The most convenient and popular structure to do business in India by a Non-Resident is incorporating a Private Limited Company. Once a company is incorporated in India, including a wholly owned subsidiary of a foreign Company, it is treated at par with domestic companies (in its entirety). All foreign investments are repatriable (net of applicable taxes).Click here to have a brief outlook of process of incorporating a business entity in India.
Incorporating a Company in India: For incorporation, an application has to be filed with Central Registration Centre (CRC), Ministry of Corporate Affairs. The Government of India has integrated and revamped the process of incorporation through Form SPICE+ which facilitates many other necessary and mandatory registrations/licenses covering Income Tax, Goods and Services Tax, Social laws (ESIC, EPFO, Shop and Establishment Registration and Professional Tax Registration) and even opening a bank account.
What are the basics for incorporating a Company(Private Limited) in India?
This shall be the foundation stone of the prospective company, the first would be to decide a name of the company and check with the name availability with CRC in its records.
Minimum 2 Directors, 1 being a resident director i.e a director who stays in India for a total period of not less than 182 days during the financial year;
Minimum 2 Shareholders, whether Body Corporates or Individuals or combination of both;
The place of Registered Office (R.O.) of the Company should be decided considering various factors such as specific state taxes, ease of business, availability of resources, etc. In case of legal disputes, the jurisdiction of the court is determined by the location of the registered office of the company. This, therefore becomes an important factor to be considered before incorporation. Shifting of registered office from one state to another is allowed however it may take some time. Irrespective of the location of the registered office, a company can do business throughout India;
There is no minimum capital requirement prescribed for incorporating a private company. However, the amount equivalent to paid-up capital of the proposed Company should be paid/received within 180 days of incorporation.
For detailed procedure of Incorporating a Company in India, you may read our blog:
Post Incorporation Compliances
Once you have got the company registered, you need to ensure hygiene and care to be on the right side of the law. It makes a lot of economic sense to stay compliant. It helps in efficient and uninterrupted functioning of the Company. As someone rightly said, it takes less time to do things right than to explain why you did it wrong. Besides, there are consequences. For more information on Post Incorporataion Compliances, please visit: