As one of the largest markets in the world, India has a vast trade and commercial domain. However making profitts through trade and commerce is not the only factor which is prominent in the Indian market. India as a huge country lacks behind in sectors like education, employment, health care, food, and safety, etc. Our government is under a lot of pressure to ameliorate the conditions within the national legislation. The central government cannot address each and every issue simultaneously and this creates a space for specific organizations which assist the government working for the well-being of society. Such organizations are known as Non-profit organizations or non- government organizations. A Non-profit organization can be registered as a Company under Section 8 of the Companies Act, 2013.It can also be registered as Trust or a Society. Section 8 company can be incorporated for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object, provided it intends to apply its profits, if any, or other income in promoting its objects and intends to prohibit the payment of any dividend to its members. PROS OF SECTION 8 COMPANY NO MINIMUM PAID UP CAPITAL REQUIREMENT: As per Companies Act, 2013 unlike private and public limited companies, Section 8 Company do not require any minimum capital contribution for incorporation. They can commence there business without any share capital. The fund required for business can be brought in the form of donation and subscription from public and members of the Company. TAX DEDUCTION: Since Section 8 Companies are non-profit making companies they are exempted from certain income tax provisions. They are also given numerous deductions and benefits. Individual Donating Money in Section 8 companies also avail the benefits of deduction under Section 80G of income Tax Act, 1961. NO NEED TO USE TITLE : Unlike Private Limited company which uses 'Private Limited' as title after its name, Section 8 Company is not required to add any sufix or title to its name. NO STAMP DUTY PAYABLE: A section 8 Company is exempted for the payment of stamp duty applicable for registration as applicable in case of other structures such as private limited or a public limited company. CREDIBLE: A Section 8 Company has more credibility as compared to any other Non-profit organization structure be it a Trust or Society. As it is a licensed by the central government. It has more stringent regulations such as no change in MOA and AOA can be done at any stage or situation in a Section 8 Company. A section 8 company due its strict compliances as regard to functioning has a more reliable image in comparison to other legal structures.
POINT TO BE KEPT IN MIND BEFORE REGISTERING SECTION 8 COMPANIES: A. Decide regarding the proposed name to be applied, objects to be carried by the Company, authorized capital. B. Name of Section 8 Company shall include the words Foundation, Forum, Association, Federation, Chambers, Confederation, Council, Electoral trust and the like words. C. It should intend to apply its profits, if any or other income in promoting its objects. D. It should intend to prohibit the payment of dividend to its members. E. A partnership firm is allowed to be a member of the Section 8 Company MINIMUM REQUIREMENTS FOR SECTION-8 COMPANY: A. At least two shareholders B. Minimum two directors C. Shareholders and Directors could be same. D. At least one Director should be Indian resident E. There is no minimum capital required. F. Registered Office Address Proof (Rent agreement if the premises is not owned by the company) G. Documents claiming the ownership such as Sale Deed or House Tax receipt along with an NOC. PROCEDURE FOR INCORPORATION OF SECTION-8 COMPANY: A. Get Digital Signature Certificate (DSC) of all members. B. Get Director Identification number (DIN) of all Directors by using DSC. C. Suggest at least Six Company name. We will do search for name availability. D. Apply to ROC for name approval. E. Once name is approved by ROC File application to Central Government in Form INC -12 for grant of License to start Section 8 Company. F. Once Central Government issues License file Incorporation document with ROC like MOA AOA Consent of Director, Affidavit and declaration from directors etc. G. Once Incorporation form is approved by ROC, ROC shall issue Certificate of Incorporation with PAN and TAN No. Requirement to Apply for DSC: All members should have DSC 1. Pan Card Self Attested 2. Residential Proof Self Attested 3. Dully fill and sign DSC application form.
Requirement to Apply for DIN: (Minimum Two Directors are required) 1. Photograph of the Applicant – To be Self-attested. 2. PAN – To be Self-attested 3. Mobile No. 4. Email id. 5. Educational Qualification 6. Occupation 7. Proof of residence of applicant 8. Address proofs like passport, election (voter identity) card, ration card, driving licence, electricity bill, telephone bill or bank account statement shall be attached and should be in the name of applicant ( shall not be later than 2 months). 9. DSC of Individual. Requirement to Apply for Name Availability: 1. Six Proposed name with significance of Name 2. Authorized Capital- Optional 3. Jurisdiction of Registrar of Companies. 4. Main Object to be pursued by Company Requirement to Apply for Central Government License of Section 8Company: 1. Draft MOA & AOA 2. INC -15 Declaration by each subscriber (On Non- judicial stamp paper of Rs. 100/- and duly notarized). 3. Affidavit by each subscriber regarding non disqualification (On Non- judicial stamp paper of Rs. 100/- and duly notarized). 4. Declaration by each subscriber regarding non acceptance of Public deposit (On Non- judicial stamp paper of Rs. 100/- and duly notarized). 5. Consent from all Directors in DIR- 2 6. Estimated statement of Income & Expenditure for Next three years and it should be signed the proposed Promoters. 7. Estimated Balance Sheet for Next three years and it should be signed the proposed Promoters. 8. List of proposed Promoters and Directors of the Company 9. Statement of ground on which application is made. Requirement to Apply for Incorporation of Section 8Company: 1. Registered office address of Company. 2. Recent Address proof with NOC from Owner. TIME PERIOD: Time Required for Incorporation of Section 8 Company Shall be 30-60 days, depending on government approval.
REGISTRATION OF COMPANY UNDER SECTION 12A AND 80G OF INCOME TAX ACT. Income of an organization is exempted if NGO has 12-A registration. This is one time registration. If an organization has obtained certification under section 80-G of Income Tax Act then donors of that NGO can claim exemption from Income Tax. Application for registration under section 12A and 80G can be applied just after registration of the NGO.It can be applied to the Commissioner of Income Tax (Exemption) having jurisdiction over the institution. Both applications can be applied together or it can be also applied separately. If some organization is willing to apply both applications separately, then application for registration u/s 12A will be applied first. Getting 12A registration must for applying application for registration u/s 80G of Income Tax Act.
A director may resign from his office by giving a notice in writing to the company. DUTIES OF THE BOARD OF DIRECTORS: The Board shall place the resignation letter* in the meeting and pass a resolution for the same and record it in the form of minutes.The company will file DIR-12 with Registrar of Companies within 30 days from the date of resignation.The company is also required to mention about the resignation in the Board Report of the Company. *Resignation will take effect from the date on which the notice is received by the company or the date if any specified by the Director in the notice whichever is later.DUTY OF THE RESIGNING DIRECTOR: The director shall forward a copy of his resignation letter along with the reasons for resigning in Form DIR-11 with the Registrar of Companies within 30 days of resignation. Note: If you have any query or question please comment in the comment box blow or contact us. We would love to help you.
EANING: Nidhi Company means a company which has been incorporated as a public company with the object of-Culvang the habit of thri and savings amongst its members and receiving deposits from, and lending to, its members only, for their mutual benefit.
OBJECT TO INCORPORATE NIDHI COMPANY: Nidhi Company is incorporated with following objecves: To smulate savings among its memberTo lend Loans and receive money as deposits for the purpose from only its members.Since Nidhis come under NBFCs, the RBI is empowered to issue direcons to them in maers relang to their deposit acceptance acvies. However, since Nidhis deal with their shareholdermembers only, RBI has exempted such nofied firms from the provisions of the RBI Act and other direcons applicable to NBFCs. APPLICABILITY: The Central Government made 'Nidhi Rules, 2014' for the purpose of carrying out the objecves of 'Nidhi' companies. These rules shall be applicable to Every company which had been declared as a Nidhi or Mutual Benefits under Secon 620A(1)of Companies Act, 1956;Every company funconing on the lines of a Nidhi company or Mutual benefit society but has either not applied for or has applied for and is awaing noficaon to be a Nidhi or Mutual Benefit Society under Secon 620A(1)of Companies Act, 1956;Every company incorporated as a Nidhi pursuant to the provisions of Secon 406of the Companies Act, 2013. PRE-REGISTRATION REQUIREMENTS FOR REGISTERING A NIDHI COMPANY : Minimum Three Directors: Minimum three Directors are required to incorporate Nidhi Company. All this three director has to act as members of the company.
Minimum Seven Members: Nidhi Company can be started with seven members. Out of which 3 are also to be appointed as directors.
Minimum Capital Requirement: Nidhi Company as Public Limited Company Should have Capital of Rs.5,00,000/- Like Public Limited Company.
No Preference Shares shall be issued. Object of the Company The objecve of such a firm would be to imbibe in the members a habit of thri and saving and the services would only be restricted to its members;. The name of the company must have word as Nidhi Limited at the end.
PROCEDURE FOR INCORPORATION OF NIDHI COMPANY : Get Digital Signature Cerficate (DSC) of all seven members. Get Director Idenficaon number (DIN) of three Directors by using DSC. Suggest at least Six Company name. We will do search for name availability. Apply to ROC for name approval with adding word Nidhi Limited. Once name is approved by ROC File Incorporaon document with ROC like MOA AOA Consent of Director, Affidavit and declaraon from directors etc. Once Incorporaon form is approved by ROC, ROC shall issue Cerficate of Incorporaon with PAN and TAN No.
Requirement to Apply for DSC: All 7 members should have DSC Pan Card Self AestedResidenal Proof Self AestedDully fill and sign DSC applicaon form. Requirement to Apply for DIN: (Minimum Three Directors are required for Incorporaon of Nidhi Company) Photograph of the Applicant – To be Self-aested.PA N – To be Self-aested Mobile No. Email id.Educaonal QualificaonOccupaonProof of residence of applicantAddress proofs like passport, elecon (voter identy) card, raon card, driving licence, electricity bill, telephone bill or bank account statement shall be aached and should be in the name of applicant ( shall not be later than 2 months).DSC of Individual. Requirement to Apply for Name Availability: Six Proposed name with significance of NameAuthorized Capital- Minimum 5 LacsJurisdicon of Registrar of Companies.Main Object to be pursued by Company Requirement to Apply for Incorporaon of Nidhi Company: Registered office address of Company.Recent Address proof with NOC from Owner.Consent from all DirectorsAffidavit and declaraon from all directors and subscribers. TIME PERIOD: Time Required for Incorporaon of Nidhi Company Shall be 20-30 days, depending on government approval.
POST-REGISTRATION REQUIREMENTS FOR A NIDHI COMPANY : There are certain Compliances which Nidhi Company has to do aer incorporaon of Nidhi Company. Every Nidhi Company shall, within a period of one year from Incorporaon of the company, ensure that it has Not Less than 200 Members: Aer incorporaon, a Nidhi company must add at least 200 members to comply with this requirement of law. Further, it has to maintain this during the course of me. If the total members falls less than 200 at any me thereaer, it will leave the company at default. However, if the company is not able to reach the limit of 200 members, then you must apply for me within 30 days of closure of financial year in Form NDH-2 with Regional Director. Net Owned Fund: Net owned funds shall be Rs.10,00,000/- or more ('Net owned funds' means the aggregate of paid up equity share capital and free reserved as reduced by the accumulated and intangible assets appearing in the last audited balance sheet). Ratio: Ratio of net owned funds to deposit shall be not more than 1:20. This ratio is very easy to understand. Suppose, if you have net owned funds of 10 lakh, then your total deposit limit would be INR 2 Crore. Deposit: Unencumbered term deposits of not less than 10% of the outstanding deposits as specified in Rule 14. Members restricon: A Nidhi Company shall not admit a body corporate or trust as a member. A minor shall not be admied as a member of Nidhi Company. But deposits may be accepted in the name of a minor, if they are made by the natural or legal guardian who is a member of Nidhi
GENERAL RESTRICTIONS: Rule 6 provides general restricons. Carry on the business of Chit Fund,Hire Purchase Finance,Leasing Finance,Insurance or Acquision of Securies issued by anybody corporate; Issue Preference Shares,Debentures orAny Other Debt Instrument by any name or in any form whatsoever; Open any Current Account with its members; Acquire another company by; Purchase of securies orControl the composion of the Board of Directors of any other company in any manner whatsoever orEnter into any arrangement for the change of its management, unless it has passed a special resoluon in its general meeng and also obtained the previous approval of the Regional Director having jurisdicon over Nidhi;Carry on any business other than the business of borrowing or lending in its own name;Accept Deposits from or lend to any person, other than its members;Pledge any of the assets lodged by its members as security;Take Deposits from or lend money to anybody corporate;Enter into any Partnership Arrangement in its borrowing or lending acvies;Issue or cause to be issued any adversement in any form for solicing deposit;Pay any brokerage or incenve for mobilizing deposits from members or for deployment of funds or the granng loans. Share capital allotment: Every Nidhi shall allot To each deposit holder at least a minimum of 10 equity shares or shares equivalent to Rs.100/-.To each savings account holder and a recurring deposit account holder at least 10 equity shares of Rs.10/-. Acceptance of deposits: A Nidhi shall not accept deposits exceeding 20 mes of its Net Owned Assets as per last audited financial statements.The fixed deposits shall be accepted for a minimum period of 6 months and a maximum period of 60 months.Recurring deposits shall be accepted for a minimum period of 12 months and a maximum period of 60 months.In case of recurring deposits relang to mortgage loans, the maximum period of recurring deposits shall correspond to the repayment period of such loans granted by Nidhi.The maximum balance in a savings deposit account at any given me qualifying for interest shall not exceed Rs.1,00,000/- and the interest shall not exceed 2% above the rate of interest payable to savings bank account by naonalized banks.Interest for fixed and recurring deposits shall be at a rate not exceeding the maximum rate of interest prescribed by RBI which the NBFC can pay on their public deposits. Every Nidhi shall invest and connue to keep invested, in unencumbered term deposits with a scheduled commercial bank or post office deposits in its own name an amount which shall not be less than 10% of the deposits outstanding at the close of the business on the last working day of the second preceding month. In case of unforeseen commitments, temporary withdrawal may be permied with the prior approval of the Regional Director for the purpose of repayment to depositors, subject to such condions and me limit which may be specified by the Regional Director to ensure restoraon of the prescribed limit of 10%
Starting a small business is a great way to earn a living and contribute to the community. Many people with great business ideas never started, simply because they're overwhelmed by the process of starting a small business and unsure of what specifically is involved. It's understandable to freeze up at the deluge of things that are required how to start business, but getting going is actually easier than you might think. With a to-do list of smaller tasks, you will be able to tackle enough of the actions necessary to get started. Here is the step by step guide to simplify the process and getting started with your own small business: STEP 1: WRITE YOUR BUSINESS PLAN To get started, write your own simple business plan that is a high-level overview of the small business you're about to start. The plan should explain the vision and mission of starting the business. It will serve as your guide to decision making during business process. You will need to provide business plan to satisfy lenders and investors, before they approve a loan or make an equity investment in your company. Plans also serve as a means of communicating with potential partners, allies, vendors, employees and even customers. STEP 2: CALCULATING BUDGET Keep the initial cost as low as possible. Know how much you will be able to spend. If you're self funding, be realistic about numbers and whatever you anticipate your budget to be. Keep aside an additional 20 per cent amount reserve so you can survive if things go leaner than expected. Keeping budget in mind, you should also determine how long you can stay in business before you need to turn a profit. One of the most frequent mistake people make is over-estimating revenue and under-estimating expenses. STEP 3: LEGAL DOCUMENTATION When starting a business, it's wise to start as sole proprietorship, as it means less paperwork and up-front expenses. As a sole proprietor, you have full personal tax liability for all the business's profits. The upside is that you can deduct the business's losses on your personal tax return. Filing paperwork to start a business costs money. You'll need to account for city or municipality licensing, state incorporation or business entity fees and more. So, file for a business entity once you've proven in the first three to six months of business that you've got a viable, sustainable model. STEP 4: SEPARATE BUSINESS AND PERSONAL EXPERIENCES It's easy for your personal finances to get tangled up with your business finances. Whatever business entity you decide on, keep the funds separate from your personal accounts. For one thing, doing so will make it much easier to figure out what you can deduct and what you can't at tax time and it will also make it easier to grow how to start business or even sell it. STEP 5: TEST MARKETING Check the market potential of your product or services before throwing all your time and money into an unproven idea. If you have a service-based business, get involved with your local chamber of commerce or small-business chapter immediately and ask what resources are available for you to speak, present or share information about your business. If you have a product-based business, test the viability of your product at local swap meets, farmers markets or other community events to test what the public really thinks
1. Get your business spread in the existing market Getting new customers is not bad. But beer will be to sell more to the existing customers; retain the existing customers. Acquisition of new customers will involve higher promotion out-go. Whereas, selling to existing customers will be cost-effective. Pricing is another aspect which will help your business for sale in penetrating the existing market. Remember that always charging competitive price may not help. Sometimes you need to reduce the weight/quantity of the product (indirect pricing) or offer free gifts. You may even change the packaging.
2. You may seek referrals. During or after every job or sale, ask your satisfied customers if he knows anyone else who would be interested in your products or services. However, this is possible only if your deliverable can delight the customers.
3. Innovate or modify your product Every product or service has some life. It is always suggestible to go for product innovation or modification. This will help in adding new customers also. However, research & development wing should be strong enough to perform this. Just think of transformation of offline business into online business.
4. Extend your market reach. You may start locally but increase the market reach. Many businesses have gone this way and grew tremendously. There are many ways to get it- open stores in new locations, go virtual, acquire other companies, make e-ups, use social media, use website etc.
5. Participate in trade shows and arrange seminars Trade shows can be a great way to grow too. Because trade shows draw people who are already interested in the type of product or service you offer. They can powerfully improve your boom line.
6. Win the niche market Big market customers try to follow the customers of niche market. Once your product or service has got hold in niche market, it will be easy to extend the present big market. Think of branded apparels, use of home appliances, mobile handsets and many more.
7. Reduce the costs. Don't forget that reducing cost directly helps in increasing boom line and thus valuation of business. It is not necessary to cut costs in all the areas. Few areas where it can be done are- reduce wastage, electricity cost admin costs and other indirect costs.
8. Diversify your products or services. Diversification in products and services is interesting way to empower growth. Package the products. Simply think of a burger or pizza is available with sauce and chilli flakes and cold drinks. Or, a restaurant serves meal with pickle and 'papad' and 'chutney'.
9. Franchising. Franchising is good way to grow your business. It may not be possible to directly reach the customers to create brand of your product or services and go for franchising model.
To conclude, there is no open to let your business for sale. The above ways are not exhaustive but there are ways possible to achieve that depending upon the nature of product/services and business model.