India has one of the largest consumer markets available at a global level, at is has a population of over one billion inhabitants. Foreign investors who want to register a company in India are advised to study the local culture prior to starting their business activities here. However, it is important to know that India offers similar legal entities that are met across the world, such as the private limited company, which is the most popular business form registered in this jurisdiction. Investors can receive assistance on the incorporation procedure from our team of specialists in company formation in India, as well as on the applicable legislation available for foreign entities.
The following video offers a short presentation on the procedure of opening a company in India:
As presented above, the private limited company represents the first choice of both local and foreign businessmen. This type of legal entity is governed by the regulations prescribed by the Companies Act 2013 and the Companies Incorporation Rules 2014.
Other types of business forms available for investors are the following:
• sole proprietorship company;
• partnership company;
• one person company;
• limited liability partnership.
The incorporation of the company is performed through the Ministry of Corporate Affairs, which requires investors to apply for a Simplified Proforma for Incorporating a Company electronically (SPICe). Most of the legal entities have to apply for the SPICe registration, but other procedures may be applicable, depending on the specific business form and our team of company formation consultants in India can provide in-depth information on this matter.
The legal procedure for starting a company in India is handled by the Registrar of Companies (RoC), which works under the jurisdiction of the Ministry of Corporate Affairs.
In the situation in which the investors prefer to register a private limited company, the regulations for this business form stipulate that the company should have minimum two shareholders and two directors, with the mention that a natural person can have both the quality of a shareholder and a director. The legal entity can also be represented by another company, but in this case, the entity may act only as a shareholder. At the same time, this company type must also take the necessary measures for VAT registration in India.
The sole proprietorship, which is the simplest form of performing business activities, may be set up by a natural person. However, it is important to know that investors can also set up the one person company, which is basically a sole proprietorship that provides limited liability to the company’s founder.
Foreign businessmen who want to open a company in India can receive further assistance on the registration requirements from our representatives. Please contact our team of company formation agents in India for professional advice on this subject, depending on the business form chosen for registration.
