Whether register as a company or not?
This query is : Resolved
23 July 2014
Is there any criteria to register as a company by its turnover? If a proprietorship business makes a turnover of Rs 1000 crores, it is necessary to register as a company? or he may continue as a proprietorship concern?
23 July 2014
it is at the option of the proprietor. as such there is no rule whatever be your turnover.
24 July 2014
Thanks,
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
24 July 2014
form 23b is not more valid.
24 July 2014
Thanks,
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
24 July 2014
Thanks,
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
shall we use both either gnl-2 or form 23b for filing auditor appointment?
or
compulsory gnl-2?
24 July 2014
Is there any difference bw PFX and SIFY USB token in DSC?
In which time PFX should be used and SIFY usb token?
In which time PFX should be used and SIFY usb token?
29 July 2014
cash payment made to creditors above 20000 is allowable or not?
29 July 2014
if a tax payer made cash purchase above 20000 from local suppliers (they wont accept bank payment), is it allowable or not?
sec 40A(3) applicable to vendor payment?
sec 40A(3) applicable to vendor payment?
29 July 2014
no. cash payment above Rs 20000 wont be allowed
02 August 2014
individual paying freight > 700 per bill, being a excise dealer liable to service tax under reverse charge?
02 September 2014
some times, in excel if i type 01.04.2013 (april month) , it takes 04.01.2013 (it takes the one as january and 4 as date)? How can be it rectified?
03 August 2025
You've asked several related questions, so here's a clear, point-by-point response for each:
🔹 1. Is it compulsory to register as a company based on turnover?
Answer:
❌ No, it is not compulsory.
Even if a proprietorship has a turnover of ₹1000 crores, there is no legal requirement to convert into a company.
➡️ However, for practical reasons (e.g., credibility, limited liability, better funding access), high-turnover businesses often opt to register as a private or public limited company.
🔹 2. Auditor Appointment Filing: GNL-2 vs Form 23B
Answer:
As per the Companies Act, 2013:
Form 23B (used under Companies Act, 1956) is obsolete.
Under Companies Act, 2013, Form ADT-1 is used to file auditor appointment.
GNL-2 was used temporarily when ADT-1 was not functional, but now:
✅ Use Form ADT-1 for auditor appointment.
❌ Do not use GNL-2 unless specifically allowed under MCA instructions (very rare now).
🔹 3. PFX vs SIFY USB Token – Any Difference?
Answer:
PFX file: A digital certificate file (with extension .pfx) stored on your computer.
SIFY USB token: A physical device (cryptographic token) that stores your Digital Signature Certificate (DSC) securely.
✅ You can use either, but USB token is mandatory for MCA, DGFT, and Income Tax filings post-2013 as per CCA guidelines.
➡️ Best practice: Use a USB token (like SIFY, eMudhra, etc.) for security and compliance.
🔹 4. Cash Payment Above ₹20,000 – Is It Allowed? [Sec 40A(3)]
Answer:
❌ No, it is not allowed under Section 40A(3) of the Income Tax Act, 1961.
If an assessee incurs expenditure in respect of which payment is made in cash exceeding ₹20,000 to a person in a day, such expenditure is disallowed.
✅ Exceptions exist (Rule 6DD), e.g., payment in villages without banking, or in certain emergency/agricultural cases.
🛑 Paying local vendors in cash above ₹20,000 is generally disallowed as business expense unless you fall under Rule 6DD exceptions.
🔹 5. Freight Payment > ₹750 by Individual – Reverse Charge?
Answer:
Under Service Tax Reverse Charge Mechanism (RCM) applicable prior to GST (valid for FY 2013–14):
If an individual (not in business) pays freight — RCM does not apply.
If an excise dealer / business pays freight > ₹750 per consignment or ₹1500 in aggregate, then:
✅ Reverse Charge applies, and the service recipient must pay Service Tax @ 12.36% (at the time).
➡️ So yes, if you're an excise dealer and you pay GTA (Goods Transport Agency) charges over the threshold, you're liable under RCM.
🔹 6. Excel Date Format Issue (01.04.2013 becoming 04.01.2013)
Answer:
This is due to regional date format settings. Excel is interpreting DD.MM.YYYY as MM.DD.YYYY.
✅ Solution:
Go to Control Panel → Region and Language → Formats tab.
Set Short Date format to dd-MM-yyyy or dd/MM/yyyy
In Excel, ensure the cell format is set to Date with your desired format.
🔹 1. Is it compulsory to register as a company based on turnover?
Answer:
❌ No, it is not compulsory.
Even if a proprietorship has a turnover of ₹1000 crores, there is no legal requirement to convert into a company.
➡️ However, for practical reasons (e.g., credibility, limited liability, better funding access), high-turnover businesses often opt to register as a private or public limited company.
🔹 2. Auditor Appointment Filing: GNL-2 vs Form 23B
Answer:
As per the Companies Act, 2013:
Form 23B (used under Companies Act, 1956) is obsolete.
Under Companies Act, 2013, Form ADT-1 is used to file auditor appointment.
GNL-2 was used temporarily when ADT-1 was not functional, but now:
✅ Use Form ADT-1 for auditor appointment.
❌ Do not use GNL-2 unless specifically allowed under MCA instructions (very rare now).
🔹 3. PFX vs SIFY USB Token – Any Difference?
Answer:
PFX file: A digital certificate file (with extension .pfx) stored on your computer.
SIFY USB token: A physical device (cryptographic token) that stores your Digital Signature Certificate (DSC) securely.
✅ You can use either, but USB token is mandatory for MCA, DGFT, and Income Tax filings post-2013 as per CCA guidelines.
➡️ Best practice: Use a USB token (like SIFY, eMudhra, etc.) for security and compliance.
🔹 4. Cash Payment Above ₹20,000 – Is It Allowed? [Sec 40A(3)]
Answer:
❌ No, it is not allowed under Section 40A(3) of the Income Tax Act, 1961.
If an assessee incurs expenditure in respect of which payment is made in cash exceeding ₹20,000 to a person in a day, such expenditure is disallowed.
✅ Exceptions exist (Rule 6DD), e.g., payment in villages without banking, or in certain emergency/agricultural cases.
🛑 Paying local vendors in cash above ₹20,000 is generally disallowed as business expense unless you fall under Rule 6DD exceptions.
🔹 5. Freight Payment > ₹750 by Individual – Reverse Charge?
Answer:
Under Service Tax Reverse Charge Mechanism (RCM) applicable prior to GST (valid for FY 2013–14):
If an individual (not in business) pays freight — RCM does not apply.
If an excise dealer / business pays freight > ₹750 per consignment or ₹1500 in aggregate, then:
✅ Reverse Charge applies, and the service recipient must pay Service Tax @ 12.36% (at the time).
➡️ So yes, if you're an excise dealer and you pay GTA (Goods Transport Agency) charges over the threshold, you're liable under RCM.
🔹 6. Excel Date Format Issue (01.04.2013 becoming 04.01.2013)
Answer:
This is due to regional date format settings. Excel is interpreting DD.MM.YYYY as MM.DD.YYYY.
✅ Solution:
Go to Control Panel → Region and Language → Formats tab.
Set Short Date format to dd-MM-yyyy or dd/MM/yyyy
In Excel, ensure the cell format is set to Date with your desired format.
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