Legal formalities for MSME

This PPT Talks about Legal Formalities for MSME or Business. this will guide what documents needed for starting new business for various sector.

1. MAHARASHTRA CENTER FOR ENTREPRENEURSHIP DEVELOPMENT, NAGPUR Training on Technical EDP LEGAL FORMALITIES FOR STARTING MSME OR ENTERPRISE By Mr. Vijay R. Joshi Income Tax & GST Practioneer

2. Legal forms of businesses in India The legal form a firm chooses to operate under is an important decision with implications for how a firm structures its resources and assets. Several legal forms of business are available to entrepreneurial business owners. Each involves a different approach to dealing with profits and losses. There are mainly three types of business organization in terms of law. The required legal processes and needed documents differ in case of each form of business, all of these types of businesses are usually aimed at being profitable in the short and long term

3. Legal forms of businesses in India

4. Legal forms of businesses in India Sole Proprietorship :- A sole proprietorship is an unincorporated company that is owned by one individual only. While it is the most simple of the types of businesses, it also offers the least amount of financial and legal protection for the owner. Unlike partnerships or corporations, sole proprietorships do not create a separate legal identity for the business. Essentially, the owner of the business shares the same identity as the company. Therefore, the owner is fully liable for any and all liabilities incurred by the company.

5. Legal forms of businesses in India Sole Proprietorship :-

6. Legal forms of businesses in India Partnership :- As the name states, a partnership is a business owned by two or more people, known as partners. Like sole proprietorships, partnerships are able to take advantage of flow-through taxation. This means that the income is treated as the owners’ incomes so it is only taxed once. Owners in partnerships are responsible for the liabilities of the firm. However, there are some nuances to this. There are different types of partnerships: General Partnerships, Limited Partnerships, and Limited Liability Partnerships.

7. Legal forms of businesses in India Partnership :-

8. Legal forms of businesses in India Company:- A company is a legal entity formed by a group of individuals to engage in and operate a business commercial or industrial enterprise. A company may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction. A company is essentially an artificial person—also known as corporate personhood—in that it is an entity separate from the individuals who own, manage, and support its operations. Companies are generally organized to earn a profit from business activities, though some may be structured as nonprofit charities. Each country has its own hierarchy of company and corporate structures, though with many similarities.

9. Legal forms of businesses in India Company:-

10. Legal Requirements for doing business General Requirements: Permanent Account Number / Aadhar Number Shop and Establishments license (License for physical premises) GST registration Specialized Requirement: MSME Labour License ESIC / PF FSSAI License (To start a food business) etc.

11. Legal Requirements for doing business Permanent Account Number:- Permanent Account Number or PAN is a means of identifying various taxpayers in the country. PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax. PAN Card too is given by the Income Tax Department. While PAN is a number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and photograph. Copies of this card can be submitted as proof of identity or DoB.

12. Legal Requirements for doing business Aadhar Number:- An Aadhaar card is a unique number issued to every citizen in India and is a centralized and universal identification number. The Aadhar card is a biometric document that stores an individual's personal details in a government database, and is fast becoming the government's base for public welfare and citizen services.

13. Legal Requirements for doing business Shop and Establishments license / Gumasta :- The shop licence refers to a type of legal permission that legally allows people to do business in a particular place. If any individual has a physical shop or office, it is essential to obtain a license. The license acts as proof of a particular business being done at that place. The Shop and Establishment Act in India is promoted by the state governments, but it slightly varies from state to state. All the shops and commercial establishments functioning within a particular state are covered by this act.

14. Legal Requirements for doing business Goods & Services Tax Registration (GSTIN):- The goods and services tax (GST) is an indirect tax that is applied to the cost of certain goods and services. The business adds the GST to the price of the product, and a customer who buys the product pays the sales price inclusive of the GST. The GST portion is collected by the business or seller and forwarded to the government. It is also referred to as Value-Added Tax (VAT) in some countries.

15. Legal Requirements for doing business Taxes Abolished after Goods & Services Tax Act:-

16. Legal Requirements for doing business Types of GST:-

17. Legal Requirements for doing business Micro, Small and Medium Enterprises [MSME]:- Government of India enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. It became operational on October 02, 2006. It was established to promote, facilitate and develop the competitiveness of the micro, small and medium enterprises. For deciding the applicability of the MSMED Act, the government has prescribed specific turnovers and investment limits to reckon whether an enterprise falls under the micro, small or medium category.

18. Legal Requirements for doing business UDYOG AADHAAR NUMBER:- Once you get MSME registration, you will receive a Certificate of the MSME registration wherein a 12 digit unique number is mentioned. Once you get this 12 digit Udyog Aadhar Number for your Micro, Small or Medium Scale Industry, you have MSME registration in your hands.

19. Legal Requirements for doing business Benefits of Micro, Small and Medium Enterprises [MSME]:-

20. Legal Requirements for doing business Food Safety and Standards Authority of India (FSSAI)   Food Safety and Standards Authority of India (FSSAI) is a statutory body established under the Ministry of Health & Family Welfare, Government of India. The FSSAI has been established under the Food Safety and Standards Act, 2006, which is a consolidating statute related to food safety and regulation in India . FSSAI is responsible for protecting and promoting public health through the regulation and supervision of food safety.

21. Legal Requirements for doing business Benefits of FSSAI

22. Legal Requirements for doing business Types of FSSAI

23. Legal Requirements for doing business Employee Provident Fund Organization (EPFO) :- The Employees’ Provident Fund Organization (EPFO) is a non-constitutional body that promotes employees to save funds for retirement. The organization is governed by the Ministry of Labour and Employment, Government of India and was launched in 1951. The schemes offered by the organization cover Indian workers and international workers (from countries with whom the EPFO has signed bilateral agreements)

24. Legal Requirements for doing business EPFO Benefits

25. Legal Requirements for doing business Factory License :- As per the Factory Act 1948 it is mandatory for every factory owner to register their premises with the local authorities before commencing their business. Factory License acts as a document of approval given by authorities to carry out manufacturing activities. Department of the Factories and Boilers issues Factory License. It is the duty of Factories and Boilers Department to keep a check on the health, safety and welfare of workers. Factories Act 1948, says that a factory must obtain its building plan approval from the labor and employment department before covering themselves for a factory registration. Under this act, registration and renewal of the Factory license are also done to ensure the safety of workers.

26. Legal Requirements for doing business Labour License :- It applies to any establishment in which twenty or more workmen are employed on any day of the of the accounting year as contract  labour . It applies to any contractor who employs or who employed twenty or more workers on any day of the accounting year . The Contract Labour (Regulation and Abolition) Act 1970 applies to the following entities: It applies to any establishment or Contractor in which twenty or more workmen are employed on any day of the of the accounting year as contract labour. It does not apply to the establishments if any work not performed for more than one-twenty days in a year or establishments situated in the special economic zone(SEZ). It does not apply to the establishments having seasonal nature for more than sixty days in a year .

27. Thank You ! Mr. Vijay R. Joshi [CA-Final, M.com, MBA(Pursing) E-mail: [email protected] Twitter: @vrjoshi18 WhatsApp: [phone]