REAL ESTATE TAX ACCOUNTANT
Statutory Requirements: A Simple Overview
Indian companies must comply with the Companies Act 2013, which sets out various legal obligations. We offer a range of services to help businesses meet these requirements, including:
- Company Incorporation
- Document Filing with the Registrar of Companies
- Statutory Audits at Year End
- Director’s Report Assistance, ensuring all statutory points are covered
- Support for Annual General Meetings (AGMs) and compliance
- Guidance on Meetings, such as Board and Statutory Meetings, along with required filings
- Consultation on other provisions applicable to your company
Company Law
Types of Companies
- Companies registered under the Companies Act 2013 can be private or public.
- Private companies have restrictions on the transfer of shares, cannot invite the public to subscribe to shares or debentures, and are limited to 200 members.
- Public companies face no such restrictions.
- The Act also introduces the concept of a one person company (OPC), allowing a single Indian citizen to be the sole member.
Dormant Company (New in the 2013 Act)
A dormant company is one that has no significant accounting transactions or is formed for future projects. It can apply for dormant status if it’s inactive for two consecutive financial years. Dormant companies still need to hold board meetings every six months and follow certain filing and fee requirements.
Share Capital
There are two types of share capital:
- Equity Share Capital: Can be issued with voting or differential rights (like different dividend entitlements).
- Preference Share Capital: Offers priority in dividends and capital repayment when winding up the company.
Preference shares can be cumulative, convertible, participating, redeemable, or a combination.
Minimum PaidUp Capital
Private companies are required to have a minimum paid up capital of₹1,00,000, while public companies must have at least₹5,00,000. This requirement can vary depending on specific terms.
Directors and Management
Directors Requirements
Public companies must have at least three directors, private companies must have two, and an OPC requires just one.
Listed public companies must have 50% non-executive directors on their boards, while the rules for independent directors differ depending on the company structure.
Independent Director
Companies meeting certain financial thresholds must appoint at least one independent director. These directors cannot have a material financial relationship with the company and are expected to act as advisors and “watchdogs” for shareholders.
Key Managerial Personnel (KMP)
- A company with paid up capital of ₹5 crore or more must appoint a fulltime KMP, which includes a managing director or CEO, a company secretary, and a chief financial officer.
- Corporate Governance & Meetings
- Board and General Meetings
- Companies must hold four board meetings annually, with no more than 120 days between two meetings.
- AGMs should be held within six months of the financial year’s closure, with a maximum gap of 15 months between meetings.
Electronic Meetings
Participation via video conferencing is allowed, which has been a major relief for directors who cannot attend meetings in person.
Compliance
Annual Filing & Returns
Companies must file their financial statements, including consolidated statements for subsidiaries, within 30 days of the AGM. For an OPC, this period extends to 180 days.
Corporate Social Responsibility (CSR)
Every company meeting specific criteria (₹500 crore net worth, ₹1,000 crore turnover, or ₹5 crore net profit) must allocate 2% of its net profits to CSR activities. A CSR Committee, comprising three or more directors (including at least one independent director), is also mandatory.
Conclusion
Navigating the Companies Act 2013 can seem daunting, but with the right guidance, it becomes manageable. Our team is here to help your business stay compliant with all statutory obligations, ensuring smooth operations and peace of mind.
Leverage Your Potential in Real Estate Through Professional Tax Accounting
The landscape of real estate tax can be really gory. SellersBuzz makes it simple for you. Our real estate tax accounting services are developed to help clients unlock the full potential of investments, putting them on the right side of tax authorities and ensuring compliance and optimized returns.
Why SellersBuzz?
We have expert knowledge in real estate. We are very well studied individuals that understand the intricacies of real estate tax. Whether it’s managing rental properties, investing in commercial real estate, or developing new projects, we will give you insights and strategies adapted to your needs.
Local insight with global vision, being based out of Delhi, understands the local marketplace and regulatory scenario, but global outlook ensures we can very well navigate crossborder nuances in real estate investing and keep you better informed about your properties, regardless of the corner of the globe they hail from.
- Strategic Tax Planning: We are your tax filing experts, but we also work with you to develop an integrated tax planning strategy tailored to minimize liabilities and optimize the financial results of your real estate investment activities.
- Transaction Advisory: From acquisition or disposition of properties to significant investments, our advisory services ensure that all angles of taxes are considered so you make smart moves in your real estate transaction.
Stay Ahead with Regulatory Updates: Real estate and tax environments are constantly changing. We keep you abreast of the latest updates and help you adjust your strategy to stay ahead of the curve.
Our real estate tax accounting services encompass
- Property Tax Planning and Compliance: Optimizing and ensuring compliance with local regulations on property tax.
- Income Tax Filings: Streamline the process related to income derived from real estate holdings.
- GST Compliance: Reduce your hassle and apprehension on the goods and services taxing issues involved in real estate transactions.
- Investment structuring: Structure your investments for maximum tax efficiency and alltime financial gains.
- Audit Support: Provide thorough preparations and support for tax audits related to the real estate entity.
At SellersBuzz, we promise to make you succeed in the real estate sector through offering you the best tax accounting services. Together, let us dissect the complexity of real estate taxes to your advantage in investment success.
Call us today to schedule your consultation and get started on optimizing your real estate tax strategy!
FAQs on Indian Companies
What is a Private Limited Company?
It is a form of business organization wherein the liability of each shareholder is limited to the amount of unpaid shares by each shareholder. It can have a maximum of 200 shareholders and can’t invite the public to buy shares or deposit money. Transfers of shares are also restricted. At least two shareholders are required in a Private Limited Company.
What do you mean by a Public Limited Company?
A Public Limited Company may have unlimited shareholders. It does not impose restrictions on the transfer of shares. A Public Limited Company may also invite deposits from the public. Its shareholders would only be liable for the amount that remains unpaid on their respective shares. In the case of a Public Limited Company, there should at least be seven shareholders.
Which one will be the better option: Private Limited or Public Limited Company?
That depends on what you need. If you don’t plan to raise funds publicly and want to keep ownership limited to a few individuals, a Private Limited Company is usually a better fit since it has fewer compliance requirements.
What is the minimum capital for a Private Limited Company?
The minimum capital used to be ₹1,00,000 at incorporation, though this has been omitted in the Companies Act of 2013. You can increase this anytime by paying extra stamp duty and fees.
What is the difference between authorized capital and paid-up capital?
The authorized capital sets a limit, as per the Registrar of Companies, on the maximum number of shares a company is permitted to issue.
Paid up capital is the amount that is paid by the proprietor against the shares.
How do I approve a company name?
To get approval, you need to file Form INC1 online, signed by one of the proposed directors. You’ll need to:
- Submit several alternative names for the company.
- Provide the names and addresses of promoters (at least two for Private Limited and seven for Public Limited).
- Mention the authorized capital and the main objectives of the company.
- Include names of other companies you’re affiliated with.
What are the Memorandum of Association (MOA) and Articles of Association (AOA)?
Once the company name is approved, you draw up the MOA and AOA:
MOA states the main objectives of the company.
AOA sets rules for running the company, such as the authorized capital and the names of the first directors. The documents have to be stamped and signed by the promoters themselves.
What are the documents required to be filed for company incorporation in India?
You have to file:
- MOA and AOA signed by all promoters.
- Form INC7, INC8 – declaration, INC22 – notice of situation of registered office and DIR12 – consent of directors.
- Power of Attorney to be executed in favour of one individual who can deal with the incorporation process.
- Pay the fees applicable.
How is Certificate of Incorporation Issued?
After all the documents are submitted and verified by ROC, corrections will be made, if any, and the certificate of incorporation is issued.
What time can the company start business?
Private Limited Companies can start business instantly after obtaining the certificate of incorporation.
Public Limited Companies can start business only after the statutory meeting is held within six months and after filing the statutory report.
How do foreign investors abide by the legal formalities in India?
Foreign investors can authorize someone in India to act on their behalf using a Power of Attorney. Key documents (MOA, AOA, etc.) should be notarized by a public notary and attested by the Indian Embassy or Consulate in the foreign country.
What additional approvals are required for foreign investors in India?
Foreign investors must notify the Reserve Bank of India (RBI) of foreign equity or get approval from the Foreign Investment Promotion Board (FIPB), depending on the sector they wish to invest in.
How do foreign companies invest in India?
There are two primary routes:
- Automatic Approval: Most sectors are not under the approval route, and therefore the company has only to inform the RBI within 30 days of receipt of foreign investment.
- FIPB Approval: Proposals not covered under automatic approval have to be cleared by the Foreign Investment Promotion Board.