Digital signature is a technique used to validate the authenticity of a digital document. It provides more credibility to digital communications. A digital signature is defined and dealt with under Sections 2, 3 and 15 of the Information Technology Act. Section 2(1)(p) of the Information Technology Act defines Digital Signature as, “mean authentication of any electronic record by a subscriber by means of an electronic method or procedure in accordance with the provisions of Section 3”. In order to obtain a Digital Signature Certificate, there are certain procedures that need to be followed.
The following are the requirements to apply for a digital signature certificate:
Class 1 Certificates: These certificates are issued to private as well as individual subscribers. These certificates are issued to ensure that the user’s name, email address and other details provided are true and within the database of the Certifying Authority
Class 2 Certificates: These certificates are issued to the director or the signatory authorities of the companies. The main purpose of issuing these certificates is for the E-filing of the Registrar of Companies. Individuals who sign all the documents manually and file the returns with the Registrar of Companies, must mandatorily have Class 2 certificates.
Class 3 Certificates: These certificates are used for online participation or for people bidding in e-auctions or any online tenders across India. Class 3 certificates are mandatory for all the vendors who wish to participate in online tenders.
The following steps need to be followed in order to obtain a Digital Signature Certificate:
Log-in to the Certifying Authority’s website: Not anyone and everyone can issue Digital Certificates. There is a list of Certifying Authorities that are licensed to issue Digital Certificates. This list is available on the MCA website and includes authorities such as the NSDL, E-Mudhra etc. In order to obtain a Digital Signature Certificate, one must log on to the site of the Certified Authority and visit the Digital Certification Services section and choose the type of form. For example, whether you want to obtain a digital signature certificate for an individual or an organization, and accordingly one must download the form.
Fill necessary details: Upon receiving the form, the person must fill correctly all the required details. Some of the details asked are class of digital certificates, validity, contact details, residential address, type of digital certificates, GST number if applying for the organization, declaration etc. After filling the form, one must recheck the information provided and thereafter take a printout of the form and preserve the copy of it.
Provide the required proofs: The residential proof and ID proof attached to the form must be attested by an officer. It must be ensured that the sign and seal of the officer is clearly visible so as to avoid any obstruction in the procedure further.
Make the payment: The payment must be made in order to acquire the Digital Signature Certificate either by cheque or by Demand Draft in the name of the Local Registration Authority. The details of the Local Registration Authority differ from the person’s city of residence, and such details can be obtained by searching the appropriate certifying authorities licensed to issue Digital Signature Certificate.
Send a hard copy of the form to the Local Registration Authority: After filling the form, one must send in an enclosed envelope the following documents to the Local Registration Authority-:
A digital signature certificate is extremely important at times of incorporation and during all compliance stages. Having a valid digital signature, makes authentication of electronic records easy and faster.
A sole proprietorship is the simplest form of company formation. In this form of business incorporation, you set up a business solely on your own. Sole proprietorship business is not separate from the owner, i.e., it does not have a separate legal identity of its own. The personal income tax return of the owner is used to file taxes for the business as well. In this form of business, a person alone is liable to pay the debts, if any, and enjoy the profits earned. A sole proprietorship is the preferred form of business for professionals such as consultants, lawyers, etc. Its popularity stems from factors such as simple to set up, low cost of formation, etc.
It is easy to form a sole proprietorship company. Since the entire business is done on the name of the owner itself, there is less paperwork to be done while setting up this kind of business. It is a hassle-free form of business. Any person who wishes to start a business that is not so complex, he/she may consider the Sole Proprietorship form of business.
The following steps must be followed to form a Sole Proprietorship business:-
A sole proprietorship is the best way to start a business if you have no funding, and you want to test your product in the market. It entails little liability and compliance while setting up a new business and creating a brand name for your product.
The general misconception among prospective founders is that to start up, they require at least one more co-founder. What they miss out on is the fact that with the recent reforms introduced in the Companies Act it has been made possible to form a One Person Company or OPC which can be setup by a single person. Such a company works wonders for someone who wants 100% control over his company. However, an OPC may have certain issues such as not having the ability of introducing a partner, personal liability and not being high on the priority list of investors. Through this post, we discuss how is an OPC set up and what are the legal requirements associated with the same.
Following are the requirements for setting up a One Person Company:-
Following steps need to be followed in order to set up a OPC:
The following compliances are required for an OPC:
* Balance sheet
* Accounts of profits and losses
* Cash flow statement
* Change in equity
An OPC may seem like a natural choice for entrepreneurs who do not want to indulge in high cost of formation and want to retain control over their company. However, an OPC provides very little benefit to an investor and hence it is difficult to raise funding in such an entity. Also, ESOPs cannot be granted in an OPC. An OPC is a good entity choice if one wants to start a bootstrapped company with low cost of formation and with least outside interference.