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How to set up a company in India


How can foreign investors set up a company in India? 

Foreign investors may set up several types of business forms when starting a company in India. Regardless of the legal entity that was selected for incorporation, the registration procedure follows the same steps prescribed under the legislation for commercial companies. It is also important to know that most of the business structures in India are registered as private limited companies. Our team of specialists in company formation in India can offer in-depth assistance on the registration of a legal entity and can offer advice on the regulations applicable in this sense.

What are the main procedures for registering an Indian company? 

แอพ Fishing MasterAll companies operating in India are required to register with the Registrar of Companies (RoC), a department working under the supervision of the Ministry of Corporate Affairs. In order to open a company in India, the investors will need to follow specific incorporation steps, once they have chosen a business form suitable for their investment plans in this country, such as:
  • select a trading name for the company, which has to be unique at the level of the entire Indian territory;
  • prepare the application for registration of the business name, which should include minimum four proposed trading names and maximum six;
  • once the company’s statutory documents are prepared, they need to be filed with the RoC;
  • register for social security, once the company concluded the first employment contract.

The following video offers a short presentation on the registration of an Indian company:

It is necessary to obtain a Director Identification Number (DIN), regardless of the nationality of the future director. The proposed directors will also need a Digital Signature Certificate (DSG), which represents the director’s signature necessary for various company documents that are registered and filed with the Registrar of Companies. More specifically, all the directors will need a Class II Digital Signature Certificate, which can be provided by one of the licensed vendors of the Ministry of Corporate Affairs

Further on, the Registrar of Companies will approve the company’s trading name, after the company’s representatives have sent a proposal in this sense. The institution will approve the trading name if specific conditions are met, which can be detailed by our team of agents in company registration in India

What should investors take into consideration when starting a company in India? 

Those who want to register a company in India will also have to file the company’s statutory documents (articles of association and memorandum of association) and the documents must contain the signature of a company secretary. The registration procedure will incur the payment of specific fees, including the stamp duty. If the steps presented above are successfully completed, the investors will receive the certificate of incorporation and other important steps can start, such as the แอพ Fishing Masterregistration for tax matters

Why start a private limited company in India? 

One of the most suitable ways to start a busines in India is by registering a private limited company, as this business form provides a set of advantages. This business form benefits from a great flexibility. In this sense, it is important to know that, when choosing this legal entity, the investors will be able to modify the structure of the company’s owernship. This procedure can be concluded through the transfer of shares, a procedure that will need the consent of the other shareholders.  

Investors must also know that this business form can own property in its own name, which can refer to a wide category of assets, such as intangible or tangible assets – machinery, land, factories and others. When starting this type of company, the investors will also need to set up an official business address, under the requirements of the local legislation. This is applicable to all types of Indian business forms; some of which are presented below. 

What is a sole trader in India? 

A sole trader (also referred to as an individual entrepreneur) is the most basic business form when starting a company in India. It defines a type of company that is registered by a single businessman, who carries all the business operations in his/her own name

The person opening the sole trader is responsible for any matter related to his/her company and it is also important to know that if the company will have various financial difficulties, such as debts or bankruptcy, the owner will be liable with his/her personal assets, as there is no legal distinction between the two entities. However, one of the advantages of the sole trader is given by the simple registration procedure and basic compliance with the local authorities. Most of the Indian sole traders are operating in the agriculture and retail sectors

The Indian one person company 

Another business form available for incorporation in India is the one person company, which represents a hybrid legal entity, comprising the characteristics of a sole trader with the ones of a limited liability company. In other words, this business form is seen a sole trader with more rights and obligations: for example, the founder has to appoint a director, as it is the case of other legal entities with a corporate identity. 

When forming a company in India under this legal entity, it is necessary to know that the Companies Act 2013 clearly stipulates that the one person company is seen as a different legal person than the founder, who will assume only limited liability for any debts

Although this is similar to a limited liability company, it is recommended for registration only in the case of small businesses and it is also important to mention that it can’t be changed into a company, as prescribed by the Section 8 of the Companies Act

 Why register a public limited company in India? 

The Indian legislation allows the registration of a public limited company, which has similar characteristics with the limited liability company, with the difference that the shares issued by the company can be offered to the general public (this is not the case for a limited liability company). 

At the same time, this business form can accept foreign direct investments and it must be set up by at least seven members. More importantly, the shares of the company can be easily transferred and the members are liable only to the extent of their capital participation in the company.  

Our experts can offer more information on how to form a company in India. Please contact our team of consultants in company registration in India for further advice on how to register a business form suitable to the investors business plans. Our representatives can advise on the main advantages provided by each Indian business form

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