Copyright Law in India

Copyright is the exclusive right by law to do certain actions in respect of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. Copyright does not protect the specific idea or information or content but it protect the form and manner in which it is represented. It is applicable on a wide range of innovative, intellectual, scholarly, or artistic forms or works. The copyright symbol '©' (the letter C inside a circle) is used by the owner who have registered copyright. 

The intellectual properties protected under copyright laws are as follows:

Literary works- it includes works published under books, articles, journals, periodicals, manuscripts, computer programs and database.

Artistic work means includes painting, a sculpture, a drawing, an engraving or a photograph, whether or not any such work possesses artistic quality; a work of architecture; and any other work of artistic craftsmanship.

Musical work includes a work consisting of music and includes any graphical notation of such work but does not include any words or any action intended to be sung, spoken or performed with the music

Sound recording includes a recording of sounds from which sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced. A phonogram and a CD-ROM include this.

Cinematograph film includes any work of visual recording on any medium produced through a process from which a moving image may be produced by any means and also includes a sound recording.

It covers all published as well as unpublished works.

Published Works

Copyright in works published before 21st January, 1958, i.e., before the Copyright Act, 1957 came in force, can also be registered, provided the works still enjoy copyright. For this, three copies of published work shall be sent along with the application.

Unpublished Work

If the unpublished work is to be registered, a copy of the manuscript along with the application for affixing the stamp of the Copyright Office in proof of the work having been registered need to be sent. In case, if you send  two copies of the manuscript,  one copy with duly stamped will be returned back while the other copy will be restored for record purpose in the  copyright office will be kept confidential.

The applicant are fee to send just the extract  from the unpublished work rather than whole manuscript and ask for the return copy of the extract duly signed and stamped with the seal of the copyright office.

If a work has been registered as unpublished and subsequently if it is published, the applicant may apply for changes in particulars in Form V with prescribed fee to copyright Office.

 Terms -The term of copyright is, in most cases, the lifetime of the author plus 60 years thereafter.

Copyright and Innovation

 In fact, it is a bundle of rights including rights of reproduction, adaptation and translation of the work and communication to the public. It ensures certain minimum safeguards of the rights of original creators over their creations, thereby protecting their creativity. Creativity being the foundation of encouragement and progress, no civilized society can afford to ignore the basic requirement of encouraging the same. The protection in the form of right  provided by copyright to the efforts of artist ,writers, dramatists, musicians, architects and producers of sound recordings, cinematograph films and computer software.

Copyright Registration Procedure

The procedure for registration is as follows:

1.      Application for registration is to be made on as prescribed in the first schedule to the Rules.

2.      For each work to be covered under copyright, separate application should be made.

3.      Each application should be accompanied with requisite fee as prescribed in the second schedule to the Rules.

4.      In whosoever name a Vakalatnama or Power of Attorney has been executed, that person should sign the application. Power of Attorney duly signed by the party and accepted by the advocate should also be enclosed therein.

5.      It takes mandatory 30 days so that no objection is filed in the Copyright office against your claim that particular work is created or owned by you. 

Author: This blog is written by  Ms. Chanchal Sharma, a passionate blogger of Aapka Consultant.

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Distinguish between OPC and Sole Proprietorship

If you are starting a new business and unable to decide whether to start as OPC or sole proprietorship, the following differences between the two will help you to decide  the type of company to be formed.

                         Sole proprietorship is the simplest form of business. It is not a legal entity. It simply means a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can be under a fictitious name. It is easy to set up at nominal cost and sole proprietor need not to register for the business.

Whereas OPC is defined under sec 2(62) of The Companies Act which Means an individual person can now constitute a Company under this concept. In simplest form One Person Company means a company with only one person as a member. He will be the shareholder of the company and avails all the benefits of a private limited company. An OPC is classified as a private company under Companies Act.

The difference of the above two for better understanding are as follows:

Particulars	One Person Company	Sole Proprietorship
Suitability	Suitable for mid sized business.	Suitable for small business.
Promoter’s Liability	Liability is limited. Liability is to the amount of capital invested or the share holds in the company.	Liability is unlimited. Owner is liable for all the debts and liabilities of  business
Legality	Has a separate legal entity.	Not has a separate legal entity.
Governed by	Companies act	NA
Level of Protection	It is protected as s in case of default; the creditors cannot sell the personal assets of the owner for the recovery.	Since, it is not a separate legal entity. It is unprotected as creditors can sell the personal assets of the owner for the recovery.
Registration	Has to be registered by ROC and it will provide certificate.	No registration required.
Name	OPC shall be mentioned below the name of the company.	No guidelines provided.
Minimum no of directors	1 director	No guidelines
Min. no of shareholders	1 person.	NA
Start up Costs	It is comparatively higher around Rs. 15,000. Owner has to pay the cost of incorporation of company, Digital signature Certificate as well VAT/service tax registration number cost.	It is lower around Rs. 5000. Owner has to pay the cost of VAT registration and License under Shops & Establishments Act.
Business Registration Certificate	OPC can easily form a company to get its business registered with registrar of companies as a separate legal entity. After registration a certificate of incorporation will be issued as a proof of registration.	Generally sole proprietorship businesses are not registered with government of India except few businesses.
Taxation	Taxes payable at a flat rate of 30% on profits. You have to pay Dividend Distribution Tax (DDT) and Minimum Alternate Tax.	Sole proprietors must pay at the individual slab rate, but do have some conveniences; for example, if your turnover is less than Rs. 1 crore, you can declare profits at a flat 8%.
Minimum share capital	Minimum paid up capital required to form a One Person Company is Rs.100000.	No such requirement.
Meetings	1 board meeting in each half year. No requirement of annual general meeting.	NA
Annual Compliances	In addition to maintaining books of accounts, they have to get their statements and record audited, do annual filings and inform the necessary changes in structure of the company to Registrar of companies. It would cost around Rs. 10,000 annually on compliances.	Undoubtfully, sole proprietors have to maintain their books of accounts and file income tax returns as annual compliance.
Conversion	It can be converted into Public or Private company.	NA

Author: This blog is written by  Ms. Chanchal Sharma, a passionate blogger of Aapka Consultant.

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Basics of Service Tax

Service Tax – Meaning

“Service Tax is a tax levied by Central Government of India on services provided or to be provided excluding services covered under negative list and considering the Place of Provision of Services Rules, 2012 and collected as per Point of Taxation Rules, 2011 from the person liable to pay service tax. Person liable to pay service tax is governed by Service Tax Rules, 1994 he may be service provider or service receiver or any other person made so liable”.

Key points:

It is a tax on services levied by the Central Government under the Finance Act, 1994.

Business entities includes food service, consulting, banks, software development etc provides service to the customer and attracts additional service amount is called service tax.

Business entity collects the service tax from the consumer and pays to the central govt. on behalf of them.

It is indirect tax as service provider is not directly paying it but collecting from the recipients or customers and paying on their behalf to the central government.

 The government had increased the service tax rate to 14% (inclusive of all cess) from 12.36% earlier, making services more expensive for the end user.

Criteria for payment of service Tax in India

ü  The concept of service tax comes into existence in 1994. However, in 2012 the scope of items under service tax increases covering wide varieties of service.

ü  Service Tax is applicable to business when total value of service exceeds Rs. 10 lacs in a financial year.

Receiver of service liable for payment of service tax directly.

There are cases when receiver or consumer of service instead of paying tax to the service provider directly pays to the Central Government. This is referred to as reverse charge .These are as follow:

·         Service provided by foreign company with no office or establishment tin India.

·         Services provided by Director to a body corporate.

·         Services provided for transportation of goods by Goods Transport Agency, the person who pays or is liable to pay freight is liable to pay Service Tax too. , if the consignor or consignee falls under any of the seven categories viz. (a) a body corporate or a partnership firm (b) a factory (c) a corporation  (d) a company (e) a society (f) a co-operative society (g) a registered dealer of excisable goods .

·         The services in relation to Insurance Auxiliary Service by an Insurance Agent, the Service Tax is to be paid by the Insurance Company

·         Legal service provided by an individual or firm to any business entity.

·         Services by government or local authority to any business entity.

·         Sponsorship service provided by any person to Body Corporate or partnership firm.

List of services taxable

Almost all services are taxable for e.g. from architects , chartered accountants, beauty parlors, clubs, security agencies cosmetic surgeries, consulting engineers, packaging services, interior decorators, real estate agents, and restaurants. A complete list of taxable services has been specified under Section 65(105) of the Finance Act, 1994. From 1^st July 2012 onwards all services (except those specified in the negative list of services by government) are not liable for tax.

 

Negative list of Services

These are services exempt from paying service tax and included in the negative list of service tax. For the following service, service Tax is not applicable.

ü  Services provided to the United Nations or any specific international organizations.

ü  Ambulance service 

ü  Transporting students.

ü  Providing services in the educational institution, security and cleanliness services in educational institutions, sports events, sponsorships given to students during events etc.

ü  An authorized Clinical establishment or medical practioner.

ü  Services provided by Blood Bank or any other preservation centers.

ü   Services offered by temples or for conducting religious ceremony.

ü  Services provided by teachers of arts to i students, faculty and staff.

ü  Service in veterinary hospital or vet.

Beside these, there are other services too that are included in the negative list of services.

Author: This blog is written by Ms. Chanchal Sharma, a passionate blogger of Aapka Consultant.

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ADVANTAGES OF ONE PERSON COMPANY (OPC)

As per provision of section 2(62) of the Companies Act, 2013 defined (62) “one person company” means a company which has only one person as member. For the formation of OPC [Rule 3] the following conditions must be followed:

Only a natural person who is an Indian citizen and resident in India­­-

-          shall be eligible to incorporate a One Person Company;

-          Shall be a nominee for the sole member of a One Person Company.

The term “resident in India” means a person who has stayed in India for a period of not less 182 days immediately preceding one calendar year.

m One Person company can be registered only as a Private Company.

m The paid up capital of the OPC cannot exceed 50 Lakhs.

m Its average annual turnover cannot exceed 2 crores.

m A person can incorporate a maximum of 5 OPCs.

m One Person Company can appoint maximum 15 Directors, but minimum should be one Director.

m An OPC is required to give a legal identity by specifying a name under which the activities of the business could be carried on. The words ‘One Person Company’ should be mentioned below the name of the company, wherever the name is affixed, used or engraved.

m Member/Shareholder of the One Person Company acts as first Director, until the Company appoints Director(s).

Here are the 10 reasons why any entrepreneur or business ENTITY SHOULD opt for OPC. The advantages of being an OPC are as follow:

1.      A Separate legal entity

OPC is separate legal entity and capable of doing everything that an entrepreneur would do. 

2.      Annual general meetings

In OPC there is no need to hold such meetings only the resolution which shall be required to communicate to the members. The date on which is signed by the members are considered as meetings. One Person Company need not to hold any AGM (Annual General Meeting) in each year Holding Annual General Meetings.

3.      Exempted from performing certain formalities

Under OPC in case the Board consists of only one director, then the OPC will not be required to conduct a Board meeting as well. There is no requirement of appointing a first director for OPC. Apart from this, OPC is also exempted from provisions relating to notices of the meetings and any other such stipulation related to meeting like Quorum for Meetings, Proxies and Appointment of Chairman for Meeting, and restriction on Voting Rights etc.

4.      Cash Flow Statement 

One Person Company is not required to prepare this.

5.      Easy Funding

OPC can raise its funds through venture capital, financial institutions, angel investors, etc. It can raise funds from others like thus graduating itself to a private limited company.

6.      Additional risk, limited liability

The liability of the OPC is limited to the extent of the value of the share a person hold, the individual could take more risk in business without affecting loss of personal assets. 

7.      Minimum regulations

OPC have to face little compliance burden and regulation as compared to other companies, hence OPC can more focus on other functional areas. 

8.      Benefits of being a Small Scale Industries (SSI)

An OPC can avail the various benefits provided to Small Scale Industries like lower rate of Interest on loans, easy funding from bank without depositing any security to a certain limit, manifold benefits under Foreign Trade policy and others. 

9.      Benefits under Income Tax Law

Any remuneration paid to the director will be allowed as deduction as per income tax law unlike proprietorship. Other benefits of presumptive taxation are also available subject to income tax act.

10.  Receive interest on any late Payment

OPC avails all the benefits under Enterprises development Act, 2006. The newly start up OPC is micro, small, or medium; hence they are covered under this act. As per the Act, if buyer or receiver receives any late payment (receives payment after specified period), then he is entitled to receive interest which is three times the bank rate.

11.  Increased Trust and prestige

Any business entity that runs in the form of company always enjoys an increased trust and prestige.

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