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Evaluate Options
While incorporating a company in
India, you have to evaluate
options of various structures
available. Ones deserving
mention here would be –
a) A representative / Liaison
office (www.liaisonofficeindia.com)
b) A Branch office
c) A wholly owned subsidiary
d) A joint venture with local
Indian
The evaluation process typically
deals with understanding
client’s business model and
objective of setting up the
entity in India. Our team
evaluates the proposal from
applicable foreign exchange
laws, corporate laws and Income
Tax provisions.
The implications of these laws
relevant to the Indian company
are discussed with client and
scientific approach is adopted
for finally choosing an
appropriate structure. This is
where collective experience of
our team of chartered
accountants come in handy. |
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Home
>
Evaluate Options
> Forming a corporate entity in India - an
overview |
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Forming a corporate entity in India
- an overview |
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OVERVIEW
A corporate entity in India is governed
by provisions of The Companies Act 2013
(The Act).
The Act permits primarily three kinds of
Companies –
a) One Person Private Limited Company (OPC)
b) Private Limited Company
c) Public Limited Company
The basic differentiation between the
above types of Company is as follows: |
|
Particulars |
Type of Company |
|
Public |
Private |
OPC |
|
Minimum paid up
capital |
Rs. 5 Lakhs |
Rs. 1 Lakhs |
Rs. 1 Lakhs |
|
Maximum No. of
Members |
Unlimited |
200 |
1 |
|
Minimum No. of
Directors |
3 |
2 |
1 |
|
Mandatory
Resident
Director |
1 |
1 |
1 |
|
Minimum No. of
Subscribers |
7 |
2 |
1 |
|
Nature of Person
Subscriber |
Foreign
National/Corporate
allowed |
Foreign
National/Corporate
allowed |
Resident
Individual only |
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All the above type of
companies is with
limited liabilities;
owned by shareholders &
governed by the Board of
Directors. In case you
wish to know more about
the laws governing these
companies & differences
between the three,
kindly contact our
Company law cell on :
[email protected]
SETTING UP A COMPANY
IN INDIA
The procedure for the
formation and
registration of a
company in India is as
under for your
understanding –
-
Obtaining Director
Identification
Number and Digital
Signature
Certificate:
The first step is to
identify the
Directors who will
be part of the Board
of the proposed
Company and apply
for its Director
Identification
Number (DIN) and
Digital Signature
Certificate (DSC).
In case of foreign
company planning to
set up in India, it
is vital to note
that now it is
mandatory to have at
least 1 Resident
Director.
-
Selection and
Approval of name
The next step with
regard to the
incorporation of a
company is to
approach the
Registrar of
Companies in order
to ascertain whether
the name by which
the company is
proposed to be
incorporated is
available &
acceptable.
-
Preparation of
Memorandum and
Articles of
Association:
This stage will
involve drafting of
charter documents of
the Indian Company
and thereafter will
have to be vetted
and stamped by
Registrar of
Companies.
-
Filing of forms &
Submission of
Documents:
All the Forms with
relevant documents
will have to be
filed with Registrar
of Companies at this
stage. The filing
will involve filing
of charter documents
of the company,
certified copy of
approved name,
appointment of
initial Directors,
notify the
registered address,
etc along with
filing and
registration fee.
-
Certification of
Incorporation:
On the submission of
the above documents,
Registrar of
Companies will issue
a Certificate of
Incorporation. This
is the date of
incorporation of the
company.
-
Certificate of
Commencement of
Business:
Obtain a Certificate
of Commencement of
Business. This is
the date from which
a company can
commence business in
India within a
period of 180 days
from the date of
incorporation.
-
Bank Account:
A bank account for
the company can now
be opened and the
operations may
start!
STATUTORY INFORMATION
Composition of Board
of Directors:
In order to qualify for
being appointed as a
director, few provisions
have to be carefully
understood:
-
The directors should
be of sound mind and
solvent
-
The directors should
not be convicted by
Court for more than
six months and if
convicted, then a
period of five years
should have elapsed
from the date of
sentence
-
The proposed
director should have
honored payment of
all calls on shares
and should have not
defaulted on the
same.
-
The proposed
director person
should not be a
director of more
than twenty private
companies in India
and in case of
public company not
more than ten public
companies.
Other Information:
-
Subscription and
Allotment of shares
should be greater
than Minimum
subscription.
[Present limit
–approx INR 100K for
private company &
INR 500k for public
company]
-
Details of Issue of
shares to members
for consideration
other than for cash
is to be provided.
-
Details of different
types of directors.
-
Full particulars of
the nature and
extent of the
interest, if any, of
every director or
promoter.
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