How to use the Coronavirus lockdown time effectively

Make the virus work for you.

This is the vacation you always wanted. This is the time, the lack of which you used as an excuse to not execute on the things you should have been doing.

So here it is. Here’s your chance. How you use these 2 weeks(or more) can literally set you up for life. It can help you get back to old hobbies, or discover new ones, or finally get to reading that book. You can use this time to start an online business. There is so much potential, we all have the same time. It all boils down to how you use it.

So here are a few ideas as to what you can do, and what you shouldn’t do.

Don’t binge Netflix

The truth is, most people are going to go through this quarantine period the same old, boring, loser way. Watch a bunch of TV shows or movies they’ve always wanted to watch.

Do not do this. You can watch those later when you need time off from your boring college life. This is the time when you are fully in control of how you feel, use it to your advantage.

Don’t play video games

This is an epidemic I see especially in young boys. They’ve been programmed to sit on their ass and play games on a screen all day.

Accomplishment in a game becomes substitute for accomplishment in real life. This is a real problem. Games give you the feeling of achievement with their elaborate graphics and carefully designed reward systems.

Uninstall all games from your phone and computer. Men are supposed to go out and build things in the real world, don’t let a game convince you otherwise.

Don’t browse social media

The last one was for the boys. This one is for the girls.

“SeXiST”

Research shows that social media has worse effects on women than men. As a woman, it is important to stay off social media in general.

Especially in times like these, when you have more free time than ever. It is highly important to monitor your usage. Do not let that extra free time lead you into falling into the social media trap.

No, you don’t need it to stay updated with coronavirus news. Stop lying to yourself.

Everyone should carefully monitor how much they use social media in these times. Do not slip.

Don’t watch the news

This might seem counter intuitive to some of you. How do you stay informed if you don’t watch the news?

But the news sensationalizes everything. And most news outlets are constantly regurgitating the same nonsense over and over again.

At this point, you should be intelligent enough to understand that the news is not meant to inform you, but only meant to make you opinionated or fearful about the Chinese coronavirus.

You already know what you need to know. Stop actively watching the news.

Read a book

Use this time to your advantage. Read the book you’ve always wanted to read. You have literally no excuse. The average novel takes 5-6 hours to read. You can literally read a book a day.

I’m not suggesting you do that. But you have 8+ hours of free time. The least you can do is read a book a week.

Emerge as a better person after the quarantine ends. Read more.

Do an online course

Same logic. You’ve got all the time you always wanted. This is the time when you prove to yourself that it was really the time that was stopping you.

Most people just used not having time as an excuse. Now you have no excuse. This is the time when the winners will differentiate themselves from the losers.

Do a course. If you’re already doing courses, good. You can use this free time to learn something unconventional, or pursue a hobby instead.

Learn a new skill

On similar lines, learn a new skill. Take out one hour of the day to learn something you’ve always wanted to learn. Make sure this is something new, something you learn from scratch. It will help fire up those beginner, learning neurons in your brain.

Paint, sketch, 3D model, cook, craft, dance.

Workout

Just putting this out there. Take care of your health. All of my audience is young. Statistically speaking, even if you contract the virus, you will be just fine. But that doesn’t mean you should let go of your diet and health in this season.

People are running marathons in their bedrooms in China.

Eat healthy, and perform bodyweight workouts at home. Pushups, squats, burpees, surya-namaskars. The basics is all you need.

You can also do yoga, or meditate.

Reflect

Extending from the meditation point, this is a good time to reflect.

It’s just you with you. Lock yourself in a room without your phone. Sit with a pen and paper. Write how you feel. Write down whatever thoughts come in your brain.

Alone time should not be spent distracting yourself every hour with Instagram. Alone time can be used to reflect on your life choices, and make major corrections.

Coronavirus is a hard reset for society in general. We have realized that most things we think are secure, are really not. Use it as a hard reset for your own life as well. Make corrections.

So there it is. I’ve given you multiple ways in which you can utilize your time, and multiple ways in which you should not be wasting your time.

What you do in this time dictates who you are as a person.

“Every action you take is a vote for the type of person you wish to become. No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity.”
_James Clear

Summary

Don’t watch the news. Don’t watch Netflix. Don’t browse Instagram multiple times a day. Don’t play video games.

Read a book. Do a course. Learn a skill. Yoga. Pushups. Reflection.

Stay safe, stay woke, and wash your hands. Come out a better person.


If you found these tips interesting, do implement them!

What is a PAN?

What is pan-PAN is an abbreviation for permanent account number. It is a 10-digit alphanumeric unique identification number that is issued by the Income Tax Department in the form of a laminated card. PAN is mandatory during the filing of an income tax return. PAN is mandatory for all taxpayers.

Individuals and registered business entities are required to have a PAN card. This includes export businesses as well.

The entire process of PAN allotment is handled by NSDL e-Governance Infrastructure Limited (formerly National Securities Depository Limited) and UTI Infrastructure Technology Services Limited (UTIITSL).

General Uses of PAN |What is pan

  • Since PAN contains basic information such as Name, Date of birth and photograph, It can be used as a valid identity document throughout India.
  • PAN card acts as Identity proof.
  • It is helpful to keep track of your tax payments.
  • As the PAN number is very unique for every individual, It’s almost impossible to misuse for the purpose of taxation.
  • Taxpayers need to provide their PAN number while paying their Income tax.
  • In case of Sale or Purchase of Property
  • Any payments made more than Rs. 50,000 towards deposits.
  • PAN is used to avail the basic requirements such as:
  • Opening Bank account
  • Getting Internet and Landline connections
  • In order to remit any money out of India
  • In case of any transfer of funds from NRE to NRO account.
  • In case of any purchase of Mutual Funds.
  • If you are required to take out a loan, you are supposed to provide the details of PAN.
  • If you are making an Insurance payment exceeding Rs. 50,000/- a year, PAN details are required to be furnished.

Conclusion

A permanent account number is a ten-digit alphanumeric number. It is a unique identification number that is issued by the Income Tax Department. A PAN card is mandatory for filing Income Tax Returns.

Difference Between Private Limited Company Vs LLP

While starting up a company one has to decide which business organization they want to incorporate and carry on. The choice of business organization is very important to give shape to your business motive. Here, if one has to choose between the Private limited company registration and LLP one can see the advantages and the difference so as to choose what’s best for them.

Private company are those companies where the all shares of the company are held privately. They can operate their business themselves or hire directors to manage the company on their behalf. It is a business entity which is privately held by some share holders. It limits the owner liability to the extent of their shareholding and limits the no. of shareholders to 50 only. It also restricts shareholders to trade shares publically.

Advantages:

  • The liability of the shareholders is limited to the extent of their shareholding their personal assets are not taken to repay the debts of the company.  Although this has one exception where there is fraud committed in relation to the company it will negate the owner’s liability protection.
  • There is restricted trade of shares, It is an advantage to the shareholders who do not want to sell the shares to the outsiders. So the risk of hostile takeover is low.
  • It has perpetual succession and has an independent identity which is different from its owners or shareholders. It means that the company will still and continue to exist even if the members die or ceases to be a member. The change in shareholders will not bring any effect on the identity of the company. It will be the same with same privileges, immunities, estates and possessions. It will continue to exist till wound up is there according to the Companies Act 2013 or any relevant act.
  • It is a Separate legal entity.  It has its own assets and liability is a legal entity which can be sued or sue or can hold and dispose of property of the company. It is capable of owing the funds and other properties. It is a legal person under whose name the company’s property is vested and is not of the shareholders.
  • There are few shareholders the decisions taken are quick and prompt. They are governed by the Companies Act 2013 and have to follow the procedures and disclosure norms under the act.
  • Income tax act 1961 provides a lower tax burden and rates for the companies compared to other type of business.
  • A company being a legal entity has the power to sue in its name and can be sued by others.

LLP

LLP Registration is limited liability partnership. It is new form of business where both partnership and corporation exists. Here the partnership is with limited liability. It is registered under LLP Act, 2008 and with Ministry of corporate affairs.

Advantages of LLP:

  • LLP can be formed by any amount of capital. There is no need for minimum capital for LLB. It is so set up hassle free and not burdensome on the owners.
  • It requires a minimum of 2 partners and there is no limit on the maximum number of partners of the LLP.
  • The cost of registering LLP is low as compared to a company.
  • All limited companies have to get their accounts audited but in case of LLP hther is no such requirement. Although it is required to audit when the contributions of LLP exceeds Rs. 25 lakh or annual turnover exceeds Rs. 40 lakh.
  • The LLP has to file only two i.e. annual return and statement of accounts and solvency.
  • LLP is treated in par with the partnership firm. The provision of dividend distribution tax is not payable on LLP. Also under Section 40(b) deductions are allowed on the interest given to partners, any payment of salary bonus commission or remuneration.

Problems with LLP:

LLP can be bind by the act of one partner without the other partner i.e. one partner can make all other liable or bind them.

They cannot raise money from public.

Distinction Between a Public Company and a Private Company

DISTINCTION BETWEEN A PUBLIC COMPANY AND A PRIVATE COMPANY

Following are the main points of difference between a Public Company and a Private Company:-

  1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.
  2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires at least 7 members.
  3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.
  4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company

5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.

  1. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have at least 3 directors.
  2. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.
  3. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company
    9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Public Company cannot start its business until a Certificate to commencement of business is issued to it.
  4. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue Share Warrants against its fully paid up shares.
  5. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share – holders in the general meeting of the share – holders only.
  6. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.
  7. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.
  8. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.
  9. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.

BUSINESS SETUP

1. What qualifies as a “Startup” for the purpose of Government schemes?
An entity (Private Limited Company or Registered Partnership Firm or Limited Liability Partnership) shall be considered a “Startup” –
a) Upto 5 years from the date of its incorporation/ registration, and
b) If its turnover for any of the financial years has not exceeded INR 25 crore, and
c) It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

The entity should not have been formed by splitting up or reconstruction of a business already in existence.
A proprietorship or a public limited company is not eligible as startup. A one person company, being a private limited company is entitled to be recognized as a ‘startup’.For additional information, refer notification G.S.R. 180(E) dated February 17, 2016.

2. How does a Startup obtain benefits under various Government schemes including the ones announced in the Action Plan on January 16, 2016?

For availing various benefits (except tax and IPR related benefits i.e. action points #4, #9, #10 and #11 of the Startup India Action Plan), an entity would be required to be recognized as a Startup by applying on Startup India Mobile App/ Portal.
In order to obtain tax and IPR related benefits, a Startup shall be required to be certified as an eligible business from the Inter-Ministerial Board of Certification.

3. For how long would recognition as a “Startup” be valid?

An entity would cease to be a ‘startup’ upon expiry of:
a) 5 years from the date of its incorporation/ registration, OR
b) If its turnover for any of the financial years has exceeded INR 25 crore; OR
Startups would be required to intimate DIPP of any such cases within a period of 21 days.

4. Can an existing entity register itself as a “Startup” on the Startup India Portal and Mobile App?

Yes, an existing entity that meets the criteria as indicated in response to Question 1 can visit the Startup India Portal and Mobile App and get itself recognized for various benefits. The tax benefits proposed under the Finance Bill 2016 will be available from 01-04-2016.

5. What is the timeframe for obtaining certificate of recognition as a “Startup” in case an entity already exists?

The process of registration in such cases shall be real time and the certificate of recognition would be issued immediately upon successful submission of the application.

6. Do you help with Startup India registration?

Yes, we assist with application. The grant of registration depends on the government approval. The registration is not guaranteed.

7. What are your fees to assist in Startup India registration?

Our professional fees is Rs 5000 for application irrespective whether its approved or not.

8. What is government fees for the startup India registration?

There is no fees for the same.

9. Can a foreign subsidiary be registered under Startup India Scheme?

No, a foreign subsidiary cannot registered under startup India scheme. But a company with foreign shareholders and directors can be registered under startup India scheme.

Can convertible notes be issued to Indian Residents or Indian Company?

Convertible notes to Indian residents:

The concept of convertible notes was introduced in June 2016 when , the Ministry of Corporate Affairs (MCA) amended theCompanies (Acceptance of Deposits) Rules, 2014 (Rules) exempting convertible notes from the ambit of deposits, and thereby allowing recognised startups to issue convertible notes in tranches exceeding Rs25 lakhs to prospective investors, without having to comply with the slew of requirements mandated by the Rules.

The Companies Act does not specifically mention that whether it ca be issued to Indian Residents or Not. Going by that we are of the vies that the CN can be issued to Indian Residents.

Compliances when CN are issued to Indian Residents

The objective of convertible notes is to allow startups issue convertible instruments without having to go through a lot of compliances. The procedure to issue convertible notes is simple and does not involve any filing. ( No need to comply with private placement procedures)

The steps are:

  • Convene a board meeting to approve the issue of CN
  • Convene a EOGM to issue offer letter and approve CN agreement (No need to file MGT 14)
  • Issue the CN to the investors.

The advantages of CN are:

  • No private placement compliances required
  • No valuation report required
  • Optionally convertible

Accounting treatment for convertible notes:

Convertible Notes are recognised as debt in the books until they are converted or repaid.

UNION BUDGET – FY 2020 – 21

Finance Minister Nirmala Sitharaman has presented the union budget 2020-2021. She has unveiled reforms that aim at bringing a boost to the Indian Economy with the combination of short term, medium-term and long term measures. 

The Finance Minister has structured the union budget according to the theme ‘ease of living’. There are quite a few initiatives that have been made in the budget to match this theme. The budget revolves around three ideas which are – Aspirational India, Economic development and a caring society. 

Read through details of the Union Budget for the year 2020-21 to get better clarity on the same.

Pros and Cons of a Limited Liability Partnership (LLP) registration versus a Private Limited registration for Indian startups

The selection of a business entity is among the primary lawful choice taken by an Entrepreneur while starting a new business. With the presentation of the Limited Liability Partnership Act and the Companies Act, 2013, more decisions of business entities are currently accessible. In this way, it is vital for the Entrepreneur or Promoter to comprehend the upsides and downsides of every one of the business element and pick the correct one. In this article, we look at those kinds of elements viz.LLP versus Private Limited Company.

  • I) Registration
    •  LLP
      Limited liability partnership will be enlisted with the Ministry of Corporate Affairs under the Limited Liability Partnership Act, 2008.
    •  Private Limited CompanyPrivate Limited company will be registered with the Ministry of Corporate Affairs under the Companies Act, 2013.
  • ii)Name of the Entity
    •  LLP The name given by the founders must be approved by the Registrar of Company. The name proposed for approval should not be similar to existing LLPs and Companies or similar to a brand name or a trademark. The name should be unique and must be easily distinguishable from other LLPs and Companies. The name of the business will end with the words “Limited Liability Partnership” or “LLP”.
    •  Private Limited Company
      The name selection and approval process is similar for private limited company and LLP. The name of the entity will end with the words “Private Limited”.
  • iii) Legal Status of the Entity
    •  LLP
      LLP is a separate legal entity registered under the LLP Act, 2008.The one partner of the LLP not liable for the acts of the other partners done without consent. For example if Sam borrows money in the name of the LLP without the consent or knowledge of Peter who is the partners. Peter will not be liable to the amount due.
    •  Private Limited CompanyPrivate Limited Company is a separate legal entity registered under the Companies Act, 2013. The Directors and Shareholders of a Private Limited Company are not personally liable for the liabilities of the Company.
  • iv)Member(s) Liability
    •  LLP
      Partners have limited liability and are at liable only to the extent of their contribution to the LLP.
    •  Private Limited CompanyInvestors have limited liability and are liable only to the extent of their share capital.
  • v) Minimum Number of Members
    •  LLP At least two people are required to start an LLP.
    •  Private Limited CompanyAt least two people are required to start a Private Limited Company.
  • vi)Maximum Number of Members
    •  LLP
      A LLP can have unlimited number of Partners.
    •  Private Limited CompanyA Private Limited Company can only have a maximum of 200 shareholders.
  • vii)Foreign Ownership
    •  LLP
      Foreign national and foreign companies are permitted to invest into an LLP with prior permission from the RBI and Foreign Investment Promotion Board (FIPB) approval.
    •  Private Limited CompanyForeign national and foreign companies are allowed to invest in a private limited under automatic route and approval route.
  • viii)Transferability
    •  LLP
      Ownership can be transferred.
    •  Private Limited CompanyOwnership can be transferred by way of share transfer.
  • ix)Existence or Survivability
    •  LLPPresence of a LLP isn’t reliant on the Partners.Could be wound up willfully or by an Order of the Company Law Board.
    •  Private Limited CompanyPresence of a Private Limited Company isn’t reliant on the Directors or Shareholders. Could be would up just willfully or by Regulatory Authorities.
  • x)Taxation
    •  LLP
      LLP profits are taxed at 30% plus surcharge and cess as applicable.
      Dividend Distribution Tax (DDT) is not applicable for LLPS
    •  Private Limited CompanyCompanies having turnover less than Rs 250 Cr will be taxes at 25% plus cess and Companies having turnover more than 250 Cr will be taxes at 30% plus cess. DDT is application while distributing dividend.
  • xi) Annual Statutory Meetings
    •  LLP
      No requirements to conduct annual statutory meetings.
    •  Private Limited CompanyPrivate limited company must hold a minimum of 4 Board meetings in a financial year and 1 General Meetings in a financial year.
  • xii) Annual Filings
    •  LLPLLP must form 11, form 8 with MCA every year within the due dates specified under the law.
    •  Private Limited CompanyPrivate Limited Company must record Annual Accounts and Annual Return with the Registrar of Companies every year.
  • xiii) Registration Cost

Basic Legal aspects of a startup in india – Every entrepreneur should know

Before starting a new business, an entrepreneur needs to have the knowledge on various aspects of business. One such segment is the law of the land. Multiple laws can be applicable for a business such as company’s law, shops and commercial establishment, professional tax, provident fund, Goods and Service tax (GST), customs Act etc. Not all of them will be applicable for all business, you need to identify which laws are applicable for your nature of business and ensure that the company complies with them to avoid running into legal problems in the future. Let’s have a look at the legal aspect that govern a start-up business in India.

Choosing the right type of business

The first decision to make is to decide what type of company should you register as. The answer to this can be different depending on the nature of business, the long-term vision and other factors scale and funding requirements. You can choose from ‘partnership firm’‘Limited Liability partnership’‘private Limited’ or ‘one person company’ or even a sole proprietorship. Choosing the most appropriate business vehicle for one’s venture goes a long way in affecting visibility, sustainability, and profitability. So, choosing your brand will depend on long-term goals and vision. Every type of business has a separate set of laws that you have to decide to keep the existing legal frameworks in mind.

State Laws

A business must have a register office address. There are 29 states and 7 union territories in India and if your business is registered in any one of these states, you will also have to follow the state laws which may be applicable to your business. Shops and commercial establishment Act, Employee Professional Tax Act, Stamp act, Labour laws can change from state to state. For example, the stamp duty payment you make to register a partnership firm in Kerala will be different from Karnataka or Tamil Nadu.

Intellectual property law (IP)

Patent, trademark and copyright are of prime importance for your business. Every business is unique and is run by individual who are not thinking the same way or developing the same product. It’s important to protect your brand, patent your invention and copyright your content. It’s critical that you file the right patent/trademark/copyright claims. This will prevent theft.

Tax Laws

You can never run away from taxes, whether you like it or not. So, it’s important to understand what all taxes are applicable to your business and make such payments within the due date. It’s also important to note that certain taxes laws are applicable only which your business crosses a certain turnover, in this case you don’t have to pay when it’s not required. For example, in certain cases, GST is applicable only if the turnover of the company is more than Rs 20 lakhs. Undertaking the law of the land can go a long way saving cost by not paying taxes when not required and by avoiding any penalties by paying on time, when required.

Book Keeping

Maintaining you books of accounts monthly or such intervals can help you analyze the cost associated to each segment and help improve the performance of the company. Financial data at the right time can help make important decision which can increase profitability and reduce cost.

The company will also have to comply with governing bodies such as SEBI, RBI, IRDA, ICAI, ICSI etc depending on whether your business activity is governed by such bodies.

We at IndiaStartup will assist you with all legal aspects of starting your business

Basic requirements to register a LLP in India

1) Minimum partners are required in an LLP, out of which at least one partners must be a resident Indian. Indian Resident means any person who has stayed in India for more than 182 days in the previous calendar year.

2) Foreign Investment should be allowed in that Industry

3) After the LLP is set up and bank account is opened. The foreign investment which comes into India needs to be reported to the Reserve Bank of India (RBI).

Documents Required to register a LLP in India:

If you want to register a wholly owned subsidiary, then we need the holding company’s documents

  • Foreign Company Documents:
    •  The registration certificate of the foreign company
    •  Memorandum and Articles of the foreign company
    •  A board resolution Authorizing the foreign company to invest in India
  • Foreign Director
    •  Passport
    •  Utility Bill
    •  Drivers License
    •  Passport Size photographs for directors (4 each)
  • Indian Resident Director:
    •  Pan copy is mandatory for the Indian Resident
    •  ID Proof – Driver’s License/Passport/Voter’s ID
    •  Address Proof – Bank Statement/Telephone bill
  • Registered Office documents:
    •  Address Proof of place of business (Electricity Bill or Water Bill with full address)
    •  No Objection Letter from property owner of the office

FDI Reporting to Reserve Bank of India:

Every time a foreign company or a foreign individual invests money into India by setting up a business or investing in an existing business, FDI reporting to Foreign Exchange management department or RBI is mandatory.

The foreign company or foreign national investing in the Indian company must transfer the funds in foreign currency to the Indian Bank account. While doing the bank transfer, you will have to select the purpose code as “Investment” or “Equity investment” or anything similar.

Once the funds reach the Indian bank, the bank will issue a Foreign Inward Remittance Certificate (FIRC). With which we have to do the FDI reporting to the RBI

Post Incorporation Licenses:

After the LLP is registered, it may have to get certain licenses deepening on the nature and size of business. Here are the list of licenses which is required if a company is registered in Bangalore, Karnataka

1) Karnataka Shops and commercial establishment – All companies registered must get this license from the department of labour.

2) Professional Tax enrolment – All companies registered must get this license from the department of professional tax.

3) Employee Professional Tax – (required only when salary payable is more than Rs 15,000 per month to employees)

4) Import Export License – (Required if you are importing or exporting)

5) GST registration – (Required if Company is into export of goods or service, turnover is more than Rs 20 lakhs per year)