Monday 29 May 2017

REGISTERING AN ONLINE BUSINESS IN INDIA

The internet age has made it possible to buy and sell anything to everything online. Therefore, we see a lots of people – housewives, students, and entrepreneurs etc. starting businesses online. Like any business in the non-virtual world, registration of online businesses can be done. It is not a mandatory one but helpful to acquire legal protection. Registration is important for online businesses as it is asked by payment gateways (PayPal, AirPay etc.) and for invoicing purposes. However, not all payment gateways ask for registration; one of the example is PayUmoney.
If one is planning to register his online business, then he can do so in any form as mentioned below: –
1. Sole Proprietorship – You can register your ecommerce business under Sole Proprietorship at your nearest local municipal corporation office. You need to submit the Shops and Establishment Registration Form provided under Shops & Establishment Act to complete your registration. Along with it, you are needed to submit an undertaking. The fees for registration may vary depending on the state and the city’s municipal corporation area.
2. Partnership Firm – It requires minimum two persons. To register a business as a firm one should follow the steps given:
a. Choose name of the firm;
b. Create a Partnership deed;
c. Apply for PAN Number;
d. Register Partnership deed.
3. Private Limited Company – It needs minimum two directors and does not require any minimum capital. To register a private limited company, follow the steps given below:
a. Two Directors and two Shareholders are necessary;
b. Obtain Director Identification Number (DIN);
c. Obtain Digital Signature Certificate (DSC);
d. Draft Memorandum of Association (MOA) and Articles of Association (AOA);
e. Filings with Registrar of Companies (ROC);
f. Paying stamp duty to ROC;
g. Verification done by ROC;
h. Certificate of Incorporation (CIN) issued;
i. Apply for PAN number of the company.
4. Limited Liability Partnership (LLP) – It is mixture of Partnership Firm and Private Limited Company. To register a LLP follow the steps given below:
a. Minimum two partners are required;
b. Apply for DIN;
c. Apply for DSC;
d. Submit Name Application to ROC;
e. File incorporation documents with ROC;
f. Certificate of Incorporation is issued by ROC;
g. Drafting and filing of LLP Agreement
5. One Person Company (OPC) – A person can also register his business as an OPC. The key difference between OPC and sole proprietorship is the way liabilities are treated. For instance, in an OPC the promoter’s liability is limited in the event of a default or legal issues. On the other hand, in sole proprietorships, the liability has not been restricted. The registration of OPC is very much similar to Private Limited Company.
Author: This blog is written by Ms. Afreen Hashmi, a passionate blogger & intern at Aapka Consultant.
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Thursday 25 May 2017

Legal Compliance after Registering LLP in India

What are the Legal Compliance after the Register LLP in India?

As per Limited Liability Partnership (LLP) Act, 2008 and LLP Rules some Legal Compliance need to be followed after the registration of LLP firm in India.
 1. Financial affairs and file accounts need to be maintained
  • All the financial records need to be maintained as per double entry system of accounting whether in cash or accrual basis at the registered office of the company.
  • If partner contribution exceeds 25 lakhs and total turnover exceeds 40 lakhs then an auditor is required to maintain book of accounts.
2. Minute books
  • Minutes should be prepared to maintain records of all the meetings held between partners and committee of partners.
3. Change in partners
  • If any change in the structure of partners takes place then within 30 days of that change along with fees it should be intimated.
4. Annual Return
  • Annual return should be paid within, 60 days from the financial year. Its due date is 30th
  • Rupee 100 need to be paid for per day default in payment (as a penalty)
  • Returns need to be paid with ROC in e-Form 11.
5. Annual Statement Of Accounts and Solvency
  • This is paid on annual basis, from 30 days from the expiry of 6 month from end of each financial year, i.e. 30th
  • Annual returns need to be paid in e-Form 8.
6. Supplementary LLP Agreement
  • It governs the rights and duties of the partners and it should be filed to ministers of cooperate affairs within 30 days of incorporation of LLP. Failing to do so will caste upon a fine of rupee 100 per day with no ceiling on its maximum fine.
7. Income Tax Return
  • If LLP is carried on business and the overall turnover exceeds 1 Crore then tax audit is applicable and need to be paid within 30th
  • If LLP is carried on business and the overall turnover doesn’t exceeds 1 Crore then audit is not applicable and need to be paid within 30th
  • If LLP is carried on profession and the total receipts are more than 25 lakhs then audit is applicable and need to be paid within 30th
  • If LLP is carried on profession and the total receipts is not more than 25 lakhs then audit is not applicable and need to be paid within 30th
8. Meetings of LLP
  • First general meeting should be done within 30 days of formation of LLP.
  • At least one general meeting need to be held within one financial year.
  • Executive committee need to hold two meetings in one financial year.

Author: This blog is written by  Ms. Ankana Mukherjee, a passionate blogger & intern at  Aapka Consultant.
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Monday 22 May 2017

FORM 15CA & FORM 15CB- COMPLIANCE FOR FOREIGN REMITTANCE

COMPLIANCE FOR FOREIGN REMITTANCE

Foreign remittances stand for the transfer of money by a foreign worker to his home. When it comes for the taxpayers, FORM 15 CA & FORM 15 CB is a declaration and tax determination certificate respectively. With regard to tax payers, the certain information’s has been collected through tools which are chargeable to tax in the hands of recipient non-residents.
Income tax department has used this effective and utilised method for tracking up of foreign remittances. With this, income tax laws, when it comes to the foreign remittances various authentications are made to person who is non-resident for the amounts which are taxable.
With going with these process safe and easier, Income Tax Act has made the various rules, regulation and guidelines. The concept of form-15 CA initialises when any person is making a payment either to non-resident or foreign company, which is submitted online.
In another cases, where the form 15 CA doesn’t goes then the form 15 CB is required before uploading form 15 CA. In form 15 CB certain information includes as like the details and nature of the remitter, which also includes the agreement between the two parties, banks details etc.
In the process of FORM 15 CA & FORM 15 CB, for obtaining the certificate in form-15 CB is made after making the payments in form-15 CA. After that form-15 CA is uploaded by remitter on Income tax Department sites, with the electronic signs.
There are the certain cases where the form- 15 CB is not required, where the amount of remittance doesn’t exceed Rs. 50,000 and Rs. 2,50,000 and where the remittance amount is not taxable.
Where there is Indian investment abroad-in equity capitals, in debt securities, in real estate, loan extends to non-residents, travel for pilgrimage, medical treatments, educations, remittance towards foreign travels, postal services, payments for maintenance of office abroad, remittances by foreign embassies in india, payments by residents for international bidding, remittance towards personal gifts and donations etc., in all such cases FORM 15 CA & FORM 15 CB both are not required.
Author: This blog is written by Ms. Deepshikha Dabi, a passionate blogger & intern at  Aapka Consultant.
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Friday 19 May 2017

REGISTRATION OF UDYOG AADHAR

In India, entrepreneurship is also promoted by the Government through various schemes by the Ministry of Micro, Small and Medium Enterprises (herein after MSME). The new name for the registration of MSME is Udyog Aadhar registration which indeed simplifies the registration process by making it accessible online. The registration of Udyog Aadhar encourages small and medium enterprises. It also certifies the enterprises’ existence, bank details, business activities carried on, employment and ownership.
The following steps describe how a Micro, Small or Medium Enterprise can register for Udyog Aadhar online:
1. Details of the owner/applicant: The applicant/owner must enter his 12 digit Aadhar card number, his/her name (which should match with that on the Aadhar card) and his/her social category.
2. Name, Type and Address of the Enterprise: After filling the above details, the Applicant must fill the name by which his/her Enterprise is known to the customers/public and is a legal entity to conduct business. It is to be noted that one applicant can have numerous enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number as Enterprise 1 and Enterprise 2 etc. The applicant is also required to choose the type of enterprise and the postal address of the same. The address must be complete and should have essential details like State, District and mobile number.
3. Date of Commencement:The date on which the business enterprise was started or came into existence must be filled.
4. Previous Registration Details:If the organisation has been registered andissued a valid EM-I/II by the concerned GM (DIC) as per the MSMED Act 2006 or the SSI registration prevailing prior to the said Act, such number may be mentioned.
5. Bank Details:The applicant must submit his/her bank account number (the one that is used for operating the Enterprise), Name of the Bank, IFS code and the name of the branch as well.
6. Major Activity:The applicant needs to specify whether the enterprise engages in manufacturing or service activity. If the enterprise has both the activities being carried out then whatever forms a major portion is the one he needs to choose.
7. National Industry Classification Code:The NIC codes are prepared by the Central Statistical Organisation (CSO) under the Ministry of Statistics and Program implementation, Government of India. The NIC code must be filled.
8. Employment details:The number of individuals who are employed currently by the enterprise should be specified by the applicant. The applicant must provide information about the total number of individuals who are paid wages by the said enterprise.
9. Details of Investment in Plant and Machinery:The enterprise needs to provide its total investment. For coming up with total investment, the original investment (purchase value of items) is to be taken into account excluding the cost of pollution control, research and development, industrial safety devices, and such other items as may be specified, by notification of RBI.
10. Choosing District Industry Centre (DIC):This is based on location and the applicant has to choose the appropriate DIC as per the location of the enterprise.
11. Submission of Application: After filling all the necessary details as mentioned above, the applicant needs to submit the application by simply clicking on the submit button.
Author: This blog is written by Ms. Adila Qadir, a passionate blogger & intern at Aapka Consultant.
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Tuesday 16 May 2017

CHECKLIST FOR STARTING A RESTAURANT BUSINESS IN INDIA

CHECKLIST FOR STARTING A RESTAURANT BUSINESS IN INDIA

Everyone loves to eat! Who doesn’t want to gorge on the delicious food the restaurants serve along with the ambience that they provide.And chances are that one might even plan on opening his/her own restaurant to take his/her love for food to next level.
So, if you are planning to start a restaurant business either for the love of food or to venture into this rapidly growing business you need to be well prepared. Sure you have your business plan, the list food items you are going to include, the ideal place where you want to open it, the financial backing etc. Also, you need to focus on the legal and compulsory regulatory requirements to run your business smoothly and avoid any trouble in future. Once you obtain the necessary licenses and fulfill all other obligations,you are all set to start your business without any hassle.
Thus, below is the checklist regarding what all needs to be taken care of to start your very own restaurant.
  • Choosing the business entity: First and foremost you need to get a clear idea as to what kind of business entity you want to choose. These can vary from a Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company or One Person Company (OPC). As per the ownership and the kind of restaurant, future plans etc. any one of the above can be chosen depending upon what suits your needs the best.
For instance LLP’s and OPC have a comparatively low incorporation cost as compared to Proprietorships and partnership firms and even provide limited liability etc. Thus, to begin with it may be a good idea to start the business as an LLP or OPC.
  • Bank loans: To open a restaurant you may require a loan which can easily be borrowed from various banks, which are providing such loans.The bank grant depends on your business model, experience, collateral security etc. which are vital considerations for loan sanction.
Apart from regular loans there are schemes such as CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) by The Ministry of Small Medium Enterprise which provide loan without any collateral. Various banks such as SBI, Vijaya Bank, Indian Bank, Axis Bank Limited etc. provide loans under this scheme. It’s best to consult you preferred bank and get information regarding the best possible ways through which you can get a loan.
  • Food License: All restaurants need to obtain a Food Business Operator license from the Food Safety and Standards Authority of India (FSSAI), as per The Food Safety and Standards Act, 2006. Each restaurant owner is required to register their business with FSSAI. The license can easily be obtained from the state level licensing authority before starting the restaurant operations. Running a restaurant without license is considered to be a legal offence
  • Health-Trade License: Apart from Food license Health-Trade license is mandatory for all restaurants. It can be obtained from the Municipal Corporation or Health department of the statewhere you are planning to open a restaurant.
  • Eating House License:Eating House License is another necessary license. City or state police headquarters and the police commissioner (licensing) are authorized to issue this kind of license. Even, it can be obtain online.
  • Safety measures in case of fire: The restaurants need to follow all the necessary guidelines to ensure safety in case of fire. No Objection Certificate (NOC) for the same is required by submitting an application to the Chief fire officer. An inspectionwould be conducted and NOC may be granted if all conditions are fulfilled. Incase, otherwise necessary requirements are informed to the applicant.
  • Liquor License: In case you plan on serving liquor in your restaurant a liquor license is required.Excise Commissioner of the city or region of the state is the authority to issue this license.
  • Lift clearance: A lift clearance is required if you are planning to install a lift in your multi storey restaurant. The clearance can be obtained from the inspector from electricity department as well as from the Labour Commissioner of the city.
  • Music license: As per the Copyright Act of 1957, a license is required for playing recorded music or videos. Phonographic Performance Limited or Indian Performing Right Society provides this license.
  • Environmental measures: Environmental clearance is mandatory for all restaurants. An NOC from the Pollution Board of the city/state is required. This is to ensure that the environmental and pollutions norms are not being violated in the course of business.
  • Insurance: The restaurant you are planning to open needs to be insured for Public liability, Product liability, fire policy and policy for building and assets. A suitable insurance company can be approached for the same.
  • Signage License: Restaurants have to further obtain a signage license from the local civil authority (Municipal Committee or City Corporation) which is necessary for public display of signs.
  • Trademark Registration: In case you plan to open a chain in the near future or are willing to protect your brand name from illegal usage by anyone else, you may opt for a trademark registration. This would help protect the goodwill associated with your name and ensure that the brand name is not being used by anyone else.
  • Registration under Shops and Establishment Act: The restaurant needs to be registered under Shop & Establishment Act. Shop & Establishment License can be obtained by applying to the State Chief Inspector of Department of Labor. This is to protect employee rights and working conditions.
  • Registration for Service Tax: The restaurant has to be registered for service tax with Central Board of Excise and Customs.This is in regard to the services and amenities provided by the restaurant besides food.
  • Registration for VAT: Registration with state government is required for value added tax(VAT) on food items sold.
Thus, opening a restaurant requires a lot of pre-planning, various licenses and legal requirements that need to be fulfilled. Taking care of each one of them step by step can ensure a smooth start to the business which is sure to yield good results in the long run without any hassles.
Some of the related articles:
  1. LEGAL DOCUMENTS REQUIRED TO START A RESTAURANT IN INDIA
  2. LICENSE REQUIRED FOR STARTING A HOOKAH PARLOUR IN INDIA

Author: This blog is written by Ms. Eishani Behl, a passionate blogger & intern at  Aapka Consultant.
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Saturday 13 May 2017

Filing of Form 15CA and 15CB online

Filing of Form 15CA and 15CB online

It is well known that Income tax return (ITR) applications can be filed online, in a quick and time saving manner through the official website of Income Tax department. In this blog, we are going to specifically discuss the filing of Form 15CA and 15CB. The rules of filing these forms have been revised with effect from 1st April 2016. Before seeing the filing procedure, understand the basics.

What is form 15CA and who is required to file it?

Form 15CA is a system through which Government comes to know about the payments in the hands of non-resident recipients, to determine their taxability. Often called as “declaration of remittance” it is to be filled by a foreign company or a non-resident. Rule 37BB, as revised, requires banks to receive these forms, and give them to IT authorities. However, Rule 37BB provides a long list of exemptions, wherein no information of remittance is to be supplied, and form 15CA is not to be filled.
  • What is form 15CB and who is required to file it?
It is a certificate from chartered accountant who determines the chargeability of the remittance in accordance with Income Tax Act, and the relevant Double Taxation Avoidance Agreements. Section 195(6) of the Act provides for obtaining such certificate. It is to be filed by a person who comes within the ambit of filling remittance under Form 15CA.
  • Documents required according to the payment limit
Payment limitDocuments to be filled
5 lakh or lessPart A of Form 15CA
5 lakh or more1. Assessing officer’s certificate under section 197
2. Assessing officer’s order under section 195(2) and (3)
3. Part B & C of Form 15CA
4. Form 15CB certificate
Payment is not chargeable if it falls within exemptions of Rule 37BB (now expanded by 2016 revision)1. Part D of Form 15CA

(Note: All these parts are available on the website of Income Tax Department)

Procedure

STEP 1:
A user needs to be registered on the IT Department portal, for the purpose of e-filing.
STEP 2:
After completion of step 1 user can choose Form 15CA. It has four parts A, B, C, D and according to the payment limit given from table above, user needs to fill the one which is applicable to him/her. User will also be required to generate a signature using DSC Management Utility, and then upload the same.
STEP 3:
Choose the Part, to be filled. In case you are filling Form A, the details to be filled are:
Name of the Remitter, PAN  & TAN of the remitter, Address of the remitter. After having filled all the details correctly, you will be shown a success page stating successful submission of form, and a transaction ID. In case you are filing Part B & C, a drop down box will also ask you for Form 15CB. Generally, 15CB is to be filled by CA, after you have entered his membership number, by going to “My account”. Then CA can login through the same e-login process, and fill 15CB.
STEP 4:
By going to “My account” you can view the submitted form and then fill other details which are required. Once all he details are filled, you will be asked in an option “withdraw form 15CA” which is available for 7 days from the submission of form. Once you click on it, there will be a confirmation pop-up box, which will require to confirm the withdrawal. Once you click on it, user will be shown a success message. On seeing this, now user can observe that the status of form which was earlier “withdraw” has now been changed to “form 15CA has been withdrawn”. By clicking on the “Acknowledgment number”, you can now see that your Form 15CA has been successfully filed.
Details required for filing Form 15CA & 15CB
Generally, it is seen that firms and companies tend to hire CAs or professionals to do the e-filing. Therefore, here are a few details, which are required to be obtained from the tax-payer or client.
Name, address, PAN, email/phone number of the remitter, along with status of the remitter, i.e. whether it is company/individual etc. Simultaneous details of the remittee, and the country to which remittance is made. Details of remittance, as to the amount, currency, proposed date of remittance etc. also need to be known.
Details of bank of the remitter, the tax residency certificate etc.
Author: This blog is written by Ms. Aastha Mehta, a passionate blogger & intern at  Aapka Consultant.
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Wednesday 10 May 2017

SPICe Form INC 32

Ministry of Corporate Affairs (MCA) has recently introduced SPICe Form INC-32 which is a Simplified Proforma for Incorporating Company Electronically through Companies (Incorporation) Fourth Amendment Rules, 2016. SPICe or Form INC-32 can help incorporate a company with a single application for:
  1. reservation of name
  2. incorporation of a new company and/or
  3. application for allotment of Director Identification Number (DIN).
The Integrated Form INC-29 has been replaced with SPICe Form INC-32 and has been completely removed from the MCA portal.
In SPICe Form INC 32 the Digital Signature Certificate (DSC) of Subscribers will be needed instead of physical sign. The date of signing Memorandum of Association (MOA)&Article of Association (AOA) will be date of affixing DSC. The DSC of witness will also be needed, if there is no DSC there will be no SPICe procedure. The form will be processed at Registrar’s Office.
The minimum paid up and subscribed share capital required for One Person Company is Rs. 1 Lakh.
Using SPICe Form INC-32, the following types of companies can be incorporated in India:
  1. Part I Company
  2. Section 8 Company (Prior in INC-29 it was not)
  3. New Company – Public, Private, or OPC. The company can also be of different categories like company limited by shares, company limited by guarantee or unlimited company.
The digital signature of a professional (Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate) is required to file Form INC-32. The professional must declare that all information presented in the form is correct and enter his/her membership number and certificate number.
The following documents must be filed with SPICe Form INC-32 for incorporation of company:
  1. Memorandum of Association – Applicable and mandatory only in case of Section 8 company or company with foreign subscribers not having DIN
  2. Articles of Association – Applicable and mandatory only in case of Section 8 company or company with foreign subscribers not having DIN
  3. Affidavit and declaration by first subscribers and directors
  4. Proof of office address
  5. Copies of utility bills that are not older than two months
  6. Copy of approval in case the proposed name contains any words or expressions which requires approval from central government
  7. If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
  8. NOC from the sole proprietor/ partners/other associates/ existing company
  9. Proof of identity and residential address of the subscribers
  10. Proof of identity and residential address of directors
The advantage of SPICe is that there is no need to reserve Companies Name prior to Incorporation. The biggest disadvantage in SPICe system is that the maximum number of subscribers can be seven only. In case of more subscribers, normal incorporation procedure is to be followed. Only one name of the company can be proposed and it is a bit costlier as DSC of all subscribers and witness is needed.
Author: This blog is written by Ms. Afreen Hashmi, a passionate blogger of Aapka Consultant.
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Saturday 6 May 2017

UNIQUE ID REGISTRATION FOR DOING BUSINESS IN INDIA

UNIQUE ID REGISTRATION FOR DOING BUSINESS IN INDIA

The Central government is working with various State governments to introduce a ‘One India’ concept, and is said to be the most ambitious ‘ease of doing business’ initiative so far. Under this concept, ‘One-Form-One-Portal’ model is being followed, which aims to attract more investments by simplifying the processes to an extent where investors will need to fill only a single e-form for investing and doing business anywhere in India. Presently, all firms are required to complete multiple forms at the Central as well as at the State levels, which further gets complicated as different States have different requirements and regulations.
In the initial stage, a draft ‘Common Application Form’ was being circulated among the states for their feedbacks. The Centre is also developing an eBiz project that is basically a government-to-business portal. Various services are offered under the portal (providing firms and investors all kinds of facilities 24×7 online to start, run or close down the business.
In order to provide single-window clearance mechanism at the central level for various entrepreneurs, the government has come up with a plan which uses Permanent Account Number (PAN) as the Business Identification Number (BIN) for companies and firms. This step is taken in order to dispose of the need for separate registration with various authorities (the registrar of companies, the direct and indirect tax wings, and export/import).
Presently, entrepreneurs need to get a Company Identification Number (CIN) for their entities from registrar of companies, after which they need to get PAN from the income tax department and labour identification number. In order to resolve these issues and to make the registration process of entities easy, Amitabh Kant (industrial policy and promotion secretary) called a meeting and recommended to use Unique ID for registration with all central government departments.
eBiz which was conceived as the one-stop shop to get all clearances not only from central authorities but also from state as well as local authorities several years ago is now given the authority to issue Unique ID for all registration. Earlier eBiz was not able to generate the desired results as not even central agencies were fully linked to the portal. The Department of Industrial Policy and Promotion (DIPP) is now taking the initiative to get on board all agencies and their service providers (the private IT companies like TCS) for the project.
But there are quite complications in order to get all the departments on board as the government agencies have pointed out that this entire process will require an overhaul and business process reengineering which would be time consuming and may not result into immediate rollout. Also private entities have been reluctant to ensure compatibility of platforms used by various government departments. DIPP is now finding ways to resolve this and to get all of them on board so that entrepreneurs can start their businesses in India without any hesitations or fear.
Labour Department has been asked to speed up things so that the registration process is completed in a day. However, with each establishment, a subsidiary requires separate registration under various labor laws, the process then becomes time consuming. Issuing BIN will help India to move up the ladder on ease of doing business rankings where it is currently ranked 155th among 189 countries. All the procedures that are required to start a business in India are completed in around 29 days whereas in Organization for Economic Co-operation and Development (OECD) countries the entire process gets completed in eight steps and 15.7 days.
The government aims to move India among top 50 countries on ease of doing business rankings and to achieve this, the government has initiated steps to speed up liquidation and restructuring of companies to make it easier to exit a business.
Author: This blog is written by Mr. Aman Tiwari, a passionate blogger & intern at  Aapka Consultant.
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Friday 5 May 2017

What Cannot Be Trademarked In India?

What Cannot Be Trademarked In India?

The word, trademark, denotes words legally registered or established by use as representing a company or product. When competition is spurting in every nook and cranny of the world, it becomes almost essential to differentiate our goods or services from others present in the world. India has emerged as the third largest base for start-ups in the world, according to the NASSCOM Start-Up Ecosystem Report, 2015. The strife to stay in the market makes one cautious about his products. Trademark concept to Indians may be quite new, but it is interesting to know that about 3000 years ago, Indian craftsmen did engrave their signature on their artistic creations. With the advent of globalization and interconnectedness, trademark laws have fastened their grip over the Indians.
The first legislation with respect to trademarks was the Trade Marks Act, 1940 which was similar to UK Trade Marks Act, 1938. As time elapsed, it was seen that the act was inept to meet the requirements of the society. Thus, the Trade and Merchandise Marks Act, 1958 was enacted which was finally repealed by the Trade Marks Act, 1999. This act was in compliance with the provisions of the TRIPS. It provides a platform for the registration of trademarks of goods and services, thereby, providing the exclusively identifying the product with its manufacturer and thereby also providing the manufacturer relief in case of infringement of his trademark.
Trademarks, in India, have been governed by the principles of the common law.
But after the enactment of the trademarks act, 1999, section 2(1)(zb) of the act defines trademark as-
“trade mark” means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and-
(i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and
(ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark;

Certification mark

This mark basically identifies the origin, material, quality and characteristics of goods and services offered by a manufacturer/dealer from his competitors. They are also used to assess the worth of labour in manufacturing goods or services.

Collective mark

These marks differentiate the members of a collective group, which can be a cooperative organisation or an association.

What cannot be a trademark

Trade Marks Act, 1999, sections 9 and 11 give the grounds for refusing a trademark. Section 9 mentions the absolute grounds and section 11 provides with the relative grounds for refusal. Mentioned below are the grounds for refusal in India-
Devoid of distinctive nature
The criterion of being distinct has been interpreted widely in the Indian law. The mark of a product or service which is not of a distinctive nature would not be a trademark. The registration of descriptive trademarks is prohibited under Section 9(1)(b) of the Trade Marks Act, 1999, unless they are distinctive.
Names/ Surnames
Names or surnames cannot be used as a trademark in India if they do not possess a distinctive character. Also, if such names are used dishonestly, they would not be given the status of a trademark. For example, in Prathiba M. Singh v Singh and Associates 2014 (60) PTC 257 (Del), the court observed that “‘singh’ is a very common surname, and nobody can have a monopoly over it.”
Numerical
Numbers cannot be said to exclusivity to be used as a trademark, per se. In certain cases, the courts in India have concluded that numbers do not have a distinctive nature attached to them, thereby, not qualifying to be a trademark. In the case of Radico Khaitan Ltd v. Carlsberg India Pvt Ltd, the Delhi High Court observed that “a numeral cannot be said to have a distinctive character.”
Geographical location
Geographical locations cannot be used as trademarks. In Imperial Tobacco Company of India Ltd v. Registrar of Trademarks, AIR 1968 Cal 582, the Calcutta High Court held that “the trade mark “Simla” with the label is composite in character. It is a well-known hill– station of India. Its geographical signification is, therefore, plain and unequivocal.”
Colour
The Trade Marks Act does not specifically refuse the usage of colour. But Indian Registry and Courts do not prefer the idea of using colours as trademarks, for the reasons that the available stock will be depleted and the courts will be piled up with cases.
Sound
Musical notes in the form of musical notations are accepted as trademarks in India, but noises such as dog barking cannot be a trademark.
Smell
Smell has not been registered as a trademark in India. It is difficult to distinguish between different smells.
Characteristics of the goods or services
If there is any indication which serves in the trade as to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods or service, it shall not be used as a trademark. In the case of ELGI Ultra Industries Limited v The Assistant Registrar of Trade Marks, MANU/IC/0062/2008, the Intellectual Property Appellate Board [IPAB], held that “the words “ultra” and “perfect” are highly descriptive and laudatory. They cannot be seen as trademarks.”
Customary
The trademarks which consist exclusively of marks or indications which have become customary in the current language or in the bona fide and established practices of the trade shall not be registered. For example, Otis’s trademark “Escalator” for moving staircases became a generic word and therefore, the Trademark Office concluded that Otis cannot use its trademark since the mark has become customary in respect of moving stairs.
Deceitful
A trademark should not be deceitful to the public. For example, if a company starts to make biscuits by the name of Parle-J, it would be an infringement of the right of Parle-G, since it is highly deceptive.
Hurtful to religious sentiments
If certain marks become offensive to the religious sentiments of a person, they will not be considered as trademarks.
In the case of Lal Babu Priyadarshi v. Amrit Pal Singh (Civil Appeal No. 2138 of 2006, Supreme Court), the appellant had applied for registration of the mark “Ramayan” with the device of a crown in relation to incense sticks and perfumeries. The court observed that “no person can claim the name of a holy text as a trademark.”
Scandalous Matter
If any word is to be trademarked, it should not be scandalous or obscene, in any manner.
Prohibited under the emblems and names (prevention of improper use) Act, 1950
If the use of a mark is prohibited under the aforementioned act, it shall not be used as a trademark.
Shape of goods
Section 9(3) of the Trade Marks Act, 1999 states-
A mark shall not be registered as a trade mark if it consists exclusively of—
(a) The shape of goods which results from the nature of the goods themselves; or
(b) The shape of goods which is necessary to obtain a technical result; or
(c) The shape which gives substantial value to the goods.
For example, the shape of Vanilla ice cream that resulted from the nature of the product itself was not registered as a trademark.
Identical/ similar products
Any mark which is similar to an earlier mark cannot be used as a trademark for another product. For example, TATA motors cannot be assigned as a trademark again. There should be no unfair advantage.
Contrary to law
If a law of passing off is protecting an unregistered trade mark, such marks cannot be used by other persons as trademarks.

Registrar

It is open to the registrar to decline to register the appellant’s trade mark if he wishes to.
In the case of Geep Flashlight Industries Ltd. vs. Registrar of Trade Mark, AIR 1972 Delhi 179 even when the appellant’s proposed trademark satisfied the conditions under the act, the appellant was not entitled as a matter of right to the registration of the trade mark.

Conclusion

Trademark has provided a person with exclusivity over his work, but India is yet to explore in this field, to deal with the emerging innovations every next day. In India, for the registration of trademarks, the NICE classification of goods and services is followed which classifies products into 45 classes. When a product or service needs a trademark, it should fit in one of the classes. Thus, we see that the products and services have been limited to such classes by the Government.
It is not necessary to have a registered trademark, but the prior usage of the trademark is important. The problem is that nobody could save rights for products and services which would innovate in the future, especially in India. Trademarks being a self-serving aid to the society should be available on such platforms.
Some of the related articles:
  1. HOW TO REGISTER TRADEMARK IN INDIA
  2. Importance of Trademark Registration in India
  3. Trademark Registration in India
  4. What is Trademark Registartion
  5. TRADEMARK RENEWAL
Author: This blog is written by Kriti Bhatnagar.
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