I want to start a law firm with 2 other partners and 1 associate.
- So the first question is how should I organize this firm. Should this be an LLP or a pvt. ltd. or some other entity. The LLP route seems to be the most touted of all formation options these days. Any insights here?
- Once formed, what are the tax consequences for a law firm. So, let's say I collect 10,000 from a client for a court appearance, how much of that should I set aside for tax. Service tax?
- Other than tax, is there anything else I would owe anyone else (including any other governmental fees).
- Should the client receipts (money) be deposited in a separate bank account? If so, how do we open a corporate bank account? What banks are good for law firms? Banks with lower fees?
- Should I hire an external CA company to manage the books of the firm? If so, how much do they charge? They take a monthly retainer, may be? Or may be work on a mutual cooperation of services basis?
- How about recruiting associates? Is there an advantage to hiring them on "retainer" rather than as "employees?" If they are employees, then there has to be some implication on taxes, shouldn't it? And any benefits (like health insurance etc)?
22 April 2013
The following is my opinion to ur query: a) Its better to know, pros and cons of each type of organisation before you float any. b)Tax Consequence: Kindly refer reverse charge mechanism c) more clarity required on ur query. d) Receipts has to be deposited in a separate current account. Which Bank? well, the choice is yours. e) External CA Charges - Depends on CA f) Employee/Retainer? - It again depends on your requirement of staff.
PS: It seems you have got plenty of queries in your mind. I suggest you to meet any CA personally and get clarified all your queries.
02 June 2013
For starting a firm there must be qualified persons with you of the like mind otherwise the life of the firm shall be short and the partners should have enough income from the firm so that they continue with the firm and also there views shopuld be given importance.
The firm should be LLP.
Client's expenses account should be seprate account and all expenses to be incurred from that account.
You can retain a CA or CA firm for handling Tax, Company matters.
There should be proper agreement with your associates and the payment should be made in time otherwise he will not work for you.
CAclubindia
