What is the importance of getting franchise agreement?

A franchise agreement is a kind of legal agreement on a document that is entered into by two parties, one being the franchisor and the other being franchisee. This is done for opening and operating a franchise unit. And it’s usually a single unit. However, if the franchisee wants to open additional units then separate agreements for each unit will be required. These franchise agreements vary greatly with respect to the franchisor. But there are certain common elements in it, which are given below:-

Elements of a Franchise Agreement

• Details of the franchisor and the franchisee.

So, basically, this element involves details and legal authority of a person who is entering into the franchise agreement on behalf of the franchisor and the franchisee. Mostly the franchise agreement is between two legal entities like two companies and in such situation, the directors or the authorized officers by a board resolution will be the one to sign on an agreement. Both on behalf of their respective companies.

Franchise Fee & Consideration

The terms of franchise fees, its deposits, and royalties along with the advertising fees and other changes are mentioned in lengths in a separate section. The mode of payments and the due dates of those payments are also mentioned in detailed lengths. It is important to ensure these terms of franchise fees are mentioned in the franchise agreement and are as per the basic agreement and understanding between the two parties that is the franchisor and the franchisee before both the parties sign the final franchise agreement.

Business Operations

One of the biggest assets in a franchise agreement is that the franchisor is involved and helps with the operations of the units of the franchise. These are based on their past experience and their expertise. Now all the franchise agreements are supposed to contain information regarding what level of support will be provided by the franchisor and what responsibilities will be taken by the franchisee.

Following are some of the covered major areas of a franchise agreement:-

• The details of what goods and services will be given by the franchise.
• The mandatory obligation to purchase goods and/ or services exclusively from the franchisor.
• The Mandatory obligation for operating the franchisee unit which will be as per the standards of operations that are fixed by the franchisor.
• The Mandatory obligation of maintenance of bank accounts and the other details that are as per the franchisors requirement.
• The right of the franchisor for inspection of the unit at the regular intervals.

Governing Law and Dispute Resolution

Mentioning governing laws and jurisdiction in the document is a good practice. In case of the franchise agreement that’s being held between any Indian entity and any foreign entity then both the parties to the franchise agreement can designate the law of a foreign country and then submit it to the jurisdiction of a foreign Court, Be it exclusive or non-exclusive provided such a court has inherent jurisdiction over the dispute.

So these are some of the elements to include in a franchise agreement and more could be added. But the above mentioned are the base of this agreement. We at Enterslice are the renowned organization where we have hired many professionals who have years of experience in handling the legal processes. You don’t need to hesitate a bit in contacting as we can help you with the accurate procedure of Franchise Agreement anytime when you reach us. We have provided our phone number as well as the email address on our website, you can contact our representatives through that. We are 24/7 hr available at your end to assist you in a proper way.

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How can we apply for gst registration in India?

GST stands for goods and services tax which is a newly implemented tax rule that unifies all the other individual taxes making it more concise and convenient. GST registration is a mandatory requirement for the taxpaying entities. By rule, if your annual turnover of the business you run goes above the amount of Rs.20 lakhs then you must compulsorily get GST registration. Exception for the special states like Jammu and Kashmir, north eastern states and other hilly states that they must get GST registration if their turnover exceeds the amount of Rs.10 lakhs. For all these mentioned business situations, the GST registration is an absolute mandatory obligation. If you fall into that category and continue to run business without GST registration then you are liable for hefty penalties.

Who are supposed to Get GST Registration?

Following are the situations where you are supposed to get a GST Registration.

• The individuals registered under the excise duty or VAT or even Service tax or similar taxes which were taxes existing before enforcement of GST.
• Any Businesses with a turnover exceeding the amount of Rs.20 lakhs and Rs.10 lakhs for the special states as mentioned above respectively are obligated by law to have a GST registration.
• Any taxable individual or a non resident taxable individual.
• Input service distributers that are agents of a certain supplier.
• Individuals that fall into the category of tax payment under the reverse charge mechanism.

Know the Documents Required for GST Registration

• PAN of the Applicant
• Aadhar card
• Proof of business registration or Incorporation certificate,
• Identity proof and Address proof of the Promoters and/as well as the directors of your business or company with their passport-sized photographs.
• Address proof of the place of business.
• Bank Account statement or Cancelled cheque.
• Digital Signature or a DSC.
• Letter of authorization or Board Resolution for the Authorized Signatory

Follow the GST Registration Procedure Online with the Help of Experts

• Visit the official government provided website first of all. The website is reg.gov.in.
• Once you log on to the website, you will see an option sitting to register now. This is an option for the new tax payers.
• On the site, you shall see two options in order to select from, it could either be a new registration or temporary reference number. This is also known as TRN for short.
• After you through this, the next thing that will be asked would be if you are a tax payer or not along the column saying “I’m a?” and here you will put in “tax payer”. Mention along with the state or the district you are running your business in. This is also where you shall mention your legal name that is supposed to be just the same as on your PAN card. Next, simply mention your further details as asked like your registered contact and mail id, then the type of business you are running.
• Once you finish with filing these details, you will receive an OTP. This OTP is for verification. Once you verify through it, you will receive an ARN number if all your documents that you submitted are correct.
• Just in case any fault is found, you will be asked to correct it by the department or cancelled leaving you with options of either refiling the form of correcting your details. Mostly it’s the second. Once satisfied, you will get your GST registration procedure completed and done.

What is the procedure for TDS return e-filing in India?

In this article, we are going to discuss the steps on how to do TDS return filing online. Check out the steps below:-

• You can get started first of all by logging on to the TRACES and slowly start Filing in your requested details for the e-filing of your TDS return.
• Next, you can click on the register tab for the e-filing. You will see this particular option on the left corner of the newly opened window page of TRACES.
• It will take you to the e-filing portal of the ITR or income tax department. Here you will be asked for registering. You will do as a tax deductor or the collector. Remember, that your TAN shall be your default user id.
• Now you will be required to create a new password. Along with that give in the details of the authorized person like their registered mobile phone number, a work email address and other similar details of your organization. This includes the information like your address, landline number, fax number etc. Once you fill in the requested information on the form, just click submit tab then after keying in the visible captcha.
• Now next, you are supposed to log on to the e-filing portal of the income tax department by using your PAN card number as your password. Put the date of incorporation of your company or organization, or the date of birth of yours in case it’s your personal e-filing of the TDS return. And now approve the TAN Registration.
• Once approved, you will be sent a link to click on, on your email address that has been provided by you earlier. A PIN shall be sent on your mobile number then.
• Now once you click on the received link, a page will open and enter the PIN and then click on the submit button. Now, this completes your registration process of e-filing of the TDS returns.
• An important point here for you to note is that the above-mentioned information is strictly for those who have never been registered as a tax deductor or a collector.

Know the basic procedure for the e-Filing of the TDS Return

• You may start with the filing of TDS return details that are requested from you into the software or into the return preparation utility and the process it.
• Now you can select an option to upload the TDS return for e-filing to the e-filing portal of the income tax department. This will just generate a ZIP file for you. This ZIP file consists of your processed TDS return filing and then you may save it.
• Next, you can go to the DSC management utility, and then select the option for a bulk upload. To this attach your ZIP file that was earlier generated with your TDS return information.
• Pick the DSC option which will be in a .pfx form or USB token file. Select your DSC certificate file and generate DSC file to be saved to yourself. However these days, digital signatures are not always required on the income tax return filing.
• Now again log on to the income tax department portal with your tax deductor or the collector id and then select a tab that says upload TDS return. Fill in your asked details and information and then click on submit button.
• After the above steps followed, your token number shall get generated and later on checked onto through the option that says “view filed return”. This completes your job and your e-filing process is complete.

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Checklist for drafting a proper Franchise Agreement

In order to understand as to how we can execute a proper franchise agreement, first we have to be clear what a Franchise is and why is Franchise Agreement executed. In one line we can say that a

What is a Franchise?

When an established brand decides to lend their name, goodwill and trade secrets to set up their Brand’s Store on different locations and executes an agreement for the same effect then such an agreement is termed as a Franchise Agreement. Here, Franchisor and Franchisee enter into a legal agreement where Franchisee operates its business under the name of the Franchisor in exchange of payment of some fees including initial payment and royalties.

Checklist for Franchisee Agreement

Following is an example of checklist to be considered before finalizing a Franchise agreement. This is done to make sure that the agreement is not ambiguous and includes all the key clauses.

Costing Related

• If the parties have decided on total cost, royalties etc. If yes then clear distinction is provided between total cost, initial fees, initial cost required, royalty amount are to be provided.
• If any part of the initial fee refundable or not.
• Payment terms are to be clearly defined including total amount, time of payment and other financial arrangements like lump sum payments or installment facilities etc
• If the royalty amount is fixed, revenue based or a combination of the two is finalized
• Provisions relating to advertising and promotion costs. And cost sharing details.

Location Related

• Who has the authority to select the location
• Can the franchisee operate in more than one location?
• After the termination of the contract can franchisee operate independently in the same area.
• Which party will be responsible to obtain zonal permissions etc.

Building, equipment and supplies Related

• Who will decide on building plans and related details
• Provisions relating to remodeling and redecorating and who will do it.
• Is franchisee required to purchase supplies and equipment from franchisor only
• Are building, equipment and supplies covered by any kind of Group insurance plan.if yes, then its details are to be mentioned.

Operations related

• Are accounting and bookkeeping is handled solely by franchise or there is an arrangement for the same too.
• Degree of control Franchisor has over the franchisee’s operations to make sure the brand quality is maintained.
• Management aid along with training and assistance provided by the Franchisor. And if the cost for the same if covered by the royalty fees or not.
• Are there any quota’s set for sale, operating hours in the contract.
• who will provide the promotional materials.
• Are there any provisions relating to hiring fir the franchisee.

Termination and Renewal Related

• What are the non-compliances under which agreement can be terminated by the Franchisor and vice versa.
• What are the restrictions imposed on franchisee in case of termination done by Franchisor.
• Is sufficient time provided in case of termination for amortization of capital payments?

Other Matters

• Is Franchisee assignable to legal heirs in case of death or disability or can it be sold or not.
• Is business name, trademark, logo or any other mark distinctly identified with the franchisor. And there are not subject to any dispute or litigation.
• If all the requirements are met by the franchisor before executing this agreement.

Other points to consider

• Can the franchisee sell the franchised business and assign the franchise agreement to the buyer?
• Is the franchise assignable to heirs, or may it be sold by the franchisee’s estate on death or disability?
• What is the duration of any patent or copyright material to the franchise? If time is limited, does the franchisor intend to renew, and is this spelled out in the franchise agreement?
• Has the franchisor met all law requirements (registration, escrow or bonding requirements, etc.), if applicable?

 

Source url http://entersliceindia.blogspot.com/2018/09/checklist-for-drafting-proper-franchise.html

What is MSME registration? And how to apply for MSME registration online?

We all know that a country’s actual economic growth doesn’t really depend only on the big industries on a mega scale. Those are scarce in numbers. So the multinational organizations do bring in the development but on a general overview it’s the multiple small scale industries that are the backbone of a country’s economy. We are talking about something as small as cottage industries and the micro small medium enterprises. These small businesses are the true economy developers. These industries are diverse with each state adapted to their regional culture and tradition. And that’s why they are also a kind of cultural symbol.

What is the concept of MSME Registration?

The Indian government has created more accountability and support for these MSME industries in order to promote them and encourage their growth. Under the MSMED act the government has classified MSME industries as micro, small and medium enterprises. To every such industry that has an MSME Registration under the MSMED act, the Indian government provides with subsidies and certain incentives. But in order to avail for such benefits, you must get an MSME Registration. Apart from the small scale business in states, the other registered businesses like sole proprietorships, limited liability partnerships, public limited companies and private limited companies can also get an MSME registration for themselves. Let’s look at the classification criteria for the MSME Registration.

MSME Classification under the MSMED

In order to get MSME Registration your will have to get some information on how and under what category you need to do the registration for the size of industry you own. Following is the classification:-

• Micro enterprise:- You may register under this section if the investments in your industry did not exceed the amount of Rs25 lakhs, this is for the manufacturing sector of industry. For the service sector, it’s 10 lakhs.
• Small enterprises:- You can get your MSME Registration under this category if the investments into your industry were made more than the amount of Rs 25 lakhs but did not exceed the amount of Rs5 crores. For the ones in service sector the rage is from the amount of Rs 10 lakhs to Rs2 crores.
• Medium enterprises:- If your business has an investment that is more than Rs5 crores for the manufacturing sector while more than Rs 2 crores for service the sectors. Also not exceeding the amount of Rs 10 crores for manufacturing sector and Rs 5 crores for service sector then you may as well get your MSME Registration under the medium enterprise category.

MSME Registration Process:-

The MSME Registration takes place under the MSMED act. It’s not legally mandatory to apply for SSI registration but it is highly recommend getting an MSME Registration in order to avail the great government benefits.

The typical MSME Registration process involves preparing an application to be submitted to the respective government department. Your MSME Registration application will require some of your basic details to be filled in its form. The processing of your application will take anywhere between 15 days to 20 days which depend upon the satisfactory completion of your application. In case any errors are found on review, you will be asked to check whether to correct them and re-submit. Once the department is satisfied, you will be granted MSME Registration certificate making you eligible for all the desirable government given benefits.

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What is Tax Audit of an Enterprise?

 Tax Audit

As per section 44AB of Income Tax the Tax audit has been made mandatory and that all taxpayers are required to get the accounts of their business or organization audited by an outside agency.

Things are inspected during Tax audit

An examination of an individual’s or organization’s tax returns is verified. And that all the income, expenditure and deduction information have been filed correctly.

In case an organization is covered to undergo an audit covered in other provision of law, is also required to do Tax audit?

No, in case an organization is required to undergo tax audit under other than Income tax act, then Tax audit is not compulsory for such organization.

Applicability:

Sr. No.	Particulars	Limit
	Individual not opting for presumptive taxation scheme	Total sales, turnover or gross receipts > 1Crore.
	Individual opting for presumptive taxation scheme	Total sales, turnover or gross receipts >2 Crore
	individual, who is a professional	Gross receipts > Rs 50 lakhs
	Business eligible for presumptive taxation under Section 44AE*, 44BB* and 44BBB*	Claims profits or gains lower than the prescribed limit under respective presumptive taxation scheme
	profession eligible for presumptive taxation under Section 44ADA	Claims profits or gains lower than the prescribed limit under presumptive taxation scheme and income exceeds maximum amount not chargeable to tax
	Carrying on the business and is not eligible to claim presumptive taxation under Section 44AD due to opting for presumptive taxation in one tax year and not opting for presumptive tax for any of the subsequent 5 consecutive years	If income exceeds maximum amount not chargeable to tax in subsequent 5 consecutive tax years from the tax year where presumptive taxation is not opted for

 

Audit report:

Audit report is filed by qualified professionals usually the CA :-

• Form No. 3CA is furnished when a person carrying on business or profession is already mandated to get his accounts audited under any other law.

• Form No. 3CB is furnished when a person carrying on business or profession is not required to get his accounts audited under any other law
• In addition to above Form No. 3CD which forms part of audit report is also filed.

Due Date for Filing Tax Audit Reports:

The Due date of filing tax audit report under section 44AB is 30th September of the assessment year.

Penalty for Non-Compliance under sec. 44AB:

In case of non compliance a person is liable for paying penalty of 0.5% of his turnover / gross receipts subject to a maximum of Rs 1,50,000.

Due date for filing the tax returns

Under section 44AB due date to file Tax return is 30th September of the assessment year.

In transfer pricing audit cases, the due date for filing the tax audit is 30th November of the assessment year.

Advantages of Tax Audit:

1. It makes income computation more efficient
2. Correct liability is reached while Audit.
3. It acts as an eye opener for fraudulent practices.
4. Books of accounts of the company/entity are properly maintained.
5. Documentation is kept proper all the time, keeping in mind the preparedness for tax Audit.

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