Better Business Opportunities Through Collectives-Bw-PDF

8/3/2019 Better Business Opportunities Through Collectives-Bw-PDF

1/13

Sahjeevan

13.12.2010


2/13

Objectives

Nature of Activity Operational Structure

Act & its legal requirements

Ownership

Management

Profit Distribution

Taxability or Tax incentives Legal Compliances


3/13

For Development Public Charitable Trust

Charitable Societies

Section 25 Companies

For Business

Cooperatives

Producer Companies

Regular Companies Societies (Not having

Charitable Objects)


4/13

Value Added Tax (VAT) in Gujarat

Inst. Having charitable purpose are exempted fromthe definition of Dealers in VAT Act, 2005

Service Tax

Applicable to services listed in schedule of Act andall service providers are liable to get registration

Income Tax

Charitable Purpose (till F.Y. 2007-08) : (1) Education,(2) Medical, (3) Relief to poor, (4) Any other generalpublic utility

business activity incidental to the main objects were

allowed for charitable organization


5/13

As per the Finance Act 2009, F.Y. 2009-10

onwards, business activities of Charitable

organisations are allowed if it is incidental to mainobjects of

Education

Medical

Relief to Poor

Preservation of Environment

Preservation of monuments and historic places

Organisations other than above objects, fall

under objects of general public utility, can dobusiness up to gross receipt of 10 lakhs in any F.Y.


6/13

Act Companies Act, 1956

Membership (Any one who has interest inbusiness and want to invest) In case of Pvt. Ltd. Min. 2 members, max. 50

In case of Public co. Minimum 7 members

Voting Rights One vote per share

Management Board of Directors amongstmembers and can also appoint professionals fromoutside

Profit Distribution through Dividend / BonusShare


7/13

Capital Increase - through bonus shares/

members shares (Public Limited co. can also invitepublic to invest in companies share)

Legal Compliances

In case of Pvt. Ltd. - Very Minimum,

In case of Public Ltd. little Higher

Audit General Body can appoint an auditor Bank Finances Easy to get bank Finance / or

through Private Financers based on Financial

Statements / collateral / Credibility


8/13

Act State Cooperative Act , Multi State

Cooperative Act, or Mutually Aided CooperativeSociety (MACS)

Membership - Any 10 individual or 2 or more

cooperatives having involved in similar businesscan form (single comodity no multi products)

Voting Right One Member - One vote Management Board of Directors appointed

amongst members (No Professionals can be

appointed as Director)


9/13

Profit Distribution through Dividend in prescribed

limit (not on proportion to Business generated) State govt. can invest in Share Capital

State Fund/ Subsidy specially for cooperatives

Bank Finance Easy to get

State Interference in Management

Audit - can be done through approved Auditorsfrom State Govt.

Legal Compliances with Registrar Complex

procedure


10/13

Act Companies Act, 1956 (New Chapter IX-A undersection 581 inserted in 2002)

Membership Any 10 primary producers or 2 ormore producer institutions can form

Voting Rights One vote per member irrespective ofshare holding

Management Board of Directors amongst membersand can also appoint professionals from outside

Profit Distribution through dividend in prescribedlimit however, additional bonus on business patronagecan be declared on pro rata basis to business

generated


11/13

Capital Increase - through bonus shares/

members shares (restriction to invite public toinvest in companies share)

Legal Compliances Very Minimum

Audit General Body can appoint an auditor

State Fund / Subsidy At present no such

subsidy or Programmes developed to promoteproducer companies

Bank Finances Some times difficult to get bank

Finance / or through Private Financers


12/13

Parameters Normal Company Cooperatives Producer Company

Act Companies Act, 1956 State Cooperative Act Companies Act, 1956Registration Registrar of Companies Registrar of Cooprative Society Registrar of Companies

Membership Any person / insitutions who

has willingness to invest in

busness

Primry Producers, or group of co

operatives

Primary producers, Producers'

institutions, any person involved

in busines of primar produce

Voting Rights One Vote / Share One Vote / Member One vote / Member

ManagementProfessionals can be appointed

as board of Director

Board of Directors from amongst

the members only

Professionals can be appointed asboard of Direcotr

Legal Compliances In case of Pvt. Ltd. Minimum,

In case of Public Ld. Higher

Higher Minimum (Producer Co. is treated

as pvt. Ltd.)


13/13

Parameters Normal Company Cooperatives Producer Company

Profit Distribution Board in General Meeting restricted upto specified limit restricted upto specified limitPatronage Bonus No special provision in Act No special provision in Act members can get priviledge pro

rate basis on business generated

by each members

Increase in Capitalthrough share capital / bonusshare

through share capital / bonusshare

through share capital / Bonusshare

Incase of Public ltd., company

can invite plublic to invest

State Govt. can invest in Share

in pvt. Ltd. Restriction to invie

publicPublic ltd., company can

invite plublic to investState interference Minimum High State Interference Minimum

Documents

Better Business Opportunities Through Collectives-Bw-PDF