PRIVATE LIMITED COMPANY REGISTRATION IN INDIA- POPULAR MYTHS

PRIVATE LIMITED COMPANY REGISTRATION


Every month, thousands of companies are incorporated in India. There are 2 types of entity registration in India i.e. traditional types where company registration takes place in the form of sole proprietorship and partnership firms and nontraditional types like Private Limited Company Registration, Public Limited Company Registration, Limited Liability Partnership etc.

Whenever any entrepreneur approaches a consultant for new business set up in India, majority of them opts for traditional types of registration and later wants to convert the same into nontraditional types.

There are many popular myths or beliefs in the mind of new entrepreneur which stops them to opt for non traditional types of entity registration in India.



Let’s discuss about some of the popular myths or beliefs about private limited company registration in India.

Popular myths or beliefs about Private Limited Company Registration

1)      Company registration is an expensive proposition

Quite contrary to the popular belief that private limited company registration is a costly affair, the fact of the matter is that now, the government has reduced the mandatory fees payable to ROC tremendously. Accordingly, upto authorized and paid up capital of Rs 15 lac, very nominal fees is payable to ROC. Depending upon the level of professional who assists in company incorporation, the entire fees for private limited company registration is anywhere between Rs 10,000 to Rs 15,000 for capital upto Rs 15 lac and 2-3 directors and shareholders which is quite minimal as compared to similar fee for incorporation in foreign countries.

2)      Compliance cost of private limited company is high as compared to other entities

This is second popular myth that compliance cost of private limited company is very high as compared to other entities. The fact remains that in case of private limited company, 2 additional compliance need to be done. First is statutory audit or financial audit needs to be conducted through practicing chartered accountant irrespective of turnover of the company. Second is that some annual forms need to be filed before ROC every year. Besides these 2 additional compliance, all the entities have to do periodical compliance relating to accounting, GST filing, Tax Audit, Income Tax Return filing etc.

3)      Too much time is involved in holding 4 board meetings and 1 Annual General Meeting

This is again a misconception that lots of time is involved in holding BM and AGM. In fact, board meetings may be held in no more than 30 minutes to 45 minutes.

4)      Income Tax Rates of Private limited companies are higher as compared to other forms of entity

This assumption is partially correct since tax rates of only sole proprietorship and LLPs can be slightly less. Otherwise, all other entities like Private Limited Company, Public Limited Company, Partnership firms and OPC are taxed at 30%. Also, in case of proprietorship, in case of income more than Rs 10 lac, it will also be taxed at 30%

Thus, there are lot of unfounded myths and belief about private limited company registration in India which need to be broken by way of proper professional guidance and consultancy.

In case you need any information or clarification regarding private limited company registration in India, you may contact EzyBiz India at www.ezybizindia.in and call us at +919899217778

Location: India

Comments

Post a Comment

Popular posts from this blog

Updated Income Tax Return Filing – New Procedures

Image
    Income Tax Return Till now, as per the Income Tax Act, 1961 (“the Act), in case any assessee finds any omission or error in the Income tax return filed for any assessment year, they have an option to revise the same within 3 months before the end of relevant assessment year or before the completion of the assessment whichever is earlier. Therefore, there was very less time available to the taxpayers to file the revised tax return. Now, the Hon’ble Finance Minister has provided some relief to the tax payers while doing their Income tax return filing . Accordingly, now an assessee can file an updated tax return wherein such errors or omission can be rectified by paying some additional taxes. Also, such updated tax return can be filed within 2 years from the end of the relevant assessment year. Therefore, now the window for revision or filing of updated tax return is available for 2 years from the end of the relevant assessment year instead of earlier period of only 3 months. Ho
Read more

NRI Tax Return Filing- Some points to be kept in mind

Image
  NRI Tax Return Filing   Whether obligation of Income Tax Return Filing is only on the Residents or whether Nonresidents are also required to their tax return in India? This is a question which comes in the mind of many individuals.   As per the provisions of the Income Tax Act, 1961 ( the Act) every person having taxable income in excess of prescribed amount is required to prepare and file his or her income tax return on or before the due dates prescribed under the act.   Therefore, the obligation of tax return filing is on both the residents as well as non residents. In this write up, we would be discussing about NRI Tax Return filing in India.   Following points shall be kept in mind before filing income tax returns in case of NRIs:   a)      Determination of Residential status   Unlike residents, whose income earned in India as well as outside India is taxable in India, in case of nonresidents, only income earned in India is taxable and income earned out
Read more

NRI Taxation- Taxability of sale of property in India

Image
  Form 15CA and 15CB   NRI Tax Return Like any Resident individuals, sale of property in India by NRIs are subject to capital gain tax on any appreciation made on such property. However, such capital gain tax may be avoided if such capital gain proceeds are invested in the manner prescribed under the Income Tax Act. Further, NRIs can also repatriate the sale proceeds of property outside India after payment of appropriate taxes and filing of form 15CA and 15CB . Such sale of property and relevant capital gain tax on same need to be reported while filing NRI Tax return in India. Similarly, any income earned by NRIs by giving Indian property on rent would also be subject to tax in India after statutory deduction and such income will also form part of NRI Tax return in India. It may be noted that all the transactions in India of NRIs relating to immovable property is governed by the guidelines issued under FEMA and RBI regulations. Any person, not being Indian citizens and/or compa
Read more