Happy Diwali To All

Hope the festival of lights brings your way bright sparkles of peace, contentment, joy, and happiness which stays with you throughout this year and also in the years to come. May the lamp of joy remain illuminated in your life now and forever. Wishing you all a joyous Diwali!

The word Diwali (or Deepavali as it’s sometimes called) means “row of lights

Diwali takes place annually and lasts for five days. During this festival, people decorate their homes with lights and oil lamps, called diyas. Diwali honours the Hindu goddess of wealth, Lakshmi. Hindus celebrate the return of the deities (gods) Rama and Sita to the city of Ayodhya, after defeating the evil king Ravana!

 Diwali is a time to have fun with friends and family! People exchange gifts and sweets, enjoy delicious feasts, watch firework displays and wear new clothes. It’s a time to clean and decorate your home, too.

During the festival, small earthenware lamps filled with oil are lit and placed in rows along the parapets of temples and houses and set adrift on rivers and streams. The fourth day—the main Diwali festival day and the beginning of the lunar month of Karttika—marks the beginning of the new year according to the Vikrama calendar. Merchants perform religious ceremonies and open new account books. It is generally a time for visiting, exchanging gifts, cleaning and decorating houses, feasting, setting off fireworks displays, and wearing new clothes. Gambling is encouraged during this season as a way of ensuring good luck for the coming year .

Steps to Open liquor Shop: Liquor Laws, Renewal, Revoking

What Is Liquor License?

A Liquor license is a permit given by the state excise department to those who want to sell alcoholic beverages at a certain place. Each state government has laid down certain rules and regulations for the licenses which should be followed by every person who wants to sell hard drinks, beer or wine. This license is issued only after close inspection and examination of all the details of the License holder. Selling liquor without a license is an illegal act and it is an offence under various state laws.

Types Of Liquor Licenses

  1. Beer and wine liquor license – License for those who want to sell only beer and wine to the customers. They are not allowed to sell liquor or distilled spirits. These types of licenses are given to small restaurants.
  2. Restaurant liquor License – License for those who want to sell beer, wine and liquor in their restaurant premises to their customers. It is also called “all-liquor license”. These licenses are given to those restaurants whose business mainly depends upon selling of food items and only certain percentage of their sales comes from alcohol.
  3. Tavern liquor license – License for those who want to sell beer, wine and liquor and their half of the business comes from selling alcohol and half from selling of food items. This license is operative in some states and in some states; no such separate license exists as it totally depends upon the govt. ruling that state as well as their local regulations. State govt. may ask you to apply for this license, if you are serving food items and half of your sales are from selling alcohol.
  4. Brewpub Liquor license – License for those who make their own beer and wine. In some states you need a separate license for it to serve it to the customers.

Liquor Laws In India

  1. A person having the age of 21 years or above only can obtain the liquor license in India. Age for obtaining liquor license differs from state to state. For Ex – In Delhi, the age of obtaining liquor license is 25 years. The process of obtaining liquor license takes time and it is challenging as well.
  2. The subject of “alcohol” is included in the state list under the seventh schedule of the constitution of India. Therefore, the law which governs the sale and consumption of alcohol differ from state to state.
  3. Under Article 47, the constitution of India clearly gives direction to the states to improve public health and prohibits the intoxicated drinks and drugs which are injurious to health.
  4. Liquor is banned in some states such as Gujarat, Bihar, Manipur, Nagaland and the union territory of Lakshadweep. Sale, purchase and consumption of alcohol in these states is a punishable offence.

Why Liquor License Required?

  1. Manufacturing, selling and distributing intoxicating liquor without a state license is an illegal act and it is an offence under various state laws.
  2. Alcohol has been consumed by every class of society whether it is rich, middle or a poor class. Peoples are influenced by easy availability and weak implementation of laws. To control that, state govt. imposed some rules and regulations on liquor licenses. Before issuing liquor license to any person, there should be a proper check on the details of the person applying for liquor license. Proper inspection leads to reduction in the wrongful sale of liquor licenses.
  3. There is a need of strong rules & regulations to maintain the health, peace & order in the country. Therefore, Liquor license is necessary.

Renewal Of Liquor License

If you want to maintain your Liquor license, you have to renew your license yearly by paying a certain amount of fees. You may get reduction in the renewal fees if you will maintain a good position in your area throughout the year.

Revoking Of Liquor License

Your license can be revoked if you will not follow the rules & regulations of the state excise authority.

License can be revoked –

  1. If you will sell alcohol on dry days
  2. If you will sell alcohol to minors
  3. If you will not follow the rules and regulations of the state authority.

Types Of Bar to Start as a Business

There are six categories of the Bar:

  1. Lounge
  2. Tapas Bar
  3. Pub
  4. Sports Bar
  5. Night Club
  6. Concept Bar

Moa and Aoa Certificate

A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders. The MOA is accessible to the public and describes the company’s name, physical address of registered office, names of shareholders and the distribution of shares.

The MOA and the Articles of Association serve as the constitution of the company. The MOA is not applied in the U.S. but is a legal requirement for limited liability companies in European countries including the United Kingdom, France and Netherlands, as well as some Commonwealth nations.

Content of MOA

  • Name of the Company
  • Address of the Registered Office
  • Objectives of the Company
  • Liability of Shareholders
  • Authorized Share Capital
  • Association and Formation of a Company

Articles of Association (AOA) describes the rules and regulations for the internal management of the company.

Articles of Association has to be carefully drafted at the time of Company Registration considering the The provisions of the articles are binding on the members as well as the company. The AOA should always be in harmony with the MOA of the company, meaning which the Articles cannot prescribe rules, which is beyond the powers mentioned in the Memorandum.

Articles of Association generally prescribes the relation between shareholders and Board of Directors, relation among shareholders and Directors themselves.

Content of AOA

  • Interpretation
  • Private Company
  • Share Capital and Variation Of Rights
  • Preference Shares
  • Alteration to Memorandum
  • Control of Shares
  • Shares held Jointly
  • Increase of Capital
  • Lien on Shares
  • Calls on Shares And Transfer Of Shares
  • Transmission of Shares
  • Forfeiture of Shares
  • Alteration of Capital
  • Capitalisation of Profits
  • Buy-Back of Shares
  • Issue of Shares In Kind
  • General Meetings
  • Proceedings at General Meetings
  • Voting Rights and Proxy
  • Directors
  • Proceedings of The Board
  • Chief Executive Officer, Manager, Company Secretary or Chief Financial Officer.
  • Common Seal
  • Borrowing Powers
  • Operation of Bank Accounts
  • Dividends and Reserve
  • Accounts
  • Audit
  • Winding Up
  • Secrecy
  • Indemnity
  • Execution Clause

THE CERTIFICATE OF INCORPORATION

A certificate of Incorporation is a legal document that shows you are formed and registered your limited company with Companies House. This is in line with the Companies Act 2006. In essence, it is your company’s  birth Certificate.

MoA and AoA are charter document for a Private Limited Company. MoA stands for Memorandum of Association of company and AoA is abbreviated form of Articles of Association.

Memorandum of Association of Company prescribes the scope of operations of company by enumerating the main object and activities of the company. Whereas the Articles of Association provides in what manner the operations and administration shall be carried on. Both documents having vital importance shall be drafted very carefully after consultation of Professional.

The memorandum and Articles of the company shall also be filed in forms along with application for company formation and registration in India. The subscription to MoA and AoA shall be made by affixing DSCs of subscribers in electronic form.

Documents needed for the Certificate of Incorporation-

  • Utility Bill and NOC from the owner for the Registered Office address of the Company;
  • Rental Agreement with the owner of registered office & Rent receipts, if premises is rented;
  • Consent to act as a Director of the company in form DIR – 2;
  • Affidavit and declaration by first subscriber(s) and director(s) in form INC – 9 (duly franked and notarized);
  • Certified True copy of the self-attested Identity proof of the first subscriber(s) and director(s).

The application is submitted by paying the requisite Government Fess and Stamp Duty as applicable in case of concerned state on the portal. The application and allotment of PAN and TAN are also processed with the same application.

On review and verification of the application made for certificate of incorporation in forms, the Registrar on his satisfaction may issue the Certificate of Incorporation under his seal and signature in electronic form. The Certificate of Incorporation issued will include the date of incorporation as well as the Permanent Account Number (PAN) of the company.

Complete Guide to Company Registration

Building a setup is a risky but a satisfactory step towards the future. The entrepreneurs, willing to focus on launch and set-up business, search to start business without any hassle concerning the legal procedure for incorporation of company. Here is the step by step guide to register your company. Three are four step in it.

  • Digital signature certificate-The first and foremost step is to procure the DSCs of the Personnel involved in Private Company Incorporation in India. The requirement of DSSCs arises for filling of e-forms on online portal of MCA as the Ministry has prescribed provided for online registration procedure for company incorporation and other applications.

 Digital Signature Certificate, commonly known as DSC are issued by the Certifying Authority in token form and is valid for 1 or 2 years.

  • Director identification number-Director Identification Number (DIN) is a unique number assigned by Ministry of Corporate Affairs to the individual making an application for allotment of DIN. The number is allotted for lifetime by the Ministry unless it is surrendered or withdrawn.
  • Copyright of Name-Before making an application to incorporate and register Pvt Ltd Company in India, the name for the proposed company shall be reserved. An Application for Reservation of Name of Private Limited Company shall be made in e-Form INC – 1 by making payment of requisite fees.

 In one application you may provide maximum 6 names in preferential order along with the significance for application for proposed name(s). The appointed professional shall make a search for availability of name before filling the application so that the applicant can make application of the names accordingly. The Registrar enjoys 100% discretion for approval of name application.

  • Certificate of incorporation-After reservation of the name for proposed company by submitting form INC – 1, the application for issuance of Certificate of Incorporation shall be made.

You can contact Himanshu Negi & Associates for company Registration

Xbrl Conversion Of The Documents

XBRL (eXtensible Business Reporting Language) is a freely available and global framework for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting.  One use of XBRL is to define and exchange financial information, such as a financial statement.

Need of XBRL conversion-

Companies have the option to create their own XBRL documents in house or to engage a third party to convert their financial statements into XBRL form.

The first step in creation of an instance document is to do tagging of the XBRL taxonomy elements with the various accounting heads in the books of accounts of the company. This would create the mapping of the taxonomy elements with the accounting heads so that the accounting information can be converted into XBRL form.

Mapping is the process of comparing the concepts in the financial statements to the elements in the published taxonomy, assigning a taxonomy element to each financial statement concept.

Selecting the appropriate elements for some financial statement elements may require a significant amount of judgment. For that reason those in the company who are most familiar with the financial statements should be involved in matching financial statements concepts to taxonomy elements. The mapping should be reviewed before proceeding further as the complete reporting would be dependent on the mapping.

For tagging or capturing the information which is often included in brackets in the labels by the company, it can either be captured as footnote or if detailed tags are available, the same should be tagged with the detailed tags.

In case any information is present in the financial statements for which corresponding tag/element is not available in the taxonomy, then the same needs to be captured in the next best fit element in the taxonomy or should be included under the corresponding ‘Others’ element. Further, it is imperative to include footnote w.r.t. same while preparing the instance document. Source- MCA .

You can contact us on our website for XBRL Conversion and Registration related queries.

All you Need to know about NBFC

Nidhi’s are companies registered under section 620A of the Companies Act, 1956(Section 406 of the new Companies Bill 2012, as passed by Lok Sabha) and is regulated by Ministry of Corporate Affairs (MCA).

Even though Nidhis are regulated by the provisions of the Companies Act, 1956, they are exempted from certain provisions of the Act, as applicable to other companies, due to limiting their operations within members. The detailed rules of operation for Nidhi companies have been put in place with effect from 1 April 2014 vide notification dated 31 March 2014.

Nidhi Company works through its members. It can accept deposits and lends loans to its members only. Nidhi is the safest and the cheapest way of raising funds from the General public (just by registering them as members.

 Nidhis come under one class of NBFCs, RBI is empowered to issue directions to them in matters relating to their deposit acceptance activities.

However, in recognition of the fact that these Nidhis deal with their shareholder-members only,RBI has exempted the notified Nidhis from the core provisions of the RBI Act and other directions applicable to NBFCs. As on date (February 2013) RBI does not have any specified regulatory framework for Nidhis.

Some types of NBFCs-

  • Mutual benefit financial company (MBFC)
  • Mutual benefit company (MBC)- A company which is working on the lines of a Nidhi company but has not yet been so declared by the Central Government; has minimum net owned fund(NOF) of Rs.10 lakh, has applied to the RBI for certificate of registration and also to Department of Company Affairs (DCA) for being notified as Nidhi company and has not contravened directions/ regulations of RBI/DCA.
  • Miscellaneous non-banking company (MNBC), i.e. chit fund company.

You can contact us on our website for more queries.

What is GSTIN and How to get it

It is a 15 digit Number. All the business entities registering under GST will be provided a unique identification number known as GSTIN or GST Identification Number. So far, for any dealer registered under state VAT law, a unique TIN number is issued by the respective state tax authorities.

All the business entities registering under GST will be provided a unique identification number known as GSTIN or GST Identification Number.

Formate of GSTIN-

  1. First two digits of GSTIN is your state code.
  2. The next 10 digits denotes the PAN or Permanent Account Number of business entity/proprietor
  3. 13th digit is based on the number of registrations done by the business entity within a state
  4. 14th digit is “Z” by default
  5. The last digit is the check code, this can be a number or an alphabet
  6. How to apply for GSTIN

How to apply for GSTIN

1. Log on to that GST online portal

2. Go to ‘Register Now’ and fill in Part A of the application with your name, e-mail ID and mobile number

3. The portal will verify your details by sending an OTP to your mobile and email

4. Once the verification process is completed, you will receive the Application Reference Number (ARN) via mobile or email

5. Now you can fill Part B of the application using the ARN. The documents you will require in this step include:

  • Photographs
  • Constitution of taxpayer
  • Proof(s) of place of business
  • Bank account details
  • Authorisation form

6. Fill in all the information and upload all the documents that are required in the application and submit the application using DSC or Aadhaar OTP

The GST officer will verify your application within 3 working days. The officer will either approve your application, in which case you will receive your Certificate of Registration (Form GST REG 06), or the officer will ask for more information using the Form GST-REG-03.

Step By Step Guide To Acquire Bar License

Getting a liquor license can be a long and challenging process. Each state, county and town will have different requirements and licensing procedures for obtaining a permit to sell alcohol. Here is the step by step guide which will help you to get the bar license

  • Know the liquor license laws of your state each state has an Alcoholic Beverage Control (ABC) agency that regulates the sale and distribution of liquor, so you also contact your local ABC office for more information.
  • To know the type of your license liquor license is divided into three types so its very necessary to know the type which license you need the basic type of liquor license are Tavern license, Beer and wine, Restaurant.
  • After knowing the need of your license you have to write an application for the respected type of license.

 As part of your application, you will need to write a clear description of the type of business you will be running. You should include information on whether you intend to sell alcohol for consumption on the premises and on the percentage of your total income you expect to come from the sale of alcohol.

  • After writing the application You can acquire the necessary forms from your local council or related agency and the Alcohol and Tobacco Tax and Trade Bureau. In some states you will need to submit an application to both the state and your local town or county.
  • After you submit your application, a notice will be posted at the proposed location of your business, including your name, the type of license you are applying for and what selling privileges the proposed license would entitle you to.
  • You will need to renew your liquor license on a yearly basis, which will involve paying a renewal fee.

So this is the step by step guide how you can get a bar license or liquor license for your bar or to get the license and register your business you can contact us on Himanshu Negi & Associates.

Number Of Licenses Required To Open a Restaurant Final

We are in the final part of our restaurant registration series Number Of Licenses Required To Open a Restaurant .Where we will discuss about all the remaining required licenses. To open a restaurant one need number of licenses to register it as we have already discussed about some of them the last ones are here-

  • Certificate Of Environmental Clearance- The Certificate of Environmental Clearance Rules, 2001 is a piece of legislation generated from the Environmental Management Act Chapter 35:05. The’Rules’ guides the assessment of small and large-scale developmental projects which may have both positive and negative environmental effects.

Acquiring the certificate also involves screening, scoping and evaluation of the project to examine its impact on the environment. You will have to submit some documents to obtain CEC along with the application, and they are, The Environmental Impact Assessment Report (EIA) or the Environment Management Plan (EMP), details of a public hearing and NOC granted by state regulators.

  • Shop And Establishment Act- you have to submit the application form with needed documents mentioning the name of the shop, the postal address of the establishment and the proof of ownership such as the Rent Agreement or Shop Lease Papers to the Local Chief Inspector of the shop or other Inspectors.

Once the government officials verify all the documents, he registers the restaurant in the Register of Establishment and issues a registration certificate. This certificate must be explicitly displayed at your restaurant and must always be renewed before its expiration.

You would roughly obtain this license within 7-10 working days. If you wish to change any information, you must inform the Inspector within 15 days so that he could then make the changes in the register of the establishment and issue a fresh registration certificate.  It is also mandatory to inform the local inspector regarding the closure of the business within 15 working days 

So these are the all type of license needed to open a restaurants in India. You can contact us via our website Himanshu Negi & Associates for more updates and registration related queries.