Frequently Asked Questions (FAQ)
The process of submitting statutory returns over the Internet, using IT enabled mechanism that has been pre-approved by the relevant authority.
- Ministry of Company Affairs
- Income Tax Department
- Director General Foreign Trade
- Central Board of Excise and Custom
- Controller General of Patents, Designs and Trademarks
- Copyright Office, Government of India
- TDS Central Processing Cell
- Indian Chemical Council
Secretarial Standards are integrated, harmonised and standardized practices so as to promote uniformity and consistency.
Following are Secretarial Standards in India
- Meetings of the Board of Directors (SS-1)
- General Meetings (SS-2)
- Dividend (SS-3)
- Registers and Records (SS-4)
- Minutes (SS-5)
- Transmission of Shares and Debentures (SS-6)
- Passing Resolutions by Circulation (SS-7)
- Affixing of Common Seal (SS-8)
- Forfeiture of Shares (SS-9)
- Board's Report (SS-10)
Secretarial Audit is a mechanism to monitor compliance of provisions, processes and procedures envisaged under various statutes.
Corporate Governance refers to a set of systems, processes and principles to ensure that a company is governed in the best interest of all stakeholders and it comprises of
- Adequate disclosures and effective decision making to achieve corporate objectives
- Transparency in business transactions
- Statutory and legal compliances
- Protection of shareholder interests
- Commitment to values and ethical conduct of business
Corporate Restructuring is a comprehensive process to consolidate, rearrange and strengthen an organization with respect to its set-up and business operations so as to achieve its Vision, Mission and Objectives with in the Generic Environment.
The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India.
The Foreign Investment Promotion Board (FIPB) is a single window national agency of Government of India to consider and recommend foreign direct investment (FDI) which does not come under the automatic route.
MCA21 Mission Mode Project (MCA21) is the e-governance initiative from the Ministry of Corporate Affairs, Government of India forming part of National e-Governance Plan of Government of India.
Competition Commission of India is a body of the Government of India responsible for enforcing The Competition Act, 2002 throughout India to prevent activities that have an adverse effect on competition in India.
The Company Law Board is an independent quasi-judicial body in India which has powers to overlook the behaviour of companies within the Company Law. The Company Law Board will be succeeded over by the National Company Law Tribunal, which will govern all companies under the Companies Act, 2013.
The Copyright Board is a quasi-judicial body with its jurisdiction extending to the whole of India. The Board is entrusted with the task of adjudication of disputes pertaining to copyright registration, assignment of copyright, grant of Licenses in respect of works withheld from public, unpublished Indian works, production and publication of translations and works for certain specified purposes.
The Telecom Regulatory Authority of India (TRAI) is established by Government of India to regulate telecom services and tariffs.
Cyber Appellate Tribunal has been established by Government of India, under the Information Technology Act.
The National Green Tribunal is established under the National Green Tribunal Act 2010 for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation for damages to persons and property and for matters connected therewith or incidental thereto.
Intellectual Property Appellant Board is established by Government of India to exercise jurisdiction over Trademarks, Patents and Geographical Indications as on date. It is the only tribunal in India which has a global impact.
The Income Tax Appellate Tribunal is not a Court but is a Tribunal exercising the judicial powers of the State in dealing with the appeals under the Income Tax Laws of India.
Insurance Regulatory and Development Authority of India (IRDA) is an autonomous apex statutory body of Government of India which regulates and develops the insurance industry in India.
Succession planning is a strategic process for Organization Development with the potential to fill Key Business Leadership Positions in the Organization, through a systematic evaluation process and training so as to match up to the occasion of Leadership Contingency.
Risk reward ratio is calculated mathematically by dividing the amount a stock trader stands to lose if the price moves in the unexpected direction (i.e. the risk) by the amount of profit the stock trader expects to have made when the position is closed (i.e. the reward).
A professional employer organization (PEO) is a firm which has outsourced Human Resource Administration, viz; employee management tasks, such as employee benefits, payroll and workers' compensation, recruiting, risk/safety management, and training and development so as to concentrate on growing its business.
Joint Venture is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task / project. In a joint venture (JV), each of the participants is responsible for profits, losses, costs and outcome associated with JV.
An independent contractor agreement should contain the following terms and conditions:-
- a description of the services to be performed by the contractor
- the amount to be paid to the contractor and when they will be paid
- a work made for hire provision
- a confidentiality or nondisclosure provision.
It is a contract that is legal and binding between the franchisor and the franchisee. The expectation of the franchisor from the franchisee for running a business is well knit and framed in the agreement.
A mentor is a person in a company who has enriching experience and imparts training and counseling to new employees. He advises as well as helps less experienced persons over a period of time to develop the best potential.
It is a form of arrangement in the shape of a contract in which leasing company is the official employer. Under this arrangement, a firm leases the services of its employees to another company.
It is a theory which assumes that all people have problem solving potential and they are creative. All people differ in their cognitive style as regards their creativity, problem solving and decision making.
It is a complete and detailed list of goods and material in stock. It contains an itemized listing of tangible goods or property.
- Find out how long the business has been on the market and why the owner wants to sell.
- Spend some time in the business to see if cash receipts actually match what is reported on the seller’s books.
- Make sure that any important contracts necessary to run the business (such as an office lease or an exclusive agreement with a key customer) do not expire or terminate once the business changes hands
Hitting the Wall is a feeling of despair during entrepreneurial career due to liquidity crisis or resource mismatching, which is required to be overcome by using the scientific tools of management.
Locks and Keys are few tips for protecting your business from theft and fraud, such as:
- Limit access to valuable equipment, inventory and checks. Look up everything you can
- Segregate responsibilities with the accounting department so that no one person controls all the financial functions.
- Make sure employees use their allotted vacation time .Most embezzlement plots are uncovered during the employee’s absence because these schemes require the perpetrator to cover their tracks at all times.
To be registered with Registrar of LLP under LLP Act 2008
Name should contain 'Limited Liability Partnership' or 'LLP' as last words
- Legal entity
LLP is a separate legal entity registered under LLP Act
- Formation Cost
The cost of Formation is lesser that of formation of Company.
- Formation by Foreign Nationals
Foreign Nationals alone can not form aLLP.
- Minimum Number of Members
Minimum 2 partners
- Management Team
Minimum 2 Designated partners
Designated Partners are responsible for day to day operations and statutory compliances
- Remuneration to Managerial Personnel
Remuneration to partners will be determined on LLP Agreement
- Liability of Partners / Members
Limited to the extent of contribution towards LLP
- Capital Contribution
Determined by partners as per the LLPagreement.
- Tax Liability
Income of Partnership is Taxed at a Flat rate of 30% Plus surcharge as applicable.
- Transfer of ownership Rights
Ownership transfer is governed by theLLP Agreement.
- Statutory Meetings
There is no requirement to hold any meeting
- Maintenance of Statutory Records / Minutes Book
Required to maintain books of accounts.
- Annual Filing
Annual Statement of accounts and Solvency & Annual Return needs to be filed every year.
- Agreements / Contracts with Partners/Director
Partners are free to enter into any contract with LLP
LLP enjoys higher reputation compared to Partnership as it is registered and regulated by LLP Act
Voluntary or by order of National Company Law Tribunal.
- Financial Information
- Product information
- Customer Information
- Information of management
- Market, Sales, Distribution, Competition and Legal matters as well.
When a company helps in the development of other new and startup companies by providing them management training or official space, it is referred to as business incubator.
- Complete Understanding of the company, not only your role or job profile
- Take on management opportunities even if they are small
- Think strategically and solve the problems
- Inculcate the intangible qualities of a leader with vision and responsibility at large.
- Identify and examine the causes of the deficiencies in the system as well as their impact.
- Apply techniques and problem solving strategies
- Consider conducting quarterly, rather than annual, reviews of your employees
- Promote self-appraisal of employees and key resources
- Comment on good side of people before pointing out the deficiencies
‘Secretarial Audit’ is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc. It is a mechanism to monitor compliance with the requirements of stated laws and processes. Periodically examination of work is necessary to point out errors & mistakes and to make a robust compliance mechanism system in an organization.
Every company needs to comply hundreds of Laws, rules, regulations. These laws are complex and non-compliances would attract major risk to company. Periodically inspecting the records of company gives exact information whether, and if so, to what extent Company has complied with the laws applicable to the Company.
Secretarial Audit gives comfort to the regulators, stakeholders and management that company has disciplined approach to evaluate and improve effectiveness of risk management, control, and governance processes
As per section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, following companies are required to obtain ‘Secretarial Audit Report’ form independent practicing company secretary;
(1) Every listed company
(2) Every public company having a paid-up share capital of Fifty Crore rupees or more; or
(3) (b) Every public company having a turnover of Two Hundred Fifty Crore rupees or more.
• “Turnover” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year. [Section 2(91)]
Secretarial Audit is also mandatory to a private company which is a subsidiary of a public company, and which falls under the prescribed class of companies
WHO CAN BE APPOINTED AS SECRETARIAL AUDITOR?
Only a member of the Institute of Company Secretaries of India holding certificate of practice (company secretary in practice) can conduct Secretarial Audit and furnish the Secretarial Audit Report to the Company.
PROFESSIONAL RESPONSIBILITY AND PENALTY FOR INCORRECT AUDIT REPORT
• Section 448 of Companies Act, 2013 deals with penalty for false statements. the section provides that if in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement,
• (a) Which is false in any material particulars, knowing it to be false; or
• (b) Which omits any material fact, knowing it to be material,
• he shall be liable under section 447.
• Section 447 deals with punishment for fraud which provides that any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud. In case, the fraud in question involves public interest, the term of imprisonment shall not be less than three years.
• In terms of Section 448, a Company Secretary in Practice is liable to attract penal provision if, he makes statement in the Secretarial Audit Report which is false is any material particulars, knowing it be false or omits any material fact knowing it to be material.
• Besides, the Company Secretary in Practice shall be liable for professional or other misconduct mentioned in First or Second Schedule or in both the Schedules to the Company Secretaries Act, 1980 and where held guilty, be liable for the following actions:
• (i) where found guilty of professional or other misconduct mentioned in the First Schedule:
• (a) reprimand;
• (b) removal of name from the register of members upto a period of three months;
• (c) fine which may extend to one lakh rupees.
• (ii) where found guilty of professional or other misconduct mentioned in the Second Schedule:
• (a) reprimand;
• (b) removal of name from the register of members permanently or such period as may be thought fit by the Disciplinary Committee;
• (c) fine which may extend to five lakh rupees.