Company Formation in India Overview
Starting a company in India can be a lucrative venture, but navigating the regulatory landscape and ensuring compliance with legal requirements is crucial. At ARKC Advisors., we specialize in guiding entrepreneurs and investors through the company formation process, ensuring a seamless and efficient setup. This guide provides an in-depth overview, answers common questions, details the step-by-step procedure, and offers a practical checklist to help you establish your business in India.
Understanding the Companies Act 2013
Company formation in India is regulated by the Companies Act 2013, which outlines the legal framework for incorporating and managing companies. The Act encompasses various aspects such as company types, governance, financial reporting, and compliance. Whether you’re a domestic entrepreneur or a foreign investor, adhering to the Companies Act is essential for legal and operational compliance.
Types of Companies
- Expert Guidance:Private Limited Company: Limited to a maximum of 200 members and does not offer shares to the public.
- Public Limited Company: Can offer shares to the public and has a minimum of seven members.
- Limited Liability Partnership (LLP): Combines the benefits of a partnership with the limited liability of a company.
- One Person Company (OPC): A single-member company that provides limited liability to its owner.
Shareholders and Directors
Foreign nationals can own up to 100% of a company in India, subject to sector-specific regulations and approvals from the Reserve Bank of India (RBI) or the Foreign Investment Promotion Board (FIPB). Foreign nationals can also serve as directors, but a local director must be appointed to comply with Indian regulations.
Memorandum & Articles of Association
The Memorandum of Association (MOA) outlines the company’s objectives and scope, while the Articles of Association (AOA) details the internal rules and procedures. Both documents must be stamped, with the stamp duty varying based on the company’s authorized share capital.