Effect on Government Approvals on the corporatization of business

Effect on Government Approvals on the corporatization of business.

The role of government is inevitable in today’s business environment. The government affects the manner of doing business by controlling and ensuring the process of business is good for society. Here is the list of government approvals required on the corporatization of business:

ROC approval - A fresh approval is required for the registration of the company, person company, and LLP.

Local authority approval – pollution/municipal licenses and other govt licenses (related to factories and boilers act) After incorporation of new LLP/Company, a business transfer agreement would be made to transfer all assets, liabilities, licenses, permits, contracts, etc., from the old entity. Based on this all the licenses and permits may be transferred.

If there is practical difficulty in interacting with concerned local authorities a clause in the business transfer agreement to be incorporated to run the business in old license name until the things get stabilized.

This is a purely a liasioning issue with the local authorities and may be negotiated through a consultant in case of difficulty.

Trade certificate - Application for new/revised Trade certificate generally costs Rs 1,000/-. Additional costs may be incurred in case a consultant is employed to file the application.

MSME certificates - Yes MSME certificate needs to apply freshly. MSME benefits are available to all types of businesses.

The only condition is that the Turnover/investments are within the monetary limits specified by the government in this regard.

GST certificate - Yes needs to be freshly applied and also old stock and ITC shall be transferred to new GSTN so obtained.

Industrial registration, Registration under shop act, PF & ESI, etc - Fresh registrations are required in all such cases in the name of a new company or LLP so constituted. All existing staff and employees would require fresh registrations with same UAN.

PAN TAN Professional Tax registrations - Fresh application for allotment of new PAN is not required as an amendment in existing PAN would suffice the purpose. For amendment in old PAN correction in PAN application would require to be applied for.

Application of allotment of new TAN number and professional tax registrations is required in the new name.

However, there is no need to file any separate form. Details in relation to Area Code and other details shall be mention in the form INC-32 itself and PAN & TAN shall be generating with Certificate of Incorporation. Thus, a new PAN will be generated with the incorporation process of the company and all assets and liabilities of the old PAN shall be transferred to the new PAN so allotted.

Import Export license number - In case of change in the constitution of business new Import Export number

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