Indian Company Registration

India as one of the fastest growing economies in the world attracts plenty of Foreign Direct Investment (FDI) and Private Equity capital. According to a recent report by Nomura, a Japanese Brokerage firm, FDI into India is likely to have hit high of $34.9 billion in financial year 2015, a massive 61.6 per cent jump from $21.6 billion in the previous fiscal. With the world’s second largest population and a large talent pool of skilled IT professionals, India continues to be an attractive destination for investment amongst Foreign Companies and Foreign Nationals. In this article, we provide a comprehensive guide to Indian Private Limited Company and India entry strategy for foreign nationals and foreign companies.

Overview of India Entry Strategies for Foreign Companies / Foreign Nationals

Following are the available types of entry strategies into India:

Incorporation of a Private Limited Company or Limited Company

Incorporation of a private limited company is the easiest and fastest type of India entry strategy for foreign nationals and foreign companies. Foreign direct investment of upto 100% into a private limited company or limited company is under the automatic route, wherein no Central Government permission is required. Hence, incorporation of a private limited company as a wholly owned subsidiary of a foreign company or joint venture is the cheapest, easiest and fastest entry strategy for foreign companies and foreign nationals into India.

Incorporation of a Limited Liability Partnership

Incorporation of a Limited Liability Partnership (LLP) is also an India entry strategy for foreign nationals or foreign citizens as 100% FDI in LLP is now allowed. An LLP, however, cannot have shareholders and must be represented by Partners – thereby making it an ideal choice for investment vehicles and professional firms.

Through Proprietorship Firms or Partnership Firms

Proprietorship firms or Partnership firms are the most basic types of business entities mostly used by very small businesses or unorganised players. Foreign investment into a proprietorship firm or partnership firm requires prior RBI approval. Hence, proprietorship firms or partnership firms are not suitable for a foreign company or foreign national investment into India.

Registration of Branch Office, Liaison Office or Project Office

Registration of Branch Office, Liaison Office or Project Office requires RBI and/or Government approval. Therefore, the cost and time taken for registration of branch office, liaison office or project office for a foreign company is higher than the cost and time associated with incorporation of a private limited company. Further, foreign nationals cannot open branch office, liaison office or project office. Hence, this option is limited to being an India entry strategy only for foreign companies.

FDI in Private Limited Company

Foreign Direct Investment (FDI) into an Indian Private Limited Company or Limited Company is allowed upto 100% in most sectors. Only a very few sectors require prior Central Government approval for investment by foreign company or foreign national. The following sectors require Government Approval for investment by Foreign Company or Foreign National:

  • Petroleum sector (except for private sector oil refining), Natural gas / LNG pipelines.
  • Investing in companies in Infrastructure
  • Defence and strategic industries
  • Atomic minerals
  • Print Media
  • Broadcasting
  • Postal Services
  • Courier Services
  • Establishment and operation of Satellite
  • Development of Integrated township
  • Tea Sector
  • Asset Reconstruction Companies

Incorporation of Private Limited Company for Foreign Companies and Foreign Nationals

The following are the steps involved in the incorporation of a Indian Private Limited Company for foreign nationals or foreign companies:

Management and Shareholding Structure

A private limited company must have a minimum of two Shareholders and two Directors. A shareholder can be a person or a corporate entity. However, a Director has to be a person. Foreign nationals are allowed to become Directors of an Indian Private Limited Company.

The Board of Directors of the Indian Private Limited Company must have one Director who is both an Indian Citizen and Indian Resident. However, there is no requirement for the Indian Director to be a shareholder in the Company. Hence, most foreign companies or foreign nationals prefer to incorporate a company in India with three Directors – two Foreign National Directors and one Indian National Director.

The 100% shares of the Indian Company can be held by a combination of Foreign Companies and/or Foreign Nationals. Indian private limited companies require a minimum of two shareholders mandatorily. Hence, one corporate entity or person cannot hold all the shares of an Indian Private Limited Company.

Obtaining Digital Signature for Foreign National Directors

A digital signature is required for filing the incorporation documents and continued compliance documents for a company. Hence, Digital Signatures must be obtained for one or more Director(s) of the company. The following video is a guide to submitting Digital Signature application:

The following are the documents and information required for obtaining Digital Signature for a foreign national:

  • 1. Foreign national is residing in native country
  • If native country is a signatory of Hague Convention: For attestation, proof of identity, address proof and photo on DSC application should be notarized by the Public Notary of that foreign country and apostilled by the competent authority of that foreign country.
  • If native country is not a signatory of Hague Convention: For attestation, proof of identity, address proof and photo on DSC application should be notarized by the Public Notary of that foreign country and consularized by the competent authority of that foreign country . Documents required: Passport, Application form with Photo (all attested).
  • 2. Foreign national residing in India
  • The following documents should be certified by Individual’s Embassy
  • Resident Permit certificate issued by Assistant Foreigner Regional Registration Officer, an officer of Bureau of Immigration India.
  • Passport
  • Visa
  • Application form with Photo(attested)
  • 3. Foreign national neither in India nor in the native country
  • The following documents should be certified by the local embassy of the country to which the person belongs:
  • Passport
  • Visa
  • Application form with Photo(attested)

Name Approval

In parallel to the digital signature application process, name approval can be obtained for the proposed company. The name of the Indian Company must be unique and should end with the words “Private Limited”. Click here to know more about Naming an Indian Private Limited Company.

Filing for Incorporation of a Private Limited Company

Once name approval is obtained, incorporation documents can be filed with the Ministry of Corporate Affairs to incorporate the Company. The incorporation documents to be filed includes affidavits & declarations from Directors, Memorandum of Association, Articles of Association Subscriber Sheet and Registered Office Address proof.

The affidavit and declarations from the Directors contain certain declaration from the Directors. Affidavit and Declaration would have to be executed independently for each of the Director and notarized (For Indian Director & Foreign Director).

Subscribing to the Memorandum of Association (MOA) & Articles of Association (AOA)

By subscribing to the MOA & AOA, the shareholders (either foreign companies or foreign nationals or Indian companies or Indian national) show their intention for becoming a shareholder in the company to be incorporated.

In case a Foreign Company is a subscriber to the MOA & AOA of the proposed Indian Company:

The following documents pertaining to the foreign entity subscribing to the shares of the Indian Company must be submitted:

  • Board resolution of the Foreign Entity authorising investment in shares of the Indian Company.
  • Copy of the certificate of incorporation of the foreign entity.
  • Copy of address proof for the foreign company.

On submitting the above documents along with the application for incorporation of a company, the Registrar would issue a Certificate of Incorporation for the Indian Private Limited Company, if the documents submitted are acceptable.

After obtaining the incorporation certificate, the Indian Company can apply for a PAN Card and take the necessary steps for opening a bank account for the company in India.

Check Business Name Availability

Find if business name can be registered with MCA in India

To register a company in India, the first step is to obtain name approval for the business from the Ministry of Corporate Affairs (MCA). This process takes about 24-48 hours. A private limited company name in India must end with the words private limited. One Person Company ends with (OPC) private limited. LLP end with LLP and Section 8 companies can end with words like foundation, association or institution.

A company name proposed to be registered cannot be identical or similar to an existing company name. Also, every company name must include a word that denotes the activity undertaken. For example, in VERVE Financial Services Private Limited - Financial Services denote the activity undertaken. Check Business Name Availability

Online Trademark Search

Enter a brand name to search across all trademark classes

All trademarks are registered in India with the Office of the Controller General of Patents, Designs and Trade Marks. A trademark application has to be filed under a class that denotes the type of goods or services the brand or logo represents. There are 45 trademark classes and each class represent a distinct type of goods or service.

Trademark search can be conducted using the tool above to check if any identical or similar brand or logo is registered or applied for under the same class. If there is an existing application, care must be taken while reapplying to ensure that the application is not rejected by the Trademark Registrar. Trademark Search

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition Unregistered type of business entity managed by one single person A formal agreement between two or more parties to manage and operate a business A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. Registered type of entity with limited liability to the owners and shareholders
Ownership
  • Sole Ownership
  • Min 2 Partners
  • Max 50 Partners

For One Person Company
  • 1 Director
  • 1 Nominee Director
Registration Time 7-9 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • LLP Deed
  • Incorporation Certificate
Governance - Under Partnership Act LLP Act, 2008 Under Companies Act,2013
Transferability Non Transferable Transferable if registered under ROF Transferable
Compliance Requirements
  • Income tax filing if turnover is more than Rs.2.5 lakhs
Know More

Indian Subsidiary FAQ's

How many people are required to incorporate a Private Limited Company?

To incorporate a private limited company, a minimum of two people are required. A private limited company must have a minimum of two Directors and can have up to a maximum of fifteen Directors. A minimum of two shareholders and a maximum of up to 200 shareholders are allowed in a private limited company.

What are the requirements to be a Director?

The Director needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors in an Indian Private Limited Company.

What is the capital required to start a Private Limited Company?

You can start a Private Limited Company with any amount of capital. However, the fee must be paid to the Government for issuing a minimum of shares worth Rs.1 lakh [Authorized Capital Fee] during the incorporation of the Company. There is no requirement to show proof of capital invested during the incorporation process.

Is an office required for starting a Private Limited Company?

An address in India where the registered office of the Company will be situated is required. The premises can be commercial/industrial/residential where communication from the MCA will be received.

Do I have to be present in person while incorporating a Private Limited Company?

No, you will not have to be present at our office or appear at any office for the incorporation of a Private Limited Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.

What are the documents required for Incorporation?

Identity proof and address proof are mandatory for all the proposed Directors of the Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

How long will it take to incorporate a Company?

IndiaFilings.com can incorporate a Private Limited Company in 7-15 days. The time taken for incorporation will depend on the submission of relevant documents by the client and the speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your Company and ensure you have all the required documents prior to starting the incorporation process.

What do I need to quickly incorporate into a Company?

To incorporate a Company quickly, make sure the proposed name of the Private Limited Company is very unique. Names that are similar to an existing private limited company / limited liability partnership / trademark can be rejected and additional time will be required for resubmission of names.

How long is the incorporation of the company valid?

Once a Company is incorporated, it will be active and in existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and may be struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.

What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Company.

What is Director Identification Number?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

What is the authorized capital fee?

The authorized capital of a Company is the number of shares a company can issue to its shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay an authorized capital fee of a minimum of Rs.1 lakh.

What are the statutory compliances required for a Private Limited Company?

A private limited company must hold a Board Meeting at least once every 3 months. In addition to the Board Meetings, an Annual General Meeting must be conducted by the Private Limited Company, at least once every year.

Can NRIs/ Foreign Nationals be Director in a Private Limited Company?

Yes, a NRI or Foreign National can be a Director in a Private Limited Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be a Resident India.

Can NRIs/ Foreigners hold shares in a Private Limited Company?

Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.

What are the FDI guidelines for Foreigners in a Private Limited Company?

100% Foreign Direct Investment is allowed in India in many of the industries under the Automatic Route. Under the Automatic Route, only a post-investment filing is necessary with the RBI indicating the nature of investment made. There are a few industries that require prior approval from the RBI, in such cases, approval must first be obtained from RBI prior to investment.

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Many small businesses pay lakhs in penalty every year to the Government for late filing various statutory returns. Such penalty or late fee paid is not tax deductible and is a drain on profitability. At IndiaFilings, our mission is to provide the most affordable services to our customers and help them avoid all late fee.To achieve our mission - we have built enterprise grade technology to help you proactively know the upcoming compliance and avoid penalty.Checkout our compliance services below, talk to an Advisor and stop paying unwanted late fees.

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Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

MCA Compliance

Every registered entity has to comply with all the compliance obligations after the completion of each financial year. Majorly, it includes the audit of books of accounts, income tax return filing, and annual forms with the MCA.

Form Company Compliance Due date Penalty
COB Filing Commence of Business Certificate To be filed before 180 days of company Incorporation Rs.50,000 for non-compliance
DIR 3 EKYC Any director with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Directors
Form ADT 1 Appointment of auditor Within 15 days from the date of appointment of the Auditor Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form AOC 4 Filing financial statements of the company 30 days from the conclusion of the AGM Late fees will be applicable, with fees ranging from 2 to 12 times the nominal fee, depending on the number of days of delay.
Form MGT 7 Annual Returns of the Company 60 days from the conclusion of the AGM

In addition to the above filings, depending on the type of entity and business activity more compliance filing maybe applicable. Please check with an IndiaFilings Advisor to help you with the compliance for your company.

All Limited Liability Partnerships (LLP) registered in India are required to file statutory returns with the Ministry of Corporate Affairs (MCA) each year. IndiaFilings can help you maintain your LLP Compliance at a very affordable price.

Form LLP Compliance Due date Penalty
DIR 3 KYC For every designated partners of a limited liability partnership (LLP) with DIN Before 30th September every year Deactivation of the DIN
A late filing fee of Rs.5,000
Disqualification of the Partners
Form 11 Annual Returns May 30th every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.
Form 8 Statements of Accounts and Solvency 30th October every year Late fees will be applicable, with fees ranging from 1 to 50 times the nominal fee, depending on the number of days of delay.

Apart from the aforementioned filings, there might be additional compliance filings that could be relevant for LLPs. Please consult with an IndiaFilings Advisor to assist you with the compliance needs of your LLP.

Entity Form Due date
Private Limited Company Annual Return (Form MGT-7) 60 days from the conclusion of the AGM or 28th November 2023 (Which Ever is Earlier)
Financial Statements (Form AOC-4) 29th October 2023
DIR-3 KYC 30th September 2023
Form DPT-3 30th June 2023
Form ADT-1 15th October 2023
ITR 6 (Non audit case) 31st July 2023
ITR 6 (Audit Cases) 31st October 2023
GSTR 9 31st Dec 2023
Limited Liability Partnership ITR 5 (Non audit case) 31st July 2023
ITR Form 5 (Audit case) 30th September 2023
Annual return - Form 11 30 May 2023
Financial Statements - Form 8 30 October 2023

Note : Get in touch with our experts to efficiently handle your compliance filings, whether you are an LLP, a company, partnership firm or a proprietorship. Contact us to ensure your compliance is filed before the due date.

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SUSMITHA K

Indian Subsidiary
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04 April 2022
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Susmitha has been fantastic through out the journey and very professional to work with, I will highly recommend her work. Thanks for all the help!!

NAGA KRISHNAVENI V

Indian Subsidiary
Verified Customer
24 September 2019
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It was a pleasure working with Naga Krishnaveni and Reema Lovelyn and I really appreciate them taking my calls and answering all my questions as swiftly as they did. I also appreciate their professionalism and working with me given my timezone (USA).

DHVANI MODI

Indian Subsidiary
Verified Customer
17 July 2019
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Modi did a great job.

IMAYAVARMAN T

Indian Subsidiary
Verified Customer
02 November 2018
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Great help when needed

LOURDU ANJALI A

Indian Subsidiary
Verified Customer
08 August 2018
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Great Job

REEMA LOVELYN

Indian Subsidiary
Verified Customer
03 July 2018
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She has been amazingly patient. She was very helpful and she is very knowledgable about the incorporation process. I really enjoyed her her help

SATYAVRAT PANDEY

Indian Subsidiary
Verified Customer
25 May 2018
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Great Job, fast response

MUHAMMAD RAFIQUE

Indian Subsidiary
Verified Customer
24 May 2018
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