RBI guidelines on NBFC take over

RBI guidelines on NBFC take over

What is NBFC?

A Non Banking Financial Company (NBFC) happens to be a company that is registered under the aegis of Companies Act, 2013 of India. It is involved in the trading of loans and advances, shares acquisition, stock, bonds, hire-purchase insurance business or chit-fund business.

Takeover of NBFC

Takeover of NBFC normally happens via the documents pertaining to the target firm. If Acquirer gets sanction to the takeover of the concerned NBFC, an MOU will be signed along with a token sum. Then Know Your Customer (KYC) Documents, Business Plan & Projection for 3 years have to be made with regard to incoming directors, as per the suggestion of the acquirer. Through this article, we intend to throw light on RBI regulation pertaining to the acquisition of NBFC.

Basic formalities

Relevant documents has to be submitted to the RBI by the acquirer. The acquirer has to reply to all RBI queries related to the takeover. After getting the approval letter from the RBI, the acquirer is required to issue a public notice in the 2 newspapers for 30 days in accordance with the RBI guidelines. This is done to invite any objection, if any, from the general public or any interested parties with regard to the change in management. The inking of Share Purchase Agreement & giving of change of management, payment of remaining considerations etc. has to happen on the 31st day of newspaper notice or as concurred by all the parties concerned.

The need of RBI Approval beforehand

Prior written consent of the RBI is needed for:

Any alteration in control of an NBFC, which might not lead to change of management;

Any change in the nature of shareholding, which would result in acquisition/ transfer of shareholding of 26 percent or more of the paid-up equity capital of NBFC. However, prior consent would not be mandatory if the nature of shareholding does not exceed 26 percent which is as a result of buy back of shares/ decrease of share capital and it has approval of the competent court. In such cases, the RBI has to be informed within 1 month from its occurrence.

Any change in the composition of the NBFC which would lead to an alteration in over 30 % of the directors, not including independent directors.

Beforehand approval is also not needed for those directors who are selected again post retirement on a rotational basis.

NBFCs will continue to concerning any alteration in their directors/ management as Financial Companies Acceptance of Public Deposits (Reserve inform the Reserve Bank required in Non-Banking Bank) Directions, 1998,

Non-Systemically Significant Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015 & Systemically Important Non-Banking Financial (Non-Deposit Accepting Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.

Application for advance Approval

Applications pertaining to this can be submitted to the Regional Office of the Department of Non-Banking Supervision under whose authority the Registered Office of the NBFC is located.

The need of advance Public Notice regarding alteration in Control/Management

It is necessary to give public notice of at least 30 days in advance prior to conducting the sale of, or change of the ownership via selling shares, or alteration in control, either with or without the sale of shares. This type of public notice will have to be provided by the NBFCs & also by the other party or jointly by the relevant parties, post getting the advanced permission of the RBI.

The public notice should clarify the reason to sell or transfer ownership/ control, the details regarding transferee & the motive behind such sale or transfer of ownership/ control. The notice has to appear in at least one prominent national & in one popular local (covering the place of registered office) vernacular newspaper.

The guidelines mentioned above are applicable instantly i.e., the same will be valid for any takeover or acquisition of control, any diversion in the shareholding or any change in the management happening post the date of this circular.

Other laws apply as well

These guidelines will be including, & not in suppression of the essence of any other laws, rules, regulations or directions, till the time it is active.

Repeal & Saving

Non Banking Financial Company, (Approval of Acquisition or Transfer of Control) Directions 2014 dated May 26, 2014, will remain cancelled. Despite this, any thing done, purported to have been done or unleashed within the directions hereby nullified shall continue to be guided by the clauses of the stated directions.

Annex

Particulars about the suggested promoters/ directors/ shareholders of the Company

Sr. No.Particulars RequiredResponse
1.Name
2.DesignationChairman/ Managing Director/ Director/ Chief Executive Officer
3.Nationality
4.Age (has be backed with the date of birth)
5.Business Address
6.Residential Address
7.E-mail address/ Telephone number
8.PAN Number under Income Tax Act
9.Director Identification Number (DIN)
10.Social security number/Passport No.*
11.Educational/professional qualifications
12.Professional milestone related to the task
13.The area of business or vocation
14.Any other information relevant to the Company
15.Name/s of other companies in which the person has held the post of Chairman/ Managing Director/ Director/ Chief Executive Officer
16.Name/s of the regulators (RBI, SEBI, IRDA, PFRDA, NHB or any other foreign regulator) of the entities mentioned in which the persons hold directorships
17.Names of the NBFC, in case, the individual is related as Promoter, MD or Director comprising a Residuary NBFC, which has not been allowed to accept deposits/ prosecuted by the RBI?
18.Details of the tribunal, if any, pending or commenced or resultant in a conviction in the past in contradiction of the person or against any of the entities he is associated with for violation of economic laws & regulations
19.Cases, if any, involving the person or relatives of the person or the entities in which the person is associated with, are in default or have been in evasion in the last five years in related of credit services acquired from any entity or bank
20.In case the person happens to a member of a professional association/ body, particulars of the disciplinary action, if any, pending or commenced or leading to conviction in the past against him/ her or whether he/ she has been barred entry of any professional occupation at any time
21.Whether the person is eligible for disqualification provided under Section 164 of the Companies Act, 2013
22.Has the individual or any of the companies, he/ she belongs to, been under any kind of probe at the instance of the Government Department or Agency
23.Has the person been found violating rules/ regulations/ legislative requirements by Customs/ Excise/ Income Tax// Foreign Exchange/ Other Revenue Authorities, if so, give particulars
24.Involvement in the business of NBFC (number of years)
25.Equity shareholding in the company
No. of sharesFace valuePercentage of total paid up equity share capital of the company
26.Name/s of the companies, firms & proprietary concerns in which the person holds substantial interest
27.Names of the principal bankers to the concerns at 26 above
28.Names of the overseas bankers *
29.Whether the number of directorships held by the person goes beyond the limits permitted under Section 165 of the Companies Act, 2013
* For foreign promoters/ directors/ shareholders
Note: Different form should be given with regard to each of the proposed promoters/ directors/ shareholders

Information about Corporate Promoter

Sr. No.Particulars RequiredResponse
1.Name
2.Business Address
3.E-mail address/ Telephone number
4.PAN Number under Income Tax Act
5.Name & contact details of compliance officer
6.Line of business
7.The details of their major shareholders (more than 10%) & line of activity, if corporates
8.Names of the principal bankers/ overseas bankers *
9.Name/s of the regulators (RBI, SEBI, IRDA, PFRDA, NHB or any other foreign regulator)
10.Names of Firms in the Group as defined in the Prudential Norms Directions
11.Names of the firms in the Group that are NBFCs
12.Specify the names of companies in the group which have been prohibited from accepting deposits/ prosecuted by RBI?
13.Particulars of trial, if any, pending or started or led to a conviction in the past in contradiction of the corporation for violation of economic laws & regulations
14.Cases, if any, wherein the corporate, has defaulted or have been in default in the last 5 years with regard to credit facilities sought from any entity or bank
15.Whether the business has been under any kind of probe by the Government Department or Agency
16.Has the Corporate been found guilty of violating rules/ regulations/ legislative requirements by Customs/ Excise/ Income Tax// Foreign Exchange/ Other Revenue Authorities, if so, give particulars
17.Is the promoter corporate/ majority shareholder of the promoter business, if a business, ever applied to RBI for CoR which has been rejected

What is the exemption limit of agricultural income?

What do you mean by agricultural income?

Agricultural income constitutes the money or revenues earned from areas such as farming/Agriculture land, building on/associated with agricultural land, and the commercial gains made out of horticultural land.

According to the Section 2 (1A) of the Income Tax Act of 1961, agricultural income is:

Any income or money made out of any piece of land in India meant for agriculture

Additionally, any revenue derived out of such land through agricultural works like refining agricultural products so as to make it commercially viable in the market

Any income collected through saplings or seedlings reared in a nursery

Moreover, any revenue linked to a farmhouse lest it is in line with provision prescribed in Section 2 (1A)

Section under which agriculture income is exempted

As specified under Section 10 (1) of the Income Tax Act of 1961, agricultural income is set aside from taxation. But, it is included for computation of the total tax liability provided the guidelines given beneath are followed in totality:

Total agricultural income does not go beyond Rs. 5,000/- for the last financial year.

Net income, on top of the gross agricultural income, breaches the general exemption ceiling (It is to be noted – The primary limit of agricultural revenue kept out of tax net is 2,50,000 for person less than 60 years of age and Rs. 3,00,000 for those higher than 60 years of age)

For people who meet the afore-mentioned criteria, the taxable agricultural income will be calculated by following these methods-

Method 1: Inclusion of the agricultural income to the cumulative income

Method 2: By including income exempted under Section 10 in the agricultural income

Method 3: Moreover, deducting the amount acquired from Step 2 from that of Step 1 to arrive at the final tax liability.

Pay your taxes to rid yourself of anxiety

Benefit u/s 54 B

The person who pays tax (individual or HUF) can gain under this section, provided he sells his agricultural land to purchase another. But there is a catch as he has to meet certain conditions to claim the benefit.

Some fine Examples Of Agricultural Income

These happen to be:

Revenue derived through selling replanted trees

Additionally, the rental accrued from a piece of agricultural land

Revenue obtained through selling of seeds

Money earned via nurturing creepers/ flowers

Further, profits accrued through a partner belonging to a firm or a company indulging in agricultural production or activities

So, interest received by a partner from a firm or company via ploughing in capital in agricultural endeavors

Commonly Asked Questions

1. What is the ceiling for agricultural income tax exemption?

The primary limit to exempt agricultural income from tax is –

-Rs. 2, 50, 000 for people falling below the age bracket of 60

  • Rs. 3, 00, 000 for people above the age bracket of 60

2. Why is agricultural revenue kept away from the tax net?

Since from the beginning itself, agriculture happened to be a major source of income generation for a large number of the population in India. Also, the whole country still relies a lot on crop production to get its food on the table. This also happens to be a primary sector, pushing the economic wheels of the country. Hence, it is imperative that the Government comes up with schemes, strategies, and policies that ensure the constant evolution of the agriculture sector. So, in one such scheme, agricultural revenue is kept away from the purview of income tax.

3. How do we portray agriculture revenue in income tax?

In case your gross agricultural revenue happens to be less than Rs 5000 during a financial year, it can be projected in your income tax return ITR-1. However, in the event of your income going beyond Rs 5000, Form ITR -2 becomes applicable.

3. What is agricultural income and how is it treated for tax purposes?

Under Section 2 (1A) of the Income Tax Act of 1961 agricultural income is defined as –

A rent or income sourced from any piece of land in India meant for agriculture

Also, any money generated from such land through agricultural activities like processing of agricultural products to make it commercially viable

Additionally, any income made from saplings or seedlings nurtured in a nursery

Any income pertaining to a farmhouse if it follows guidelines prescribed under Section 2 (1A)

Income included for the sake of tax

As described in Section 10 (1) of the Income Tax Act of 1961, agricultural income is set aside from taxation.

But, agricultural income is used for the net tax liability calculations if the conditions described underneath are met totally-

Gross agricultural income going above Rs. 5,000/- in the last financial year

Net income, along with the gross agricultural income, breaks the basic exemption ceiling

GST Penalties and Appeals

GST Penalties and Appeals

The GST Law has defined its offenses and penalties that are levied in each scenario. This is an important topic for every business owner, CA, CS as any mistake can cause severe consequences.

Overview

GST law prevents many tax evasion and corruption over tax as it contains strict provisions for offenders regarding penalties, prosecution and arrest. The introduction of GST Law Government of India ensures to prevent tax evasion and corruption and also introduces stricter liabilities for the non-payment of the same.

Offences and Penalties

Offenses

There are 21 offences which are being introduced under GST law. Some of the offences which has been introduced by the introduction of GST law are as follows-

  1. When the company/organization or an individual has not enrolled themselves under GST Law, even when it is required by law.
  2. Supply of any goods/ services without any invoice or issuing a false invoice.
  3. The issue of invoices by a taxable person using the GSTIN of another bonafide taxpayer.
  4. Submission of false information without getting registered under GST Laws.
  5. Submission of fake financial records/ documents or files,or fake returns to evade tax.
  6. Obtaining refunds by fraud.
  7. Deliberate suppression of sale to evade tax.
  8. Opting for a composition scheme even though a taxpayer is ineligible.

Penalty

If any of the offense is committed by a taxpayer, then he is liable for the penalty which he has to pay under GST. the principals on which these penalties are based are mentioned by law.

For Late Filing

If returns of GST are filed late i.e. after the last date of filing, then it would involve a penalty of Rs. 100 per day as per the Act. So it is 100 under cgst and 100 under sgst so, total late fee would be levied of Rs. 200/- per day along with the interest of 18% per annum. The time period will be from the next day of filing of the date of payment.

For not filing

If you are not filing your GST return, then it will have a cascading effect as you will not be able to file your subsequent returns and therefore it involves heavy penalty and fines.

For the 21 offenses with no intention of fraud or tax evasion

If the offender is not paying the tax or making short payments must pay a penalty of 10% of the tax amount due subject to a minimum of Rs. 10,000/-.

For the 21 offense for the intention of fraud or tax evasion

In this case the offender has to pay 100% penalty for tax evasion subject to a minimum of Rs, 10,000/-. The tax evader could be imprisoned for a term of 1 year for tax amount 100-200 lakhs, upto 3 years for 200-500 lakhs and upto 5 years for the tax amount of 500 lakhs and above.

Inspection under GST

The Joint commissioner of CGST and SGST may have reasons to believe hat in order to evade tax, a person has suppressed any transaction or claimed excess input tax credit etc. then the joint commissioner can authorize any other officer of CGST/SGST in writing to insect places of business of the suspected evader. 

Search and Seizure under GST

The joint commissioner can order for search and seizure if he finds any person liable for tax evasion on the basis of the inspection. 

Goods in Transit

If a person in charge is carrying goods exceeding 50,000/- is required to carry the following documents-

  1. Invoice or bill or delivery challan
  2. Copy of e-way bill

Compounding of offences under GST

Compounding offenses is a shortcut method to avoid litigation. In case of prosecution each time of hearing in criminal proceedings a person has to appear before a magistrate along with his advocate which is little time consuming process.

In compounding offence, the accused is not required to appear personally and can be discharged on payment of compounding fee which cannot be more than the maximum fine as applicable under GST.

Prosecution under GST 

If someone has committed crime under GST law deliberately, then he is subject to criminal prosecution under the law. A few example of these offenses are follows-

  1. Issue of an invoice without supplying any goods and services 
  2. Obtaining refund of any CGST/SGST by fraud
  3. Submitting fake financial records/ documents or files and fake returns to evade tax.
  4. Helping another person to commit fraud under GST.

Arrest under GST Law

Any person accused of committing a cognizable offense is entitled to get arrested within 24 hours of the offense. Then he is to be produced before the Magistrate within 24 hours of the arrest.

Appeal

Any person aggrieved by the decision of tribunal or court may appeal in the appellate court. If the person is aggrieved by the decision of fit appellate authority then he could appeal in the National Appellate Tribunal and then to the High court and Supreme court thereafter.

What is a Non Disclosure Agreement?

What is a Non Disclosure Agreement?

A non-disclosure Agreement is a legal contract stating certain confidential information, and the extent to which it is restricted to the third parties. It can be entered into or with a person or organization.

Confidential information could be anything i.e. Trade secrets, business plan, business methods and strategies, drawings, charts and more. Confidential information also includes software programmes and code.

Advantages of a Non-Disclosure Agreement

Protects Business Secrets

NDA  helps protect business secrets and other confidential information. It is a common agreement that is usually signed by every employee of the organization.

Enhances client relationships

Organizations generally let their employees sign NDA to help maintain a strong client relationship.

NDA Procedure

  1. Organizations generally execute agreements to be signed by their employees so that in future if they change the organization they will not disclose any secret information in front of any competitor organization. We help our clients in roaring of the NDA according to the needs. It takes approx. 3-4 days.
  2. In case you would like any changes to the agreement, our team will help in doing that. Two rounds of iteration are included in the original price.

Why BIAT Legal LLP

  1. We deliver all doubts in just 4 business days. And if you are not fully satisfied then it takes another couple of days to keep our clients satisfied to the fullest.
  2. We have a strong team having experience over 5 years who would advise you the best and clear all your queries around the clock. But our motive is to ensure that no client is unsatisfied.

Therefore, we can say that BIAT Legal LLP is a one stop solution for all your legal needs.

Know your legal right/ Divorce in India

Know your legal right/ Divorce in India

Between any couple divorce appears to be the most traumatic occurrences of their lives. However, it can be a costly affair in India if divorce is contested by any of the parties. Even couples who agree for mutual divorce have to show to court that they have been separated a year before the filing of the divorce petition. In India dovorce is considered to be a personal matter as rules of divorce are connected with one’s religion like Hindus, Buddhists, Sikh, and Jains is governed by Hindu Marriage Act, 1955. Muslims by dissolution of muslim marriages act, 1939, Parsis by the Parsi marriage and Divorce Act, 1936, and Christians by Indian Divorce Act, 1956. 

The spouse can initiate to send legal notice before ending their relationship.

There are different grounds on which divorce is granted, here our expert legal team helps you understand different topes of Divorce petitions and help in understanding the divorce process in India.  

Types of Divorce Petitions

Divorce with Mutual Consent

When both spouses agree to a divorce, then it is considered a Mutual Divorce. However, as per the Act, a couple should at least be separated for over a year and the same is to be proved before the Hon’ble Court. Ofte, even when either of the spouses is reluctant to the mutual divorce, agrees to a mutual divorce because it is relatively inexpensive, time saving and not as traumatic as a contested divorce. Matters such  as child’s custody, maintenance and property rights could be agreed mutually through an Agreement.

There are three aspects regarding which a husband and wife have to reach a consensus.

First is Maintenance decided by a wife. For this no law has stated the minimum or maximum limit of support. It could be any figure or no figure. 

Second is of Custody of a child, it takes maximum time in court to decide the custody of a child. It takes much longer when it is without mutual consent. Child custody in a mutual consent could be shared, joint or excessive depending upon the understanding of the spouses. 

Third one is the Property, the spouses must decide who will get which part or how much of the property. Thus includes both movable and immovable property. Even bank accounts could also be shared amongst the two. It is not necessary for it to be fair, so long as it is agreed to by both parties.

Once the first motion of the Divorce is filed, before filing of the second motion of divorce, there is a timing minimum of 6 months. However, waiver application could be moved before the Hon’ble court and its total courts jurisdiction on its allowance. As per section 13B of Hindu Marriage Act, 1955 and section 28 of special marriage act, 1954, the couple should be living separately for at least one year before divorce proceedings can begin. Living separately does not mean that they are living in different locations, it’s just mean that couple have to prove that there is no relationship between two as husband and wife i.e. having no physical relationship etc.

Divorce without Mutual Consent

In case of a contested Divrce following could be the grounds on which Petition can be filed-

Cruelty

Cruelty could be physical or mental cruelty. If any of the spouses has an apprehension or a reason to believe that he/she has been a victim to cruelty then it would be a sufficient ground to file for Divorce.

Adultery

If the husband has maintained illegal or consesunal intercource with a third woman, the wife is free to file for Divorce. However, it is no longer considered as a crime after the Supreme Court Recent judgement.

Desertion

If one spouse is deserting the other spouse without a reasonable cause (cruelty for eg) then there is  a reason for Divorce. There should be a proper reason to prove that. As per the act, dissertation should have lasted for at least two consecutive years.

Conversion

If any spouse converts his/her religion then divorce could be filed.

Mental disorder/unsoundness of mind

If any spouse becomes of unsound mind then divorce can be granted by either of the spouses.

Renunciation of the world

If any spouse has renounced the world then spse can take divorce.

BIAT Legal LLP over the years has become expert in handling Family and Matrimonial Litigations. 

Trademark Renewal Process In India

trademark renew in india

The Trademark Renewal can be defined as a process of restoration of all terms ,conditions , rights and security which a trademark provides to the business or a company.

  • RENEWAL TIME PERIOD OF TRADEMARK –

The trademark has a validity time period of 10 years and later on the company or business need to renew the registration without wasting time.

The organisation should register within 6 months before expiration after 06 months of the expiration or within one year of expiration.

  • RESTORATION OF TRADEMARK AFTER BEING REMOVED FROM REGISTER –

A Trademark can be restored even after being removed from the register .the process involves filing TM -10 and TM-13 forms along with the prescribed fee within one year of the trademark expiry.

  • DIFFERENCE BETWEEN TRADEMARK REGISTRATION AND TRADEMARK RENEWAL –

The Trademark registration leads to protection of the brand name and its right to use from any misuse.The trademark renewal on the other hand leads to the extension of the protection of the product brand and its rights for the next 10 years.

  • CONSEQUENCES FOR NON RENEWAL OF TRADEMARK WITHIN TIME LIMIT –

In case the renewal is not being applied within the specified time frame ,the trademark gets removed from the register immediately.One should remember that the maximum time to apply for the renewal of a trademark is 12 months after the expiry of the trademark registration.

  • TRADEMARK BEING REMOVED ON BASIS OF NON USE –

When a trademark is not being used for the period of consecutive 05 years from the registration date or not used for a period of 03 months before date of application for removal ,thereafter it can be removed .

  • TRADEMARK OWNER BEING INITIATED ABOUT RENEWAL OF TRADEMARK –

The trademark owner is always initiated about the trademark renewal and it is done through IP India.An electronically generated notice is being sent from the trademark automation system and is delivered to the owners address through the registered post.

  • TRADEMARK RENEWAL NOT DONE IN DUE TIME AND OTHER COMPANY REGISTERS THE SAME –

In case the trademark renewal is not done by the owner in a specified time frame after the expiration , it goes available in the public domain and anyone can apply for the registration and the previous owner has no right to stop the registration since he does not have the rights of that particular trademark.

  • ANYONE ELSE APPLY FOR RENEWAL ON PLACE OF TRADEMARK OWNER –

In case , the owner is not available to apply for trademark renewal , the renewal can be done through his /her authorized agent , administrator ,managing trustee etc. 

  • OBJECTION BEING RAISED DURING TRADEMARK RENEWAL –

During the renewal of trademark when an objection is being raised , a letter of query is being sent to the applicant.There after the renewal process remains pending till a response from the applicant is not being received. 

  • CAN A TRADEMARK CLASS CHANGE DURING RENEWAL – 

No , a trademark class once registered cannot be changed by the entity or there cannot be any modification once after the registration.

LIMITED LIABILITY PARTNERSHIP COMPANY [LLP] FORMATION IN INDIA

LIMITED LIABILITY PARTNERSHIP COMPANY [LLP]

The LLP stands for limited liability partnership which can be defined as a corporate entity registered under the limited liability partnership act ,2008.

It can also be defined as a hybrid form of partnership that enjoys limited liabilities and also includes features of a company.One should note that the compliances for a company are applicable to limited liability partnership.

  • BUSINESS WHERE LLP NEED APPROVAL FOR REGULATORY AUTHORITIES –

There are certain business activities where the limited liability partnership companies need prior authority of regulatory authorities before the beginning and usch business activities are venture capital ,banking , stock exchange ,merchant banking ,architecture , chit fund ,reconstruction , NBFC ,mutual fund etc.

All the activities marked above need the prior approval for concerned authorities and bodies before starting the business as per terms and conditions of the companies act ,2013.

  • FOREIGNER CAN BECOME A PARTNER IN LLP –

According to new companies act ,2013 , the foreigner can also become a partner in the limited liability company keeping in mind that there should be at least one member or partner in the company who is an indian citizen and resident of India in the previous calendar year.

  • CONVERSION OF PARTNERSHIP FIRM INTO LLP –

A partnership firm can be easily converted into the limited liability partnership firm according to rules defined below –

A form 17 is needed to be filed along with the form 2 for the conversion of the partnership firm into the limited liability partnership company.

One should note that an existing partnership firm by complying with the provisions of clause 58 and schedule 2 of Limited liability partnership act can be easily converted into a limited liability partnership company.

  • MINIMUM PARTNERS REQUIRED TO FORM LLP –

As per the Limited Liability Partnership act,2008, The minimum partners required to incorporate a limited liability partnership firm is two and there is no limit for the maximum number of partners.

  • A FOREIGN LLP CAN ESTABLISH BUSINESS IN INDIA –

According to the new companies act,2013 a foreign limited liability partnership company can easily establish a business in India.The process involves filing of form 27 with the ROC.

The form includes various details such as foreign LLP incorporation , two authorized representatives ,designated partners for compliances under the act.

  • ADVANTAGES OF FORMING LIMITED LIABILITY PARTNERSHIP COMPANY –

The advantages of forming limited liability partnership companies are defined below –

1] FEATURES OF PARTNERSHIP AND COMPANIES –

The basic and foremost advantage is that LLP includes features of both partnership firm as well as the company.Therefore both the types of feature are available here.

2] INCORPORATION COST INVOLVED –

  The cost involved in the incorporation of the limited liability partnership company is very low.

3] MINIMUM TWO AND MAXIMUM PARTNERS EXEMPT –

 In LLP there is no limit for the maximum number of the partners and minimum required partners for the incorporation is two.

4] AUDIT NOT MANDATORY –

 There is no mandatory audit to be done in LLP unless the turnover exceeds Rs. 40 lac. And the capital contribution exceeds rs.25 lac.

5]MAINTAIN ONLY ACCOUNT BOOKS-

 There are very few records to be maintained i,e only the books of account are needed to be maintained.

6] LIMITED LIABILITY OF PARTNERS –

 In the case of LLP , the partners’ liability is limited to his shares and therefore the personal assets of  every partner is safe and secured.

Decoding the benefits of registering a Business

Decoding the benefits of registering a Business

There are lots of benefits which are there of registering a business in India and they are as follows-

  1. It gives you a structure- By forming a new company, it gives you a better structure of business, like suppose if you want to open a one man company then you can go for One person company formation, or if there are Partners in your company then you must opt for a Partnership Firm and by forming a company, it helps in smoothly running of a firm.
  2. Without structure there is no order in the company and therefore it affects the profit margin of the company. Therefore when we talk about business then we must focus on how must give a properly organized structure to your business idea.
  3. By opting for a registration of company, it gives a separate entity to your business, as you get certificate of incorporation which can be called as a Birth Certificate of your newly formed company.
  4. There is perpetual existence of a company, like when we open a startup , then everyone one only wants to make money but also they want to establish a legacy. When a business is registered it gives a separate entity. If and when the owner of the business dies the business can continue to exist. Its ownership can be transferred to another Director, or it can lie dormant.
  5. Registered business are more trustworthy, basically unregistered business is worthless as before doing any business, anyone wants to have safe business and they do not want to lose in their services, therefore registered business are termed as more understandable as compared to the unregistered one.
  6. Limited liability partnership is probably the most overused terms when it comes to “ benefits of Business Registration”, however people are still fuzzy about its meaning. So Limited Liability means that a company is a separate legal entity and it has to bear its own losses.

Conclusion

When it comes to business registration, there are many but when we talk about its benefits, there we lack, I hope that through this blog we have enlightened you with the understanding of what the benefit actually means.

What Is Trademark Rectification ?

What Is Trademark Rectification ?

What is Trademark Rectification?

Trademark rectification is needed when there is a need for any kind of alteration, change, modification or rectification in the registered mark or in the register of trademarks, or rectification of the trademark register by such aggrieved party.

Trademark rectification rights in India is governed by chapter VII of the trademark Act, 1999. Under section 57 of the Trademarks Act, any person who is aggrieved by the entry in the trademark register can file for trademark rectification before the registrar of trademarks. However, in certain cases consequences can be cancellation of trademark registration.

Who can file Trademark Rectification?

  1. It can be filed by the owner of the trademark itself, or
  2. It may also be filed by the party or entity being aggrieved by such entry.

Common grounds for filing Trademark rectification in India

  1. Due to latest knowledge or advancement
  2. Due to non-use of registered trademark for over 5 years by the registered owner.
  3. Due to non-renewal of the original or previous registration of the trademark.
  4. In cases where inclusion of addition of certain more classes of goods or services to the business gamut of the registered trademark.
  5. Conditions which are beyond any more grounds stipulated in section 9 and 11 of the Indian Trademark Act, 1999.
  6. The certain omission of any entry eg, a disclaimer, condition or limitation.
  7. Where the registration is obtained by misrepresentation of facts, similar to an earlier mark registered and lacks sufficient cause for registration.
  8. Cases where mark was wrongly remaining on the register and causing or likely to cause confusion.
  9. When the renewal fee has not been paid.

Procedure for Trademark Rectification In India

Procedure for Trademark rectification in India includes following hings-

In cases where trademark registry has marked the trademark application as Formality check or send back to EDP, therefore in this case option of rectification and of being is being given and it requires to be resubmitted. In such cases, rectification deed is required to be prepared to address all the concerns of the trademark examiner-

  • TM-O form is required to be filled in order to file trademark rectification.
  • Make sure that your trademark rectification application is a clear and crisp statement of grounds related to the application.
  • You must support your arguments with strong evidence to support rectification of the specified trademark.

We have immense and diversified experience in handling Trademark rectification cases and shall suggest more professional ways to avoid trademark rectification. 

Vinubhai Haribhai Malaviya and Ors. vs State of Gujarat

Vinubhai Haribhai Malaviya and Ors. vs State of Gujarat

A recent judgement of the Supreme Court of India on criminal law passed by the quorum of justices Rohinton F nariman, Surya Kant and Ramasubramanium. The judgement holds that a power exercised by the magistrate under section 156(3) of the Cr.Pc. is post cognizance. 

The question arises by the Supreme court that once Chargesheet is filed by the police after doing proper investigation, then whether Magistrate has the power to pass an order to the police officials for further investigation under section 173(8)  and if so then upto what stage of criminal proceedings? 

Different views were given by different judges which also creates doubt in the judicial minds. Then after a near exhaustive survey of the conflicting decisions, the Bench in malviya held in favour of the view that a magistrate has power to direct further investigation by an investigating agency post cognizance on a police report right up to the stage of framing of charge that interpreted section 173(8) crpc restrictively. This view was acceptable as it was undoubtedly redounds in the interest of justice. 

It is pertinent to note that the Bench in malviya was concerned only with the question whether post cognizance a Magistrate could direct further investigation under section 173(8). Whether a magistrate exercising power unders section 156(3) was acting pre cognizance or post cognizance was not at all the issue in this case.

Thus it is undoubtedly correct that section 156(3)  and 173(8) operate at a different stages of investigation like section 156(3) operates at pre cognizance stage whereas 173(8) operates at the post cognizance stage as it is intended to supplement a completed investigation.

It is pertinent to note here that the power of magistrate under section 173(8) is not derived from his power unders section 156(3) but is a distinct and independent power. 

This proposition regarding the meaning of “taking cognizance” has been often repeated in many apex court judgment. Had the bench of Malviya been cognizant of this well established proposition of law, it is doubtful if it would have arrived at the unfortunate finding in paragraph 26 of the judgement.

The power unders section 156(3) can only be exercised at pre cognizance stage was an erroneous finding in law”.

Judgement

Therefore it was held in the case that a three judge bench of the Supreme Court Of India virtually overruled a 43 year old precedent and held that magistrate can invoke power under section 156(3) of the code of criminal procedure even at the post cognizance stage. The Bench headed by Justice RF nariman held that this judgement was rendered without advertising to the definition of “Investigation” in section 2(h) of the crpc. It was observed that the finding in the law in the said judgement that the power under section 156(3) crpc can only be exercised at the pre cognizance stage is erroneous.