What is the importance of getting franchise agreement?

A franchise agreement is a kind of legal agreement on a document that is entered into by two parties, one being the franchisor and the other being franchisee. This is done for opening and operating a franchise unit. And it’s usually a single unit. However, if the franchisee wants to open additional units then separate agreements for each unit will be required. These franchise agreements vary greatly with respect to the franchisor. But there are certain common elements in it, which are given below:-

Elements of a Franchise Agreement

1) Details of the franchisor and the franchisee.

So, basically, this element involves details and legal authority of a person who is entering into the franchise agreement on behalf of the franchisor and the franchisee. Mostly the franchise agreement is between two legal entities like two companies and in such situation, the directors or the authorized officers by a board resolution will be the one to sign on an agreement. Both on behalf of their respective companies.

Franchise Fee & Consideration

The terms of franchise fees, its deposits, and royalties along with the advertising fees and other changes are mentioned in lengths in a separate section. The mode of payments and the due dates of those payments are also mentioned in detailed lengths. It is important to ensure these terms of franchise fees are mentioned in the franchise agreement and are as per the basic agreement and understanding between the two parties that is the franchisor and the franchisee before both the parties sign the final franchise agreement.

Business Operations

One of the biggest assets in a franchise agreement is that the franchisor is involved and helps with the operations of the units of the franchise. These are based on their past experience and their expertise. Now all the franchise agreements are supposed to contain information regarding what level of support will be provided by the franchisor and what responsibilities will be taken by the franchisee.

Following are some of the covered major areas of a franchise agreement:-

· The details of what goods and services will be given by the franchise.

· The mandatory obligation to purchase goods and/ or services exclusively from the franchisor.

· The Mandatory obligation for operating the franchisee unit which will be as per the standards of operations that are fixed by the franchisor.

· The Mandatory obligation of maintenance of bank accounts and the other details that are as per the franchisors requirement.

· The right of the franchisor for inspection of the unit at the regular intervals.

Governing Law and Dispute Resolution

Mentioning governing laws and jurisdiction in the document is a good practice. In case of the franchise agreement that’s being held between any Indian entity and any foreign entity then both the parties to the franchise agreement can designate the law of a foreign country and then submit it to the jurisdiction of a foreign Court, Be it exclusive or non-exclusive provided such a court has inherent jurisdiction over the dispute.

So these are some of the elements to include in a franchise agreement and more could be added. But the above mentioned are the base of this agreement. We at Enterslice are the renowned organization where we have hired many professionals who have years of experience in handling the legal processes. You don’t need to hesitate a bit in contacting as we can help you with the accurate procedure of Franchise Agreement anytime when you reach us. We have provided our phone number as well as the email address on our website, you can contact our representatives through that. We are 24/7 hr available at your end to assist you in a proper way.

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Who are eligible for MSME registration?

While thinking of availing the benefits coming from the MSME registration, you might need to know who are fulfilling the criteria forthe eligibility for MSME/ SSI registration. The MSME registration or as the newly introduced term Udyog Aadhaar can be issued by basically any kind of business entity. A few examples would be the sole proprietors, any limited liability partnership firms, Hindu undivided families, registered private limited companies, producer companies, cottage industries etc.

Hence any kind of association of persons that are co-operatively running any business or similar societies may apply for MSME registration. Most of the small businesses get registered for MSME or Udyog Aadhaar are able to enjoy the government given benefits under the MSMED act which stands for micro, small, medium enterprise development under the act of 2006. It is rather recommended to always get an MSME registration in case, you fall into the eligibility criteria. We will now discuss the eligibility criteria for applying for the MSME registration.

Criteria for the application of MSME Registration

Only those business entities that fall under the following eligibility criteria canget an MSME registration as per the MSMED act of 2006.

Now in case, any business entities who are involved with the manufacturing and the production of any goods may consider the following classification to get registered.

- Micro enterprises:- Any business entity that has an investment made in their manufacturing plant and over their machinery that hasn’t exceeded the amount of twenty-five lakh rupees may register themselves under the micro enterprise section.

- Small enterprises:- Any business entity that has an investment made into their manufacturing plant and over their machinery that hasn’t exceeded the amount of five crore rupees, however its more than the higher limit of micro enterprises which was twenty five lakh rupees can register themselves under the small enterprises section of SSI registration.

- Medium enterprises :- Any business entity that has an investment made in their plant and over their machinery that hasn’t exceeded the amount of ten crore rupees, however its more than the higher limit of the investment amount of small enterprises which is five crore rupees can get register themselves under the medium enterprises under the manufacturing section of MSME registration.

Now in case of, any business entities that may be involved with the service sector then their financial limits will have different MSME registration eligibility criteria.

- Micro enterprises:- Any business entity that has an investment in equipment that hasn’t crossed the limit of ten lakh rupees can register under micro enterprises for the service sector.

- Small enterprises:- Any business entity that has an investment in equipment that hasn’t crossed the limit of two crore rupees but is more than the higher limit of investment of micro enterprises which is ten lakh rupees may register under small enterprises of the service sector.

- Medium enterprises:- Any business entity that has an investment in equipment that hasn’t crossed the limit of five crore rupees but is more than the amount of higher limit of investment of small enterprises which is two crore rupees then they may register themselves under the medium enterprises of the service sector.

It is recommended to most of the businesses to obtain MSME registration under the MSMED act and get various benefits out of which the best one would be the protection against any delay in the payments. So look for which criteria you fit in to get your MSME Registration done in a hassle-free way. We at Enterslice are constantly available to help you with immediate solutions in order to guide you and prepare your documents. You can dial our helpline number or drop us an email so that we can revert you back as soon as possible. We make sure to offer reliable help to those who are looking forward for instant solutions at your end.

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What is the procedure for TDS return e-filing in India?

In this article, we are going to discuss the steps on how to do TDS return filing online. Check out the steps below:-

· You can get started first of all by logging on to the TRACES and slowly start Filing in your requested details for the e-filing of your TDS return.

· Next, you can click on the register tab for the e-filing. You will see this particular option on the left corner of the newly opened window page of TRACES.

· It will take you to the e-filing portal of the ITR or income tax department. Here you will be asked for registering. You will do as a tax deductor or the collector. Remember, that your TAN shall be your default user id.

· Now you will be required to create a new password. Along with that give in the details of the authorized person like their registered mobile phone number, a work email address and other similar details of your organization. This includes the information like your address, landline number, fax number etc. Once you fill in the requested information on the form, just click submit tab then after keying in the visible captcha.

· Now next, you are supposed to log on to the e-filing portal of the income tax department by using your PAN card number as your password. Put the date of incorporation of your company or organization, or the date of birth of yours in case it’s your personal e-filing of the TDS return. And now approve the TAN Registration.

· Once approved, you will be sent a link to click on, on your email address that has been provided by you earlier. A PIN shall be sent on your mobile number then.

· Now once you click on the received link, a page will open and enter the PIN and then click on the submit button. Now, this completes your registration process of e-filing of the TDS returns.

· An important point here for you to note is that the above-mentioned information is strictly for those who have never been registered as a tax deductor or a collector.

Know the basic procedure for the e-Filing of the TDS Return

· You may start with the filing of TDS return details that are requested from you into the software or into the return preparation utility and the process it.

· Now you can select an option to upload the TDS return for e-filing to the e-filing portal of the income tax department. This will just generate a ZIP file for you. This ZIP file consists of your processed TDS return filing and then you may save it.

· Next, you can go to the DSC management utility, and then select the option for a bulk upload. To this attach your ZIP file that was earlier generated with your TDS return information.

· Pick the DSC option which will be in a .pfx form or USB token file. Select your DSC certificate file and generate DSC file to be saved to yourself. However these days, digital signatures are not always required on the income tax return filing.

· Now again log on to the income tax department portal with your tax deductor or the collector id and then select a tab that says upload TDS return. Fill in your asked details and information and then click on submit button.

· After the above steps followed, your token number shall get generated and later on checked onto through the option that says “view filed return”. This completes your job and your e-filing process is complete.

Checklist for drafting a proper Franchise Agreement

In order to understand as to how we can execute a proper franchise agreement, first we have to be clear what a Franchise is and why is Franchise Agreement executed. In one line we can say that a

What is a Franchise?

When an established brand decides to lend their name, goodwill and trade secrets to set up their Brand’s Store on different locations and executes an agreement for the same effect then such an agreement is termed as a Franchise Agreement. Here, Franchisor and Franchisee enter into a legal agreement where Franchisee operates its business under the name of the Franchisor in exchange of payment of some fees including initial payment and royalties.

Checklist for Franchisee Agreement

Following is an example of checklist to be considered before finalizing a Franchise agreement. This is done to make sure that the agreement is not ambiguous and includes all the key clauses.

Costing Related

· If the parties have decided on total cost, royalties etc. If yes then clear distinction is provided between total cost, initial fees, initial cost required, royalty amount are to be provided.

· If any part of the initial fee refundable or not.

· Payment terms are to be clearly defined including total amount, time of payment and other financial arrangements like lump sum payments or installment facilities etc

· If the royalty amount is fixed, revenue based or a combination of the two is finalized

· Provisions relating to advertising and promotion costs. And cost sharing details.

Location Related

· Who has the authority to select the location

· Can the franchisee operate in more than one location?

· After the termination of the contract can franchisee operate independently in the same area.

· Which party will be responsible to obtain zonal permissions etc.

Building, equipment and supplies Related

· Who will decide on building plans and related details

· Provisions relating to remodeling and redecorating and who will do it.

· Is franchisee required to purchase supplies and equipment from franchisor only

· Are building, equipment and supplies covered by any kind of Group insurance plan.if yes, then its details are to be mentioned.

Operations related

· Are accounting and bookkeeping is handled solely by franchise or there is an arrangement for the same too.

· Degree of control Franchisor has over the franchisee’s operations to make sure the brand quality is maintained.

· Management aid along with training and assistance provided by the Franchisor. And if the cost for the same if covered by the royalty fees or not.

· Are there any quota’s set for sale, operating hours in the contract.

· who will provide the promotional materials.

· Are there any provisions relating to hiring fir the franchisee.

Termination and Renewal Related

· What are the non-compliances under which agreement can be terminated by the Franchisor and vice versa.

· What are the restrictions imposed on franchisee in case of termination done by Franchisor.

· Is sufficient time provided in case of termination for amortization of capital payments?

Other Matters

· Is Franchisee assignable to legal heirs in case of death or disability or can it be sold or not.

· Is business name, trademark, logo or any other mark distinctly identified with the franchisor. And there are not subject to any dispute or litigation.

· If all the requirements are met by the franchisor before executing this agreement.

Other points to consider

· Can the franchisee sell the franchised business and assign the franchise agreement to the buyer?

· Is the franchise assignable to heirs, or may it be sold by the franchisee's estate on death or disability?

· What is the duration of any patent or copyright material to the franchise? If time is limited, does the franchisor intend to renew, and is this spelled out in the franchise agreement?

· Has the franchisor met all law requirements (registration, escrow or bonding requirements, etc.), if applicable?

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MSME Registration and its Benefits

Micro, Small and Medium enterprises in India need to register themselves as MSME with the Ministry of Micro, Small and Medium Enterprises. The MSME registration also called the Udyog Aadhaar registration is not mandatory by law but the additional benefits that come with the registration are encouraging enough for the owners and promoters of these enterprises to get the unit registered.

This industry offers the highest employment opportunities to the general public. The sector employs 69% of the total employed crowd in India, contributes 45% to the manufacturing sector and 45% to exports and is expected to contribute 50% to India’s GDP by 2024.

The business entities that can benefit under the MSMED Act are:

· Proprietorship firms

· Partnership firms

· LLPs

· Private Limited Companies

· Public Limited Companies

The benefits of MSME registration are:-

A. Central Government Benefits:

· Under Priority sector lending, easy sanction of loans from banks

· Loans at subsidized rate of interest from banks

· Indirect Tax exemption scheme

· Exemption under Direct Tax Laws

· Protection against delay in payment of loans as per the Delayed Payments Act.

B. State Government/ Union Territory incentives for MSMEs:

· Development of specialized industrial estates

· Tax subsidies

· Power tariff subsidies

· capital investment subsidies

C. Other Benefits:

· Bank loans to MSME’s are cheaper by at least 1-1.5% compared to other businesses

· Under the Mudhra Loan Scheme MSME get easy credit with collaterals.

· Easier approvals for government agencies for registrations and licenses

· Eligible for government subsidies

· Hassle-free opening of current account for the business

· For Trademark registration, only 50% of the applicable fee needs to be paid by the MSME

· Sponsorship or financial support is received from the Government to participate in foreign expos and exhibitions to showcase products.

· Disputes are resolved faster

· Preference during awarding of government tenders

The UdyogAadhaar came into effect from September 2015. The MSME Registration is a simple process and can be applied online or by submitting the application form at the nearest zonal/branch office of NSIC (National Small Industries Corporation). It is a 12-digit number issued by the Ministry and remains the same throughout the lifetime of the business.

The following documents need to be submitted along with EM--II for UdyogAadhaar registration:-

1. Clearances from the Pollution control Board, Drug Control Board.

2. Proof of ownership of the premises or rent receipt/ NOC from owner in case of rented property

3. Partnership Deed or Memorandum of Association and Articles of Association and Certificate of Incorporation along with an authorization of one of the directors to sign the application form

4. Industrial license copy

5. Purchase bill of machines installed

6. Personal Aadhaar number of the directors, name of the Industry, Address of the business unit, bank details of the business

Once uploaded, the registration number is received via email on the email id provided.

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Get More Information about GST Registration

The GST law makes it mandatory for many to apply for a GST registration. This article will cover multiple points under several different headings regarding GST registration in India.

What Is The Prescribed Threshold Limit for GST Registration?

The threshold limits of GST registration depend upon state to state. In case aggregate turnover of a person or entity is more than Rs 20 lakhs, then they would have to apply for GST registration. However, this limit for the GST registration is different for some special states like the north-eastern states of India including Sikkim and Jammu and Kashmir.

The aggregate annual turnover here means all the taxable and the non-taxable supplies along with the exports of goods and services of a person that’s having the same PAN. The aggregate annual turnover doesn’t include all the values of the supplies on which there’s a tax levied on the basis of the concept called reverse charge basis i.e. inward value supplies.

Who Require GST Registration?

Those falling into the category of a mandatory Online GST registration under the GST act are given below:-

· Those individuals that make an inter-state supply which is irrespective of the above mentioned threshold limit for GST registration.

· The casual individuals that are taxable, and will be required to get their GST registration and again, irrespective of the threshold limit.

· Also the individuals required to pay any taxes under the reverse charge.

· All of the taxable individuals who are non-resident.

· Those individuals that needs to do tax deduction under the section 37 for TDS

· Those agents that work for the suppliers.

· The individuals that are input service distributors.

· Those who do business and supply the goods and services via the means of electronic operations like the e-commerce websites.

· Those that are the aggregators supplying any service under some brand name or certain trademark.

There are certain situations other than the above mentioned scenarios

1. When a supplier makes some taxable supply of goods or services and their aggregate annual turnover is more than 20 lakhs then it is required for them to apply for New GST registration in India.

2. The same as mentioned in point 1, for the suppliers that are operating from the states of the north-east, Sikkim, Himachal and Jammu and Kashmir. But here the annual turnover will be at a threshold limit of Rs 10 lakhs.

3. Those individuals who were already registered under the previous tax structure pre-GST.

What is The Time limit for GST registration procedure?

Those eligible for GST registration must get their registration done within the time frame of 30 days from the first day they become eligible for GST registration.

What are the other aspects of GST registration?

There needs to be always a separate GST registration for business with multiple verticals as it becomes small units of different businesses irrespective of the state they are operating in. Such an option would be open to those individuals who must have their PAN card number available for Online GST registration and in case of the non-resident individuals, a GST registration can be granted on the basis of other documents in the absence of a PAN card number and they will be allotted a unique identity number. Every person that wants to apply for GST registration must have a PAN card though.

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