1. There is no maximum limit on the number of members forming a joint family business for acquisition of gain.
2.All the members of the joint family except the minors will be members of the joint family business.
3.See that the minimum number of members of the joint family business is not less than seven.
4. This minimum number should be kept in mind for future registration of the company under the Act, whenever required.
5.Collect the capital of joint family business from the joint family members by giving them shares worth of and in proportion to the amount contributed by them.
6.It may be noted that requirement of having a minimum size of paid up share capital for incorporation of either a private or Public Company has been withdrawn by the Companies (Amendment) Act, 2015 effective from 26.05. 2015.
7.If the members belong to a Joint Hindu Family, the deed of settlement should specifically assign specific share in the corpus, to the coparceners.
8.It is also necessary to clarify in the aforesaid deed, details about the future acquisition, the extent to which such acquisition would or would not belong to the joint Hindu Family business.
9.Select a suitable name for the joint family business.
10. Application for seeking availability of a new name under the Companies Act, 1956,is not required at this stage but before registering it under Section 366 of the 2013 Act the existing or new names should be availed of by making the necessary application electronically to the ROC in e-Form INC-ll.
11. Prepare a Deed3 of Settlement or any other instrument constituting or regulating the joint family business.
12. Get it stamped as per the Indian Stamp Act’ prevailing in the State or Union Territory where the joint family business is formed.
13. Get it signed by all the existing members of the joint family business or by their duly authorized agents.
14. Acquire or take on rent a place for office of the joint family business.
15.Print letter heads in the name of the joint family business giving the address of the office just acquired or taken on rent.
16.Open a bank account in the name of the joint family business and see that any two of its members could jointly sign on behalf of the joint family business.
17. Start operating the joint family business with the capital obtained from its member
18.If the joint family business falls within the ambit of the Shops and Establishment Act, then follow the formalities required under that Act.
19.Please remember that a joint family business does not have a separate legal personality independent of its constituents, and thus is not an artificial juristic person in the eye of law.
20. Keep in mind that a joint family business which is not a joint stock company as defined in Section 366 of the 2013 Act, cannot later on be registered as a company limited by shares.
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