An interview of Shri Babulalji Singhvi who will inspire us how to do the business in a difficult time.

Introduction

Shri Babulalji Singhvi’s native place is Asada. He is the founder member of the Friends and Friends group. He has started the business from scratch and now handling various businesses like edible salt, commercial salt, Castrol oil, and dragon fruit.  You can watch the full profile of the business on the below link https://www.friendsgroup.co.in/.

How to Start the Import/Export Business

From the Registration point of view –

• Take Import-Export code
• Take the GST Certificate

From Government point of View –

We have to check the regular updates of the government of India. We can do every item import and export that the government of India is permitting. Also, there are lots of incentives in the export business.

From Practical Point of view-

1. Knowledge – Knowledge of the Product is a must for doing the export business.
2. Marketing of the Product – The second step is to find the market of the business. Once you get the market of the product you can start the production
3. Manufacturing – It is always advisable to do the manufacturing rather than trading. As it gives confidence to the exporter
4. Utilisation of Funds – There is no harm in taking the bank loan or loan from any party but never misutilse the fund in buying a house or expensive car. Always utilize 100 % fund in the business. Also, it is advisable to keep some buffer fund to get the benefits from any business opportunity if comes.
5. Always think long term – Try to do the contract with the debtors and supplier for the long term. We are doing a contract of 30 years with the client.
6. Timely delivery – Exporter always wants the timely delivery, If for any purpose you are not able to deliver than inform in advance so that they can plan for other option and it will increase the confidence of exporter on you.
7. Quality – You have to be expert knowledge of the product and maintain the superior quality from the peers. If there is fault in quality there will be difficulty in getting the payments

Is COVID is an Opportunity for the India?

Yes, may be this type of pandemic can be opportunity for the India. As many countries are looking for the alternative to China.

I will suggest the government to take the following step-

• Single window system of the business
• Ease of finance for the MSME
• Increase duty on foreign products
• Hassle-free availability of land
• Ease of doing business by reducing the paperwork and taxation

In past also I have seen after an earthquake in Bhuj lots of company have come to Bhuj and it has developed in a faster pace.

How you are able to maintain the Joint family business for so many years?

We have done the distribution of the work. Each person is handling his work. Also, we are doing meeting with each other on a regular interval so if any problem comes, we jointly handle the situation.

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  ANNUAL COMPLIANCES OF COMPANY UNDER COMPANIES ACT 2013

  OTHER EVENT BASED COMPLIANCE

• Opening of Bank Account – Immediately after Incorporation Company needs to open bank account and every subscriber of MoA should deposit their share of contribution as agreed in MoA
• First Auditor Appointment – It should be Within 30 Days From The Date Of Incorporation in Board meeting and Filing of ADT -1 for first Auditor is not mandatory pursuant to section 139(6)
• Commencement of Business – Form INC-20A as a declaration for Commencement of Business within 6 month from incorporation, A company must not enter into any transaction or business activity before approval of INC-20A.
• Share Certificate & Franking – Share certificates shall be delivered within a period of 2 months from the date of Incorporation to First Subscribers for more details please refer below link https://taxbaniya.com/stamp-duty-payment-on-share-certificate-in-maharashtra/

Combined reading of Share Certificate and Commencement of Business, Share Amount should be brought within 2 months from date of Incorporation

• Board Meetings

Minimum 4 board meeting with an interval of maximum 120 days between 2 consecutive board meeting

Further A One Person Company, small company, dormant company and a private company (if such private company is a start-up) shall be deemed to have complied with above provisions if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days.

• Annual Closing

Preparation and Audit of Financials

Director Reports

MGT 9

Appointment of Auditors and Filing ADT 1

• Annual General Meeting

First Can be held within 9 months after year end and subsequent within 6 months after year end

• Filing      of            financial               statement (form AOC-4),
• Filing of annual return (form MGT-7),
• DIR KYC of All directors MSME Compliance half yearly
• DPT Form for Loan from directors and Relatives (DPT 3)
• Office Address KYC – Active 22A Maintenance of Minutes and
• Maintenance of Statutory records and registers

• Change in authorized or paid up capital of the Company.
• Allotment of new shares or transfer of shares.
• Giving loans to other Companies. Giving loans to directors.
• Appointment of managing or whole time director and payment of remuneration. Loans to directors.
• Opening or closing of bank accounts or change in signatories of bank account.
• Appointment or change of the statutory auditors of the Company.
• Change in the registered office of the Company (Inc-22)
• Change in the director of the Company (DIR-12).
• Change in the auditor of the Company (ADT-1).
• Change in the object of the Company. Change in the name of Company.

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In an effort to give a fresh start to existing Non-Compliant companies and LLPs, the Government has unveiled schemes for compliance regularization. The scheme will provide complete penalty waiver and prosecution immunity for the Directors & promoters. Hence, we request you to use this golden opportunity to regularize any pending compliance at the earliest.

Once the compliance is regularized, the Directors can continue to maintain compliance or file apply for strike-off.

WHY ANNUAL COMPLIANCES ARE MANDATORY

If compliance is not regularized, prosecution may be initiated by the Registrar against defaulting companies along with additional fees.

Also If Compliance is not done your DIN will be in disqualified status and you will not be able to further incorporate or appointed in any Company / LLP at least for 5 years

So Even if you don’t want to continue the Company but want to keep DIN intact then do compliances and file for Strike off of the Company

APPROXIMATE SAVINGS UNDER THE SCHEME

It will depends on the year from which the Compliances are pending w.e.f 1/7/2018 additional fees for MGT 7 and AOC 4 is RS 100 Per day Per Form fees form and these 2 forms are mandatory each year. e.g.

• Before FY 1617 – Approx additional fees 150000 each year
• FY 1617 – Approx additional fees 150000
• FY 1718 – Approx additional fees 115000
• FY 1819- – Approx additional fees 35000

Thus, we request you to use this wonderful opportunity to regularize all compliance without fail in the time provided and receive prosecution immunity certificate.

Things to Do & Documents Required

To begin the compliance regularization process, we must first understand the nature of transactions that has happened in the company. After that, an Accountant designated for your company will do the following services for each year:

• Drafting of Financial, Director Reports etc
• Income tax filing only For FY 1819 and FY 1920
• Preparation of MCA Forms

To perform the above functions for a year, it takes time and we would require the following details:

• Details of company/promoters
• Bank statements
• Sale and Purchase Invoice and expenses data

You can send the same from the comfort of your home. Once the data is shared, we will start the process for regularizing compliance and get your signature wherever required.

Cost of Compliance

The nature of transactions and size of business would determine the cost of compliance. For small companies with minimal transaction, we are offering a very attractive pricing of Professional fees of RS 12500 per year in additional to the RoC Fees.

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What is the Importance of share certificate?

After formation of private or public limited company every company should issue share to the first subscriber. For issuing share to the first subscriber we need two documents –

• Letter of allotment
• Share certificate.

What is Letter of Allotment of Shares (Article 37) –

Letter of allotment should be on Rs 1 Adhesive Stamp paper. It is mainly an  covering letter of the share certificate.

What is a share certificate?

Share certificate is a document that will give the ownership to the shareholder in the company.

In how many days share certificates shall be issued?

ANSWER: As per section 56 (4) of the Companies Act, 2013:

Share certificates shall be delivered within a period of 2 months from the allotment, in case of allotment of shares-

• Within a period of 2 months from the date of incorporation.
• Within a period of 1 month from the date of receipt of transfer and transmission.
• Within a period of 6 months from the date of allotment in case of the allotment of debenture.

In how many days stamp duty shall be paid to the revenue department for share certificate?

Instruments executed in State –  shall be stamped before or at the time of execution or immediately thereafter on the next working day following the day of execution

Instruments executed out of State – may be stamped within three months after it has been first received in this State

How much stamp duty need to be paid for share certificate?

In Maharashtra its Re 1 for Every Rs 1000 Share Capital including Premium if any

What is the Mode of stamp duty payment in share certificate?

STAMPS TO BE USED –

Adhesive Stamp upto Rs 1 only. (Section 11).

In Case Duty Exceeding Re. 1 by Impressed Stamp Fixed by Proper Officer

Where to pay Stamp Duty for share certificate?

Adhesive Stamp – This is the revenue stamp that is available in the post office.

Impressed Stamp – For impressed stamp follow the below step by step  procedure

Visit on https://gras.mahakosh.gov.in/echallan/

eSBTR

Select Article Code Should Be 17

What is the Penalty for not paying the stamp duty on share certificate?

Penalty will be 2% per month, maximum 4 times of stamp duty value. This penalty need to be adjudicated at collector office.  

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Tax Savings under Different Structure (When the Annual Net Profit is upto Rs. 25 Lac)

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