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Company Formation India

Updated on Thursday 03rd May 2018

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India is a great place to form a company and as a future investor you should choose which business entity type best suits your interests. There are five types of business entities in India:

- partnership firm, 
- sole proprietorship, 
- private limited liability company, 
- public limited company, 
- limited liability partnership.
 

Steps for setting up a company in India

 
If you wish to set up a company in India, the first things that you should take into account are the following:
 
1. Decide on at least four names for your future company and then get the one name you want to be approved. Of course, you first need to make sure that the name has not been used by another company. The word "limited" will be at the end of the name you choose in case you prefer a public type of company and "private limited" in case you choose the private type.
 
2. For the company registration procedure in India you also need to have a Digital Signature Certificate required in order to prove your identity in various situations.
 
3. Last, but not least, as of 2006, you need to apply for a Director Identification Number as well.
 

Requirements for opening a private limited liability company in India


Then, as we have mentioned above, you can choose if the company is going to be private, public or of another type. As businessmen and entrepreneurs usually choose to incorporate private limited liability companies in India, for this type of company, one should know there are some requirements to be met:
 
- a minimum number of two directors;
- minimum two shareholders (with the specification that the shareholders can be directors at the same time and vice versa);
- a minimum required capital of 100,000 INR, (about 1,400 euro).
 
In order to open a company in India, a foreign investor should also know that the process itself should not take more than 15 days and that the costs of the company formation depend on the share capital.
 
Once a foreign company is registered in India, it is seen as a local Indian company and therefore it is treated as such.

Income taxes must be paid after a Permanent Account Number is obtained. The Revenue Department is the responsible authority for issuing this number. If the company is liable for withholding taxes, then it also has to obtain a Tax Deduction Account Number.
 
Furthermore, the company formation procedure in India does not require the physical presence of the director during the entire process, as the documents can easily be sent there; however, it is important to mention that some papers need to be certified in your home country.
 
For more information about how to open a company in India, please contact our local company incorporation specialists.
 

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