Social Enterprise Establishment Requirements

[Due Quach]

Vikash and Amit,

Please kindly update the team on the regulations and requirements for establishing Healing Life Now as a social enterprise in India. 

I would like to know:

1) Legal Structure options and risk implications : for example Non-profit Non-governmental organization or limited liability company or corporation? 

2) Capital Contribution or Equity Funding minimum requirements or recommendations - for instance, the minimum authorized share capital for private limited companies in India seems to be INR 100,000.  Does this apply to social enterprises? 

3) Foreign ownership regulations or restrictions

4) Other requirements - proof of lease or address? other documentation needed 

5) What is the tax regulation? Are social enterprises subject to corporate tax? personnel tax?

6) what personnel benefits and contributions are required of employers? eg, health insurance, social security, etc

7) Will we need to hire legal support to submit the documentation? Or is it fairly easy to fill out and submit ourselves?  If we have to hire support, how much would the fees be? 

Please also give me an idea of budget. 

1) how much would rent for a modest office in Kolkata cost per month? How much space is optimal? 

2) how much should we budget for utilities - electricity, water, gas, internet, phone, other? 

3) fees for hiring part-time accountant? 

4) what other start-up expenses would come up? for example, office fit-out, including furniture, air con, office supplies, etc 

 

If you have found any good any white papers from PriceWaterhouseCoopers, Deloitte, Grant Thornton, E&Y, or a respected legal firm, please share with me. 

Many thanks,

Due 

[Amit Singh]

Hi Due,

We have a meeting scheduled on saturday 10/08/2013 with an accounting person who looks into all these legalities. Will update you accordingly after the meeting.

Regards,
Amit

[Amit Singh]

Dear All,

Finished meeting with the accounting person. Will update on the same ASAP.

Regards,
Amit

[Amit Singh]

Dear all,

The discussion with the accounting professional was as follows :-

1)  The best option for HealingLifeNow as of now will be to registered as an LLP company
2)  There will be no issues if any of the member is of foreign national
3)  Upto INR 200000 non taxable
4)  Audit not required till INR 2500000 p.a.

Process requirements

1) DIN number for all the members of the company is to be obtained
2) PAN number for Heraling Life Now to be obtained
3) Creation of LLP for Healing Life Now
4) Total expenses will be INR 14000 ( 10000 for the LLP formation and 1000 each for the DIN number)
5) Filing of accounts every year will be taken care by him (Charges not confirmed)

Please do revert for clarifications if any.

Thanks & Regards,
Amit

[Due Quach]

Hi Amit,

Thanks for this.  We still need answers to the rest of the questions and a budget.  Did the accountant indicate whether there is a minimum seed capital (equity contribution) amount? 

Also on the human resources side, what are the regulations for employer contributions for health and social benefits, if any? Payroll tax? 

Thanks,

Due

Sent from my iPhone

[Due Quach]

Also, what does DIN and PAN mean?

Sent from my iPhone

[Amit Singh]

DIN - The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified.

PAN - Permanent Account Number (PAN) is unique alphanumeric combination issued to all juristic entities identifiable under the Indian Income Tax Act 1961. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and is almost equivalent to a national identification number. It also serves as an important ID proof.

And about rest of the questions I am forwarding you his email please feel free to ask any questions to him.

His name is Amit and email address is - csam...@gmail.com

n.b - Please mark a copy to me as I can push him for the update.

Regards,
Amit

[Due Quach]

Thanks Amit,

We really do need to know what the annual budget for Healing Life Now as a full business will look like as soon as possible. 

Assuming the number of patients continues to grow, by the end of the year, we can easily be at full capacity for the 3 of you.  Then the team has to recruit more healers. When we begin to manage other healers, the three of you will need to assume part-time management duties in addition to healing. All staff should be paid a meaningful salary. 

My thinking is that we should be able to raise money from donors to support the formal establishment of the social enterprise.  But I need a ball park number of how much money needs to be raised. 

Many of the patients we are helping now have access to people with deep pockets. So I am hoping they will be willing to give back by helping grow Healing Life Now so more people can benefit.  To raise funds, we will need to put together a formal business plan with a sensible budget. 

Please let me know when you can show us a budget. 

Thanks,

Due