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Frequently Asked Questions (FAQ)
1. What are the different types of companies you can incorporate?
A company, as per the Indian Companies Act, 2013 is a company Incorporated under Companies Act, 2013 or under any previous company law. The Act prescribes following types of Companies in India
One Person Company
Section 8 Company
2. What is Trade License and why it is needed?
A trade license is a document/certificate that gives permission to the applicant (person seeking to open a business) to commence a particular trade or business in a particular area/location.It ensured that the business or trade is carried by adhering to all the standards of safety as issued by State Municipal Corporation. It protects the residents from being affected by any health hazards.
It has been made necessary by the government to carry out any particular business or trade in a particular area and to ensure that no one is carrying out any unethical business practices.
3. What is IEC Code and why it is needed?
Import Export Code (also known as IEC code) is a 10 digit identification number that is issued by the DGFT (Director General of Foreign Trade), Department of Commerce, Government of India.
Companies and businesses must obtain this code to start a business that deals with import and export in the Indian Territory. It is not possible to deal with export or import business without this IEC code.
4. What is Professional Tax?
The respective state governments in India levy the professional tax on income from profession or employment. The professionals earning an income from salary or other practices such as a lawyer, teacher, doctor, chartered accountant, etc. are required to pay professional tax. In case of salaried and wage earners, the professional tax is liable to be deducted by the employer from the salary/wages and the same is to be deposited to the state government.
5. What isMSME/Udyam Registration and what are its benefits?
Udyam Registration is a government registration for MSMEs, providing them with a unique Identity Number and a recognition certificate, to certify them as micro/small/medium enterprises. The primary motive behind this launch was to provide plenty of benefits to MSME businesses in India some of which is mentioned below:
Bank Loan-Collateral Free, Lower Interest Rate
Subsidies on Registration
Protection form Delayed Payments
Registered MSME‘s get exemptions under direct tax laws
Concession on electricity bills
Claim the expenses for obtaining ISO certification
6. What is SAFTA?
SAFTA (South Asian Free Trade Area) is the free trade arrangement of the South Asian Association for Regional Cooperation (SAARC). The primary objective of the agreement is to promote competition in the region while providing proper benefits to the countries involved (India, Pakistan, SriLanka, Afganistan, Bangaladesh, Bhutan, Maldives and Nepal). The agreement will benefit the people of South Asia by bringing transparency and integrity among the nations by reducing tariff and trade barriers. Ultimately it establishes a robust framework for regional cooperation
7. Why do we need FSSAI Registration & License?
FSSAI Registration - All petty food business operators required FSSAI Registration. Petty food business operator is any person or entity who:
Manufactures or sells any article of food himself or a petty retailer, hawker, itinerant vendor or temporary stall holder; or
Distributes foods including in any religious or social gathering except a caterer; or
Other food businesses including small scale or cottage or such other industries relating to food business or tiny food businesses with an annual turnover not exceeding Rs.12 lakhs and whose:
The production capacity of food (other than milk and milk products and meat and meat products) does not exceed 100 kg/ltr per day or
Procurement or handling and collection of milk is up to 500 litres of milk per day or
Slaughtering capacity is 2 large animals or 10 small animals or 50 poultry birds per day or less.
FSSAI License - Any person or entity that does not classify as a petty food business operator is required to obtain an FSSAI license for operating a food business in India
8. What is Trust and why trust registration is important?
A trust is a legal relationship in which the holder of a right gives it to another person or entity who must keep and use it solely for another's benefit.
The trust shall be governed by a set of written terms and conditions known as trust deed.
According to Section 3 of Indian trust Act,1882, trust is defined as an obligations annexed to the ownership of the property, arising out of confidence reposed in, accepted by the owner, or declared and accepted by him, for the benefits of another or of another and the owner.
9. What is Society?
Societies are formed by groups of people who wish to join to promote their common interests. These interests may be recreation, cultural or charitable. Societies can be formed for any useful purpose but they cannot be formed to carry on a trade or business.
Any seven or more persons associated for any literary, scientific, or charitable purpose, or for any such purpose as is described in section 20 of Societies Registration Act,1860 may, by subscribing their names to a memorandum of association, and filing the same with Registrar of Joint-stock Companies form themselves into a society under this Act.
10. Why Shop & Establishment Registration is needed?
If you are starting a commercial establishment or a shop, you need to file for registration under the Act, within 30 days of commencement of your establishment.
This registration is mandatory for several reasons, including the opening of the current account in a bank. This Shop and Establishment Act license, forms as a basic license and a proof of your business to apply for other registrations required to run a business in India.
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