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Know-How Consulting Services Help in the Growth of Start-ups
Startups are small businesses seeking a strong place in the product market. They operate in uncertainty and have limited resources at their disposal. It is a challenging situation for them, so unbiased feedback is necessary. Startup consultancies offer you such services for business growth. You can hire consultants for startup companies in Kolkata for reliable outcomes.
Startup consultants support new business ventures and provide expert advice. This significantly improves their chance of success. They help in saving time and reducing budgetary requirements. You can avoid costly mistakes after taking their suggestions. Consultants also help these new ventures in managing legal aspects. This is how they offer assistance to the entrepreneurs and their ventures.
Types of Services
From the consultant, every startup owner can expect the following services-
- Strategizing and Planning
- Formation of Legal Business
- Business Structure Development
- Vendor Selection
Benefits of Hiring Startup Consultancy Services
- Feedback
Startups usually work with a lot of talent, knowledge, and experience. However, they remain unprepared for other uncertainties. Hence, receiving honest feedback is imperative. The consultants will provide you much the needed outlook on the core practices. They also give feedback regarding the organization, its execution, and other details.
2. Roadmap Creation
The consultants help in the strategic planning, analysis, and statistics. Strategizing is the key to business success. It lets you create a good roadmap for the business, ensuring the objectives are ideal. Most startups fail to have a concrete plan at hand. Hence it ends up becoming a major business hurdle. The consultant will help you chalk out an effective plan keeping the company goals in mind.
3. Management Advice
The consultants will help you through every stage of the business – from initiation to vision creation. They will prepare excel sheets and PowerPoint presentations for advising the management. This service is crucial to ensure that people running the startup do not lack managerial experience. If the management team is strong, the business will operate in the right direction. You can take the consultant’s help regarding finances, marketing, strategy, and development. As a client, you can gather insights and clarity regarding the work.
4. Market Research
The consultant will research the market and suggest the best segment to grow. Effective market research is necessary for growth, exposure, and enhancement. The consultant will gather vital data related to your competitors, consumers, other trends, and attributes. They will constantly analyze the market dynamics and alert for changes across different sectors. Accordingly, they advise suitable changes as well.
Startup business consultants will help your company strengthen its market presence, reputation, and revenue. They do a comprehensive analysis and suggest tactics vital for business growth. They also help solve the crisis which looms large in the business. This way, the company can progress toward a steady recovery.
A Complete Overview of Insolvency Professional Services
Insolvency professionals deal with the resolution process of any entity/person. This should be covered under the IBC code – insolvency and bankruptcy code. Besides, they should be registered under the IBBI or Insolvency and Bankruptcy Board of India.
You can consult the insolvency professional’s service in Kolkata for best-in-class assistance.
Who are Insolvency Professionals?
The insolvency professionals help individuals come out of debt. The Interim Resolution Professionals are part of the corporate insolvency procedure of any corporate debtor. The liquidator handles the liquidation process of the corporate debtors. The bankruptcy trustee is involved with the bankruptcy process of the firm or the person.
Insolvency accountants help individuals and companies under financial burden. They work with the company director’s and debtors, give them advice on insolvency processes. This is how they help them maximize returns for creditors and stakeholders.
The Insolvency professionals play other roles like supervisor, administrator, nominee etc.
What do Insolvency Professionals deal with?
The primary duty of the professionals is to assess the financial position of the individual, firm, and partnership. In most instances, they attempt to save the business. Besides, they perform other functions like –
- Analyze the financial position of the client in the market.
- Understand the firm’s receivable position and handle the entire financial process.
- Take the competing interests into account
- Do formal discussion with the creditors/debtors
- Handle the organization’s settlement process
- Make detailed preparations before selling assets after liquidating the firm or individual.
Get involved in the procedure of fund distribution after keeping aside liquidation costs.
A few other roles form a crucial aspect of this job. It involves preparing and providing the National Company Law tribunal with reports. The following steps are taken in this regard –
- For liquidation plan, the submit a report within 75 days to start the process. A core duty of the professionals is taking the approach forward.
- Handle details of the asset memorandum.
- Check details on the performance of the liquidation process after regular intervals.
- Assess the ins and outs of the assets sale.
- Discuss with debtors and creditors till both parties settle.
- Prepare the final report before the firm’s dissolution.
How much do Insolvency Professionals charge?
The prices charged by insolvency professionals vary from one firm to another. It depends on the amount of work and the time they devote to the case. They also deduct costs based on the amount available to creditors. The creditors decide how much shares the insolvency experts will get. They evaluate it after supervising the entire process.
Get in touch with the experts at S.M Gupta & Co. We work with a team of experienced insolvency professionals who deal with business financial matters. Visit the website to know more.
What are the Roles and Responsibilities of a Chartered Accountant?
The career of chartered accountancy is one of the most preferred In our country. Becoming a successful CA is tough; however, it is not impossible. It needs 4.5 years of dedicated studying and training in this course. The roles and responsibilities are huge, but every task requires expertise. If you are looking to hire professionals for your business, you should go for the best chartered accountant in Kolkata. They are trained to work for individual as well as corporate clients.
What does a CA Professional do?
Audit and Accountancy
Accountancy is one of the main streams of work for CA experts. They perform this prominent function with high levels of knowledge and capability. Their role involves bookkeeping, doing complex financial scrutiny, writing up the accounts, making financial statements etc. Chartered accountants act as auditors with the potential to assess the business’s financial condition. They handle all risks and identify scopes of improvement. Auditing also entails reviewing business financial data, checking document validation etc.
Taxation
Determine the Firm’s Financial Status
Taxation is another important task performed by CA experts. They furnish returns, manage different kinds of tax assessments etc. They are also responsible for assessing the financial liabilities on behalf of the business. The CA provide general advice to the owners/clients dealing with taxation issues. They seal the cost of production that is involved in a project. Besides, they guide you with cost management, cost control, price setting etc.
CA professionals examine the financial documents of the company and determine its financial status. They conduct a thorough analysis to conclude if the business is going through gains or losses. You can seek essential guidance from them related to market risk management. This way, the companies can improve service efficiency and increase their profits.
Strategic Advisor
When you hire chartered accountants for your business, they will assist you with effective corporate strategies. As a business leader, you can gather advice about cutting costs and making the business financially efficient. This will help you improve the bottom line after mitigating all risks. CA experts have knowledge in financial reporting, budgeting and governance. With their help, you can meet the financial objectives of your company.
Since you know about a CA expert’s vital roles and responsibilities, you can hire the best ones for your business.
Analysis of Amendments in Provision of Slump Sale
The Finance Act 2021 has amended the provisions related to slump sale. It has amended the scope of the definition of the term slump sale by amending the provision of clause (42)(C) of section 2 of the Act so that all types of transfer as defined in clause (47) of section 2 of the Act are included within its scope. It has also amended the Section 50B (2) to provide the FMV of the capital assets as on the date of transfer shall be calculated in the prescribed manner. In this article we will analyse the changes made by such amendments and rational behind such changes.
♦ Insertion of section 50B and 2(42)(C)
- Prior to Finance 1stApril 2000, there was no specific here was no specific provision in the Income-tax Act, 196 that’s specifically dealt with taxation of slump sales. Finance Act ,1999 inserted the Section 50B and Section 2(42)(C) in the act, and made applicable from 1st April,2000.
- Section 50B contains special provision for computation of capital gains in case of slump sale, whereas Section 2(42)(C) defines the “slump sale” means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.
♦ Section2(42)(C): Prior to Amendment
- As the definition of slump sale include the transfer only by sale, so whether other means of transfer listed in sub-section (47) of section 2 of the Act, in relation to capital asset like exchange, relinquishment etc, are excluded?
- Hon’ble Madras High court in case of Areva T & D Ltd. v. CIT, [2020] made following observations:
- In order to draw distinction between the term ‘sale’ and ‘exchange’, Hon’ble Madras HC referred to the definition provided in Transfer of Property Act, 1882 and Sale of Goods Act, 1930.
- As per Sec. 54 of the Transfer of Property Act, 1882, ‘Sale’ is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Further, as per Sec. 2(10) of the Sale of Goods Act, 1930, ‘price’ means the money consideration for sale of goods. Also, as per Sec. 118 of Transfer of Property Act, 1882, ‘exchange’ means mutual transfer of ownership of one thing for the ownership of another between two persons, neither thing nor both things being money only.
- Based on the above definition the court held that that slump sale u/s 2(42)(C) of the Act shall arise only if there is a transfer of an undertaking as a result of the sale, for a lump sum consideration. If there is no monetary consideration involved in the transaction, then it would be held that not possible for the Revenue to bring the transaction done by the assessee within the definition of the term ‘slump sale’ as defined u/s 2(42)(C) of the Act.
- Court has also placed reliance on the decision of Hon’ble Bombay HC in Bharat Bijlee (supra), wherein the Bombay HC held that the definition of slump sale under Section 2(42)(C) is only restricted to transfer resulting from ‘sale’ and does not include other ‘transfers’ as given under Section 2(47) of the Act.
♦ Section2(42)(C): After Amendment
- As per the amended Section 2(42)(C), “slump sale” means the transfer of one or more undertaking,by any means for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.
- Also inserted Explanation 3,that for the purposes of this clause, “transfer” shall have the meaning assigned to it in clause (47) of section 2 of the Act;
- By amending the provision of clause (42)(C) of section 2 of the Act all types of transfer as defined in clause (47) of section 2 of the Act are included within its scope.
- Its also overrule the Madras HC and Bombay HC judgment as stated above, where only transfer by sale were covered by the slum sale and not other form of transfer as defied u/s 2(47).
♦ Section50B (2): Prior to Amendment
- Section 50B (2) provides that in relation to capital assets being an undertaking or division transferred by way of such sale, the “net worth”of the undertaking or the division, as the case may be, shall be deemed to be the cost of acquisition and the cost of improvement and no indexation shall be available if the slump sale treated as long term capital gain.
- Explanation 1 to Section 50B, net worth = aggregate value of total assets of the undertaking (Ignoring Revaluation) less value of liabilities of such undertaking as appearing in its books of account.
- Explanation 2 to Section 50B provides that for computation of net worth depreciable assets shall be taken at written down value of the block whereas non- depreciable assets at book value. In case of capital assets in respect of which the whole of the expenditure has been allowed or is allowable as a deduction under section 35AD, value shall be taken as nil.
- The capital gain = Sales consideration less Cost of Acquisition (i. e.Net worth). As section 50B (2) prescribe the cost of acquisition but does not contain any provision for computation of the full value of consideration.
♦ Section50B (2): After Amendment
- The finance act has amended the section 50B (2) of the act to provide that Fair market valueof the capital assets as on the date of transfer, calculated in theprescribed manner, shall be deemed to be the full value of the consideration received or accruingas a result of the transfer of such capital asset.
- In Explanation 2a new clause has been inserted to provide while calculation net worth, that value of capital asset being goodwill, which has not been acquired by the assessee by purchase from previous owner, shall be taken as nil.
- The department via notification no 68/2021 dt 24thMay, 2021 notified the Rule 11UAE for Computation of Fair Market Value of Capital Assets for the purposes of section 50B of the Income-tax Act. As per the rule the, the fair market value of the capital assets shall be the FMV1 determined under sub-rule (2) or FMV2 determined under sub-rule (3), whichever is higher.
- FMV1 shall be the fair market value of the capital assets transferred by way of slumpsale determined in accordance with the formula –
A+B+C+D – L, where,
- A= book value of all the assets (other than jewellery, artistic work, shares, securities and immovable property) as appearing in the books of accounts of the undertaking or the division transferred by way of slump sale as reduced by the following amount which relate to such undertaking or the division, —
(i) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and
(ii) any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;
- B = the price which the jewellery and artistic workwould fetch if sold in the open marketon the basis of the valuation report obtained from a registered valuer;
- C = fair market value of shares and securitiesas determined in the manner provided in sub-rule (1) of rule 11UA;
- D = the value adopted or assessed orassessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property;
- L= book value of liabilities as appearing in the books of accounts of the undertaking or the division transferred by way of slump sale, but not including the following amounts which relates to such undertaking or division, namely: —
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company;
iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;
(iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;
(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities;
(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares.
- FMV2shall be the fair market value of the consideration received or accruing as a result of transfer by way of slump sale determined in accordance with the formula-
E+F+G+H, where,
- E = value of the monetary consideration received or accruing as a result of the transfer;
- F = fair market value of non-monetary considerationreceived or accruing as a result of the transfer represented by property referred to in sub-rule (1) of rule 11UA determined in the manner provided in sub-rule (1) of rule 11UA for the property covered in that sub-rule;
- G = the price which the non-monetary considerationreceived or accruing as a result of the transfer represented by property, other than immovable property, which is not referred to in sub-rule (1) of rule 11UA would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer, in respect of property;
- H = the value adopted or assessed or assessable by any authorityof the Government for the purpose of payment of stamp duty in respect of the immovable property in case the non-monetary consideration received or accruing as a result of the transfer is represented by the immovable property.
- The fair market value of the capital assets under sub-rule (2) and sub-rule (3) shall be determined on the date of slump saleand for this purpose valuation date referred to in rule 11UA shall also mean the date of slump sale.
Compounding of offences under Companies Act 2013 | Section 441
Defaults under the Companies Act, 2013 provides for certain liabilities and the registrar of a company has powers to initiate prosecution against the company and its directors and other officers in accordance with the provisions of the law. When a provision has been violated or a default or delay has occurred, the directors may, instead of allowing the launching of a prosecution or contesting any prosecution already launched against the company and its directors and officers who are liable, apply to get the offence compounded, if the offence in question is a compoundable offence.
Section 441 of the Companies Act, 2013 deals with Compounding of offence. Compounding of offences is not new under the Company Law; similar provisions were also presents in Section 621A of the Companies Act 1956.
You can read Section 441 of the Companies Act, 2013 here: http://ebook.mca.gov.in/default.aspx
Compounding of offences is a settlement mechanism, by which, the offender is given an option to pay money in lieu of his prosecution, thereby avoiding a prolonged litigation. While there is no definition of the word “compounding” provided either in the Act 1956 or the Act 2013. However legal meaning of compounding of offence is “Doing good the default/non-compliance”. Therefore, the first and foremost step in compounding is to make the default good.
Types of Penalties:
There are five types of penalties that can be levied on the commission of the offences that have been contemplated under the Companies Act, 2013.
Which offences are compoundable?
According to Section 441(1), as amended by the Companies (Amendment) Act 2017 and the Companies (Amendment) Ordinance, 2018, any offence punishable under the Companies Act (whether committed by a company or any officer thereof) not being an offence punishable with imprisonment only, or punishable with imprisonment and also with fine, may, either before or after the institution of any prosecution, be compoundable.
Any offence covered under Section 441(1) by any company or its officer shall not be compounded if the investigation against such company has been initiated or is pending under this Act.
According to Sub-Section (6), any offence which is punishable under this Act with imprisonment only or with imprisonment and also with fine shall not be compoundable.
Thus, the following offences under the Companies Act cannot be compounding by the NCLT or the Regional Director:
> An offence which is punishable with imprisonment only.
> An offence which is punishable with imprisonment and also with fine.
Jurisdiction to handle cases for the compounding:
A significant pre-requisite for filing application for compounding is to know where the application should be filed. The National Company Law Tribunal shall exercise the power of compounding an offence in accordance with and subject to the provisions of the Companies Act and the Rules prescribed under it.
But according to clause (b) of Sub-section (1), as amended, wherethe maximum amount of fine which may be imposed for such offence does not exceed twenty-five lakh rupees, by the Regional Director or any officer authorised by the Central Government.
Procedure to compound an offence under Companies Act, 2013:
a) Calling of Board Meeting Company will call the Board Meeting as per Companies Act, 2013 and SS1.
b) Calculate the amount of offence Board will calculate the amount of the penalty as per the relevant section.
c) Holding of Board Meeting Pass a resolution to file application with authority for compounding of offence and authorize director of the Company and for preparation and signing of documents including application. Company will authorize any professional for follow up the matter with authority.
d) Preparation of Compounding Application Company will prepare the application of compounding as per NCLT Rules.
e) Filling of Form with ROC Procedure for making application:
Application for compounding shall be submitted electronically in eform GNL1. This form will be forwarded by ROC to NCLT/Regional Director as applicable. The Schedule of fees under the National Company Law Tribunal Rules 2016 has prescribed a fee of Rs, 1,000/- on an application for compounding of certain offences.
In GNL – 1, the application can be filed for Company, Director or Manager/Secretary or CEO/CFO or other officers of the Company (even jointly). Details of only 8 persons can be entered in the e Form. If number of persons is greater than 8, then additional details can be provided in optional attachment.
f) Hearing before Authority. There is no specific provision in the Act, normally, NCLT/Regional Director will give personal hearing and then pass a speaking order giving reasons. The hearing can be attended by Director/secretary/ officer of Company or by authorized representative like advocate or a practicing CS/ CA/ CMA.
Where any offence is compounded, intimation thereof shall be given by the company to the Registrar within seven days from the date on which the order is made available to the petitioner/applicant.
Permission of Special Court No More required:
As per sub-section (6)(a) of section 441 as stood before being amended by the Companies (Amendment) Ordinance 2018, permission of the Special Court was required for compounding of any offence which is punishable under this Act, with imprisonment or fine, or with both. Such offences can now be compounded without the permission of the special Court in view of the said amended effective from 2nd November, 2018.
Discretionary power to reject the Application?
The Compounding application cannot be rejected without due consideration. The Company Law Board (now NCLT) in the case of Amadhi Investments Ltd., held that neither of the CLB or the Regional Director has been authorized with discretionary power to reject a compounding application without due consideration.
Whether NCLT has powers to review its own decision?
The NCLAT in the case APC Credit Rating Private Limited Vs. Registrar of Companies, NCT of Delhi and Haryana, [2018] 143 CLA 166 (NCLAT) had answered the above question, the NCLAT held that;
“it is clear that there is no inherent power to review, as is under Order 47 Rule 11 of the Code of Civil Procedure, 1980 but the Tribunal has power conferred by sub-section (2) of Section 420 of the Act, 2013 to rectify any mistake apparent from the record and to amend the order accordingly.”
Therefore, we can categorically say that NCLT has power to review its own orders unless the statue is amended to make way for such review. From the above decision of NCLAT it is clear that inherent powers under Rule 11 of the NCLT Rules can’t be said to be empowering NCLT with a power to review.
> An offence which is punishable with imprisonment only.
> An offence which is punishable with imprisonment and also with fine.
Jurisdiction to handle cases for the compounding:
A significant pre-requisite for filing application for compounding is to know where the application should be filed. The National Company Law Tribunal shall exercise the power of compounding an offence in accordance with and subject to the provisions of the Companies Act and the Rules prescribed under it.
Circular No. 11/2021 issued by CBDT regarding use of PAN
CA Mayur Agrawal
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