India Company Registration

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India Company Registration

Incorporation of a Company in India is a simple process. Except for very few sectors that require approval from government (Like Insurance, Defence, Telecom, Banking), 100% ownership is permitted.

A single application needs to be filed electronically for the following

Reservation of name
Application for allotment of DIN (Director Identification Number)
Permanent Account Number (PAN) which is the registration with the Income Tax Authority
Tax Collection and Deduction Number (TAN), which is relevant when tax is to be withheld from employees, landlord or professionals
Goods and Services Tax Identification number (GSTIN), which is chargeable on all revenue and against which input credit for services/purchases are claimed
Employees state Insurance corporation registration (ESI) and Employees provident fund organisation registration (EPFO), which are relevant once the number of employees exceeds a certain number

PRE-REQUISITES

India Company Registration

All the documents pertaining to the foreign national and corporate shall be notarized in their country.

1. Company Name

The nomenclature has to include activity as the second word and the last two words will be Private Limited.

2. Shareholders

Minimum 2 shareholders. Overseas corporate entity can hold all shares while 1 share can be allotted to an individual.

3. Directors

Minimum 2 Directors (One Resident Director mandatory). All proposed Directors need to obtain Digital Signature Certificate (DSC) for obtaining DIN. Foreign directors do not require business visa necessarily. If the Indian Director is only a nominee, it is suggested to have a nominee director agreement with the Indian Director, to avoid any confusion in the future.

4. Share Capital

The first shareholders must bring the subscribed capital to the Company within 60 days of Company Incorporation and the Company must issue share certificates to the shareholders.

Authorised capital is the defined maximum capital of the Company. This needs to be kept high to avoid changing this often.

It is suggested that all the anticipated expenses pre revenue generation be brought in as capital in one of more tranche. However it is to be noted that cross border equity investments into India require compliances, hence it is advisable to avoid too many tranches.

When the share capital is remitted this is under Foreign Direct Investment guidelines (FDI). For this reporting to Reserve Bank of India is mandatory.

5. Registered Office Address

Registered Office refers to the official correspondence address of the company in India. It can be a virtual office or rented property.

6. Memorandum of Association of Company & Article of Association of Company

These have to be drafted to ensure that the Company is permitted to carry all the activities planned immediately and in the future.

7. Necessary documents required for filing application

i. The shareholders and directors will require to furnish below documents:

Proof of identity – Passport for individuals, registration certificate for non-individuals
Residential address of the shareholders (Any utility bill not older than 2 month)

ii. Copy of registration of the foreign body corporate along with copy of Memorandum and Articles (Regulation/Charter)

iii. Resolution passed foreign body corporate for incorporation in India along with the name of authorized representative, no. of subscription of share.

PROCESS

India Company Registration

All the documents executed / notarised / attested as per documentation requirements has to be attached to the e-Form INC-32 and 35 and has to be digitally signed with the Digital Signature Certificate (DSC) of the proposed shareholder/director.

1. RUN Name Reservation

A web-based application is to be filed for reserving the Company Name, if the name is to be reserved first before filing the documents. The name approved under RUN Process is valid for a period of 20 days from the date of approval. Company Incorporation documents are to be filed within the validity period of Company Name.

2. Preparation and Filing of Company Incorporation Documents with MCA

Company Incorporation Process consists of preparation and filing of the flowing E-Forms:

e-Form INC-32: Simplified Proforma for Incorporating Company Electronically (SPICe)
e-Form INC-35: Application for Goods and services tax Identification number, employees state Insurance corporation registration plus Employees provident fund organisation registration (AGILE)

POST INCORPORATION ACTIVITIES

India Company Registration

1. Bank Account

This requires resolution of the board of directors and then a few KYC (Know Your Customer) documents have to be submitted to the bank.
Depending on which bank the parent company has account in, we can decide the bank where the Indian entity can open the bank in
Most activities can be done using net banking

2. Import Export Code (IEC)

The Company will require IEC registration for exporting or importing goods or services

3. Trademark

The Company needs trademark protection for the brands it used in India. It is suggested that the logo be registered in India
The Indian entity is the licensee of the brands of the parent in India, for which it can pay royalty fees.

4. Agreements between parent entity and the Indian entity

Similarly, for all the expertise the parent company brings, the Indian entity can pay Fee for Technical Services
Royalty and Fee for Technical Services are two permissible heads under which Indian entity can remit money to the parent as per the standard India and Foreign country’s Double Taxation Avoidance Agreement

5. Regular Compliances

Tax Deduction at Source (TDS) deposit and returns, GST deposit and returns, MCA annual filings, Income Tax Returns, Statutory Audit and Transfer Pricing Audit are required activities.
Most companies that do not wish to hire full time internal resources outsource this to Virtual CFO firms.