The most suitable form of entity for carrying out business in India with a long term objective would be to form a Private Limited Company, by making investment through the equity shares in the Company. The basic Requirement for a private Limited Company in India is as follows:-
Minimum Two Directors (One should be resident in India)
Minimum Two Shareholders
Under the current rules and regulations the registration of the company in India is easy and hassle free. The steps for incorporation of Company in India are as under:
1. Acquire Digital Signature (DSC) and Director Identification Number (DIN) for the proposed Promoter director of the Company
2. Name Approval:
An application in Form No. INC 1 needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated.
Following details are required to be stated in the application:-
1. Five alternative names for the proposed company. The name can be coined names from the objects of the proposed company, or the names of the directors, etc. but should definitely be indicative of the main object of the company. The foreign nationals can have identical name of its parent company, subject to terms & conditions as may be imposed by the ROC.
2. Details of Promoters and Directors of the Proposed Company
3. Main objects of the proposed company.
4. Names of other group companies.
On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 10 days to the applicant. On fulfilling of the objections a formal letter of name approval is issued. Name will be allowed for 60 days only from the date of filing of application for reservation of name.
3. Drafting of Incorporation documents
On receipt of the name approval letter from the ROC, the incorporation documents like Memorandum of Association ( MOA) & Articles of Association ( AOA), Form INC 9, Form INC 10 etc are required to be drafted. The MOA and AOA are charter documents of the company. Therefore, these documents should be drafted with due diligence and by a professional having in depth knowledge of the business and Applicable Indian Rules & Regulations. The MOA states the main and incidental or ancillary objects of the proposed company. It also states the authorized share capital of the proposed company and the names of its promoters. The AOA contain the rules and procedures for the routine conduct of the proposed company. It also states the names of its first / permanent directors of the proposed Company.
Documents required for incorporation of the company
The following documents are required to be executed (signed) before they are submitted to the ROC.
MOA and AOA - These are required to be executed by the promoters in their own hand in the presence of a witness in quadruplicate stating their full name, father's name, residential address, occupation, number of shares subscribed for, etc.
Other Incorporation Documents such as Form INC 7, Form INC 8, Form INC 9, Form INC 10, Declaration by Directors, Form INC 22 Affidavit for non acceptance of Deposits, DIR 12, Power of Attorney etc
Execution of these documents before filing for Registration
Once the documents as stated above, are properly drafted, these will be signed by the promoter directors and the consultant responsible for incorporation of the company. Further these documents need to be notarized & legalized in case the documents have been signed outside India. Thereafter these documents will be submitted to the ROC for incorporation of the company alongwith requisite fee as prescribed under the Act.
Issuance of certificate of incorporation by the ROC
The Registrar of Companies on being satisfied about the documents filed and contents thereof, will issue certificate of incorporation. The certificate so issued by the ROC is conclusive proof of incorporation of the company in India under the Companies Act, 2013.