Starting Business in India
.
Besides incorporation there are many other
formalities in establishing a business in India.
The following chart contains typical formalities
including incorporating a private limited company in India.
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Filing the proposed name of company for
approval to the Registrar of Companies (ROC); Get the Memorandum and
Articles of Association vetted by the ROC and printed |
1 |
7 |
|
Make an application to the Superintendent
of Stamps or an authorized bank requesting for stamping of the
Memorandum of Association and Articles of Association.
|
2 |
1 |
|
Present the required documents along with
the registration fee to the Registrar of Companies to get the
certificate of incorporation |
3 |
9 |
|
Obtain a company seal |
4 |
3 |
|
Visit the UTI Investors Services Limited
to obtain a Permanent Account Number |
5 |
7 |
|
Obtain a Tax Account Number for income
taxes deducted at source from the Assessing Office in the Income Tax
Department |
6 |
7* |
|
Register under Shops and Establishment Act |
7 |
2* |
|
Register for value added tax (VAT) before
the Sales Tax Officer of the ward in which the company is located |
8 |
12* |
|
Register for Profession tax |
9 |
2* |
|
Register with Employees' Provident Fund
Organization |
10 |
2* |
|
Register with ESIC (medical insurance) |
11 |
1* |
|
Filing for Government Approval before RBI/FIPB
for Foreigners and NRI's |
12 |
15* |
Type of Business Entities in India for Starting Business in India
Private Limited Company
|
IT
is mandatory for foreign investors to obtain governmental approval for
incorporating in India or forming a joint venture in India. In some sectors
certain restrictions apply. Proper legal advice must be obtained before
incorporating in India to ascertain the eligibility and applicable
restrictions.
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A private company is a company which has the following
characteristics:
-
shareholders’ right to transfer shares is restricted;
-
the number of shareholders is limited to fifty; and
-
an invitation to the public to subscribe to any shares or debentures is
prohibited.
Public Limited Company
Limited
Liability Partnership Law soon in India
A new law to allow "Limited Liability
Partnership" (LLP) in India is expected to be introduced in the
Parliament of India.
_____****_____ |
A public company is defined as a company which is not a
private company. The following conditions apply only to a public company:
-
It must have at least seven shareholders.
-
A public company is not authorized to start business upon the grant of the
certificate of incorporation. In order to be eligible to commence business
as a corporation, it must obtain another document called "trading certificate".
-
It must publish a prospectus or file a statement in lieu of a prospectus
before it can start transacting business.
-
A public company is required to have at least three directors.
-
It must hold statutory meetings and obtain government approval for the
appointment of the management.
There are several other provisions contained in the
Companies Act 1956 which are applicable only to public companies and should
be consulted.
Branch Office
Foreign companies engaged in manufacturing and trading activities abroad are
allowed to set up branch offices in India for the purposes of export/import
of goods, rendering professional or consultancies services, R&D, promoting
technical or financial collaborations, representing the parent company,
acting as buying/selling agents, rendering services in IT and development of
software, rendering technical support to the products supplied by the
parent/group companies, foreign airline/shipping companies. Branch offices
could be established with the approval of the government of India and may
remit outside India profit of the branch, subject to RBI guidelines after
payment of applicable Indian taxes.
Procedure for Formation of Company in India
Liaison Office/Representative Office
A Liaison Office could be established with the approval
of the government of India. The role of Liaison Office is limited to
collection of information, promotion of exports/imports and facilitate
technical/financial collaborations.
Liaison office cannot undertake any commercial activity directly or
indirectly.
Project Office
Foreign companies planning to execute specific projects in India can set up
a temporary project/site offices in India for carrying out activities only
relating to that project. The Government of India has now granted general
permission to foreign entities to establish project offices subject to
specified conditions.
Note: Foreign investors are required
to seek governmental approval before investing in India. Some approvals are
automatic, though application is required for those approvals. Special
Permission could be obtained to invest over and above the regular percentage
allowed. See our
FDI in India Sector wise Guide
for more information on various conditions of investing in India. See the
Procedure for Formation of Company in India. Also
visit the
Joint Ventures in India
Contact us for Incorporating
In India
Services Offered by Us
Madaan & Co. has helped
foreign companies in setting up there operations in India and
other countries. A careful tax planning is required before
opening a subsidiary, branch, joint venture, project office or
liaison office in India. We can help you in corporate planning
and setting up in India and other countries. We have also helped
US law firms in handling their India related legal work. We can
help your law firm or company in setting up in India and other
countries.
|
Contact us
for:
-
Incorporating in a company in India
-
Opening a Branch Office
-
Opening a Project Office
-
Setting up Joint Ventures in India
-
Setting up a Subsidiary in India
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Negotiating Agreements
-
Setting up Outsourcing in India
-
Drafting Agreements
-
Negotiating Agreements
-
Setting up Outsourcing in India
-
Dispute Resolution
|
Our lawyers include those admitted to bar in the United States of America. They have
undertaken legal maters in the USA, India and Europe.
They understand the multi-cultural and the
multi-jurisdictional aspects of international business
in this age of globalization. They include those educated
at Harvard Law School, Harvard University in the
USA and premier universities in India. |
Click here to Contact us for
further information
-
Contact Information:
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& Co.
Attorneys at law
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