A company is an association formed for the purpose of doing business. The Companies Act 1956 states that ‘company’ includes companies formed and registered under the Act. It is a separate legal entity and consists of directors and shareholders. Based on the activities, the company can be classified.
I. Based on commercial activities: the company can be classified based on its activities, such as manufacturing activity, service activity, non-profit activity, etc.
II. Based on Passives – Can be limited or unlimited.
3rd Party Based on Membership – Can be Public, Private and Government
IV. According to the place of registration: Indian or foreign
V. Based on Control – Holding or Subsidiary
Limited Liability Company –
o This is a non-governmental organization
o The maximum number of shareholders here is limited to fifty and the minimum to two.
o Shareholders do not have the right to transfer the shares.
The procedure to incorporate a Private Limited Company is
or Select a name for the company
o Request Identification Number of Directors and Digital Signatures
o Draft Memorandum and Corporate Bylaws
o Presentation of documents before the Registrar
or Payment of Fees
o Obtain Certificate of Incorporation
public limited company
o Offer shares to the public
o Must have at least 7 shareholders
o You must have at least three directors on your board
o Must hold regular statutory meetings
The procedure to incorporate a Private Limited Company is
or Select a name for the company
o Request Identification Number of Directors and Digital Signatures
o Draft Memorandum and Corporate Bylaws
o Presentation of documents before the Registrar
or Payment of Fees
o Obtain Certificate of Incorporation
o Obtain Startup Certificate
A foreign company can also establish a liaison office or a branch in India
A liaison office is a communication channel between the head office and the place of business. The function of a liaison office is to represent its parent company and promote its business.
A branch is authorized to
o Import/export of goods
o Offer consulting services
o Do research work
o Represent the parent company as buying or selling agent
o Offer technical support to the products supplied by the parent company
The time taken to register a company in India would be anywhere from a few hours to three months.
Advantages of establishing a company in India
India has double taxation treaties with many countries.
Tax exemptions for companies established in SEZ
Tax incentives for IT companies
Qualified English-speaking employees available at nominal fees