The SAMRIDH Scheme

Iccha Shakti

Encourages aspiring entrepreneurs to kickstart their business ventures.

Gyaan Shakti

Offers knowledge and ecosystem support to women entrepreneurs, nurturing entrepreneurship.

Karma Shakti

Provides practical assistance to entrepreneurs in establishing and expanding their businesses.

It specifically provides access to programs for

• Incubation and acceleration
• Entrepreneurship skilling and mentorship
• Marketing assistance
• Funding and financial assistance
• Compliance and tax assistance
• Community and networking

Eligibility

Any woman entrepreneur with an established or new startup or just a business idea can benefit from this scheme.

Application procedure for Startups

• Visit https://wep.gov.in/.
• Click on the “Register” button on the homepage. Following this, a registration form will appear on the screen.
• Fill in all the details and click on the “Register” button at the bottom of the page.
• After completing registration, a page will appear asking for “Areas of Interest” and relevant fields.
• Fill in all the Personal Information, Business Information, and Educational information. Keep in mind that the fields might vary depending on the area of interest you are choosing.
• Successful submission of details leads you to become a member of the WEP and grants you access to several benefits.

Benefits of the WEP

WEP actively hosts a wide range of events as a platform, providing resources and promoting entrepreneurial communities.

• It provides monetary assistance, including seed capital, growth capital, line of credit( LOC), and non-credit support.
• Promotion of offline initiatives and outreach programs by partnering with other organizations.
• Incubation and acceleration support to startups founded or co-founded by women entrepreneurs registered with the program.
• Identification of skill gaps and providing online/offline training on these aspects.
• Marketing and networking support to early-stage or established entities
• Compliance services to registered users, which provides them with the essential tools to adhere to legal compliances, perform registrations, furnish accounts, make loan applications, provide license counseling, and so on.
• A like-minded community to understand the true spirit of entrepreneurship and the way forward.

To provide better support, WEP has tied up with some Fortune companies like CRISIL, Facebook, SIDBI, NASSCOM, DICE, FICCI, Mann Foundations, Shopclues, CII, and many others. The fortunes will play a key role in developing different skill sets important for a robust entrepreneurial ecosystem.

Frequently Asked Questions

Company is a Separate Legal Entity

A company is recognised as a separate legal entity, distinct from its shareholders. Even if it is fully owned by a single person or a group, the company maintains its independent status. This distinction ensures the company can continue existing regardless of changes in ownership.

However, while a company has legal recognition, it is not considered a citizen and cannot claim fundamental rights granted to individuals.

Example

Suppose John and Mary start a bakery and register it as a private limited company (e.g., "Sweet Treats Pvt. Ltd."). The company can enter into contracts, own property, and sue or be sued in its own name. If the company faces a lawsuit, John and Mary’s personal assets are protected, and only the company’s assets are at risk

Corporate Taxation

As a separate legal entity, a company is taxed independently from its owners. Corporate tax rates vary based on the type of company, its turnover, and prevailing tax laws. This separation ensures that individual shareholders are not personally liable for the company's tax obligations, reinforcing financial security and stability.

Example

Tech Innovators Pvt. Ltd." earns ₹2 crores in a financial year. The company pays corporate tax at the applicable rate (e.g., 25% for companies with turnover up to ₹400 crore), separate from the personal income tax liabilities of its shareholders. The shareholders are not personally liable for the company’s tax dues.

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Limited Liability

Limited liability protects shareholders by restricting their financial responsibility to the amount they have invested in the company. This means that even if the company faces financial losses or legal claims, the personal assets of shareholders remain secure. This feature makes private limited companies an attractive option for entrepreneurs and investors.

Example

If "Green Energy Pvt. Ltd." takes a loan and fails to repay it, the shareholders are only liable up to the amount unpaid on their shares. Their personal assets, such as their homes or personal savings, cannot be used to settle the company’s debts.

Company has Transferability of Shares

Shares in a company can be transferred freely unless restricted by the company's articles of association. This feature enhances liquidity, allowing investors to buy or sell shares easily.

While shares of public companies are freely transferable, private companies may impose certain restrictions on share transfers to maintain control over ownership.

Example

A shareholder in "Family Foods Pvt. Ltd." wants to transfer shares to her son. She can do so, provided the company’s Articles of Association allow it and the required approvals are obtained. This enables her to pass on ownership without affecting the company’s existence.

Company is a Juristic Person

Under the Companies Act, a company is considered a juristic person, meaning it has legal rights and obligations similar to a natural person. However, an authorised individual must represent it in legal matters, usually a Board of Directors or a specifically empowered Director.

While a company can file lawsuits, it cannot take an oath or serve as a witness in court, as these actions require a natural person.

Example

"Urban Developers Pvt. Ltd." can purchase land, enter into contracts, and hire employees in its own name. It is treated as a legal person, distinct from its shareholders, and can enforce its rights in court through an authorized representative.

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Company has Perpetual Succession

A company's existence is independent of changes in ownership or shareholder status. Even if a majority shareholder (owning 99.99% of shares) passes away, the company continues to operate until it is formally wound up. This ensures stability and continuity in business operations.

Example

"Dabur India Ltd." was incorporated in 1884 and has continued to exist and operate despite changes in ownership, management, or the death of shareholders. The company’s existence is not affected by such changes and continues until it is formally dissolved

Common Seal (If Applicable)

A common seal acts as the official signature of the company, used to authenticate important documents like contracts and deeds. While the Companies Act of 2013 has made it optional for private companies, some organisations still choose to adopt it for added authenticity and formal recognition.

Example

"Metro Pvt. Ltd." adopts a common seal as its official signature. When signing a property purchase agreement, the document is stamped with the company’s common seal, signifying its authenticity and approval by the board of directors. While optional, some companies still use it for formal documents

Decree Against Company & Corporate Veil

A company is generally not liable for an employee's wrongful acts unless they occur within the scope of employment. For liability to arise, the wrongful act must be directly linked to business operations rather than simply occurring during work hours.

The "corporate veil" protects shareholders from personal liability, but courts can lift this veil in cases of fraud or misconduct.

Example

An employee of "RapidMove Logistics Pvt. Ltd." causes damage to a client’s goods while making a delivery as part of his job. The client sues the company, not the employee personally. However, if the directors used the company to commit fraud, the court could hold them personally liable by lifting the corporate veil.

Company can Own Property

A company, as a separate legal entity, can own property in its name, and its assets are distinct from those of its members. Members do not have direct ownership over company assets but may have a right to claim remaining assets after the company is wound up.

Example

"TechHive Innovations Pvt. Ltd." purchases office equipment and furniture. These assets are owned by the company itself, not by any individual shareholder or director. If a shareholder leaves, the equipment still belongs to the company.

Company can be Trustee

A company can act as a trustee if its Memorandum of Association (MoA) permits it. The objects clause in the MoA defines the company's ability to function as a trustee. Companies often act as trustees in managing trusts, employee benefit funds, or asset management services, ensuring structured administration of assets.

Example

"SecureTrust Pvt. Ltd." is appointed as the trustee to manage a scholarship fund for underprivileged students. The company manages the fund’s assets and disburses scholarships according to the trust’s rules.

Capacity to Sue and Be Sued

As a separate legal entity, a company has the right to initiate legal proceedings and can also be sued in its own name. This ensures accountability and allows the company to protect its rights, enforce contracts, and address disputes independently of its owners or directors.

Example

"PureWater Solutions Pvt. Ltd." discovers that a supplier has delivered defective water filters. The company files a lawsuit against the supplier in its own name. Similarly, if the company fails to pay its rent, the landlord can sue the company directly.

Importance of Understanding Company Features

Understanding these features is crucial for ensuring legal compliance and making informed business decisions. It helps entrepreneurs, investors, and stakeholders navigate corporate operations effectively while minimising risks. Recognising the legal and financial implications of these features enables better decision-making in establishing and managing a company.

Frequently Asked Questions

Who Can Be a Designated Partner in LLP?

Only individuals can be Designated Partners in an LLP. As per the Limited Liability Partnership Act, 2008, a minimum of two Designated Partners is mandatory, and at least one must be an Indian resident. This designation is crucial for ensuring legal compliance, managing financial responsibilities, and fulfilling statutory obligations within the LLP.

Who Can't Be a Designated Partner?

• Undischarged insolvents
  
• Individuals declared insolvent or who have withheld creditor payments in the last five years
  
• Those imprisoned for six months or more for offences involving moral turpitude
  
• Minors below 18 years
  

The Central Government holds the authority to annul these disqualifications if deemed necessary.

Designated Partner Identification Number (DPIN)

Every Designated Partner in an LLP must obtain a Designated Partner Identification Number , also referred to as a Director Identification Number (DIN). This unique number is mandatory for LLP registration and compliance. To obtain a DPIN, you need a Class 2 digital signature, which ensures secure authentication.

All partners in an LLP are eligible to become Designated Partners, but only those specified in the incorporation document hold this role at the time of registration. The LLP Partnership Deed allows rotation of the Designated Partner role, enabling different partners to take on responsibilities with mutual consent. This flexibility ensures equal participation while maintaining compliance with LLP regulations.

Documents Required for Becoming a Designated Partner

To become a Designated Partner in an LLP, you need to apply for a Designated Partner Identification Number. For this, you must submit the following documents:

• Identity Proof – A self-attested or certified copy of a document that includes your photograph, date of birth, and father’s or husband’s name (such as an Aadhaar card, PAN card, or passport).
  
• Residential Proof – A self-attested or certified copy of an address proof like a utility bill, bank statement, or rent agreement.
  
• For Nominees of a Body Corporate – A resolution or authorisation letter from the company mentioning their name and address is needed.
  
• For Foreign Nationals – A valid passport copy is needed.
  

Authorities for Attestation/Certification

Certain officials and professionals can attest or certify documents needed for a Designated Partner Identification Number . These include:

• Gazetted officers from the Central or State Government
  
• Notaries public
  
• Practicing professionals like Company Secretaries, Chartered Accountants, or Cost and Works Accountants
  

While attesting documents, the authority must include their name in capital letters, registration number, ministry or department details, and an official seal or stamp. This ensures the documents are valid and accepted for DPIN approval.

Translation Certificate

If your documents are in a language other than Hindi or English, you must attach a translated copy. This translation must be certified and attested to meet compliance requirements. It ensures that authorities can verify the details correctly and process the application without delays.

Appointment of Designated Partner

At least two individuals must be appointed as Designated Partners when registering an LLP. If a Designated Partner leaves the LLP, a new one must be appointed within 30 days. Failing to do so will result in all partners being considered Designated Partners, which may lead to compliance issues. To complete the appointment process, the following forms must be submitted:

To appoint a Designated Partner, the following forms must be submitted:

• Form 9 – This form records the consent of an individual to become a Designated Partner.
  
• Form 4 – It contains details of individuals who have given their consent to take on the role.
  
• Form 10 – This form is used to notify any changes made by the Designated Partners.
  
• Form 5 – Every LLP must submit this form to the registrar, providing details of individuals who have consented to become Designated Partners. It must be filed within 30 days of the appointment.
  

Related Read: What is LLP Form 11?

Government Fee for Appointment of Designated Partner

The government charges a fee based on the LLP’s contribution when appointing a Designated Partner. The fee structure is as follows:

• ₹50 – If the LLP’s contribution is up to ₹1,00,000
  
• ₹100 – If the contribution exceeds ₹1,00,000 but is limited to ₹5,00,000
  
• ₹150 – If the contribution exceeds ₹5,00,000 but is limited to ₹10,00,000
  
• ₹200 – If the contribution exceeds ₹10,00,000
  

Related Read: Complete LLP Registration Fees Guide

Duties and Responsibilities of a Designated Partner

• Signing the Statement of Account and Solvency: The Designated Partner must sign the Statement of Account and Solvency, confirming the financial position of the LLP. This document is crucial for transparency and is filed annually.
  
• Filing Annual Returns on Time: It is the Designated Partner’s responsibility to ensure that the LLP files its annual returns within 60 days of the financial year’s closure. Late filing can result in penalties and legal complications.
  
• Filing Additional Documents: The Designated Partner must submit any other documents requested by regulatory authorities to comply with legal requirements.
  
• Cooperating with Inspectors: During investigations or inquiries, the Designated Partner is required to cooperate with inspectors, providing necessary documents and signing examination notes to verify accuracy.
  
• Reimbursing Investigation Expenses: In the case of investigations, the Designated Partner is responsible for reimbursing the costs incurred, such as those related to audits or compliance checks.
  

Penalty for Not Having a Designated Partner

Every LLP is required to have at least two Designated Partners at all times. Failing to comply with this requirement incurs a penalty starting at ₹10,000, which can increase to ₹5,00,000.

If a Designated Partner exits the LLP and is not replaced within 30 days, the LLP will face similar penalties. Non-compliance with this rule can lead to legal and financial consequences, making it essential for LLPs to appoint and maintain the required number of Designated Partners.

Rights of a Designated Partner

Decision-Making Rights

A Designated Partner holds significant decision-making authority within an LLP. They are involved in making key business decisions, including formulating policies, setting operational strategies, and managing the financial aspects of the LLP. Their role is vital in ensuring that the LLP functions efficiently and adheres to its business goals.

Profit-Sharing and Financial Rights

A Designated Partner is entitled to a share of the profits generated by the LLP, with the exact share determined by the LLP agreement. This agreement outlines how profits and losses are distributed among the partners, ensuring that the Designated Partner receives a portion based on their involvement and the terms set forth.

Additionally, they have financial rights concerning capital contributions and can receive distributions and benefits according to the LLP's agreed financial terms.

Right to Access LLP Records and Documents

A Designated Partner has the right to access all official records and documents of the LLP. This includes financial statements, tax filings, agreements, and any legal documents related to the firm’s operations. This right ensures transparency within the LLP, allowing the Designated Partner to make informed decisions and stay updated on the company’s financial and legal status.

Liabilities of a Designated Partner

Liabilities in Case of Non-Compliance

A Designated Partner is responsible for ensuring that the LLP complies with all relevant legal requirements. Failure to comply with regulations such as filing annual returns or paying taxes can result in penalties, fines, and legal action that impacts both the LLP and the individual partner.

Legal and Financial Liabilities Under the LLP Act

Under the LLP Act, 2008, a Designated Partner may be personally liable if the LLP violates legal obligations. This includes non-payment of statutory dues, failure to meet regulatory requirements, or failure to comply with financial disclosures. In such cases, the Designated Partner is expected to take responsibility for rectifying the situation, with potential legal and financial penalties if the issue remains unresolved.

Situations Where Personal Liability May Arise

Although an LLP offers limited liability protection, there are circumstances where a Designated Partner could be personally liable. If involved in fraudulent activities, misrepresentation, or intentionally ignoring legal obligations, the Designated Partner may face personal liability. This could result in the loss of personal assets or legal actions separate from the LLP’s legal structure.

Frequently Asked Questions