Company registration in India and obtaining residency
India does not accept dual citizenship. It means that Indians cannot obtain the citizenship of another country (except in exceptional circumstances). Also, people who want to get citizenship in this country cannot, in any way, obtain Indian citizenship. People who enter India, for example, to study, invest, register a company, and so on, are the exceptions to this law.
Obtaining permanent residence in India is possible under two conditions:
OCI:
It is an almost lifetime visa card that guarantees multiple travels in India. People who have this card for 5 years can apply for citizenship in this country. Applicants (except Bangladesh and Pakistan) who were born after 1950 can apply for this visa. However, people in this category must be citizens of those countries where dual citizenship is allowed.
PIO:
People of Indian descent (such as Pakistanis) receive a PIO card. It is valid for 15 years and allows people to travel freely in India and live in this country without a visa for 180 years. Citizens of Pakistan, Bangladesh, Afghanistan, Nepal, Bhutan, Sri Lanka, and China can receive this card.
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Registration of a company in India and types of companies
Each country has its economic style and context. So there are different divisions for different companies (India is not an exception). India has allocated various types of companies to the public to facilitate its economic and registration affairs. It is done both for foreigners and the Indians who intend to register a company in India. MIE Austria has discussed the types of companies in India and their characteristics. India has 12 kinds of companies.
- A limited liability company
- It restricts the shareholders’ right to transfer their shares.
- The minimum number of partners is 2, and the maximum number of partners in this type of company is 50.
- They do not have the right to sell shares to the public by invitations or transferring the shares.
- The minimum capital defined in Indian law for these companies is 100,000 rupees. It may change from time to time. The law does not mention the maximum amount of recourses.
- Public joint-stock company
- In these companies, shareholders can transfer their shares to others without an agreement.
- They have at least 7 members, and there is no limit on the number of shareholders.
- Subscription or sale of shares must be done to transfer shares, and everyone must be invited publicly.
- The amount of capital is at least 500,000 rupees. The maximum amount is not defined and may vary from time to time.
- Unlimited liability company
- All members or partners of the company have unlimited liability in the company and are responsible for all obligations of it.
- The assets of the partners can be used as corporate debts.
- These types of companies can be changed to a limited liability company at any time under the law of 32 for Indian companies.
- Single ownership company
- It is a business entity in which an individual manages and is responsible for the entire organization or business.
- This person is the single owner, shareholder, or partner of the company. All the responsibilities for making profits or losses of the company are on that person.
- There is no separate business in India under any personal property law.
- Partnership with Hindu families
- It is a type of business in which only members of an Indian family can participate and run a family business.
- These companies are fully Indian, and only Indian people with Indian citizenship can register them.
- Partnership
- It is a type of business that is formed between several people who agree to benefit from the trade equally.
- They earn and divide the profit of the company equally between themselves.
- This type of partnership or business is governed by the Indian Partnership Act of 1932.
- This type of company may be formed between several people with different specialties.
- Cooperative company
- It is a voluntary organizational structure in which members work together to promote the interests of their members.
- These companies are formed entirely in the interests of the people of the company or a group of people.
- There is no restriction on the entry or exit of individuals or members.
- These types of companies are governed by the Cooperative Associations Act of 1912 in India.
- Limited liability partnership (LLP)
- In this type of company, at least one person has unlimited liability.
- Other members may have limited liability, but at least one person must be responsible for the entire company.
- Other members’ responsibilities will be set according to the amount of their partnership or shares.
- Unlike public partnership companies, this type of company does not end with the death or debts of it.
- These types of companies are managed under the Limited Liability Companies Act of 2008.
- Representative office
- In a way, these companies are as a representative office of the leading company.
- These offices are responsible to gather information about the Indian business environment or invest in this country.
- These types of offices do not have the right to engage in any commercial, industrial, or business activities.
- The only role of these representative offices is gathering information and promoting exports and imports to India.
- These types of companies must provide their income through the income of the leading company.
- Branch office
- Foreign companies that have manufacturing, commercial, or service activities can register a branch office in India.
- These offices can fulfill the various goals of the company, including providing professional, consulting, export or import services, etc., and do them simpler.
- These offices cannot have any unique production activities or carry out the company’s production activities in India.
- These branches operate under the legal supervision of India, which allows the establishment of branch offices in this country.
- Project office
- Various foreign companies can register temporary project offices in India to carry out planning and activities related to that project.
- Subsidiary company
- These are companies with 100% foreign ownership.
- The Indian partners do not involve in the investments of this company.
Foreign subsidiary companies in India can be registered in one of the following ways:
- Limited liability company
- Public joint-stock company
- Unlimited liability company
- Single ownership company
The expenses and minimum capital for registering a company in India
You must pay some fees if you want to register for any type of company anywhere in the world. What are the costs of starting a business? What are the initial expenses that should be included in the initial fund of the company? We will discuss the payment fees for registering a company in India below:
- Single ownership company
It is between 5,000 and 12,000 rupees, which is about 50 to 150 euros.
- Limited liability branch
It is between 6,000 and 14,000 rupees, which is about 70 to 170 euros.
- Private limited liability company
It is between 7,000 and 15,500 rupees, which is about 80 to 180 euros.
The applicant must keep about 10,000 Indian rupees (about 1,250 euros) in the central fund of the company to start a business in India. The applicants can go through this process online. Shareholders can also hold this share. It can be divided into 10,000 shares of 10 rupees. It means that the number of shareholders of Indian companies can increase by up to 10,000.
Registering a company in India and its steps
Registering a company in India has 13 steps. MIE Austria will deal with these steps briefly and precisely:
- The Director’s Identification Number (DIN)
This number is available online. The form is also available online. The applicant must then print and sign the application form and send it, along with an identity certificate and address, to the ministry for approval. The Director’s Identification Number will be issued after confirmation.
- The digital signature certificate
The applicant can get the digital signature certificate from one of the six private agencies authorized by MCA 21(State Department). Company managers must provide an application form with an identity certificate and address.
- Creating a name for the company
The applicants can do this online. They can check whether it is possible to choose their desired name on the MCA 21 (State Department) website. The company’s name must have a maximum of 6 syllables. The selected name will be on the website after confirmation.
- Attached company documents
These documents must be attached without a signature and with a payment receipt. Then, the applicant must complete all the forms.
- Receiving the registration certificate
The applicant must send a copy of the consent of the initial managers, as well as the signed and stamped form to the Companies Registration Office.
- Designing the name and logo of the company
The company needs a logo for its brand. The cost of logo registration depends on the number of words engraved, the number of required forms, and the delivery time.
- The Permanent Account Number (PAN)
The applicant can receive this account number online. However, physical presence is required for the final confirmation.
- The Tax Account Number (TAN)
You can apply online to receive your tax account number. This request is issued after the approval of the Tax Office of India.
- Registering in the Property and Documents Registration Office, and opening the place of activity (both in the city and in the province)
The applicants must rent or buy a property for business. They must also submit their application with the name and postal address of the newly established company and the payment of other expenses to the Registry Office. Companies must register in this office within 30 days of opening a business.
- Registration in the Tax Office of Goods and Services
Any company with a turnover of 200,000 rupees (equivalent to 25,000 euros) must register with this organization and pay annual taxes.
- Registration in the Advanced Tax Offices (local)
According to Section 5 of the Tax Code of India, every employer is required to pay advanced tax. This tax must be in the form of an application and documents submitted to this organization.
- Registration in the employees’ financial fund
The employer is obliged to submit the employees’ information of one’s company in India to this office. This information is as census and statistics of employed people.
- Health insurance registration
The employer is obliged to insure oneself, one’s employees, as well as the company in the local insurance office. The employer must approve the application form.
Registering a company in India and business plan
One of the critical conditions for registering a company in India is to submit a business plan. A business plan can express your goals and foresight, so you must consider some essential points in preparing a business plan. Although India is not so strict in the writing and designing of the business plan, it should generally be approved by the authorities mentioned earlier.
A business plan means that a person who wants to start a new business in this country must look forward to the future to achieve one’s goals. The applicant must implement one’s company’s business development plan on paper. The mentioned authorities may approve or reject the business plan. The applicant must start the company registration process in India from the beginning if one’s business plan is rejected.
All the business plans in India must have the following characteristics:
- It must be submitted in writing.
- It must have a table of content.
- It must mention the summary of executive planes.
- It must contain developmental and sufficient provisions in the growth and development of Indian products.
- It must mention the ways to provide the required resources.
- It must mention the type of activity and the format of the company.
- It must mention the short-term and long-term plans of the company.
- It must mention a summary of the company’s operations.
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