Corporate Digest Magazine- March/2018

March 2018 INR 150/-

Venture Care

Digest

Strategy

Finance

Digital

Legal

7 THINGS YOU MUST KNOW IF

FINANCIAL MANAGEMENT:

HOW TO GENERATE WEBSITE

INCORPORATION OF A

YOUR COMPANY IS GETTING

A LOOK OUT

TRAFFIC THROUGH SOCIAL MEDIA

PUBLIC LIMITED COMPANY IN

CLOSED

INDIA

- STRATEGY

- FINANCE

- DIGITAL

www.venture-care.com/magazine

- LEGAL

Index 3

EDITORIAL STRATEGY 7 THINGS YOU MUST KNOW IF YOUR COMPANY IS GETTING CLOSED 9 TIPS FOR EFFECTIVE IMPLEMENTATION OF NIDHI COMPANY

4 6

FINANCE FINANCIAL MANAGEMENT: A LOOK OUT

8

SHOW ME THE MONEY NOW

10

INSIGHT OF PREPARING BUSINESS RESEARCH REPORT

12

WHY SHOULD YOU DO YOUR BUSINESS VALUATION?

14

DIGITAL HOW TO GENERATE WEBSITE TRAFFIC THROUGH SOCIAL MEDIA

16

LEGAL & COMPLIANCE INCORPORATION OF A PUBLIC LIMITED COMPANY IN INDIA

20

10 POINTERS TO CONSIDER BEFORE FILING A TRADEMARK

24 26

A BRIEF GUIDE ON HOW DIGITAL SIGNATURES WORK

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March 2018

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Editorial

Editorial While investing what you will see- profit or cash. That too cash coming from operating activities. It is great investment motivation. Unless you see the money from the company you should not invest. Profit may be manipulated but CASH can't be. In “show me the money' you will the various aspects.

A research report is a document prepared by a research analyst. Generally, a research analyst is a part of the investment banking team. Reports communicate information which has been compiled as a result of research and analysis of data and of issues. Research is more focussed towards the purpose and usability by the people. There are some myths about research reports. In this article you will come to know the various aspects of research reports.

Starting a company is always a great thing. However, closing it sometimes is never a good experience. Even so, when it is unavoidable, it must be done. Winding up a Editor limited company is a process that can be complex and simple depending on many factors like the reason that has caused the dissolving of a company, among others. To wind up a company, there are many things that one needs to know. In this article you will have insight of Various aspects; very interesting!!

Prashant Kumar

People are less concerned with Nidhi Company. But, it has its own purpose. It is incorporated to help members.

Members can lend to and borrow from a NIDHI Company. In this article you get nine tips in this regard.

Trademark is like a name of a person. It is very important. You will come to know ten tip on this.

The world is constantly evolving because of the new technological advancements the world keeps making on a daily basis. With digital signature whether a class ii digital signature or class iii digital signature, life has become simple. While some may ask about how to get digital signature, to others, it is not a mystery especially with the vast number of digital signature providers around. How the digital signature work- interesting!!

Financial management refers to the efficient and effective management of funds, whether long-term or short-term, in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management with the help of all persons involved in the business. If you are doing business you must know the look out of Financial Management.

It is a very common question from business managers that why should I value my business. Valuation of business in not only for raising funds but also for internal purpose to assess growth in value of the firm.

You will also understand the aspects of incorporation of a public limited company and social media marketing.

...

Happy Reading...

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March 2018

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Strategy

d e s o l C 7 THINGS YOU MUST KNOW IF YOUR COMPANY IS GETTING CLOSED Starting a company is always a great thing. However, closing it sometimes is never a good experience. Even so, when it is unavoidable, it must be done. Winding up a limited company is a process that can be complex and simple depending on many factors like the reason that has caused the dissolving of a company, among others. To wind up a company, there are many things that one needs to know. They are vital pieces of information that are very enlightening. These things include the following.

TOP SEVEN THINGS TO KNOW 1. Winding up a limited company can be done in three major ways. It can either be voluntarily by the members where a company passes a specific resolution relating to closing a Ltd company or when it passes a resolution in a general meeting regarding the private limited company closure because of expiration. It can also be done by a tribunal under certain circumstances like the inability to pay debts, failure to file annual returns for five consecutive years, an order under Chapter XIX, and so on. It is never a decision that one wakes up and passes it.

2. Each of the methods used to close a company has unique provisions. Therefore, before you voluntarily close the company, make sure that you follow all the procedures on how to close a limited company. If it is by a tribunal, get as much information about how to dissolve a company using a tribunal so that you can be aware.

3. A liquidator will be required to help with the liquidation of the company. The liquidator is excellent because they can fast track closure procedures by ensuring that by the time full closure takes place, the assets have been liquidated.

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Strategy 4. You must always know the right time to exit. Typically, when closing a limited company is by voluntary action, take time to come up with the right exit time. Do not struggle to fast track exit mode. Take your time and wait for the right time. Treat it like you would trade. Always strive to fast track exit when it is a peak time for the season. This helps you to make a maximum proďŹ t before you dissolve your business. Always have the perfect business exit strategy.

5. You have to notify your employees about the arrangements and decision for dissolving a company. It is cruel and very inappropriate to tell the employees on the last day of their working day. This is not appropriate.

Informing them earlier prepares them for the impending 'doom.'

6. The money gotten from the liquidation process is either used to clear any debts that the company had or is fairly distributed among the shareholders. These apply to closure by a tribunal and voluntary closure respectively.

7. You must be prepared mentally, physically, and emotionally. Closing a company is not a joke, and it can take a toll on you. Therefore, brace yourself for a lot of mental, physical, and emotional drainage. It is never easy when closing a company

...

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March 2018

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Strategy

9 TIPS FOR EFFECTIVE IMPLEMENTATION OF NIDHI COMPANY Establishing nidhi company incorporation is a brilliant idea especially because we are living in an era where many people see the benefits therein. Nidhi companies are growing very popular by the day, and this is very impressive because it gives many other people a chance to venture into this kind of business and has room enough to make profits. For anyone that is starting up this company, nidhi company registration is very crucial, and you will spend a small amount of money as nidhi company registration fees. When everything is said and done, you will be ready to commence with the activities. If you register a company and it is in operation, you have to ensure that it is running effectively.

NINE TIPS TO HELP YOU 1. You must have at least Rs. 5, 00,000. This is the minimum paid capital that is required, and with this amount, you can be able to take care of the members who will be part of the company.

2. Get at least 200 members to start with. This is the minimum number of members required for anyone to register a nidhi company . The figure can be more but must never be less.

3. You must stick to the requirements of a Nidhi company. For one to access nidhi company registration services and carry out online nidhi company registration, they have to ensure that they have the right requirements.

Contrary to this, you will not be registered.

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Strategy 4. Never deviate from what is required of the company. Whether you carry out one-person company registration OR Pvt ltd company registration in India, you must stick to the intended purpose of the company. This is to carry out lending and borrowing activities between the members. Any other activity outside this may lead to a shutdown of the business when proved to be true. There are prohibitions for such a company, and you must always avoid what is prohibited.

5. Stick to the objective of Nidhi companies. Strive to instill the virtue of saving and thriftiness among the members and always be true to them. As long as you are loyal to your members and they are satisďŹ ed with the operations and the services of the company, they will be loyal to the company. This will be beneďŹ cial to the company.

6. Do not offer preference shares. This is unacceptable for any Nidhi company. If these shares were already offered before the company was incorporated, they should be redeemed as soon as possible by the people involved, and the practice should not repeat itself.

7. Have sober directors: this is essential because the directors are the ones that run the company. Therefore, as you register a nidhi company, ensure that the directors you pick are informed, wise, educated, ethical, and are experienced.

8. Purpose to always ensure that the ratio of net owned and deposits made are never more than 1:20. This is an effective way to ensure that the processes of lending and borrowing are within the appropriate and safe levels.

9. Stick to not giving unsecured loans at any given point. This is required because when one forfeits their payment, the company may be left in a lot of trouble and this can be damaging.

When your nidhi company incorporation is up and running, never jeopardize it at any given point. These tips will help you to effectively.

... www.Venture-Care.com/Magazine

March 2018

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Finance

Financial Management: A look out Financial management refers to the efficient and effective management of funds, whether long-term or shortterm, in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management with the help of all persons involved in the business.

As a non-finance manager, we must develop the following skills: 1. An understanding of key financial concepts- Understanding the profitability as mentioned below:

Revenue Less: Cash operating cost PROFIT BEFORE DEPRECIATION INTEREST AND TAXES Less: Depreciation & Amortization PROFIT BEFORE INTEREST AND TAXES Less: Interest PROFIT BEFORE TAXES Less: taxes PROFIT AFTER TAXES

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Finance 2. Understanding the Balance sheet: What are the things mentioned in the balance sheet- Long-term assets, short term assets (working capital), capital, Short term liability and most importantly “Reserve & surplus”. Let me take an example- Munjal Showa (a listed company) has approximately reserve of INR 500 Crore. Can you analyse this? Of course, company is in better position. Better position means the company share's price will increase (just wait for 15th April 2018)- value creation for the investors.

3. Understanding of cash flow statement: There are three parts of cash flow statement:

Ø Cash flow from operating activity Ø Cash flow from investing activity and Ø Cash flow from financing activity If we look at the above the three activities are intertwined. If your business is going for expansion of course you need to invest in long term assets and for that you will need finance and that expansion plan shall be reflected in the operating activity.

4. Understanding the cost Few costs are unnecessary. You should focus to eliminate those costs. Similarly, few costs are necessary to incur and you should not hesitate in incurring those costs.

5. Estimating and managing the budget: It is a strategy. Capital budgeting is to be analysed according to the need of expansion. Investment in long term assets seems (sometimes) the company is very aggressive BUT this may not be true. Auto-ancillary companies heavily depend upon the demand side of auto companies. But the economy has seen frequently the capital expenditure done by the auto-ancillary companies has gone rusting.

To conclude, financial management is not just a concept; instead it is a strategy. Finance is the back bone of any organization and managing it is important. Few tips may be- assess, estimate, invest, draw and again invest.

... www.Venture-Care.com/Magazine

March 2018

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Finance

Show me the money now Cash flow statements have three distinct sections, each of which relates to a particular component - operations, investing and financing - of a company's business activities.

Cash Flow from Operations: This is the key source of a company's cash generation. It is the cash that the company produces internally as opposed to funds coming from outside investing and financing activities. In this section of the cash flow statement, net income (income statement) is adjusted for non-cash charges and the increases and decreases to working capital items - operating assets and liabilities in the balance sheet's current position.

Cash Flow from Investing: For the most part, investing transactions generate cash outflows, such as capital expenditures for plant, property and equipment, business acquisitions and the purchase of investment securities. Inflows come from the sale of assets, businesses and investment securities. For investors, the most important item in this category is capital expenditures (more on this later). It is generally assumed that this use of cash is a prime necessity for ensuring the proper maintenance of, and additions to, a company's physical assets to support its efficient operation and competitiveness.

Cash Flow from Financing: Debt and equity transactions dominate this category. Companies continuously borrow and repay debt. The issuance of stock is much less frequent. Here again, for investors, particularly income investors, the most important item is cash dividends paid. It is cash, not profits, that is used to pay dividends to shareholders.

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March 2018

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Finance

A Simplified Approach to Cash Flow Analysis: what is it?

A company's cash flow can be defined as the number that appears in the cash flow statement as net cash provided by operating activities, or "net operating cash flow". However, there is no universally accepted definition.

For instance, many financial analysts consider a company's cash flow to be the sum of its net income and depreciation (a non-cash charge in the income statement). While cash flow analysis can include several ratios, the following indicators provide a starting point for an investor to measure the investment quality of a company's cash flow: Operating Cash Flow/Net Sales This ratio, which is expressed as a percentage of a company's net operating cash flow to its net sales, or revenue (from the income statement), tells us how much cash we get for every single rupee of sales.

Free Cash Flow Free cash flow is often defined as net operating cash flow minus capital expenditures, which, as mentioned previously, are considered obligatory. A steady, consistent generation of free cash flow is a highly favourable investment quality.

As a practical matter, if a company has a history of dividend payments, it cannot easily suspend or eliminate them without causing shareholders some real pain. Even dividend pay-out reductions, while less injurious, are problematic for many shareholders.

Free cash flow is an important evaluative indicator for investors. It captures all the positive qualities of internally produced cash from a company's operations and subjects it to a critical use of cash - capital expenditures. If a company's cash generation passes this test in a positive way, it is in a strong position to avoid excessive borrowing, expand its business, pay dividends and to weather hard times.

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March 2018

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Finance

Insight of Preparing Business Research Report A research report is a document prepared by a research analyst. Generally, a research analyst is a part of the investment banking team. However there are many independent research analysts also who sell their report to small investment banks on a contract/fees basis. A research report may focus on a specific stock or industry sector, a currency, commodity or fixed-income instrument, or on a geographic region or country. Reports communicate information which has been compiled as a result of research and analysis of data and of issues.

Research is more focussed towards the purpose and usability by the people.

Some truth & myth of a research report (not exhaustive):

Myth

Truth

It should be lengthy.

It should be precise and to the point.

It is an assembly of data from secondary sources.

It is a logical derivation of data converted into information. If possible data from primary sources can also be gathered and converted into information.

It is always biased

sound report is always fair

A research report is always good and acceptable to everybody.

A report should be capable of answering “Why”, “How” and “When” as and when required.

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Finance

Standard steps that can be taken while preparing a research report:

Ø Finding out the purpose of the report: It is an important step. Analysts should be clear about the purposewhether it is for buy sell decision or case study or else.

Ø Listing down the data to be gathered from various sources: analysts should be well clear that what the relevant data to be gathered are. Collecting irrelevant data is waste of time.

Ø Gathering the data from primary and secondary resources: If possible primary data sources are preferable.

However, we may rely upon secondary data sources.

Ø Converting data into information: All the collected data should be converted into information which will be used in drafting the report.

Ø Preparing report: As mentioned above the report should be precise and should answer why, when, how and what.

Nature of research: A research report may be quantitative, qualitative or mixed of both. Observation is required while preparing qualitative research. Even in mixed of both wherever qualitative data is to be introduced, there comes “observation”. A well written report allows the reader to see things in their mind as clearly as if they were seeing it with their own eyes. Good observational writing utilizes all of the senses in describing the event, character or item; transporting the reader easily into the world an analyst is creating or describing.

To conclude, a research report should be precise and to-the-point. A good report should answer why, how and when. It may be prepared with the help of primary and/or secondary data sources.

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March 2018

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Finance

Why should you do your Business Valuation?

It is very common that business managers ask why business valuation is required. Ø The above questions may be because of the following reasons: Ø Professional fees and other costs involved in the valuation done. Ø Time of the business managers involved in solving the queries of valuers. Ø No clear purpose of valuation seen and Ø Sometimes being suspicious that whether valuation will be fair and reasonable Why you should value your business; there are many reasons (not exhaustive):

Ø To set a basis of value for a business. Ø To understand the worth of the business. Ø To set a base line value for the business and develop a strategy to improve the

profitability of the business Ø Increase the value of the business for an exit strategy. Ø To evaluate an offer of a strategic sale of a business. Ø To justify the per share equity value in a company for shareholders. Ø For buy-sell purposes and funding the business. Ø To obtain bank financing or alternative investment. Ø To determine the intrinsic value of a business and assess whether it is different from the

fair market value of the business Ø To identify whether the business is growing, stagnant or declining in value to

restructure the business.

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Finance Now let us see what the factors which affect business valuation are:

Ø 1. Market share of the business Ø 2. Industry- concentration, fragmentation Ø 3. Management's capability and commitment Ø 4. Operating mind-set Ø 5. Nature of fixed assets owned by the company Ø 6. Team's skill and sustainability Ø 7. Strategy: Ø Marketing strategy Ø Product strategy Ø Service strategy Ø Pricing strategy Ø Financial strategy Myth is that, business owners think that business valuation is required only for companies and not for proprietorship firms. But this is not true. To know the value of the current business and how to increase the

...

valuation is utmost important. Yes, different business valuation methods may be required for different stage of business and types of businesses.

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March 2018

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Digital

How to generate WEBSITE TRAFFIC through social media Did you know that social media marketing has a 100% higher lead-to-close rate than outbound marketing? Or that 84% of B2B marketers use social media in some form? No matter what you sell and who you sell it to, using social media as a marketing tool can help you grow your brand and pad your wallet.

Social media are computer-mediated technologies that facilitate the creation and sharing of information, ideas, career interests and other forms of expression via virtual communities and networks. The variety of stand-alone and built-in social media services currently available introduces challenges of definition; however, there are some common features

Ø Ø

Social media are interactive Web 2.0 Internet-based applications User-generated content, such as text posts or comments, digital photos or videos, and data generated through all online interactions, is the lifeblood of social media.

Ø

Users create service-specific profiles for the website or app that are designed and maintained by the social media organization.

Ø

Social media facilitate the development of online social networks by connecting a user's profile with those of other individuals or groups

Social media is a dynamic model of consumer behaviors driving new social technology development while at the same time, new technologies that affect consumer behaviors. It's important for brands looking at what's next in social media to understand this dynamic nature amongst their own customers and broader community.

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March 2018

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Digital

The Importance of Social Media in Business By giving your business brand the social media touch, you not only generate more business but also connect with your customers better and serve them on a higher level. It actually makes your online marketing easier.

Now, let us look at the importance of social media in business by analyzing it: 1. Leverage Social Advertising Social media advertising may be the new kid on the block, but it's growing faster than imagined. Take Facebook Ads for example. This just goes on to show that social advertising is here to stay — for a long, long time.

They're realizing that taking the social media advertising route makes total sense. Here's why:

Ø Lower ad costs Ø Targeted reach Ø Real-time performance analysis 2. Boost Brand Awareness Social media proves to be a powerful tool when it comes to growing your brand awareness. There are businesses that dismiss it as a way to build a brand, but by doing that, they're leaving an open ground for competitors.

Increasing your brand awareness via social media isn't rocket science. Here are a few tips on how you can do so.

Ø Ø Ø Ø Ø

Find Your Audience Use Visuals Create Conversations Measure Your Efforts Build Authority

3. Increase Inbound Traffic One of the most effective ways to generate targeted traffic to your website is via inbound traffic. If you avoid this, you ignore the importance of social media in business and you will be limited to your inner circle of customers or the people that are already familiar with your market or brand.

For example, having an active blog makes it easy for you to connect with your audience with the help of fresh content. But by having them share this content (on the right time) on Twitter or Facebook increases your reach 10X. You're suddenly reaching out to a bigger audience that may like plus share your content, follow your brand and ultimately become a customer.

4. Improve Search Engine Optimization Every seasoned social media marketer knows that there is some connection between social media and search engine optimization.

Here's how understanding the importance of social media in business and working on it can help improve your SEO.

Ø Higher Chances to be found via Web Search Ø Ability to Reach More People via Social Media Search 5. Increase Conversion Rates Social media is the best platform for capturing targeted leads for your business, but it doesn't stop there.

Getting quality leads is only one part of the equation. The other part is converting those into sales.

Here are some ways you can use social media for better conversion rates.

Ø Use It for Social Proof Ø Use it for User-Generated Content

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Digital 6. Satisfy Your Customers Losing a customer is hard, and gaining a new one is harder. But retaining an existing customer is 10 times easier.

Which is why customer satisfaction should be your topmost priority.

Increasing customer satisfaction with social media includes:

Ø Monitoring conversations to see if your customers are talking about your brand and in what context. Ø Broadcasting important messages, announcements and offers to customers via a social media platform such as Twitter. Ø Offering prompt customer service to customers who are facing genuine problems or need some help with the product or service. Ø Holding regular question & answer sessions with customers to understand their concerns get real feedback and see how things can be improved. Ø Connecting and building a relationship with power users or customer advocates so that they can help serve other customers.

7. Enhance Brand Loyalty If you want to get the most out of your social media marketing efforts, it's crucial that you focus on increasing brand loyalty. Having a loyal following means better engagement and better conversations.

You can enhance brand loyalty on social media by:

Ø Ø Ø Ø Ø

Having a Solid Social Media Strategy Sharing Value-Oriented Content Being Consistent Responding to Queries Show the Human Side

Here are some more points why social media is important for Web traffic: 1. Social media posts can be used to drive targeted traffic.

Creating a new page on your site is like taking a really great selfie. You want the world to see it and bask in its brilliance, that's why for selfies and landing pages, well-placed social media posts can make all the difference.

We've seen a single link on Reddit drive over 20,000 visitors in one weekend and links submitted to stumble upon can take a page that was consistently earning a handful of visitors a day and increase that number to hundreds.

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Digital 2. Using social media for business boosts your site's SEO Search engine crawlers know which pages are consistently earning traffic and which are just floating out there, forgotten and ignored. SEO is the most important part of earning top spots in search engine rankings, but driving traffic to your optimized pages will cause them to climb much faster in the search engine results pages 3. If you're doing it right, social media will lead to real relationship building.

Part of what makes things like Twitter and Instagram marketing so cool is the interaction you get to have with your customer base — you can read their tweets and status updates to get insights into their daily lives. You can also use social media as a tool for connecting with complementary, non-competing businesses, thought leaders and tastemakers in your space, as well as journalists who cover your industry.

4. Users are receptive to your messages.

People view Twitter and Facebook as social networks, not marketing machines. As a result, they're less likely to see what you post as an advertisement and will be more likely to hear what you have to say. This translates to serious web traffic when you link to your site and posts that market themselves as your friends and followers share what you've posted.

5. Social media ads allow targeting and retargeting.

One of the reasons social media is important is because of the highly customizable nature of social media ads.

Facebook ads, for example, allow you to target users by things like location, education level, industry and even purchase history and the pages they've liked.

6. Social media can help you get noticed at events, and even generate earned media coverage.

Whether your business is sponsoring a charity fundraiser or attending a major trade show, there's no better way to leverage your presence than with the help of social media.

7. You can respond to problems immediately.

If there's a problem with your product or service, you want to know about it right away. With the feedback you get in the process of social media marketing, you'll be the first to know when there are issues – and you can take steps to resolve them right away.

8. A strong social media presence builds brand loyalty.

It's easy to imagine why: when you're engaging and interacting on social media (not just tossing your posts out onto the web hoping someone will stumble upon them) you become less like a corporation and more like what you truly are — a unified group of people who share a vision.

9. Your competition is getting social, so you should too.

Did you know that 91% of brands are using more than one social media platform? This isn't something you want to fall behind the competition on, because it's much harder (and more expensive) to play catch up than it is to get in on the game early. If your competitors get to your potential customers first, they'll earn their loyalty and you'll have a hard time winning them over.

10. The social media marketing arena is a (fairly) level playing field.

The people and brands who thrive and go viral in are those with the most clever, attention grabbing tactics (and the most ridiculous gifs) and the most useful, link worthy content. In short, they're providing value to their target audience while also showing personality and being entertaining. If you want to get lots of traffic and really increase your sales online, you're going to have to outwit, out network and out write your competition while offering superior products and customer service.

11. When it comes to news jacking, social media is king.

Sometimes your brand is mentioned on a cable TV show. Sometimes it's not, but you know just how to slide your product into the story to aim the spotlight in your direction. Facebook, Twitter and even Reddit marketing give you a front row seat to the news that's becoming viral right as its happening.

...

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March 2018

19

Legal & Compliance

Incorporation of a Public Limited Company in INDIA Section 2 (71) states that a public company means a company which: I) Is not a private company; II) Has a minimum paid-up share capital , as may be prescribed: Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purpose of this act even where such subsidiary company continues to be a private company in its articles.

PROS OF PUBLIC LIMITED COMPANY: It's quick and easy to get started It's now very easy to start a limited company and it can all be done online. Long gone are the days of waiting weeks for Companies House to process the paperwork: now you can start a limited company in just a few hours.

What's more, the cost of incorporating is an allowable expense against corporation tax.

The company has a separate legal identity: A limited company has its own legal identity. So third parties contract with the 'company' and not the individual directors and shareholders. A company's existence will only cease if it is formally dissolved, liquidated or by other order of the courts or Registrar of Companies. Amongst other beneďŹ ts, this can provide more perceived security for employees than other business structures.

The owners' liability is limited: The shareholders of a company have a limited or capped liability for the debts of the business. The extent of their liability is the amount paid for their shares plus, if they have any, the unpaid amount on any nil or partly paid shares. In practice it is usually just the amount paid for the shares plus any unsecured loans made to the company.

Raising capital through public issue of shares The most obvious advantage of being a public limited company is the ability to raise share capital, particularly where the company is listed on a recognized exchange.

Since it can sell its shares to the public and anyone is able to invest their money, the capital that can be raised is typically much larger than a private limited company.

It's also possible that having stock listed on an exchange could attract investment from hedge funds, mutual funds and other institutional traders.

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Legal & Compliance

Growth and expansion opportunities The value of being able to raise finance is in how it can be employed to serve the business. By having more finance potentially more readily available and on better terms than a private company, the public limited company can be in an advantaged position to:

Ø Ø Ø Ø Ø Ø

Pursue new projects, new products or new markets Make capital expenditure to support and enhance the business Make acquisitions (whether in cash or by offering shares to the shareholders of the target business) Fund research and development Pay off existing debt (or replace existing debt with new debt on better terms) Grow organically

Transferability of shares The shares of a public limited company are more easily transferable than those in the private equivalent, meaning shareholders benefit from liquidity. If shares are quoted on a stock exchange, shareholders and potential shareholders will generally find it easier to transfer shares in the company. The fact the shareholders are less bound to remain with the company can give them comfort – and may help the company by making people more willing to invest.

Without restrictions on transferability of shares that often apply in private companies, it's also easier to deal with situations like a shareholder's death, allowing shares to be transmitted in line with the terms of any will.

Points to be kept in mind before incorporation of a Public Limited Company: Minimum Capital: The Company must have minimum Paid Up Share Capital as may be prescribed. i.e. Rs. 5 Lacs.

Minimum number of Shareholder: There must be at least 7 subscribers to the memorandum of Association of the company [Section 3(1)(a)] Minimum number of Directors: Minimum number of Directors required is 3 Directors upto a maximum Limit of 15 Directors [Section 149(1) (a) & (b)]. A company can appoint more than 15 directors after passing a special Resolution in a general Meeting.

Resident Director: Every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year.[(Section 149(3)] Director Identification Number (DIN) All Directors should have valid DIN. (In case the proposed directors don't have a Director Identification number (DIN) allotted to them) Digital Signature certificate(DSC): Digital Signature for all three Director is required to digitally sign the E-Forms to be submitted with the Registrar of Companies.

The name of the company must have word as Limited at the end.

Procedure For Incorporation Of Private Limited Company: Ø Ø Ø

Get Digital Signature Certificate (DSC) of three members.

Apply to ROC for name approval with adding word Limited through RUN system.

Once name is approved by ROC File Incorporation document with ROC like MOA AOA Consent of Director, Affidavit and declaration from directors etc.

Ø

Once Incorporation form is approved by ROC, ROC shall issue Certificate of Incorporation with PAN and TAN No. and DIN No three Directors.

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Legal & Compliance

Requirement to Apply for DSC: All 3 members should have DSC

Ø Ø Ø

Pan Card Self Attested Residential Proof Self Attested Dully fill and sign DSC application form.

Requirement to Apply for Name Availability:

Ø Ø

Proposed Name of the Company.

Main Object to be pursued by Company

Requirement to Apply for Incorporation of Private Limited Company:

Ø Ø Ø Ø Ø

Registered office address of Company.

Utility Bill and Ownership Proof with NOC from Owner.

Consent from all Directors. (DIR 2) Affidavit and declaration from all directors and subscribers.

Document required from subscriber / Director: I. Pan Card and Address proof of Director / Subscriber ii. Following information is required from director: a) Place of Birth: b) Occupation : Self Employed / Professional / Homemaker / Student / Serviceman c) Area of occupation : Government / teaching/ other (if other please mentioned specific occupation) d) Education Qualification e) Email ID f) Phone no g) Duration of stay at present address (which you provided as address proof) h) Identity Proof : Voter ID / Passport / Driving License (any 1) I) Resident proof :Bank Statement / Electricity Bill, Mobile Bill, Telephone Bill (any 1) j) No of share to be subscribe

TIME PERIOD: Time Required for Incorporation of Private Limited Company Shall be 10-15 days, depending on government approval.

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March 2018

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Legal & Compliance

What Is Next After Incorporation Of Company?

1. Opening of Bank Account: The Company needs to open Bank Account in the name of Company.

Pan Card, Certificate of Incorporation, MOA & AOA and Board resolution is required to open Bank Account.

2. Deposit Share Application money in Bank Account.

Subscribers to MOA are required to deposit share application money in Bank Account of the Company by cheque.

3. Issue Share Certificate to members / Subscribers.

Once Share Application Money is deposited in company's Bank Account the Company is required to issue Share Certificate to Subscribers / Members. Share Certificate has to issue within 3 month from Date of Incorporation.

4. Appoint Statutory Auditor The Board of Directors of the Company needs to appoint Statutory Auditor of the company within one month from date of Incorporation.

4. Apply for licenses which are required for doing business.

The Company needs to apply for licenses which are required for running business smoothly.

Annual Compliances With Registrar Of Companies: 1. Filling of Financial Statements or Financial Results: Every Company is required to file its Financial Statements within 30 days of its Annual General Meeting with Registrar of Company in E-FORM AOC-4 2. Filling of Annual Return: It is mandatory for every company to file its Annual Return with Registrar of Companies within 60 days of Annual General Meeting in E-FORM MGT-7.

3. Appointment of Auditor:

...

An Auditor will be appointed for term of One year in AGM for next financial year and the company needs to file form ADT -1 within 15 days from AGM date.

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March 2018

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Legal & Compliance

10 Pointers to Consider Before Filing a Trademark A trademark is an identity of a business and can be in the form of a logo or symbol. A registered trademark can't be used by any other person and will be illegal under Trademarks Act, 1999. The registration of a trademark should be done after finalizing the name of the firm. Thorough research of a logo should be done to remove the possibilities of a similar logo with another business which can cause a conflict. Using other's trademark intentionally or unintentionally is regarded as an infringement of the rights of the others which can give rise to a court case.

Tips to look into before filing for a trademark are: 1. Keep Clear Objectives

A trademark is a symbol of a company and should illuminate and symbolize the goals of the business and what they are preaching to achieve. It should be different from the other logos and should advertise their business.

2. Guarding the Trademark The Trademark must be personalized so that no one can infringe the copyrights and should define the area of business of the firm along with the goods and services they are offering. This will ensure that no other firm will steal or use the same logo like yours.

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Legal & Compliance 3. Application for submission of a Trademark The firm must submit an application along with the images of the logo which they are using to give distinctiveness to their goods and services. The firm will be allowed to use the trademark only after the filing of the application.

4. Keep a check on the application It is vital to keep your eyes on the application for three months as it is the period it usually takes by the authority to check it. It is not rare that the applications or emails get lost, and the application remains unverified.

5. Register future trademarks A firm should not wait for the expansion of the business and should plan all the trademarks in advance which will be necessarily needed for future products and services. This will also ensure that any other firm will not take your desired logo.

6. Timing is crucial A business organization should not waste time in thinking as the opportunity can slip from the hands in the blink of an eye. This profession is infamous for stealing, and copyright violations and thousands of such cases are pending in Indian courts.

7. Expert assistance An expert help will give you the required knowledge about the whole process of registration of a trademark and also, they are well-versed with the loopholes and intricate details which can be very helpful.

8. Do not share the mark One should not share the mark he/she has specifically developed as they are surrounded by eyes looking to snip and commit a crime.

9. Know the benefits of a registered trademark If a company has varied goods and services, then the owner can register different trademarks for every such product, giving them their own identity among the customers.

10. Act In accordance with law The most important tip is to proceed and act as per the law.

Henceforth, these tips will keep you all covered!

... www.Venture-Care.com/Magazine

March 2018

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Legal & Compliance

A BRIEF GUIDE ON HOW DIGITAL SIGNATURES WORK The world is constantly evolving because of the new technological advancements the world keeps making on a daily basis. Sending on information became extremely easy with the availability of the internet. Ever since this provision was made available by electronic gadgets, more developments have been made to ensure that we can send signed documents to one another. This eliminated the need to always need for physical signatures which sometimes may be an inconvenience. With digital signature whether a class ii digital signature or class iii digital signature, life has become simple. While some may ask about how to get digital signature, to others, it is not a mystery especially with the vast number of digital signature providers around.

Digital signatures can be seen as electronic ďŹ ngerprints as many would describe them. They are unique and are used to identify the sender of a certain message. Typically, when making a digital signature, a Public Key Infrastructure is used, and it is standard. One can get a Digital signature certiďŹ cate online, and they can pick the class of the digital signature they want. Directors of companies are often required to have a digital signature class required for different kinds of businesses. Thus they BUY digital signature online and use them. There is a speciďŹ c way in which these signatures work when the signatures are used.

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March 2018

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Legal & Compliance

HOW THE SIGNATURES WORK The background information about digital signatures that many people do not know about is the working mechanism of these signatures. Many people always wonder how it is possible that it works so effectively and very securely. Here is how it works.

1. Typically, it begins with applying for the digital signature where the providers will be required to generate a public key and a private key using a mathematical algorithm. Once this is done, when the signer signs a document electronically, a signature is created using the private key.

2. Every time you click on the 'sign' button, a mathematical algorithm creates a hash, which is the unique 'fingerprint.' This hush is very specific, and any slight change will alter the hash. The hash is created by the private key. Once the 'sign' button is pressed the document will be signed and ready to be sent.

3. When the recipient of the document receives and opens the document using a program that can read a digital signature, the program will use the public key to decrypt the hash. The program will then calculate the new hash, and if the new hash is same as the first one decrypted earlier, then it registers that the document has not been changed. It will display a message to communicate the same at the top of the document when opened.

4. The program used to decrypt the hash will also validate that the public key that was used on the signature belongs to the signer of the document and it will display the name of the person that signed the document.

5. In case the program fails to decrypt the signature present in the document, then it is an indication that the document was not signed by the individual that is expected to have signed it. It can also show that the document was changed after it was signed by the signer. This will automatically invalidate the signature.

This is how the digital signatures work, and because of their excellence, simplicity, and convenience, you can also apply for your digital signature certificate and enjoy the benefits.

...

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About Venture Care:Venture Care is India's 1st of its kind online Business Solution Company which helps to Plan, Launch, Manage and Grow Businesses. Find More about us at www.venture-care.com

WHAT WE DO

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Since 2010, Venture Care (a S&F Advisory Brand) is helping businesses and enterprises to Plan a Business, start a business, run a business, Grow a Business and Close or Exit from a Business.

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We at Venture Care generate ideas, spark actions and quantify time-bound results by providing tailored, practical and affordable solutions for the growth of your company. Venture-Care is dedicated to turning good ideas into measurable change

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Our team of Chartered Accountants, Business planner, Technocrats, Strategist, Marketers, Senior Bankers, Company Secretaries, Tax Experts and other professionals enables us to help and guide you to ourish your business aspirations.

Head Ofce (India) Venture Care

Branch ofce (Netherlands) Venture Care

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Dhankawadi Pune 43. ask@venture-care.com 020 65363633

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