April 2024

Fire license or no-objection certificate is an important document which is issued by the Department of Local Self Government of Rajasthan to certify the conformity of requirements of fire safety measures of premises. In Rajasthan, fire license is required to obtain building plan approval from the Municipal Corporation. Fire accidents can cause devastating damage to both life and property. Property owners must take proactive measures to protect their immovable assets from the risk of fire. One important step in this regard is obtaining a Fire No Objection Certificate (NOC) from the appropriate authorities. Fire NOC important A Fire NOC is an official document issued by the fire department or fire safety authority, certifying that a building or property complies with the necessary fire safety standards and regulations. It ensures that the property is adequately equipped with fire prevention and firefighting equipment and that appropriate safety measures are in place to prevent and control fires. Obtaining a Fire NOC is particularly crucial for commercial establishments, industrial units, educational institutions, hospitals, hotels, malls, and other high-occupancy buildings. It demonstrates the property owner’s commitment to fire safety and helps mitigate potential risks to the lives of occupants and the surrounding community. Moreover, having a Fire NOC also facilitates smooth business operations, as many insurance companies require it to provide coverage against fire-related incidents. Rajasthan Municipalities Act, 2009 According to the Rajasthan Municipalities Act, any individual proposing to construct a building of more than 15 meters in height for commercial or business purposes must apply for a fire license to the Cheif Fire Officer. The application has to be duly authorised before submission along with the appropriate building plans to the concerned authority, which is the Local Municipal Corporation under the state law. Fire License Categories for Buildings Education buildings. Residential apartment buildings Hotels Hospitals and sanatoria Custodial institutions Telephone exchange. Assembly buildings Multiplex buildings Business buildings Mercantile buildings Industrial buildings Low hazard Industrial buildings Moderate hazard Industrial buildings High hazard Storage buildings High hazard Benefits of a Fire NOC Fire NOC offers several significant benefits. Firstly, it ensures compliance with legal requirements, avoiding penalties and legal complications. Additionally, many insurance companies require a Fire NOC to provide coverage against fire-related incidents. Having a Fire NOC also demonstrates the property owner’s commitment to fire safety, thereby enhancing the reputation and trustworthiness of the establishment. Moreover, it provides peace of mind to occupants, customers, and employees, knowing that their safety is a priority. Need for Fire License Fire license is a must for anyone seeking trade license or occupancy certificate from the civic body in the state. Fire license is necessary to carry out businesses and trading activities, as listed under in the Department of State disaster and fire services. Fire license is needed to verify that a building is resistant or unlikely to observe any fire-related accident. Documents required Site plan; Architect verified checklist; Floor plan; Basement floor plan; Terrace plan; Floor plan on stilts/ground floor; Elevation plan; Cut plan; Provisional/Revised Provisional NOC (Application for Occupancy of NOC). Apply online for a fire NOC in Rajasthan Identify the applicable fire safety rules: The Rajasthan Fire Prevention and Fire Safety Rules outline the requirements and guidelines for fire safety compliance. Familiarize yourself with these regulations to ensure that your property meets the necessary criteria. Prepare the required documentation: Gather all the necessary documents for the application process. These typically include property ownership documents, building layout plans, structural stability certificates, occupancy certificates, electrical and mechanical installation certificates, and details of fire safety measures installed on the premises. Engage a licensed fire consultant: It is advisable to engage a licensed fire consultant or a fire safety agency to conduct a comprehensive fire safety audit of your property. They will assess the property’s fire safety features, make recommendations for improvements if needed, and help you prepare the necessary documentation. Application submission: Once you have compiled all the required documents, submit your application to the designated authority. In Rajasthan, you can submit your application to the office of the Chief Fire Officer or the Regional Fire Officer in your respective district. Inspection and verification: Upon receiving your application, the fire department will inspect the property to verify compliance with fire safety standards. They will assess the adequacy of fire exits, firefighting equipment, alarm systems, electrical safety measures, and other necessary precautions. Compliance and certification: If your property meets the required fire safety standards, the fire department will issue the Fire NOC certifying your property’s compliance. In case any deficiencies are identified during the inspection, you will be provided with a list of improvements or modifications to be made. Once the necessary changes are implemented, you can request a re-inspection for certification. Renewal and ongoing compliance: Fire NOCs are typically valid for a specific period, after which they need to be renewed. Ensure that you keep track of the expiry date and initiate the renewal process on time. Additionally, regularly review and maintain the fire safety measures on your property to ensure ongoing compliance with the regulations. FAQs What is a Fire NOC? A Fire NOC, or No Objection Certificate, is a document issued by the fire department of a particular jurisdiction, certifying that a building’s fire safety measures comply with the relevant regulations and standards. Why is a Fire NOC required in Rajasthan? Fire NOCs are required to ensure that buildings meet minimum fire safety standards, thereby reducing the risk of fire incidents and ensuring the safety of occupants and property. Who needs to obtain a Fire NOC in Rajasthan? Generally, all commercial and industrial establishments, educational institutions, hospitals, high-rise buildings, and residential buildings above a certain size are required to obtain a Fire NOC in Rajasthan. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration |

Fractional ownership is when an investor purchases a percentage or share of an asset instead of paying the full price. This enables those with less access to capital or looking to diversify over several kinds of assets to get a stake in areas like real estate, aviation, and fine art. Depending on the type of fractional ownership, the owner may also obtain partial usage rights in addition to an equity stake. What Is Fractional Ownership? Fractional ownership is the shared owning of an asset among a group of people. Each owner holds a part of the asset and typically shares the benefits and responsibilities that come with it. This includes any increases in the value of an asset. A person engaged in fractional ownership of a vacation property, for example, can make personal use of the space and earn revenue when it is rented out. Fractional ownership in real estate is typically arranged through a property management company that oversees the upkeep of the vacation home. How Fractional Ownership Works A sponsor or manager forms a legal ownership entity and acquires the asset (a jet, building, etc.)  The entity divides ownership rights into shares by issuing equity, partnership stakes, membership units, or other fractional interests. Shares are sold to individual investors to raise capital, pay down debt, or fund operations. Ongoing costs and revenues from usage fees, rentals, sales, etc., may be allocated pro rata to co-owners, depending on the terms of the fractional agreement. Most fractional ownership deals use legal entities like limited partnerships and limited liability companies. This formally divides economic returns according to ownership percentage while centralizing management control with the sponsor or general partner. The limited partners, that is, the buyers, participate by providing capital. In exchange, they receive limited rights to usage or income distributions tied directly to the percentage of the assets they hold. Fractional vs Direct & Indirect Ownership Dimension Fractional Ownership Direct Ownership Indirect Ownership Ownership Structure Shared ownership among multiple investors Sole ownership by an individual or entity Ownership through securities like REITs or stocks Capital Requirement Lower due to shared costs Higher, as the owner bears the full cost Varies; can be low with the purchase of shares Management Responsibility Managed collectively or by a management company Full responsibility for management and upkeep Managed by a third party; no direct involvement Usage Rights Shared pro-rata and pre-scheduled Full Usually none Income Potential Potential rental income that depends on the usage agreement Full rental income potential subject to owner decisions Income through dividends or share value appreciation Liquidity Varies; can be lower due to shared ownership agreements Higher; asset can be sold or financed High; securities can be quickly bought or sold Risk Level Depends on co-owner agreements and market conditions Directly tied to property value and market conditions Dependent on the performance of the managed portfolio Example Owning a share in a vacation home Owning an entire apartment building Investing in a REIT that owns multiple properties Pros and Cons of Fractional Ownership Pros Lower financial commitment Shared costs and responsibilities Access to higher-value assets Potential for appreciation and income Cons Limited access and flexibility Less liquid Dependent on co-owners and sponsor Limited personal use May lose value Advantages of fractional ownership Fractional ownership has several advantages. A primary benefit is the lower financial commitment required. This approach makes it feasible for individuals to take a stake in high-value assets that might be financially out of reach if the only option was full ownership.1 Another significant advantage is the sharing of costs and responsibilities. The maintenance and management of the property are divided among the owners, reducing the individual burden and expenses. This model also allows for diversification. When used for investing, individuals can spread their risk by owning fractions in different types of assets, from luxury real estate to high-end yachts. Fractional ownership grants partial direct ownership and access to higher-value assets, enabling individuals to co-own properties or other expensive items that could be unaffordable. There is also the potential for appreciation and income. In real estate, for example, fractional properties can appreciate in value over time, and when they are not in personal use, these properties can be rented out for additional income. This combination of lower upfront costs, shared responsibilities, investment diversification, access to high-end assets, and potential financial returns can make fractional ownership an attractive option. Disadvantages of fractional ownership Despite its benefits, fractional ownership has disadvantages. A significant drawback is the limited control and flexibility that you have. Decisions about the property must usually be made collectively or by a managing partner, which can lead to complications if owners have differing opinions or objectives.1 Another challenge is the complexity of exiting from fractional ownership. Selling a fractional share is more difficult than selling a fully-owned property, especially if there are specific restrictions or a limited market. Being dependent on co-owners is another factor. The financial health and decisions of other owners can directly impact the overall investment, posing risks in cases of financial difficulties or disagreements among co-owners. FAQs Is Fractional Real Estate a Good Investment? Determining whether fractional real estate is a suitable investment depends on several factors. If you’re looking for a lower-cost entry into real estate investment, are comfortable with shared decision-making, and don’t mind having limited personal use of the property, then fractional ownership might be a good fit. It’s also well-suited for investors seeking portfolio diversification. However, if you prefer having complete control over your investment, require more immediate liquidity, or are uncomfortable with the potential complexities of co-ownership, traditional real estate investing might be more appropriate. Note that fractional real estate investing can still require a significant initial investment. Can Fractional Ownership Be Financed, or Does it Require a Cash Purchase? Yes, fractional ownership can be financed, but the process may differ from traditional real estate or business financing. Some fractional ownership arrangements allow for mortgage financing, where each co-owner secures financing for their share of the property. However, not all lenders

A foreign corporation establishes a BRANCH office in India to carry out BRANCH activities for its business. The foreign firm can only generate revenue from the Indian Branch office if the Reserve Bank of India allows it; it must cover all of the expenses of the Indian office using remittances from the Head office or revenue generated from the Reserve Bank of India-approved Indian operation. In India, foreign corporations are permitted to open a branch office. However, unlike forming a corporation, establishing a branch office necessitates clearance from the Reserve Bank of India (RBI). The foreign company can only begin operations after receiving a branch licence from the RBI. BRANCH OFFICE is suitable for a foreign company to test and understand the Indian market with very strict control by the Reserve Bank of India, as it allows companies to do business but only for the activities listed in the Branch Office application. Any additional activity carried out by the Branch Office will be illegal. India is one of the world’s largest consumer marketplaces and the world’s most powerful economies. The fact that India is a fast-growing emerging economy makes it an appealing investment and commercial venture location for companies from all over the world. As a result, we are seeing an increase in the number of foreign corporations registering branch offices in India. The goal of establishing such a branch is to broaden the company’s business interests in India. For the registration of a branch office, the Reserve Bank of India is the approval authority. Section 6(6) of the Foreign Exchange and Management Act 1999 governs the creation of a branch office. The RBI master directive also lays up the standards for governance, competitive authorities, and reporting obligations. A foreign company’s branch office registration allows it to function as a legitimate business entity in India. The branch office can conduct business in the same way that the parent company does in their home country. Branch Office, on the other hand, is restricted when it comes to manufacturing activity. A branch office, for example, cannot conduct manufacturing activities directly but can subcontract them to an Indian company. Branch Office Features in General The Indian branch office’s name must be the same as the parent companies. Reserve Bank of India is the Governing body for the branch office License. It is suitable for foreign companies that want to open a temporary office in India but aren’t interested in or planning long-term activities in India. If the head office does not have money from Indian operations, it covers all of the expenses of the Branch office. Expanding its customer base by expanding its operations to new locations. Importance of Setting up a Branch Office in India Establishing a branch office is crucial for foreign companies to tap into the Indian market and talent pool. It allows them to be directly present, gaining insights into the local market and understanding customer needs. A branch office ensures access to quality talent in India, known as the knowledge capital. This direct presence aids quick communication, adaptation to local preferences, and success in the new area. Setting up a branch office is a strategic move for businesses aiming to grow and integrate into the local community. Industry-wise Business Opportunities in India India’s diverse cuisine that offers everything from tangy street food to sophisticated gourmet dishes, India’s industrial landscape is also an array of opportunities. Rapid urbanisation is filling the construction, real estate, and infrastructure sectors. The service sector, especially IT, banking, insurance, and retail, is also booming. The e-commerce arena is exciting, with intense competition among local and international giants. The government’s ‘Make in India’ initiative also encourages the manufacturing sector. Legal Aspects of Establishing a Branch Office in India To set up a branch office in India, the first step is to check if the foreign corporation meets specific eligibility criteria. An overseas corporation with a profitable track record of five years, a net worth of USD 1,00,000, and no direct or indirect business in India can qualify. The process involves navigating regulations from the Reserve Bank of India (RBI) and the Companies Act of 2013, with the Foreign Exchange Management Act (FEMA) of 1999 overseeing the process and RBI implementing it. The Companies Act guides how the business is incorporated and operated in India.  Eligibility Criteria to open a Branch Office in India The overseas parent company’s net worth should be greater than $1,000,000. The company must have a five-year track record of profitability. The organisation is involved in the Prescribed Activities of The Branch Office In India listed above. Activities that a Branch Office in India is Required to Perform It has the ability to import and export commodities. Professional and consulting services are provided. Conduct research in all areas where the parent firm is already present. On behalf of the parent company, increasing technical/financial partnership. Working in India as a representative of a parent company and acting as a buying/selling agent. In India, we provide IT services and produce software. Indulging in the provision of technical support for the parent company’s products. Working in India as an authorised representative for a foreign shipping or airline company. Obtaining Necessary Permissions and Licences Approval from RBI: Obtaining prior approval from the Reserve Bank of India (RBI) is a mandatory step in establishing a branch office in India. This involves applying Form FNC to the RBI through an Authorised Dealer (AD) Bank. In many cases, approval is granted under the automatic route, assuming the application is from an eligible entity and all accompanying documents are in order. The automatic route facilitates a smoother approval process for eligible entities looking to set up a branch office in India. Registration with ROC: Following the receipt of permission from the Reserve Bank of India (RBI) to establish a branch office, the foreign company registration application is submitted to the Registrar of Companies (ROC) using the FC1 Form. This formalises the foreign company’s presence in India and ensures compliance with regulatory