLP is a body corporate and a legal entity separate from its partners;
- The LLP will have perpetual succession;
- The mutual rights and duties of partners of an LLP inter se and those of the LLP and its partners shall be governed by an agreement between partners or between the LLP and the partners subject to the provisions of the LLP Act 2008;
- The LLP will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the LLP which may be of tangible or intangible nature or both tangible and intangible in nature;
- Indian Partnership Act, 1932 shall not apply to LLP.
- The mutual rights between the partners of LLP are governed by the LLP agreement.
What are the advantages of forming an LLP?
- Renowned and accepted form of business worldwide.
- Low cost of Formation.
- Easy to establish.
- Easy to manage & run.
- No requirement of any minimum capital contribution.
- No restrictions as to maximum number of partners.
- LLP & its partners are distinct from each other.
- Partners are not liable for Act of partners.
- Less Compliance level.
- No exposure to personal assets of the partners except in case of fraud.
- Less requirement as to maintenance of statutory records.
- Less Government Intervention.
- Easy to dissolve or wind-up.
- Professionals can form Multi-disciplinary Professional LLP, which was not allowed earlier.
What are the restrictions in respect of minimum and maximum number of partners in an LLP?
A minimum of two partners will be required for formation of an LLP. There is no limit on the maximum number of partners.
Whether a body corporate may be a partner of an LLP?
Yes, a body corporate may be a partner of an LLP.
What are the qualifications for becoming a partner?
Any individual or body corporate may be a partner in a LLP. However an individual shall not be capable of becoming a partner of a LLP, if :
- has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;
- is an undischarged insolvent; or
- he has applied to be adjudicated as an insolvent and his application is pending.
Who can be a 'Designated Partner'?
Only an individual can be appointed as a 'Designated Partner' and at least one of the Designated Partner shall be a resident of India. In case of a LLP in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such LLP or nominees of such bodies corporate shall act as designated partners.
What is Designated Partner Identification Number (DPIN)?
Designated Partner's Identification Number (DPIN) is a eight digit numeric number granted to any person intending to be appointed as Designated Partner for the purpose of its identification, on the lines similar to Director's Identification Number (DIN) required for Directors in case of Companies. Every Designated Partner is required to have atleast a provisional DPIN for forming a LLP.
Is there any difference between Managing & Designated Partner?
Designated Partners are partners who are responsible for managing the compliance under the LLP Act and Managing Partner are partners , who are managing the business of the Firm and therefore it is not necessary that a Designated Partner is also a Managing Partner & vice versa.
Can any partnership firm be a partner in the LLP?
No, Only an Individual or Body corporate can be partner and the definition of Body Corporate does not include partnership in its ambit. However any partner of the Partnership firm in his individual capacity can hold partnership in LLP.
What do you mean by Contribution?
In reference to LLP, contribution can be termed as, what a partner is contributing towards the Limited Liability Partnership for running of his business. Contribution in case of LLP is alike Share Capital in case of Company.
Whether it is necessary to get the accounts of the llp audited?
Only the Limited Liability Partnership whose contribution exceed Rs. 25 Lakh or the Limited Liability Partnership whose turnover exceed Rs. 40 Lakh are required to annually get their accounts audited by any Chartered Accountant in practice.
Whether every LLP would be required to maintain and file accounts?
Every LLP shall be under obligation to maintain annual accounts reflecting true and fair view of its state of affairs. A Statement of Accounts and Solvency shall be filed by every LLP with the Registrar of LLP every year.
What is the tax treatment for LLPs?
LLP incorporated in India will be assessed as if it is a partnership firm. LLPs are in the same parlance as partnership firms so far tax provisions are concerned and therefore Minimum Alternate Tax and Dividend Distribution Tax will not be applicable for LLP.
Whether it is necessary that all the partners share the profit of LLP?
No, the profit sharing ratio can be decided as per the LLP Agreement and the same can have the provision of non- profit sharing partner.