You should go for a private limited company.
In my advise you should start the business after getting all the compliances. It is not advised to import the product on personal basis.
Regards
Need guidance for company registration according to my porject
Hello, I am starting a company in which I am going to import products from foreign countries like Malaysia and China and then going to sell in different states of India by retail as well as wholesale to a dealer. I know that I would need IEC Code and GST number for that but I need to know which company registration I should go for? My estimated budget is maximum 10-12 lakhs per year. We are two people working in this project. Should I go for partnership firm or LLP registration? One more thing, I am bringing some products already from Malaysia on the name of personal bases and I need to sell them and registration of firm will take time as well. Is there any way to sell them with bill? and even if I get GST number will I be able to sell these products i bought on personal bases with GST bill??
Asked 6 years ago in Business Law
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12 Answers
1) Sell all products on individual base after registration of firm you can show those business in that firm at the end of the year.
2) You better go for LLP firm that will be best.
Thanks for your answer. But I didnt understand first answer? Like if i brought products now on personal bases then how can I show them in my GST number, wouldn't that be caught?
Asked 6 years ago
1. For entering into international ventures it is not advisable to limit the organisation to partnership firm as its periphery is limited compared to limited company or LLP.
2. So proceed for forming a private limited company containing as many directors as you want but contain it within 5 for effective running of the business.
3. Apart from GST you would require lot of other registration and licenses like trade license etc.
Feel free for further assistance to set up such company.
No, you can show that you have applied for LLP registration and it's in process, you will get receipt of it.
For your first question - Given your yearly business budget, please consider moving forward as a partnership firm. LLP is not recommended as the one time set up cost and annual compliance cost under LLP Act for setting up / running an LLP will be about 15% of your stated per year budget.
For your second question - If your aggregate turnover from the total sale of products in your name in a financial year does not exceed Rs 20 lakh, you don't need GST registration. Basis said position, as a one-off case, you can sell such products in your personal capacity with a bill but not GST number. The other way could be that assuming you're setting up a partnership and getting GST for it, I'd recommend that you transfer the goods you've purchased in your personal capacity to the partnership firm as part of your contribution and then sell such products using bill with GST of your partnership.
Trust the above helps.
Sir you can form a LLP with the other person and can get same registered.
Further can seek pan card and registration under GST for same.
For this time.order you can register yourself under GST and pay under your name as individual registered under GST later when firm is registered and operative you can surender your registration after one year.
You can seek registration of GST on your name. There is nothing wrong in individual transaction you can seek gst registration pay gst under your name.
You can not do the same, as advised
For this purpose you have to purchase quoating your GST number to get ITC. Any personal purchase cannot be taken into the account claiming ITC under GST regime
1. LLP is better than partnership
2. when you bought the articles, you are required to pay GST which will be collected by the vendor and deposited in government treasury. In your case you bought the articles from a foreign country, so no gst will be payable by you because gst is not applicable to foreign vendors. You just have to pay import duty when these articles enter into India. When you sell these articles in India, you can sell them under your individual GST number pending the issue of GST number for your company. The GST collected by you from your seller will be deposited by you in government treasury. So where is the question of being caught? Government is only interested in the collection of GST by the party on whom such obligation is imposed and deposit of the collected GST in government treasury.
Each partner should have a copy of the partnership deed. A Copy of the Partnership Deed should also be filed with the Registrar of Firms in case the firm is being registered. Decide whether or not to register the partnership firm. Partnerships in India are governed by the Indian Partnership Act, 1932. The partners may also mention any additional clauses. Some of the examples of additional clauses which may be mentioned in the partnership deed are mentioned below:
Interest on the partner’s capital, partners’ loan, and interest, if any, to be charged on drawings.
Salaries, commissions etc, if any, payable to partners
Method of preparing accounts and arrangement for audit
Division of task and responsibility, namely, the duties, powers and obligations of all the partners.
The rules to be followed in case of retirement, death and admission of a partner.
If you are selling the products in your name under the GST on your name then you may have to obtain new GST for the firm at a later stage.
Until then you can sell the products on your name with bills from your name
But I didnt understand first answer? Like if i brought products now on personal bases then how can I show them in my GST number, wouldn't that be caught?
You cannot utilise the company's GST for your personal transactions instead you may obtain a new GST to sell the products on your name exclusively.