RBI to infuse 10,000- crore liquidity via OMO route

Liquidity conditions are likely to remain tight and may not fall below, 1 lakh crore in the near term, despite the Reserve Bank of India (RBI)’ s announcement of open market operations ( OMOs) on Friday.
After market hours today, RBI announced an OMO up to ₹ 10,000 crore on Friday. OMOs are market operations conducted by RBI by way of sale/purchase of government securities to adjust rupee liquidity conditions.
The government securities RBI will purchase through OMO are 7.32 per cent 2014, 7.59 per cent 2016, 8.15 per cent 2022 and 8.20 per cent 2025. “ The liquidity deficit in the system is not expected to improve in a major way due to this. We need one more OMO next week and
probably another one, depending upon the situation,” said Prasanna Patankar, senior vice- president, STCI Primary Dealer.
Today, banks borrowed ₹ 1,28,400 crore from RBI’s daily liquidity adjustment facility (LAF), compared with an average borrowing of slightly above ₹ 1 lakh crore last month, far ahead of RBI’s comfort zone.
But, the announcement of the OMO is expected to be positive for government bonds.
“The bond market will get comfort and yields are expected to drop on Tuesday,” said S Srinivasaraghavan, executive vice- president and head ( treasury) at Dhanlaxmi Bank. The yield on the 10- year benchmark bond 8.15 per cent 2022 fell marginally on Monday at 7.7976 per cent.
It is expected to drop by another two to five basis points tomorrow. The Street believes to comfort liquidity conditions, government spending, having slowed down during the current financial year, should pick up.
“Government spending needs to flow into the system to bring down the liquidity deficit. OMO will just support the market. There is oil subsidy worth ₹ 25,000 crore that is expected. This fiscal, the
government has been trying to control its spending to keep the fiscal deficit under control,” said a treasury official of a private sector bank.
The government has been trying to control spending in a bid to stick to the fiscal deficit target of 5.3 per cent of GDP for FY13. Last Friday, the government had cancelled the last scheduled auction of
government bonds worth ₹ 12,000 crore.
As the final instalment of corporate advance tax is due on March 15, the Street expects the liquidity deficit to worsen.
“Around the first 10- 12 days of March, the system loses around 15,000- 20,000 crore on account of rise of currency with public. This is a seasonal phenomenon due to which liquidity deficit will again go up and subsequently, there will be advance tax outflows of ₹ 60,000- 70,000 crore,” said Suyash Choudhary, head ( fixed income), IDFC Mutual Fund.
LAF (cr) Source: RBI

As the final instalment of corporate advance tax is due on March 15, the Street expects the liquidity deficit to worsen EPFO to pay 8.5% interest on deposits for FY13

Decision taken at the meeting of the Central Board of Trustees PRESS TRUST OF INDIA New Delhi, 25 February Retirement fund body Employees Provident Fund Organisation ( EPFO) today decided to pay 8.5 per cent interest rate to its over 50 million

subscribers on their provident fund ( PF) deposits for the financial year 2012- 13, higher than the 8.25 per cent provided in the previous financial year.

The decision was taken at the meeting of the Central Board of Trustees (CBT), the highest decision making body of EPFO, chaired by the labour minister.

“A decision has been taken to pay 8.5 per cent interest on PF deposits. But we have expressed our reservations, as we wanted higher interest rate,” said D L Sachdev, secretary, All India Trade Union Congress, after the CBT meeting. Earlier, a note prepared by EPFO for consideration of the February 15 meeting of the Finance and Investment Committee ( FIC) had said, “... 8.5 per cent rate of interest for the year 2012- 13 is feasible.” According to the EPFO estimates, apayment of 8.6 per cent interest rate on PF deposits would result in a deficit of 240.49 crore whereas a8.5 per cent interest rate for the current financial year would leave a surplus of ₹ 4.13 crore.

In the FIC meeting, union leaders refused to discuss the issue regarding payment of interest in the current financial year, as the agenda note for the issue was not provided in advance to them, sources said, adding the note was tabled during the meeting.

They had said the EPFOs estimates would be directly tabled before the CBT meeting ,for final approval. The notification on interest rate is issued by the government after concurrence with the finance ministry. Usually, EPFO announces interest rate at the beginning of the year, but there has been a delay this time.

Trade unions have been pressing for an early meeting of the CBT to decide on the interest rate for the current financial year. EPFO had paid 8.25 per cent interest to its subscribers for 2011- 12, lower than the 9.5 per cent disbursed in 2010- 11. Interest rate for the financial year 2010- 11 was 9.5%.

Usually, EPFO announces interest rate at the beginning of the year, but there has been a delay this time State FMs’ panel agree on GST law: Odisha minister

Instances of terror financing in country

Over 1,400 instances of terror financing in country’s economic channels were red-flagged by intelligence and security agencies last year, a latest report of the Finance Ministry says, marking a 300 per cent jump in such suspicious transactions.

The Financial Intelligence Unit (FIU), which functions under the ministry, has reported that it had received 1,444 reports during 2011-12 from agencies like the Intelligence Bureau, the Research and Analysis Wing and those in the economic domain and affiliated to the Income Tax and Customs departments.

The figure of such reports from these agencies stood at 428 during 2010-11, the agency says.

“The FIU also supports the efforts of domestic intelligence and law enforcement agencies against terror financing by providing information specifically requested by them, either by searching its database or by calling specific information from the reporting entities,” the report says.

The FIU is the national agency responsible for receiving, analysing and disseminating suspicious transaction reports (STRs) to security and anti-money laundering and tax evasion departments of the country.

The agency also reported a more than 100 per cent rise in the number of STRs received during 2011-12 as it collected a total of 69,224 such reports during this period as compared to 20,698 STRs during 2010-11.

The instances of reportage of fake currency in Indian banking channels are also on the rise, the FIU says.

RUN- UP TO THE BUDGET 2013- 14

Harmonising excise duty and service tax laws on cards in Budget |GST is a tax on both goods and services. As such, laws governing goods and services cannot be different |FM would meet the empowered committee of state finance ministers on GST thursday |Outline of GST likely to be given in Budget |Some more health and education services likely to be included in the negative list TOWARDS GST

Goods & Services Tax (GST)

As a prelude to the Goods & Services Tax ( GST), the finance ministry might harmonise service tax and excise duty laws in Budget 2013- 14. Also, it is likely to simplify Cenvat credit rules that allow set- off of excise duty or service tax paid on inputs against tax liability on the final product. It is also considering bringing some health and education categories in the negative list for taxation of services.
At present, excise duty and service tax are levied under two Acts. The ministry has shown its intent to merge the laws as a step towards GST. To begin with, it might harmonise essential processes like registration, return and assessment compliance.
Cenvat credit and provisions related to the settlement commission and appellate matters are common for service tax and excise duty.
A finance ministry official said the Central Board of Excise & Customs was also trying to address the issues related to input tax credit. It was in the process of simplifying the existing Cenvat credit scheme.
“If Cenvat credit rules are simplified, it will be a good reform. They should also address the concerns with regard to inverted duty structure, where raw material duty is higher than the finished product,” said Pratik Jain, partner, KPMG. He added wherever there was a difference between the provisions of central excise and service tax, rules should be aligned. If a refund was allowed on export of excise- exempt goods, that should be allowed for export of services, too.
In last Budget, too, Cenvat credit rules were amended to simplify the procedure for refund of unutilised credit on account of exports. Credit was allowed on sale, supply, repair, rent and insurance of motor vehicles. The amendments allowed credit on delivery of goods and payment of service tax by the service receiver on areverse- charge basis. However, experts say it has not helped much.
Officials also said some education and health categories might be brought under the negative list, which keeps 17 services outside the tax net. Currently, education is kept under the negative list at the pre- school level, up to higher secondary school, as part of acurriculum to obtain a qualification, and as part of an approved vocational course.
Auxiliary educational services and renting of immovable property by educational institutions in respect of education have been exempted from service tax. Healthcare services provided by clinical establishments, authorised medical practitioners or para- medics are also exempt. Budget might move some of these services, as well as bring in some more services taxed currently, to the negative list.
Move seen as prelude to GST rollout; rules for Cenvat credit also likely to be simplified

I- T dept to simplify norms on ECB interest payment

The Income Tax ( I- T) Department is looking at ways to relax and simplify the rules on tax collection and credit associated with foreign investments into the country, especially via external commercial borrowing ( ECB).
Concern has been raised on the method of identification for providing tax credit and the requirement of a permanent account number (PAN) for deduction of withholding tax.
Industry had raised these two issues before a Central Board of Direct Taxes committee looking into the matter, said a senior finance ministry official.
The panel is to soon give its report to the ministry and is expected to suggest simpler norms, said the official.
One member of an apex business chamber, who’d taken part in the discussions, said the PAN requirement for a lower withholding tax on ECB interest payments was seen as a major trouble area.
From April 1, 2010, under Section 206A of the I- T Act, any person entitled to receive a sum or income or amount on which tax is deductible in these cases is required to furnish his PAN to the person responsible for deducting such tax. If the PAN isn’t there, tax has to be deducted at 20 per cent.
The Finance Act, 2012, introduced Section 194LC in the I- T Act, providing for a lower withholding tax at five per cent on interest payments by Indian companies on borrowings made in foreign currency by such companies from a source outside India.
The chamber representative said with foreign investors reluctant to get into the process of getting a PAN, this differential treatment was proving an irritant.
The ministry official said the department will have to find a way out in which individual investors were not troubled but the required information was also with the department.
Govt likely to harmonise excise, service tax laws in Budget

Scope of consumer complaint

The National Consumer Commission ruled last week that even if a work contract is terminated for breach of terms, a consumer complaint can be moved before it. In this case, Poonam Chambers vs Aluplex India Ltd, the former filed a complaint for recovery of damages for the work left unfinished by the latter. The contract was terminated and the work was got completed through other agencies. When Poonam Chambers moved the Maharashtra state consumer commission, it dismissed the complaint at admission stage on the ground that the contract was terminated earlier to filing of complaint. Hence, no relationship of consumer and service provider subsisted between the parties and there is no consumer dispute under Consumer Protection Act. On appeal, the national commission set aside the state commission’s judgment and stated that “once the parties entered into a contract to provide service and the latter stopped work, the aggrieved party is entitled to file claim on account of deficiency of service even after termination of contract. Merely by termination of work contract it cannot be inferred that there was no relationship of consumer and service provider between the parties.” 

MJ ANTONY 

Forced to submit resignation

An employee of Atlas Cycle (Haryana) Ltd, who was allegedly beaten up, given electric shocks and forced to write his resignation letter was ordered to be reinstated by the Punjab and Haryana High Court, and that order was upheld last week by the Supreme Court. The worker was in service since 1977 and his resignation without any acceptable reason and without any monetary incentive should be considered in context. He complained about the forcible resignation within a day and he wrote to the chief minister and others. However, these factors were not considered by the labour court and it dismissed his complaint. On appeal, the high court passed the order of reinstatement with 25 per cent back wages. The Supreme Court stated that since the labour court overlooked material evidence on record, the high court was justified in interfering with the finding of facts by the labour court.

Customs Tribunal Order Quashed

The Supreme Court has set aside the order of the Customs and Excise Appellate Tribunal upholding the levy of duty and penalty for the import of furnace oil by Uniworth Textiles Ltd. The company had argued that the demand was delayed and therefore not valid. The tribunal reasoned that since the company procured furnace oil not for its own captive plant but for a sister concern, it could not claim exemption from payment of duty. The Supreme Court stated that the tribunal was wrong and its conclusion that non- payment was equivalent to collusion or willful misstatement was untenable. It rejected the revenue authorities contention that the act of the company was willful and mala fide. It is a serious allegation requiring high order of credibility and the authorities have not discharged this burden of proof.

DRT Auction Rule Mandatory

The Supreme Court has ruled that the provision for deposit of 25 per cent of the purchase money in an auction sale under the Debt Recovery Act (DRT) is mandatory and the recovery officer cannot relax it. According to the law, if there is a default on this, the property shall be resold immediately. The court thus dismissed the appeal of the purchaser in the case, C N Paramasivan vs Sunrise Plaza, against the Madras High Court judgment. In this case, which was fought over two decades, the partners of a firm defaulted in repaying the loan advanced by Indian Bank. The property was sold in auction, which was challenged by the partners for violation of the rules. The debt recovery appellate tribunal held that the purchasers did not act bona fide and set aside the sale and asked the partners to deposit the entire loan amount. The buyer challenged that order, contending that the rule to deposit was not mandatory, but only directory. The high court rejected his petition, and the Supreme Court dismissed the appeal. 

Black Money and Tax Evasion

In order to check black money and tax evasion, an online databank is being set up by the finance ministry for effective coordination and dissemination of various inputs pertaining to illegal funds.
The online system, which would act as a databank for financial intelligence sleuths, is named Virtual Office. It will help in the monitoring of suspicious transaction reports (STRs) generated by the Financial Intelligence Unit- India ( FIU- Ind), an agency tasked with receiving, analysing and disseminating information relating to suspect financial transactions to enforcement agencies and its foreign counterparts.
It will have a representative each from Central Board of Direct Taxes, Directorate General of Revenue Intelligence, Central Economic Intelligence Bureau, Directorate General of Central Excise Intelligence and FIU- Ind.
India has lost a whopping $123 billion in black money during the last decade, according to a report by a US- based research and advocacy organisation on ‘ Illicit Financial Flows from Developing Countries: 2001: 2010’.
As many as 13,871 STRs were disseminated by the FIU- Ind during financial year2011- 12.
Of these, 10,956 were passed on to CBDT, 1,615 to the Enforcement Directorate, 1,130 were shared with CBEC, DRI and DGCEI, 117 STRs with Securities and Exchange Board of India, 51 with Reserve Bank of India and two with Insurance Regulatory and Development Authority.
An STR is a transaction, of ₹ 10 lakh and above, which gives rise to a reasonable ground of suspicion that it may involve the proceeds of a crime through drug trafficking, gun running, and illegal imports and exports of goods.

 

PRESS TRUST OF INDIA

New pension plans are still costly

To avail of the tax- saving season, unit- linked pension plans have been launched in a new avatar. HDFC Life Insurance was the first, launching the Pension Super Plus. Plans by ICICI Prudential Life Insurance and Birla SunLife Insurance followed. Financial planners say they are fielding many queries about these products. Under Section 80C of the Income Tax Act, pension plans qualify for a tax deduction of up to ₹ 1 lakh. On maturity, a third of the corpus, which the customer receives as a lump sum, is tax- free; the rest has to be used for buying an annuity product that gives periodic income. Guaranteed returns from new unit- linked pension plans have become popular. The Insurance Regulatory and Development Authority has asked companies to provide non- zero guarantee on maturity benefits. Earlier, it had asked for at least 4.5 per cent, which led to pension plans disappearing from the market. However, the guarantee provided is meagre. With the new plans, an aggressive investor is likely to get one per cent guaranteed return. Sample this: ICICI Prudential Life Insurance will pay 101 per cent of the premiums paid till date to an aggressive investor (75 per cent in equity), irrespective of the policy term. A moderately aggressive fund ( 50 per cent in equity) guarantees 125- 150 per cent. And, a conservative fund ( 25 per cent in equity) would pay 145- 190 per cent, depending on the premium payment option, the policy term and the investment option. This return varies between 101 and 140 per cent for Birla SunLife Insurance’s product; for HDFC Life Insurance, it is 101 per cent. However, in each of these cases, if the fund value is more than the guaranteed amount, you earn the fund value on maturity. One per cent return for an investment term of 10 years or more for an aggressive investor ( equity investor) is too low. Equity funds can give much higher returns in the same period. According to mutual fund rating agency Value Research, despite the poor market conditions, equity diversified funds gave about four per cent returns in the past five years. Even a five- year bank deposit gives higher assured returns of 8.50 per cent, along with tax benefits. Conservative investors might find the debt investment option lucrative but through 10, 20 or 30 years, debt products like tax- free bonds and debt mutual funds would yield similar returns. Why, then, should you pay more than other long- term instruments and earn at par? Mumbai- based certified financial planner Gaurav Mashruwala says there isn’t much difference between earlier unit- linked pension plans and new ones, in terms of wealth accumulation. Typically, financial planners do not recommend pension products for retirement planning. The retirementplanning instruments they favour are the Employees’ Provident Fund ( EPF), the Public Provident Fund ( PPF) and equity mutual funds. The charges by these pension plans are similar to unit- linked insurance plans but higher than those of other products. For instance, Birla SunLife Insurance levies a premium allocation charge of six per cent for the first three policy years. This is lowered by one per cent for the fourth and fifth years and fixed at four per cent from the sixth year. The annual fund management charge for equity funds is 1.35 per cent; for debt funds, it is one per cent. The policy administration charge is ₹ 20 for the first five years and ₹ 25 from the sixth year, which would rise five per cent every year, subject to a ceiling of ₹ 6,000. Also, there is an annual investment guarantee charge of 0.25 per cent of the fund value. Compare this to the expense ratio of mutual funds ( 0.50 to 2.75 per cent). And, PPF accounts can be opened for free. Certified financial planner Kartik Jhaveri says the lock- in period is another drawback. Also, only athird of the amount is available on maturity. “ Instead, you can invest in an equity fund or a debt fund and time the income as you want. In case of an emergency, it is more difficult and expensive to withdraw from an insurance plan, against mutual funds or bank deposits,” he says. One can easily take a look at the 15- year returns data by equity funds. Even if unitlinked pension plans give higher returns through 10, 15 or 20 years, you may still choose other avenues, owing to lower lock- in periods, lower costs and higher liquidity. For tax- saving, too, PPF/ EPF and equity funds are equally, if not more, tax- friendly. “By not choosing a pension plan, one would only compromise on tax saving; that, too, if it is required,” says Mashruwala. Typically, if you are contributing towards PPF, EPF, a home loan and a child’s tuition fee, you may not need to save any taxes. The new pension norms mandate buying annuity from the same insurer. If it is not the best offer, you are stuck with the same company. Jhaveri says pension plans are advisable only if one is invested in Life Insurance Corporation’s Jeevan Suraksha ( a traditional pension plan launched in 2000), which assures eight per cent returns, or if one is an indisciplined investor. Otherwise, avoid pension plans, he advises. With 50 per cent investment in equities, minimal fund management charges and average returns of nine per cent, the New Pension Scheme is another good option. One may also consider pension plans from mutual fund houses. One can receive the entire corpus on maturity and either put it in a savings account or buy annuity at the best offered rate. Under the garb of non- zero guaranteed returns, insurers are offering a raw deal at higher costs AT A GLANCE ICICI Pru Shubh Retirement HDFCLife Pension Super Plus Birla SunLife Empower Pension Plan Entry age ( years) 35- 70 35- 65 25- 70 Policy term ( years) 10,15, 20, 25 and 30 10, 15, 20 10, 15, 20 Premium paying term 5 and 10 years Equal to policy term 5- 30 years Charges PAC( 1- 5 yrs) = 3%* PACfor10 years = 2.5%* PAC= 6%, 5%, 4% varying each yr FMC= 1.35% FMC= 1.35% FMC= 1.35% ( 1% fordebtfund) Policy Admin Fee = 0.30%# Policy Admin fee = 0.40 - 0.47%# Policy Admin fee = ₹ 20 to ₹ 25 Invstguarantee fee = 0.50%## Invstguarantee fee = 0.40%## Invstguarantee fee = 0.25%## Miscellaneous charge = ₹ 250 Miscellaneous charge = ₹ 250 Exposure to equity up to 75% up to 60% up to 100% Guaranteed 101- 195% of all premiums** Higherof fund value or101% of all premiums Higherof fund value or101- 140% of all maturity benefit paid till date ( including top- up premiums) premiums of premiums paid till date Guaranteed 101- 195% of all premiums** Higherof fund value orall premiums Higherof fund value or101% of all premiums death benefit at6% annually orpremiums accumulated at0.5- 3% annually PAC = Premium allocation charge; FMC = Fund management charge; PPT = premium payment term; * Annual premium payment ; ** Depending on the investment option, policy term & premium payment term Source: Product Brochures NEHA PANDEY DEORAS

Preview

Biplab Mondal Asks:

PLEASE INFORM ME ABOUT DETAILS OF THE COMPANY FORMATION, FEE PROCEDURE, TOTAL EXPENSE ETC & DURATION OF COMPLETION.

Reply From Companysetup:

Dear Sir,

 

Many thanks for taking interest in our services. For incorporation of a private limited company anywhere in India having authorized capital of Rs. 1,00,000/- with two resident Indian directors we charge Rs. 14,999/- (all inclusive) [ Rs. 4,999/- towards professional fees plus Rs. 10,000/- towards govt fees & all sort of out of pocket expenses]. We will form your company in almost 7 working days from date of receipt of documents and payments. We take an advance payment of Rs. 4,999/- before starting the process and balance Rs. 10,000/- to be paid after approval of company's name but before submission of final documents & govt. fees. There are no hidden charges beyond our quoted amount. We hope you will find terms suitable to you.

 

Our quoted fees is inclusive of followings:-

 

 1)  All Sort of Government Fees.

 2)  Director Identification Numbers (DIN) = 2 Nos.

 3)  Digital Signature (DSC) = 1 No.

 4)  Checking availability of company's name/s.

 5)  Getting approval of name of proposed company.

 6)  Drafting of MOA & AOA (By-Laws) and getting approval.

 7)  Printing of Final Memo & Articles (By-Laws) = 50 copies.

 8)  Stamping of MOA & AOA.

 9)  Representing you before Registrar of Companies.

10) Obtaining Certificate of Incorporation.

 

Now a days, the process of incorporation is undertaken online therefore your all documents are needed in soft copy (scan) through E-mail .

 

Following documents/ information are required initially from your end:-

 

1) PAN Card of proposed directors with self attested.

2) Proof of Address of Directors (Latest Bank Statement or Telephone Bill within a period of 2 months/ Driving License/Passport/ Voter identity Card etc) with self attested.

3) Qualification of the proposed directors.

4) Passport size photograph (Soft Copy in JPEG format).

5) Proposed 1+5 name for the new company.

6) Description about the main object of the company.

7) The Affidavit from the directors in non judicial stamp paper worth Rs 10/- and must be notarized ( the format will be sent by us at later stage).

8) The complete registered address of the company, if :

- own by the directors(NOC from director along with the consumption bill, like electricity bill,telephone bill,etc)

- own by other than director(rent agreement, NOC along with consumption bill, like electricity bill,telephone bill,etc from  owner).

9) Nearest Police Station to the registered address(Name & Address).

 

We hope to clarify everything about information that may required by you. Kindly revert back suitably if you need any clarification/ information in this regard.

 

With kindest regards,

 

Kanika Rawat

companysetupindia.com

316-317, Vats Market, Adj. Shiva Market,

Madhuban Chowk, Pitampura, New Delhi-110034, India

Tel: +91-11-41117200 (20 Lines), +91-11-41117201 (Direct)

Fax: +91-11-45076210.

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Biplab Mondal Asks:

 

Dear Madam,

 

I read your mail and in this regard I would like to say that I am keen interested to setup a PUBLIC LIMITED COMPANY. But madam is there any way that I can issue redeemable preference share or debenture to raise the company fund? Please state me in details.

On the other hand Money marketing is one kind of big business in India today and this is my second choice. Many people take it in different ways. But I from my end, I want to utilize the fund for the development of company business in return of the expected benefit of the customers. So I am interested in forming of money marketing company too. So, I am requesting you to provide me prior information so that my business can be developed by either forming chit fund company or in a simple way of forming only a public limited company or setting up micro-finance company.

 

My thinking and plans are stated you in details but I will contact you after I get the assurance from you and then I will provide you the primary business details of our company and the documents you need for the process.

 

Thanks & Regards

 

Biplab Mondal
 

Reply From CompanySetup:

Dear Sir,

 

Good day !

 

U/s 80 of the Companies Act 1956, an unlisted public company may issue redeemable preference share which should be redeemed within a period of twenty years . The following are the process to issue the redeemable preference share:

 

1)      Increase the authorised capital of the public limited company from the minimum limit of Rs. 5 Lac.

2)      The article of association of the public limited company must authorize the issue.

3)      A notice must be issued for the general meeting along with the explanatory statement which contain several matter regarding the issue such as the price, objectives, the class of person to whom the issue has been made, proposed time when the allotment is completed etc.

4)      A special resolution required to be passed by the members of the company u/s 81 (1A) authorizing the board for issue of the same.

5)      The statutory auditor / the company secretary of the issuing company shall certify that the issue is made in accordance with the company rules which is to be produced in the general meeting.

 

Regarding the issue of debentures an unlisted public company may issue the same.

 

1)      First of all a Board meeting is convened at which the decision to issue debentures, the number and terms of issue and the rate of interest is taken by means of a resolution to that effect.

2)      It is necessary that the total value of debentures including other borrowings should be well within the borrowing limit fixed by the shareholders by the resolution under Sec 293(1)(d) of the act.

3)      In case the debentures are issued under a Trust Deed, necessary consent of trustees is obtained and a draft of Trust Deed is prepared. A draft of prospectus and the Debenture Bond is also prepared.

4)      After the completion of these formalities, the Board approves the drafts of prospectus, Trust Deed and debenture bonds and directs the secretary to arrange for their printing.

5)      The Trust Deed is then executed with the trustees for debenture holders.

6)      Only secured debentures will be permitted for issue to the public. The particulars of the charges created on the issue are to be filed with the Registrar of Companies within 30 days of the execution of the Trust Deed for registration and a Certificate of Registration is obtained. This Certificate is to be endorsed on every Debenture Certi­ficate. All particulars are also entered in the "Registrar of Charges" maintained by the company at its registered office.

7)      A copy of the prospectus is then filed with the Registrar and the Prospectus is issued to the public. In case the debentures are to be issued privately (without making a public offer) a statement in lieu of prospectus is to be filed with the Registrar at least three days before the first allotment of debentures.

8)      After the allotment, the particulars about each debentures are entered in the Registrar of Debenture-holders and Deben­ture Certificates are prepared which are issued to the Allottees in due course.

 

Regarding  Chit fund Companies operating in Delhi as a practice, first obtain a certificate of incorporation from the Registrar of Companies.
(A) Requirements for registration of New Co. with Registrar of Chit Fund, New Delhi.
After getting this certificate, you can apply for registration of first Bye-laws of the company with Chit Fund Department., Govt. of N.C.T. of Delhi, 13th floor, Bikri Kar Bhawan, I.P. Estate, New Delhi 110 002 (Tel. No. 331 8992)

a) Memorandum and Articles of Association.
b) Incorporation Certificate.
c) Form No. 2 regarding shares allotment.
d) Form No. 18 regarding registered office. 
e) Form No. 32 regarding appointment of Directors.
f) R.O.C. Receipt for filing of form No. 2, 18, 32.
g) Bank certificate for deposit of Rs. 10,00,000/- as paid-up capital.
h) Resolution for appointment of foreman of the company.
I) Affidavits of the Directors regarding:-

1. Age, good health and sound mind.
2. Insolvency.,
3. Non-conviction.
4. Membership/Directorship in other chit fund company.

j) Proof of ownership of the office premises.
k) No objection certificate from the landlord.
l) Rent Receipt of premises.
m) Lay out plan of premises.
n) Photo-copies of Ration Cards of the Directors.
o) Photographs of all the Directors duly attested.
p) Papers regarding financial soundness of the Directors.

1. Proof of property, if any.
2. Assessment order, if any.
3. Balance sheet(s) of the company whether partnership or proprietorship.
4. Other financial documents.

q) Form CF-1 in duplicate (application for registration).
r) Bye-laws in duplicate.

We hope we clarify everything about information that may required by you. Kindly revert back suitably if you need any clarification/ information in this regard and also submit the documents to start the process.

 

 

With kindest regards,
CA Pradeep Mallick

info@companysetupindia.com
316-317, Vats Market, (Adjoining Shiva Market)
Pitampura, New Delhi-110034, India
Tel: +91-11-41117200 (20 Lines), 41117202 (Direct),Mobile: +91-09310277186
[You may call us during Indian Time 09:00 am to 07:00 pm GMT+05:30]

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