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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Yes, a shareholder who casts an e-vote can still attend the general meeting and participate in discussions. However, there are a couple of important points to keep in mind: Participation in the Meeting: Using the e-voting facility does not bar you from physically attending the meeting. You can joinRead more

    Yes, a shareholder who casts an e-vote can still attend the general meeting and participate in discussions. However, there are a couple of important points to keep in mind:

    • Participation in the Meeting:

      • Using the e-voting facility does not bar you from physically attending the meeting.
      • You can join the meeting, ask questions, and contribute to discussions even after casting your e-vote.

    • Changing Your Vote:

      • Typically, once an electronic vote is successfully submitted, it is considered final.
      • Most companies do not allow a vote change after it has been recorded.
      • Exception: Some companies may offer a specific time window or mechanism (like a “revote” option) if you wish to change your vote before the final tally. It’s essential to check your company’s specific e-voting guidelines
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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    When a private company has only two shareholders, the quorum for a general meeting is usually defined by the company’s Articles of Association. Here’s what you should know: Standard Quorum Requirements:Typically, the Articles specify that at least two members must be present to form a quorum. In a tRead more

    When a private company has only two shareholders, the quorum for a general meeting is usually defined by the company’s Articles of Association. Here’s what you should know:

    • Standard Quorum Requirements:
      Typically, the Articles specify that at least two members must be present to form a quorum. In a two-shareholder company, if one shareholder is absent, the quorum is not met, and the meeting cannot proceed as a valid AGM.

    • Adjourned Meetings:
      Even if a meeting is adjourned and reconvened, the quorum requirement remains the same unless the Articles explicitly provide that a lower quorum (for example, one member) is acceptable for the adjourned meeting.

    • Custom Provisions in Articles:
      Some companies may have provisions allowing a single shareholder to constitute a quorum during an adjourned meeting. It’s essential to review the Articles of Association to determine if such an exception applies.

    Key Takeaway:

    Unless the company’s Articles specifically allow for a lower quorum (such as one member) during an adjourned meeting, the attendance of just one shareholder in a company with only two shareholders does not meet the quorum requirement

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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    A National Holiday refers to any day that is officially declared by the Government of India as a public holiday (for example, Republic Day, Independence Day, or Gandhi Jayanti). When it comes to holding an Annual General Meeting (AGM), the concept of a national holiday is significant for several reaRead more

    A National Holiday refers to any day that is officially declared by the Government of India as a public holiday (for example, Republic Day, Independence Day, or Gandhi Jayanti). When it comes to holding an Annual General Meeting (AGM), the concept of a national holiday is significant for several reasons:

    • Scheduling Considerations:
      National holidays typically mean that government offices (like the Registrar of Companies) and other essential services are closed. This can affect the practical aspects of conducting the meeting, such as filing related documents or ensuring proper participation.

    • Quorum and Participation:
      Since many directors and shareholders may be unavailable on a national holiday, holding an AGM on such a day could lead to issues with meeting the quorum requirements necessary for a valid meeting.

    • Best Practices:
      Companies are generally advised to avoid scheduling AGMs on national holidays. If an AGM is scheduled on a national holiday, it is often postponed or adjourned to the next working day to ensure full participation and compliance with statutory requirements.

    Conclusion:
    In summary, a “National Holiday” under the Companies Act refers to days when official operations are suspended by government decree. For AGMs, this means companies should plan to avoid these dates to ensure that quorum is met and the meeting can proceed smoothly.

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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    The Companies Act, 2013 lays out clear guidelines on when and where an Annual General Meeting (AGM) should be held. Here’s a quick overview: Timing: Public Companies: Must hold their AGM within 6 months from the end of the financial year. Private Companies: Should conduct the AGM within 15 months frRead more

    The Companies Act, 2013 lays out clear guidelines on when and where an Annual General Meeting (AGM) should be held. Here’s a quick overview:

    • Timing:

      • Public Companies: Must hold their AGM within 6 months from the end of the financial year.
      • Private Companies: Should conduct the AGM within 15 months from the previous AGM.
      • The meeting must be scheduled on a day that is considered a working day, ensuring that essential services (like banks and registrars) are available.

    • Day:

      • The AGM should be held on a working day. This is important because many stakeholders rely on the availability of government offices and other support services on working days.

    • Place:

      • The Board decides on the venue for the AGM. Typically, it’s either the company’s registered office or another location clearly notified in the meeting notice.
      • The chosen venue must be accessible to shareholders, and details of the location must be clearly stated in the notice.

    • Notice Requirements:

      • The company must issue a notice specifying the date, time, and place of the AGM at least 21 clear days in advance of the meeting.

    In essence, the AGM must be held within the prescribed timeframe, on a working day, and at a venue communicated well in advance to all shareholders. This ensures that the meeting is conducted efficiently and that shareholders can participate without any hindrances.

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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Under the Companies Act, 2013 and the respective rules regarding the inspection of records and registers, companies must allow their members to access and inspect certain documents (such as registers, minutes, and other statutory records). However, when the Articles of Association (AoA) are silent oRead more

    Under the Companies Act, 2013 and the respective rules regarding the inspection of records and registers, companies must allow their members to access and inspect certain documents (such as registers, minutes, and other statutory records). However, when the Articles of Association (AoA) are silent on charging fees for such services, the company is generally not obligated to levy any fees for providing inspection, copies, or extracts.

    Key Points to Understand:

    • Statutory Rights of Members:
      Members have a legal right to inspect the company’s records and registers. This right is protected under the Companies Act, and any fees imposed should not hinder that right.

    • Role of the Articles of Association:
      If the AoA specifically mention fees for providing copies or allowing inspections, then those terms must be followed. However, if the AoA are silent on this matter, there is no statutory mandate requiring the company to charge any fee for these services.

    • Administrative Considerations:
      While the company might incur minor administrative costs in processing requests, there is no requirement to pass on significant fees to members unless the AoA provide otherwise.

    • Best Practices:
      Many companies choose to provide access to these records without charge as a part of good governance and transparency. Even if minimal fees are charged, they should be reasonable and not deter members from exercising their statutory rights.

    Conclusion:

    If your company’s Articles of Association do not specify any fees for the inspection or copying of records and registers, you are not required to charge fees for these services. This approach aligns with the statutory intent to ensure that members can easily access important company documents.

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Ramesh Sharma
Enlightened
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  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Internal Financial Controls (IFCs) are the systems, policies, and procedures implemented by a company to ensure that its financial reporting is accurate and reliable, assets are protected, and the risks of fraud and error are minimized. Key Features of Internal Financial Controls: Accuracy of FinancRead more

    Internal Financial Controls (IFCs) are the systems, policies, and procedures implemented by a company to ensure that its financial reporting is accurate and reliable, assets are protected, and the risks of fraud and error are minimized.

    Key Features of Internal Financial Controls:

    • Accuracy of Financial Reporting:
      IFCs help ensure that accounting records and financial statements are prepared correctly.
    • Asset Protection:
      They safeguard company assets from misuse or theft.
    • Fraud Prevention:
      Robust controls help prevent fraudulent activities.
    • Operational Efficiency:
      These systems streamline processes, reducing errors and inefficiencies.

    Are They Mandatory?

    • For Listed Companies:
      Yes, all listed companies are required to have strong internal financial controls. Their effectiveness must be reported in the Director’s Report under Section 134 of the Companies Act, 2013.
    • For Other Companies:
      While the requirement is more stringent for listed companies, other companies—especially those meeting certain thresholds for paid-up capital, turnover, or net worth—are also expected to establish adequate internal financial controls. Even if not strictly mandatory for every company, implementing IFCs is considered a best practice for good corporate governance.

    Conclusion

    Internal Financial Controls are essential tools for ensuring the integrity of financial operations. They are a mandatory requirement for listed companies and are strongly recommended for all companies to promote transparency, safeguard assets, and manage risks effectively.

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Yes, you can generally claim GST input tax credit on office expenses—provided these expenses are incurred for business purposes and you meet the conditions laid out in the GST law. Here’s a simple breakdown: Eligibility:Input tax credit (ITC) is available for goods and services that are used in theRead more

    Yes, you can generally claim GST input tax credit on office expenses—provided these expenses are incurred for business purposes and you meet the conditions laid out in the GST law. Here’s a simple breakdown:

    • Eligibility:
      Input tax credit (ITC) is available for goods and services that are used in the course of your business. For example, expenses like rent, utilities, stationery, and other office supplies qualify if they are used exclusively for business operations.

    • Conditions to Claim ITC:
      To claim the credit, ensure you:

      • Hold Valid Tax Invoices: You must have proper invoices showing the GST charged on these expenses.
      • Use for Taxable Supplies: The expenses should be related to making taxable supplies. If the office expenses are partly for non-taxable or exempt supplies, you may need to proportionately reverse the credit.
      • Meet the Conditions Under Section 16: Input tax credit is available only if the conditions specified in Section 16 of the CGST Act are satisfied.

    • Exceptions:
      Certain items might be specifically blocked under GST, or the credit may be restricted if the expense is partly for personal use. For instance, if any portion of the office expense is related to exempt supplies, you cannot claim ITC for that portion.

    Bottom Line:
    If your office expenses are incurred solely for business and you maintain proper documentation, you can claim the GST input tax credit on these expenses. Always review your invoices and usage carefully, and if needed, consult with a tax professional to ensure you’re compliant with the GST rules.

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    When a business changes its legal structure—from a proprietorship to a partnership—the underlying legal entity also changes. Since GST registration is issued to a specific legal entity, the GST number linked to your proprietorship cannot be transferred to the new partnership. What This Means: New LeRead more

    When a business changes its legal structure—from a proprietorship to a partnership—the underlying legal entity also changes. Since GST registration is issued to a specific legal entity, the GST number linked to your proprietorship cannot be transferred to the new partnership.

    What This Means:

    • New Legal Entity:
      A proprietorship is treated as an extension of the owner, while a partnership is a distinct legal entity with its own identity.

    • New GST Registration Required:
      Since the legal entity has changed, you must cancel your existing GST registration for the proprietorship and apply for a new GST registration in the name of the partnership.

    • Compliance:
      It’s important to complete the new registration process to ensure continued compliance with GST laws and avoid any disruptions in your business operations.

    Final Takeaway:

    No, you cannot use the same GST number when transitioning from a proprietorship to a partnership. A new GST registration is mandatory for the new partnership entity.

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Ramesh Sharma
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    No, when calculating aggregate turnover under GST, you do not include the value of inward supplies on which the Reverse Charge Mechanism (RCM) is payable. Reference to the Law: Section 2(6) of the CGST Act, 2017 defines “aggregate turnover” as the aggregate value of all taxable supplies, exempt suppRead more

    No, when calculating aggregate turnover under GST, you do not include the value of inward supplies on which the Reverse Charge Mechanism (RCM) is payable.

    Reference to the Law:

    • Section 2(6) of the CGST Act, 2017 defines “aggregate turnover” as the aggregate value of all taxable supplies, exempt supplies, and exports made by a person in the course or furtherance of business.
    • Inward supplies under RCM are not included because they represent supplies received (where the recipient is liable to pay tax) and not supplies made by you.

    Why This Matters:

    • Accurate Calculation:
      The purpose of calculating aggregate turnover is to determine GST registration thresholds and compliance requirements based on your own business supplies. Including inward supplies would inflate your turnover incorrectly.

    • Statutory Clarity:
      The definition in Section 2(6) clearly focuses on supplies made by the taxpayer, ensuring that reverse charge transactions—where tax is paid on inward supplies—are excluded.

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Ramesh Sharma
Enlightened
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  1. CA Vishnu Ram Enlightened

    Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it: 1️⃣ If the Reimbursement is Part of the Professional Fee: If the consultant has raised a single invoice coveringRead more

    Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it:

    1️⃣ If the Reimbursement is Part of the Professional Fee:

    • If the consultant has raised a single invoice covering both professional fees and expenses, then TDS must be deducted on the total amount as per Section 194J (for professional services @10%) or 194C (for contracts @1%/2%), depending on the nature of service.

    2️⃣ If the Reimbursement is Separate & on Actuals:

    • If the consultant has provided original bills on the name of your entity (e.g., travel, hotel, or material expenses) and is merely getting reimbursed, then TDS is not applicable since these are not part of the consultant’s income.
    • If the bills are in the consultant’s name, then deduct the TDS u/s 194R with 10% if reimbursement is more than 20000.

    3️⃣ Best Practices:

    ✅ Ask the consultant to bill separately for professional fees and reimbursement.
    ✅ Maintain proper documentation (supporting invoices) to justify the non-deduction of TDS in case of scrutiny.
    ✅ If unsure, consult a tax expert to ensure compliance.

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