India Entry Services
India is one of the fastest growing markets in the world. The growth in the number of organizations arriving in India has surged over the past 7 years. The Global market has a policy mandate which includes India as a story for fuelling the desired growth. With India becoming the desired destination for investments, for entrepreneurs, business conglomerates and individuals likewise, it is imperative that the Indian Legal policies and systems for investing, entering and setting up the business are well understood.
When starting a business, one must decide what form of business entity to establish. Various factors are to be considered before starting a business. Our firm specialization includes providing India Entry Services in the following forms:
• Private Limited Company
• Branch Office (BO)
• Liaison Office (LO)
• Project Office (PO)
• Limited Liability Partnership
- Private Limited Company: All companies operating in India are governed by the Companies Act, 2013 and are required to register with the Registrar of Companies (RoC), a department under the Ministry of Corporate Affairs. Starting a business by incorporating a Private Limited Company is very convenient, popular, and successful these days. A private limited company offers various advantages as compared to Public Limited Company. A Foreign National / Businesses established outside India can setup a private limited company in India either as a Joint Venture or a Wholly Owned Subsidiary. A Wholly Owned Subsidiary is an entity whose entire share capital is held by a foreign entity.
- Branch office: A branch office is regulated under the provisions of Companies Act, 2013 and Foreign Exchange and Management Act, 1999. The Reserve Bank of India is the approval authority for registration of branch office in India. A branch office established in India performs the same business operation as that of its foreign parent company. A branch office can be opened for specific purposes. There are some requirements and conditions for opening a branch office in India.
- Liaison Office: The word Liaison means communication between two or more people or groups that work together. The Liaison office is also called Representative Office. The liaison office does research and collects business information on behalf of its overseas parent company. A foreign company establishes a liaison office in India in order to promote its business activities.
- Project Office: A foreign company that got a project in India can establish a project office to execute such project. The activities of the project office are limited to the extent of the projects for which they have been established. The project office is established for a limited period only and is funded directly by its parent foreign company through inward remittance.
- Limited Liability Partnership: The Limited Liability Partnership is governed by the Limited Liability Partnership Act, 2008. It is a separate legal entity and is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the partnership. Basically, it is an alternative corporate business having the features of both company and partnership.
Procedure/Requirement to setup Private Limited Company by Indian Nationals in India:
Below mentioned are the requirements to setup a private limited company in India by Indian Nationals:
- Proposed Name and Main Object: The very first step in the incorporation of a company is the name reservation. A company is identified through the name with which it is registered. It is very important to have a proper name which should also reflect the activities to be carried out by the company. So for name reservation, a maximum of two (2) names in order of preference should be given. Once the name is approved by the Registrar of Companies (RoC), it will be Valid for twenty (20) days from the date of approval.
The main object to be carried out by the proposed company should be given.
- Digital Signature Certificate (DSC): DSC is the digital equivalent (i.e. electronic format) of physical or paper certificates. It can be presented electronically to prove one’s identity or to sign certain documents digitally. The DSC of the proposed director is mandatory because the incorporation forms are signed with DSC..
- Subscriber and Director: A minimum of two (2) members are required to setup a private limited company in India. They may either be individual or body corporate. The details of the subscribers are required to be given.
A minimum of two (2) directors are required to setup a private company in India with at least one director being a resident of India (resident of India means the person has stayed in India for at least 182 days in the previous year). The details of the Directors are required to be given.
- Capital Requirement: There is no capital requirement for incorporating a private limited company. A company can be incorporated with INR 1. Generally, a Company get registered in India with capital of INR One (1) Lakh.
- Memorandum and Article of Association: The Memorandum and Article of Association (MOA & AOA) is a legal document and is very important for incorporating a company. The MOA is the Constitution of the company. It defines the scope and purpose for which the company has been formed. The MOA is divided into six clauses which are as follows:
• Name Clause
• Registered Office Clause
• Object Clause
• Liability Clause
• Capital Clause
• Subscriber Clause
The AOA of the company contains the regulations for the management of the company. Generally, it contains the details relating to capital, meetings, director, accounts, audit, etc. It set out the right, duties, and liabilities of the members of the company.
- Director Identification Number (DIN): DIN is a Unique Identification Number allotted to an individual who is appointed as a director of the company. At the time of incorporation, an application for allotment of DIN shall be made only through incorporation form (i.e SPICe+). However, through SPICe+ a maximum of three (3) directors are allowed for allotment of DIN.
- Registered Office: The Company must have a registered office from the date of incorporation which is capable of receiving and acknowledging all communications and notices as may be addressed to it.
- Incorporation: After filling the incorporation form with the Registrar of Companies (RoC) along with proper attachments, the RoC will examine the form, and if no error is found it will issue the Certificate of Incorporation (COI) to the company. A COI substantiates that the company has been formed.
Documents/Attachments required at the time of Incorporation
Below mentioned are the document/attachments required to be attached with the incorporation form at the time of filling it with the Registrar of Companies (RoC):
Proof of Identity & Residential Address of Subscribers/Directors:
a) Identity proof: Any one of the following –
- Voter’s identity card
- Passport
- Driving License
b) Residential proof: Any one of the following –
- Bank Statement
- Electricity Bill
- Telephone/Mobile Bill
Note: Residential proof should not be older than 2 months.
- Consent of Directors: The person who wants to become Director of the proposed company is required to give consent to act as such in Form DIR-2. The Form DIR-2 contains the particulars such as name, father’s name, address, contact number, e-mail, PAN, etc. of the Director.
- Proof of Registered Address of the Company: The following documents are required to be given as proof of registered office address of the company either at the time of incorporation or within thirty (30) days from the date of incorporation of the company:
- NOC (No Objection Certificate) from the owner of the property allowing the company to use the premise as its registered address.
- Address proof such as electricity bill, gas bill, water bill, rent agreement, etc. having the name of the owner and address of the premise.
Note: The bill should not be older than 2 months.
Procedure/Requirement to Setup Private Limited Company (Wholly-Owned-Subsidiary) by Foreign Nationals in India:
Below mentioned are the requirements to setup a private limited company (wholly owned subsidiary) in India by Foreign Nationals:
- Proposed Name and Main Object: The very first step in the incorporation of a company in India is the name reservation. A company is identified through the name with which it is registered. It is very important to have a proper name which also reflects the activities to be carried out by the company. So for name reservation, a maximum of two (2) names in order of preference should be given. The company can also provide the name of its foreign parent company. Once the name is approved by the Registrar of Companies (RoC), it will be Valid for twenty (20) days from the date of approval.
The main object to be carried out by the proposed company in India should be given.
- Digital Signature Certificate (DSC): DSC is the digital equivalent (i.e electronic format) of physical or paper certificates. It can be presented electronically to prove one’s identity or to sign certain documents digitally. The DSC of the proposed director is mandatory because the incorporation forms are signed with DSC.
- Subscriber and Director: A minimum of two (2) members are required to setup a private limited company in India. They may either be individual or body corporate. The details of the subscribers are required to be given.
A minimum of two (2) directors are required to setup a private limited company in India with at least one director being a resident of India (resident of India means the person has stayed in India for at least 182 days in the previous year). The details of the Directors are required to be given.
- Capital Requirement: There is no capital requirement for incorporating a private limited company in India. A company can be incorporated with INR 1. Generally, a Company get registered in India with capital of INR One (1) Lakh.
- Memorandum and Article of Association: The Memorandum and Article of Association (MOA & AOA) is a legal document and is very important for incorporating a company in India. The MOA is the Constitution of the company. It defines the scope and purpose for which the company has been formed. The MOA is divided into six clauses which are as follows:
- Name Clause
- Registered Office Clause
- Object Clause
- Liability Clause
- Capital Clause
- Subscriber Clause
The AOA of the company contains the regulations for the management of the company. Generally, it contains the details relating to capital, meetings, director, accounts, audit, etc. It set out the right, duties, and liabilities of the members of the company.
- Director Identification Number (DIN): DIN is a Unique Identification Number allotted to an individual who is appointed as a director of an Indian company. At the time of incorporation, an application for allotment of DIN shall be made only through incorporation form (i.e SPICe+). However, through SPICe+ a maximum of three (3) directors are allowed for allotment of DIN.
- Registered Office: The Company must have a registered office in India from the date of incorporation which is capable of receiving and acknowledging all communications and notices as may be addressed to it.
- Incorporation: After filling the incorporation form with the Registrar of Companies (RoC) along with proper attachments, the RoC will examine the form, and if no error is found it will issue the Certificate of Incorporation (COI) to the company. A COI substantiates that the company has been formed.
Documents/Attachments required at the time of Incorporation
Below mentioned are the document/attachments required to be attached with the incorporation form at the time of filling it with the Registrar of Companies (RoC):
- Resolution of Foreign Holding Company: A copy of the resolution of foreign holding company indicating its intention to incorporate a wholly-owned subsidiary in India. The name of the authorized representative, number of shares to be subscribed along with name of the nominee should be mentioned in the resolution.
Note: It should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Article and Certificate of Incorporation of Foreign Holding Company: A copy of charter and certificate of incorporation of foreign holding Company.
Note: It should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Memorandum and Article of Association of the Proposed Company: A copy of the Memorandum and Article of the proposed wholly-owned subsidiary along with subscriber sheet.
Note: It should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Declaration in Form INC-9: Form INC-9 is a declaration by the subscriber to the memorandum and first director named in the Article of the proposed wholly-owned subsidiary. The Form INC-9 is also required from the Indian Resident Director, if any.
Note: Form INC-9 of foreign nationals should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- PAN Undertaking: A copy of PAN Undertaking by the subscriber to the memorandum and foreign national who wants to become director of the proposed wholly-owned subsidiary.
Note: It should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Directors Consent: The foreign nationals who wants to become Director of the proposed wholly owned subsidiary is required to give consent to act as such in Form DIR-2. The Form DIR-2 contains the particulars such as name, father’s name, address, contact number, e-mail, PAN, etc. The Form DIR-2 is also required from the Indian Resident Director, if any, along with a self-attested copy of PAN and proof of residence.
Note: Form DIR-2 of foreign nationals should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Proof of Identity & Residential Address of the Proposed Director:
- a) Identity proof: In the case of foreign nationals
- Passport
In the case of Indian resident Director, if any, any one of the following –
- Voter’s identity card
- Passport
- Driving License
- b) Residential proof: Any one of the following –
- Bank Statement
- Electricity Bill
- Telephone/Mobile Bill
Note: Residential proof should not be older than 2 months. The Passport and Residential proof of foreign nationals should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.
- Proof of Registered Address of the Company: The following documents are required to be given as proof of registered office address of the company either at the time of incorporation or within thirty (30) days from the date of incorporation of the company:
- NOC (No Objection Certificate) from the owner of the property allowing the company to use the premise as its registered address.
- Address proof such as electricity bill, gas bill, water bill, rent agreement, etc. having the name of the owner and address of the premise.
Note: The bill should not be older than 2 months.
- At the time of Bank Account Opening of the Company, along with Passport the additional documents such as Driving License/Voter Id/National Id having proper address of the foreign national is required. As per new guidelines of RBI (Reserve Bank of India), for foreign nationals the additional documents are mandatory as banks don’t accept utility bills and bank statement as address proof.
Note: The above documents for foreign citizens and non-resident should be translated in English and notarized by a public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.