GST Registration & MSME

GST REGISTRATION

In the GST Regime, businesses whose turnover exceeds Rs. 40 lakhs* (Rs 10 lakhs for NE and hill states) is required to register as a normal taxable person. This process of registration is called GST registration.

For certain businesses, registration under GST is mandatory. If the organization carries on business without registering under GST, it will be an offence under GST and heavy penalties will apply.

GST registration usually takes between 2-6 working days. We’ll help you to register for GST in 3 easy steps.

*CBIC has notified the increase in threshold turnover from Rs 20 lakhs to Rs 40 lakhs. The notification will come into effect from 1st April 2019.

Who Should Register for GST?

  • Individuals registered under the Pre-GST law (i.e., Excise, VAT, Service Tax etc.)
  • Businesses with turnover above the threshold limit of Rs. 40 Lakhs* (Rs. 10 Lakhs for North-Eastern States, J&K, Himachal Pradesh and Uttarakhand)
  • Casual taxable person / Non-Resident taxable person
  • Agents of a supplier & Input service distributor
  • Those paying tax under the reverse charge mechanism
  • Person who supplies via e-commerce aggregator
  • Every e-commerce aggregator
  • Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered taxable person.

PARTNERSHIP FIRM REGISTRATION

Partnership Firm can be registered by at least two person. Partnership Registration in India is governed by the Partnership Act, 1932. Partnership Registration defines as – “ An Agreement between persons who have agreed to share profits of the business carried on by all or any one of them acting for all “.

Main Features of Partnership Firm –

The main features of the partnership form of business Ownership/Organisation in a more orderly manner as follows :

  • More Persons
    As against proprietorship, there should be at least 2 persons subject to a maximum of ten persons for banking business and twenty for non-banking business to form a partnership firm.
  • Profit and Loss Sharing
    There is an agreement among the partners to share the profits and losses incurred in the Partnership business.
  • Contractual Relationship
    A partnership is formed by an agreement oral or written among the partners.
  • Existence of Lawful Business
    A partnership is formed to carry on some lawful business and share its profits and losses. If the purpose is to carry some charitable works, for example – it is not regarded as Partnership.
  • Utmost Good Faith and Honesty
    A Partnership business solely rests on utmost good faith and truth among the partners.
  • Unlimited Liability
    Like Proprietorship, each partner has unlimited liability in the firm. This means that if the assets of the partnership firm fall short to meet the firm obligations (Agreement), the partner’s private assets will also be used for the purpose.
  • Restrictions on Transfer of Share
    No partner can transfer his share to any outside person without seeking the consent of all other partners.
  • Principal-Agent Relationship
    The Partnership firm may be carried on by all partners or any of them acting for all. While dealing with the firm’s transactions, each partner is entitled to represent the firm and other Partners. In this way, a partner is an agent of the firm and of the other Partners.

TYPES OF PARTNERSHIP FIRMS IN INDIA.

  1. Partnership Firm Normal
  2. Partnership Firm registered with the Registrar of Firms.
  3. Limited Liability Partnership Firm.

Partnership Firm Normal
In this type of partnership firm, a normal partnership deed is prepared and it will be notarized from the Lawyer. Partnership deed is not registered with the Registrar of Firms. Low cost and early registration attract clients for this type of partnership registration.

Partnership Firm registered with the Registrar of Firms
In this type of partnership firm, a normal partnership deed is prepared and it will be notarized and partnership deed is also registered with the Registrar of Firms. This partnership firm registration cost is almost equal to Limited Liability Partnership Firm therefore very fewer clients opt for this option.

Limited Liability Partnership (LLP) Firm.
In this type of partnership firm, a normal partnership deed is prepared and it will be notarized and partnership deed is also registered with the Ministry of Corporate Affairs. This is an advanced form of the partnership firm in which Partnership Firm Name approval and all the documents are filed with the Ministry of Corporate Affairs. All the details of LLP are available on MCA Site so anyone can verify the details which ultimately create trust on the LLP.

REGISTRATION OF PARTNERSHIP FIRM WITH THE REGISTRAR OF FIRMS.

Registration of Partnership Firm with the Registration of Firms is not compulsory but it should be registered with the Registrar of Firms soon after its formation. Because an unregistered firm can not appeal outsiders although outsiders can appeal the firm. Partnership deed registration online facility is not available. Partnership deed registration can be done by visiting at the regional Registrar of Firms Office.

PARTNERSHIP FIRM REGISTRATION PROCEDURE

  1. Prepare the Partnership Agreement/Deed.
  2. Get the Partnership Firm Notarized from the Lawyer.
  3. Apply for PAN on the basis of Notarized Partnership Deed.
  4. Open Bank Account of Partnership Firm.
  5. Apply for Partnership Firm Registration to the Registrar of Firms.

Effects of Non – Registration

If a Partnership firm is not registered, then the firms and partners will have to be deprived of the following advantages:-

  1. The firm cannot file a suit against the third party.
  2. No Partner can file a suit against other partners of the firm.
  3. The firm cannot file a suit against any partners.
  4. A partner cannot file a suit to enforce a right arising from the contract or conferred by the Partnership Act against the firm.
  5. Third parties can file a suit against the firm to enforce their rights.

Rights not Affected by Non – Registration

Non – Registration of the Partnership firm does not affect the following:-

  1. The right of the partner to appeal for dissolution of the firm or for accounts of and his share, the dissolved firm.
  2. The rights of the firm or its partners having no place of business in India.
  3. The power of an official assignee to realise the property of an insolvent partner.
  4. Suits arising otherwise than under a contract, for example, a suit against the third party for Infringement of trademarks of the firm.

BENEFITS OF REGISTRATION OF PARTNERSHIP FIRM

Followings are the benefits of partnership firm registration with the Registrar of Firms;

  • Easy Formation
    A partnership is a contractual agreement between the partners to run an enterprise. Hence, it is relatively easy to form. Legal formalities associated with formation are minimal. Through, the registration of a Partnership is desirable, but not obligatory (Agreement).
  • More Capital Available
    We have just seen that sole proprietorship suffers from the limitation of limited funds. Partnership overcomes this problem, to a great extent, because now there is more than one person who provides funds to the enterprise. It also increases the borrowing capacity of the firm. Moreover, the lending institutions also perceive less risk in Granting credit to a partnership because the risk of loss is spread over a number of partners rather than only one.
  • Combined Talent, Judgement and Skill :-
    All the partners are involved in decision making. Usually, partners are pooled from different specialised areas to complement each other.
  • Diffusion of Risk :-
    You have just seen that the entire losses are borne by the sole Proprietor only but in case of a partnership, the losses of the firm are shared by all the partners as per their agreed profit – sharing ratios. Thus, the share of loss in case of each partner will be less than that in case of proprietorship.
  • Flexibility:-
    Like proprietorship, the partnership business is also flexible. The partners can easily appreciate and quickly react to the changing conditions.
  • Tax Advantage :-
    Taxation rates applicable to the partnership are lower than proprietorship and company forms of business ownership.

How to Create a Partnership Deed?

A Partnership deed registration may be written or oral. However, the practically oral agreement does not have any value for tax purposes and therefore the partnership agreement should be written.

The following are the essential characteristics of a Partnership Deed:-

  1. Name & Address of Partners
  2. Name and Address of the Partnership Firm.
  3. Nature of business to be carried on.
  4. Date of Commencement of business.
  5. Duration of Partnership (whether for a fixed period / project).
  6. Capital contribution by each partner.
  7. Profit sharing ratio among the partners.
  8. Rights & Duties of the Partners.
  9. Salary and other Remuneration payable to Partners.

List of Documents Required for Partnership Firm Registration :

Partners Documents/Information

  1. Photo
  2. PAN
  3. Aadhar Card
  4. Mobile No & Email Id

Registered Office Documents

  1. Latest Electricity Bill
  2. Rent Agreement, If any

Other Information

  1. Name of Partnership Firm.
  2. Capital of Partnership Firm.
  3. Profit & Loss Sharing Ratio of Partners.
  4. List of Business Activities.
  5. Terms & Conditions related to Salary to partners and Interest on their capital

MSME (Udyog Aadhaar)

The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is Nitin Gadkari and the Minister of State is Pratap Chandra Sarangi since 31 May 2019.