There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast growing market, and have access to some of the best human resources in the world. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entity incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. In addition, a minimum of one Indian Director who is a Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India.
Investment and acquisition of equity shares of a Company can be broadly divided into two categories: investment under automatic route and investment under Government approval route. The automatic route requires no requirement of any prior regulatory approval for investment in equity shares of an Indian business and only post facto filing/intimation with the Reserve Bank of India within 30 days of receipt of investment money in India and filing of prescribed documents and particulars of allotment of shares within 30 days of allotment of shares to foreign investors. Foreign Direct Investment of upto 100% is allowed under the automatic route in most activities/sectors in India. Investment in activities / industries where automatic route is not available can be made with the approval of the Government under the Government Approved FDI method. Adroit Corporation can be your legal and professional partner in India to get your New Company / Subsidiary in India started quickly and cost-effectively.
Indian Subsidiary Process
1. Private Limited Company Incorporation
Adroit Corporation can incorporate a Private Limited Company in 30 to 60 days, subject to ROC processing time.
2. Obtaining DSC & DIN
Digital Signature Certificate(DSC) and Director Identification Number(DIN) is requried for the proposed Directors of the Private Limited Company. DIN and DSC can be obtained for the proposed Directors within 5 to 7 days.
3. Name Approval
A minimum of one and a maximum of six propsed names must be submitted to the MCA. Subject to availability, naming guidelines and MCA processing time, Name Approval can be obtained in 5 to 7 working days.
4. Company Incorporation
Incorporation documents can be submitted to the MCA along with an application for incorporation. MCA will usually approve the application for incorpration in 5 to 7 days, subject to their processing time.
Separate Legal Entity
A company is a legal entity and a juristic person established under the Act. Therefore a company form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts.
Foreign Direct Investment
100% Foreign Direct Investment (FDI) is allowed in many of the sectors through Company type business entity without any prior Government approval. FDI is not allowed in Proprietorship or Partnership, LLP requires prior Government approval.
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.
A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.
Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company.
Capacity to sue and be sued
To sue means to institute legal proceedings against or to bring a suit in a court of law. Just as one person can bring a legal action in his/her own name against another in that person
In the company form of organization it is possible for a company to make a valid and effective contract with any of tis members. Thus, a person can at the same time be a shareholder, creditor, director and also an employee of the company.