FEATURES OF SMARTCA SOFTWARES

1 Business Establishment

Smart CA Solutions aim to help New Start-up businessmen to study and to get advised on the requirements of their new business. A common question asked at the beginning is “Which Organisation Structure should I choose?"

• 1. In this form, an Individual is a Sole Owner of the business.
  2. All registrations of Taxes, Licences etc. are taken in his personal name.
  3. In the eyes of Law, the business concern has no separate legal existence.
  4. Similarly for Tax purposes, the profits and losses of the business are assessed in the hands of the owner.
  5. Specially meant for Small business organisations which do not require much capital resources.
  6. Private properties and Personal assets of the owner can be attached for settlement of dues of the business.
• 1. In this type of organisation structure, a group of individuals / persons enter into an agreement called “Partnership” to carry on a business. The partnership collectively with partners is called “Firm”
  2. Maximum number of partners admissible under law is 20.
  3. All registrations of Taxes, Licences etc. are taken in the name of Firm.
  4. In the eyes of Law, the business concern has no separate legal existence.
  5. But for Tax purposes, the profits and losses of the business are assessed in the hands of the Firm. The Firm and partners are separate tax entities.
  6. Specially meant for Medium & small business organisations which may not require huge capital resources but need managerial personnel.
  7. The partners are Principals as well as agents for the act of one another.
  8. Private properties and Personal assets of the partners can be attached for settlement of dues of the firm.
• 1. In this type of organisation structure, members of a family carry on a business. The business collectively with members is called “HUF” and members are called “Coparceners”. The Male head of the Family is called “Karta”
  2. Generally, for Tax purposes, the profits and losses of the HUF business are assessed in the hands of the Karta.
  3. Specially meant for traditional family businesses.
• 1. Introduced in India after enactment of LLP Act, 2008, it is a blend of both Partnership firm and corporate form of business. The mutual rights and duties of the partners of an LLP are governed by LLP Agreement.
  2. Unlike Partnership firms, LLP has separate legal entity from its partners. Therefore, personal assets of the partners cannot be realised for settlement of dues of the LLP.
  3. No partner is liable on account of the independent or unauthorised action of other partners or for their misconduct.
  4. Each LLP to have two designated partners who are responsible for compliance with the Act.
  5. Regulatory compliances are less compared to Company form of business.
• 1. Company has a separate legal existence from its shareholders. Companies are governed by the Companies Act, 2013.
  2. In companies, ownership and management are separate. The Management is the responsibility of the Board of Directors. Just by acquiring shareholding, a person cannot participate in Day-to-day management of the Company.
  3. This form is highly suitable for organisations requiring large capital.
  4. Companies have to adhere to regulatory compliances of Registrar of Companies (ROC) and the Ministry of Corporate Affairs.
  5. Public Limited Companies can raise capital by issue of securities through Initial Public Offerings (IPOs) and Follow-on Public Offerings (FPOs)