The Central Board of Direct Taxes has extended the due dates of Income Tax Return, Tax Audit, TDS Statement and Other Compliances to provide relief to taxpayers in view of the COVID-19 pandemic. Read the official announcement below:
Circular No. 9 of 2021
F.No.225/49/2021 -ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi,
Dated 20th May, 2021
Subject: Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic
The Central Board of Direct Taxes, in exercise of its power under section 119 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) provides relaxation in respect of the following compliances:
1) The Statement of Financial Transactions (SFT) for the Financial Year 202021, required to be furnished on or before 315t May 2021 under Rule 114E of the Income-tax Rules, 1962 (hereinafter referred to as “the Rules”) and various notifications issued thereunder, may be furnished on or before 30th June 2021;
2) The Statement of Reportable Account for the calendar year 2020, required to be furnished on or before 31st May 2021 under Rule 114G of the Rules, may be furnished on or before 30th June 2021;
3) The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21, required to be furnished on or before 31st May 2021 under Rule 31A of the Rules, may be furnished on or before 30th June 2021;
4) The Certificate of Tax Deducted at Source in Form No 16, required to be furnished to the employee by 15th June 2021 under Rule 31 of the Rules, may be furnished on or before 15th July 2021;
5) The TDS/TCS Book Adjustment Statement in Form No 24G for the month of May 2021, required to be furnished on or before 15th June 2021 under Rule 30 and Rule 37CA of the Rules, may be furnished on or before 30th June 2021;
6) The Statement of Deduction of Tax from contributions paid by the trustees of an approved superannuation fund for the Financial Year 2020-21, required to be sent on or before 31st May 2021 under Rule 33 of the Rules, may be sent on or before 30th June 2021;
7) The Statement of Income paid or credited by an investment fund to its unit holder in Form No 64D for the Previous Year 2020-21, required to be furnished on or before 15th June 2021 under Rule 12CB of the Rules, may be furnished on or before 30th June 2021;
8) The Statement of Income paid or credited by an investment fund to its unit holder in Form No 64C for the Previous Year 2020-21, required to be furnished on or before 30th June 2021 under Rule 12CB of the Rules, may be furnished on or before 15th July 2021;
9) The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st July 2021 under sub-section (1) of section 139 of the Act, is extended to 30th September 2021;
10) The due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September 2021, is extended to 31st October 2021;
11) The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31st October 2021, is extended to 30th November 2021;
12) The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31st October 2021 under sub-section (1) of section 139 of the Act, is extended to 30th November 2021;
13) The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November 2021 under sub-section (1) of section 139 of the Act, is extended to 318t December 2021;
14) The due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31st December 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, is extended to 31st January 2022.
Clarification 1: It is clarified that the extension of the dates as referred to in clauses (9), (12) and (13) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds one lakh rupees.
Clarification 2: For the purpose of Clarification 1, in case of an individual resident in India referred to in sub-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date (without extension under this Circular) provided in that Act, shall be deemed to be the advance tax.
Author: Fastlegal Team
What Returns and Documents are required to be filed by Public Charitable Trust
In this article, we will list out important returns and documents that are required to be filed by Registered Public Charitable Trust in Rajasthan ( Charitable Trust Returns) , It is very important to file mandatory legal returns as prescribed by authorities from time to time.
Following are the List of Returns and documents requried to be filed by Public Chartiable Trust
| S.No | Particulars | Department | Due Date |
| 1 | Statement of yearly investment | Devsthan | 1st April each year |
| 2 | Statement of recovery of loans debts and advances etc. | Devsthan | 15th Oct. and 15th April each year |
| 3 | Statement of income from rent of properties | Devsthan | within 6 months from end of FY |
| 4 | Statement of Bhets to trust | Devsthan | within 6 months from end of FY |
| 5 | Statement of income and expenditure of the public trust | Devsthan | within 6 months from end of FY |
| 6 | Statement of payment of dues and debts | Devsthan | within 6 months from the end of FY |
| 7 | Return of Donations for 80G | Income Tax | 30th April |
| 8 | Income Tax Return | Income Tax | 30th Sept |
| 9 | Income Tax Audit in Form 10B- 12a and 80g registered entities | Income Tax | 30th Sept |
| 10 | TDS Payment | Income Tax | 07th from the end of the month in which TDS was deducted |
| 11 | TDS Return | income Tax | within 30 days from the end of qtr – for March return within 60 days from the end of qtr |
| 10 | Meeting of Trustees | Internal | as per the trust deed |
| 11 | Minutes of meeting | Internal | for every meeting held of trustees |
| 11 | Audit of Annual Accounts | Within 6 months from the end of FY | |
| 12 | Maintenance of Books of Accounts | regular basis |
How to Conduct and Document Board Meetings Effectively as per Companies Act 2013 and Secretarial Standards
In this article we will discuss about Board Meeting as per Companies Act 2013, Board meetings are critical for the governance of a company. They are a platform for discussion and decision-making by the company’s board of directors. To ensure these meetings are conducted and documented effectively, one must adhere to the provisions of the Companies Act, 2013, and the Secretarial Standards set by the Institute of Company Secretaries of India (ICSI). Here’s how to do it step by step.
Step 1: Convene the Meeting
Issuing Notice:
- Draft a notice of the meeting according to Secretarial Standard-1 (SS-1).
- Include the meeting agenda, date, time, and location.
- Send the notice at least 7 days before the meeting to all directors, by hand, post, or electronic means.
Agenda:
- The agenda should be clear and comprehensive. Every item for discussion should be stated, including items specifically required by law.
Additional Documentation:
- Provide any necessary notes or supporting documents to the directors along with the notice.
Step 2: Ensure Quorum of the Board Meeting as per Companies Act 2013
Quorum Requirements:
- Quorum should be present throughout the meeting. As per the Companies Act 2013, the minimum quorum is 1/3rd of the total strength of the board or 2 directors, whichever is higher.
Leave of Absence:
- If a director cannot attend, they should notify in advance, and the board may grant a leave of absence if deemed fit.
Step 3: Conducting the Board Meeting as per Companies Act 2013
Chairing the Meeting:
- The Chairperson, as per the Articles of Association, presides over the meeting.
- In absence of the Chairperson, the directors present may elect one amongst themselves to chair the meeting.
Discussion:
- Follow the agenda strictly for discussions.
- Encourage open discussion and note any dissenting opinions.
Voting:
- Decisions are generally taken by a majority of votes. Each director has one vote. In case of a tie, the Chairperson has a casting vote.
Step 4: Documenting the Meeting (Minutes) as per companies Act 2013
Recording Minutes:
- As per Secretarial Standard-1 (SS-1), minutes should contain a fair and correct summary of the proceedings of the meeting.
- They should be entered in the minutes book within 30 days of the meeting.
Contents of Minutes:
- Include details like the date, time, place of the meeting, list of attendees, issues discussed, decisions taken, and the final resolutions passed.
Signing of Minutes:
- The minutes should be signed by the Chairperson of the meeting or the Chairperson of the next meeting.
- Once signed, the minutes are conclusive evidence of the proceedings.
Distribution:
- Copies of the signed minutes should be circulated to all directors within 15 days after these are signed.
Step 5: Compliance and Filing
Filing Resolutions with Registrar:
- Certain resolutions need to be filed with the Registrar of Companies within 30 days of the meeting.
- File using the prescribed forms and ensure that all statutory registers are updated accordingly.
Maintain Statutory Records:
- Safeguard the minutes and ensure they are accessible for inspections as required by law.
Step 6: Disclosure and Dissemination
Disclosure to Shareholders:
- Share relevant excerpts of the minutes with shareholders if required by law or demanded by shareholders’ agreements.
Website Publication:
- If applicable, publish the proceedings of the meeting on the company’s website as per the regulatory requirements.
By following these six steps, you can ensure that your company’s board meetings are not only effectively conducted but also meticulously documented in compliance with the Companies Act, 2013, and the Secretarial Standards issued by the ICSI.
Top 10 Banks in India
India is one of the fastest-growing economies in the world, and the banking sector plays a vital role in the development of the country. Banks provide financial services to businesses, individuals, and governments, and help drive the economy forward. In this article, we will take a look at the top 10 banks in India. These banks are some of the largest, most trusted, and most respected banking institutions in the country.
1. State Bank of India (SBI):
State Bank of India is the largest bank in India, with over 25,000 branches and almost 50,000 ATMs. It is also the largest public sector bank in the country, and is owned by the Government of India. It offers banking services to more than 500 million customers.
2. HDFC Bank:
HDFC Bank is the second largest bank in India. It was founded in 1994 and has more than 5,000 branches across the country. It offers a wide range of banking and financial services, including consumer banking, corporate banking, insurance, investment banking, and wealth management.
3. ICICI Bank:
ICICI Bank is the third largest bank in India. It was founded in 1994 and has over 5,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
4. Axis Bank:
Axis Bank is the fourth largest bank in India. It was founded in 1993 and has over 4,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
5. Kotak Mahindra Bank:
Kotak Mahindra Bank is the fifth largest bank in India. It was founded in 1985 and has over 3,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
6. Bank of Baroda:
Bank of Baroda is the sixth largest bank in India. It was founded in 1908 and has over 3,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
7. Punjab National Bank:
Punjab National Bank is the seventh largest bank in India. It was founded in 1895 and has over 2,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
8. Canara Bank:
Canara Bank is the eighth largest bank in India. It was founded in 1906 and has over 2,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
9. Bank of India:
Bank of India is the ninth largest bank in India. It was founded in 1906 and has over 2,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
10. Union Bank of India:
Union Bank of India is the tenth largest bank in India. It was founded in 1919 and has over 2,000 branches across the country. It offers a range of banking and financial services, including consumer banking, corporate banking, investment banking, and wealth management.
These are the top 10 banks in India. They are some of the largest and most trusted banking institutions in the country, and they offer a wide range of banking and financial services.
How to Register Construction Company in India
Construction business can be done both government or in a private sector in India for private sector business you need to apply for vendor code to the top construction companies in India who will assign you the particular construction work in the particular area through a work order and you may also apply construction work for a government projects by applying the e procurement website of State government or Central government,
please note that for government contractor you need to apply for empanelment as a contractor with the each of government departments.
Procedure for registration of a construction company in India
In this article we will discuss about registration of construction company in India, the construction industry is a very high growth industry right now and it is expected to remain high in the next coming years, the construction business is a capital intensive business and you may require to buy an
Construction Company can be registered in the following type of business is structures in India
- Proprietorship Firm
- Partnership firm
- Limited limited partnership
- Private Limited company
- Public limited company
You can your start your construction business with any of the above mentioned legal entities in India
You can choose to register any one of the legal entities in India in this article we will share you the information about registration of private limited company for construction business in India.
As private limited company is the most popular form of business structure for doing the construction business in India and it is now very easy to register a private limited company
Procedure for registration of private limited company for construction business in India
- Decide name of the company
The name of the company e will be like ABC construction Company Private Limited, ABC construction Private Limited, ABC infra Private Limited, ABC infrastructure Private Limited.
- Objects of Company should have Construction and Infra Activities
Memorandum of association of private limited company contains the main objects that are required to be carried on while pursuing the activities of the company, the main object of the company should contain the construction activities and infra activities so that company can legally do the construction business in India as per its charter documents.
- Prepare documents required for construction company registration
Following documents are required for registration of a construction
- Pan Card
- Aadhar card
- Bank Statement with current address
- Photograph
- Mobile no
- Email id
- Electricity bill office address
- Rent agreement office address if office address is on rent
- NOC from owner
Please note that minimum two members and persons are required for registration of a private Indian company so that the documents required will be of minimum two persons who will be directors of the company and also the shareholders, you can have different scenario use as per your requirements that who will be directors, who will be shareholders, how much shares will be held among the directors for shareholders
- Find company secretary or any other professional for your registration process of your construction company
Now you can find the company secretary who will assist you in guiding the registration process for your private limited company for construction business also incorporation documents are required to be attested by the professional company secretary, chartered accountant or cost accountant in practice
- Choose choose bank account in which you want to open a bank account for a company
The MCA has eased the incorporation and business process as now it is mandatory to have a bank account for every new company at the time of incorporation only so you need to choose the bank account in which you want to open a bank account and once your company is registered you will get a bank account number on your email id and Bank officials will contact you.
- Submission of incorporation application for registration of as Private Limited Company (construction Company)
Once the above formalities are completed now you are required to apply for incorporation of a private limited company online through Spice + , if you have appointed any professional company secretary or chartered accountant or a cost accountant then he will process your incorporation form.
- Registration of Private Limited Company by registar of Companies
Once the above application is approved by the registrar of companies then you will receive the certificate of registration of a company and your private limited company is now registered
What legal documents I will get once the company is registered
Along with the legal registration of a private limited company you will get the following documents aur certificates issued from various departments along with the company registration
- Certificate of Incorporation of Company
- PAN of Company
- TAN of Company
- PF and ESIC Registration
- Professional Tax (Maharashtra)
- GST Registration (Optional)
- Bank Account of Company
How to enroll with Limited companies for construction company in India
Now if you are doing the
Preparation of company profile of Construction Company in India
I need to create a business profile of your company business profile should mention all the details regarding company its directors and promoters the past experience and future prospects of the director’s and the expertise in education qualification of directors
Following points to be mentioned in a profile of construction company
- Name of the company
- Address of the company
- Details details of directors along with their experience and education qualification
- Projects undertaken or association if any
- Details of past experience
- References
- Any other relevant details
Search for the project manager of company and book appointment
Now search for the project manager of a company in which you want to get the work and book appointment with him for meeting
When the meeting is fixed you need to submit your profile and ask him to provide particular work at the site.
Get Ebook on Construction Company
Legal Guide
- Business Entity Selection
- Procedure for registration of a construction company in India
- How to enrol with Limited companies for construction company in India
- Preparation of company profile of Construction Company in India
- Search for the project manager of company and book appointment
Submit quotation for the project work of construction company
Now you are required to submit the project quotation to the project manager for a company designated officer
Issuing of work order by company
Once company is satisfied with your profile and your quotation then company will issue a work order , work order will mention all the terms and conditions regarding payment and work to be done so I need to carefully read the details conditions of the work order.
Acceptance of work order
Once you are satisfied with the work order terms and conditions and payment terms then you can accept the work order and send the acceptance to the company
Start your construction activities
Now start your construction activity activities at a particular site provided in the work order.
Issue of work contract invoices to company
for the work completed you need to issue the particular work contract invoices that you got to the company time to time and get the payment for the work done.
Filing of your GST returns
Now file your GST returns according to the work order invoices your issued and input credit you have claimed this can be done by maintaining the regular books of accounts of your company for that you may hire an experienced accountant in this purpose also you can take help of fast legal team for completing your accounting and GST return filing work.
Buy Construction Equipment Online –
If you want to register your construction company you can contact us by filing the below form
Annual Filing of Limited Liability Partnership (LLP) for 2019 Year
Every LLP (Limited Liability Partnership) is required to file its Annual Accounts (Statement of Accounts and Solvency ) , Annual Return and Income tax Return every year within the stipulated time, even LLP having nil turnover or LLP has not carried out any business operation during the reporting period.
Annual Filing requirements with Registrar of Companies for Financial Year 2019 :
Filing of Annual Return in Form 11 for Financial Year 2018-19:
Every LLP is required to File its Annual Return to ROC by 30th May of Every Year, failure to file Annual Return will attract Additional Fee of Rs. 100 per day with no upper limit. ( Delay of 30 days will cost you Rs. 100*30= 3000)
Filing of Annual Accounts and Solvency in Form 8 for FY 2018-19:
Every LLP is required to file its Annual Accounts with ROC by 30th Oct of every year, failure to file Annual Accounts will attract Additional Fee of Rs. 100 per day with no upper limit. ( Delay of 50 days will cost you Rs. 100*50= 5000) this is in addition to Additional fee to be paid for Form 11 , if not filed.
READ How to Register LLP with New LLP Incorporation Procedure
LLP Income Tax Filing Requirement for FY 2018-19 :
The due date for filing income tax return in case of a LLP for A Y 2019-20 is 31st July, 2019 . It is applicable for income earned from April 1st, 2018 to March 31st, 2019. For LLP due date is September 30th (where audit is required), November 30th(where there are foreign transaction or specified domestic transactions).
Note : In case of LLP is registered on or after 01st of Oct than LLP may end Financial Year in next March. Like if LLP is registered on 05th of Oct, 2018 than First Financial Year of LLP may end on 31st March, 2020. This Limit is only for ROC Filing Purpose and LLP is required to file Income Tax Return Mandatory if Incorporated before 31st March of the Year.
Fastlegal provides LLP Annual Filing Services all over India Online , to avail Fastlegal Services Please Call/Whatsapp at +919782280098, Email at mail@fastlegal.in
How to Register your Company in Startup India
To Promote entrepreneurship to boost economy and increase employment , government of India Introduced Startup India Scheme, startup India Registration provides several benefits that has been provided to startups including tax holiday for period of 3 years to recognised startups.
To get recognised as startups , entity has to apply for recognition as startup on https://www.startupindia.gov.in/ , once application is submitted it is reviewed for “Department of Promotion of Industry and Internal Trade” (DPIIT) and if found eligible , the entity is registered as startup. Please note Income Tax Exemption on profits under Section 80-IAC of Income Tax Act is issued separately.
Meaning of “Startup”
An entity shall be considered as a Startup:
- Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.
- Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
- Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
- Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’.
- Explanation: An entity shall cease to be a Startup on completion of ten years from the date of its incorporation/ registration or if its turnover for any previous year exceeds one hundred crore rupees.
Government Schemes & Benefits after startup india registration
- Self Compliance under 3 environment and 6 labour laws
- Income tax Exemption
- Reduced Filing fee for Trademark
- Reduced fee for Patent application
- Easier Public Procurement norms
- Easy Winding up
- Reduced Compliance under Companies Act
- Other Schemes launched by Government time to time
Following information are required for Startup India registration :
- Name of Company
- Name of Startup
- Website address of Company
- Name , age qualification of Directors and Promoter / Authorized Representative
- Current Number of Employees including Founders
- Trademark or other IP details
- Is the startup creating an innovative product / service / process or improving an existing product / service / process ?
- Is the startup creating a scalable business model with high potential of employment generation or wealth creation ?
- Brief note supporting the options chosen above for innovation, improvement and scalability
- Has your startup received any funding?
- Any awards/recognition received by the entity , if yes , provide document in support
- What is the problem the startup is solving ? 150 to 200 words minimum
- How does your startup propose to solve this problem? 150 to 200 words minimum
- What is the uniqueness of your solution ? 150 to 200 words minimum
- How does your startup generate revenue? 150 to 200 words minimum
- App Link /Pitch Deck etc if any
- COI , MOA and AOA of Company
- PAN of Company
Fastlegal Provides help in filing your Startup India Registration application , Place your request below to get in touch with our team members
Trademark Class 2 – Goods Description
Trademark Class 2
Trademark Class 2 – Goods Description: Paints, varnishes, lacquers; preservatives against rust and against deterioration of wood; colorants; mordents; raw natural resins; metals in foil and powder form for painters; decorators; printers and artists
How to Change Partners in an LLP in India: A Step-by-Step Guide
In this article we will discuss about How to Change Partners in an LLP, Changing partners in a Limited Liability Partnership (LLP) is a regulated procedure in India, governed by the provisions of the Limited Liability Partnership Act, 2008 and rules made thereunder. The process involves a number of steps, from obtaining the consent of existing partners to filing the necessary forms with the Ministry of Corporate Affairs (MCA). Here’s a comprehensive guide to help you understand and execute this process smoothly.
Step 1: Convene a Meeting of Existing Partners
Convene a meeting of the existing partners to discuss the proposed changes in the LLP’s partnership. It’s crucial to obtain the consent of the existing partners for the change. The decision must be recorded in the form of a resolution.
Step 2: Obtain Consent from the Incoming/Outgoing Partners
Once the existing partners have approved the change, you must obtain written consent from the incoming partner(s) who is/are willing to join the LLP and from the outgoing partner(s) who is/are willing to leave the LLP.
Step 3: Execute Supplementary LLP Agreement
Draft a supplementary LLP agreement that sets forth the terms and conditions of the new partnership structure. This agreement is an amendment to the original LLP agreement and should be executed on a non-judicial stamp paper of requisite value, as per the state laws.
Step 4: File Form 3 with ROC
File Form 3 (Information with regard to limited liability partnership agreement and changes, if any, made therein) with the Registrar of Companies (ROC) within 30 days of executing the supplementary LLP agreement. This form contains information about the amendments to the LLP agreement.
Document Checklist for Form 3:
- Signed supplementary LLP Agreement
- Consent of new partners
- Consent for resignation from outgoing partners
Step 5: File Form 4 with ROC
Form 4 (Notice of appointment, cessation, change in name/ address/ designation of a designated partner or partner. and consent to become a partner/designated partner) must be filed with the ROC within 30 days of the change in partnership to provide notice of the appointment of a new partner and the resignation or cessation of an old partner.
Document Checklist for Form 4:
- Consent to act as a partner or designated partner (from the new partner)
- Resignation letter (from the outgoing partner)
- Identity and address proof of the incoming partner
Step 6: Update LLP Stationery and Other Records
Once the ROC has approved the changes, update all business stationery, official records, and other places where the old partnership details are listed. This includes letterheads, invoices, the LLP’s official website, and signs if applicable.
Step 7: Inform Banks and Other Concerned Authorities
Inform all banks where the LLP holds accounts about the change in partnership. Provide them with the updated partnership agreement and resolutions, as required. Also, notify any other concerned authorities or government bodies about the change in the structure of the LLP.
Conclusion
Changing partners in an LLP requires careful attention to legal requirements and prompt filing of necessary documents. Always ensure that you adhere to the deadlines and keep a copy of the filed forms and acknowledgement receipts from the ROC for your records. It’s often advisable to seek professional help to navigate the process to prevent any legal issues that might arise due to non-compliance with the statutory requirements.
How to Register Insurance Broking Company in India
Insurance Broking business is gaining popularity in India due to increasing awareness about insurance and large untouched market, also many new insurance companies are now coming with different insurance products, while now Term Insurance, Health Insurance, and Vehicle Insurance is now a very important part of individual’s financial planning, Also if we consider the requirements of Insurance also in a business where Fire Insurance, Machinery, Keyman Insurance, Directors and Officers liability insurance are importantly required. Insurance Brokers play a very important role in the Insurance Industry as
An insurance broker is a professional who offers, negotiates, and sells policies. He acts as an intermediary between insurers and customers and receives compensation.
An important role of brokers is to help insurers to assess the types of risks they face. Risks include natural hazards such as bad weather, hurricanes, tornadoes, fires, and floods. At the same time, brokers act on behalf of and in the interest of customers. They do comparison shopping to find the best deals and offer policies from more than one insurance company. Brokers also help their clients to outline risk management strategies, which are suitable for their profile. There are different types of risk to look into, including natural disasters, car accidents, credit risks, cash flow problems, legal liabilities, and others
In this article we will discuss about the registration of Insurance Broking Company in India
Categories of the Insurance brokers
Following are the categories of Insurance Brokers:
- Direct broker (life)
- Direct broker (general)
- Direct broker (life & general)
- Reinsurance broker
- Composite broker
Registration of Private Limited Company/LLP
In India, IRDA regulates the Insurance broking business in India and as per regulations of IRDA, an Insurance Broker should be registered as Private Limited Company /LLP in India
Name of Insurance Broking Company
The insurance brokers shall have the word ‘Insurance Broker’/ ‘Insurance Brokers’/‘Insurance Broking’ in the name of the Insurance Broker to reflect their line of activity and to enable the public to differentiate insurance brokers registered with the Authority from other non-registered insurance-related entities.
Minimum Capital Requirement for Insurance Broking Business
Any applicant seeking to become an insurance broker shall have a minimum paid-up capital/contribution as mentioned below:
| Category | Minimum Capital/ Contribution (Rupees) |
| Direct broker | Seventy Five Lakh |
| Reinsurance broker | Four crore |
| Composite broker | Five crore |
The above Capital should be only in equity and not in any other form, further, the investment in the applicant by the promoters/ shareholders/ partners shall be from their own funds and not from any other sources.
Explanation: Own funds do not include funds arranged by way of borrowings or loans.
Net-worth requirements for Insurance Broking business
The net-worth of an Insurance Broker shall at no time during the period of the certificate of registration fall below:
- Rupees fifty lakh for a direct broker,
- 50% of the minimum capital requirements or contribution or equivalent for reinsurance / composite broker.
Explanation: For the purposes of these regulations, “net worth” shall have the meaning assigned to it in the Companies Act 2013 and as amended from to time
Every Insurance broker shall submit net worth certificate duly certified by an Auditor every half-year to IRDA
Deposit requirements for Insurance Borking Business in India
Every insurance broker shall before the commencement of their business, deposit and keep deposited with any scheduled bank a sum equivalent to:
- Rupees ten lakhs for Direct broker
- 10% of the minimum capital/ contribution specified under Regulation 19(1)for reinsurance / composite broker in fixed deposit, which shall not be released to them without the prior written permission of the Authority.
- The deposit shall have a lien with the Authority
- Such deposit shall not be pledged for taking any loan or overdraft facility by the insurance broker
- Every insurance broker shall furnish to the Authority as and when called upon to do so a non-encumbrance statement from scheduled bank in which such fixed deposit is kept
- The interest earned on the deposit shall not be subject to lien with the Authority
Professional indemnity insurance
Need to furnished, within 12 months for newly registered brokers
Other services that can be provided by Insurance Broker
Claim Consultancy and Risk Management can also be provided by Insurance brokers
Application Fee for Registration of Insurance Broker
Direct broker: Rs.25,000 and Rs.50,000/- after the grant of in-principle approval in case of a fresh applicant.
In the case of Renewal of Registration, the fee shall be Rs 1,00,000/- for a period of 3 years
Training Requirements
- Fifty hours (50hrs) of theoretical and practical training from an institution recognised by the IRDA from time to time, and should have passed an examination, at the end of the period of training, conducted by the National Insurance Academy, Pune or any other examining body recognized by the Authority
- 25 hours if the applicant is CA, CS etc and should pass the examination within 1 year
Step by Step Procedure for Registration of Insurance Broking Business
- Register Private Limited company by including word “Insurance Broker’/ ‘Insurance Brokers’/‘Insurance Broking
- Increase Capital to Rs. 75 Lakh
- Obtain Training and Pass Required Examination
- Make a Deposit of Rs. 10 Lakh
- Apply to IRDA for Licence
- Follow up with IRDA
- Insurance Broking Licence
- Professional Indemnity Insurance