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In India, there are a number of ways in which you can set up business in India. These include, set up or incorporation of the following types of entities:

  • Partnership
  • One Person Company/ Sole proprietorship
  • Private Limited Company
  • Public Limited Company
  • Unlimited Company
  • Limited Liability Partnership (LLP)
  • Cooperatives
  • Trust
  • Societies

Other Options Setting up business in India:

  • Branch office
  • Liaison Office
  • Project Office

Basic Requirements for a New Business in India

Depending on the type of entity you decide to set up business in India with, there are a few basics that will be required:

Capital – There is a minimum investment amount / paid up capital that will be required to initiate the process of incorporation and registeration.

Members and/or Directors/ Partners/ Trustees – For registration of an entity, laws in India prescribe a minimum number of people that are essential to start a business. For example: a private limited company, a minimum of 2 members/ shareholders and a maximum of 200 members/ shareholders are needed and there will be a minimum of 2 directors and maximum of 15 directors.

Registered Office – When registering an entity, an address/ location of place of business, is required to be filed, which for all future purpose will be known as the registered office of the entity. This is also where all official correspondence from the Ministry of Corporate Affairs/ Registrars office will be sent. There are a number of options available now for entity looking to do business in India, from buying a property, renting a space, using a co-working spaces address (after executing the requisite documents) or even using your lawyers address (after acquiring the requisite permissions). A virtual office space is another option that a lot of entrepreneurs and companies are favouring due to the ease of doing business and correspondence.

Suitable Name – There are a few naming guidelines laid down as per law that are required to be followed while registering a new business in India. For a name to be approved for the incorporation, it must be both unique and desirable. Before applying, it is a must to search on the official government website to identify any trademarks for similar names to ensure that the proposed name is unique. No less than six different names in order of preference have to be provided while applying for registration and the names should be indicative of the main objects of the entity.

DIN and DSC – Due to the numerous forms to be filled it is mandatory (depending on the type of entity decided to be registered) to get a DIN (Director Identification Number) and DSC (Digital Signature Certificate).

Documents to be Drafted

  • For setting up a Business in India via a Company:
    • Memorandum of Associate (MOA) – This is the base document which lays down the constitution/ foundation of the company. The purpose of the MOA is to display the permitted range of activities of a company for the guidance of shareholders, creditors and others. When incorporating or registering a private limited company, proper advice must be taken to draft a proper Memorandum of Association to safeguard yourself and the business in the long term.
    • Articles of Association (AoA) – This document regulates the domestic management of a private limited company and creates certain rights and obligations between the members and the company. The Articles of Association are in fact the by-laws of the company according to which directors and other officers are required to perform their function as regard the management of the company, its accounts and audit.
    • Shareholders Agreements (SHA) – This document assigns the rights and responsibilities of shareholders of the company and helps to demarcate the benefits as well.
  • For setting up a Business in India via other entities
    • Partnership Deed/ Trust Deed/ Joint Venture Agreement
  • Forms – Various forms need to be filled carefully and submitted to the Registrar of Companies (RoC) or the respective Registrar office for the entity.