A Member Firm of Andersen Global
IMC Group Companies
Forum - Q&A
You do not need to be physically present here to set up and manage your company in India.
We’ve simplified and streamlined all the processes for you to make it quick and simple to get your company started.
No need to save hundreds of documents and paperwork. You can now store all important documents on the cloud and simply access it from anywhere.
We do not burden you with any hidden fees. There’s just one cost to get you up and running.
This type of business is operated and managed by a single person. There are no such registration formalities and they are recognized by other registrations like sales or service tax registration and therefore it is very famous among small traders and merchants.
Here, the owner and firm are not separate legal entities and therefore, the owner is responsible to pay off everything. This is the reason why sole proprietorship is suited only for small businesses.
Since there are no separate formalities for registering a sole proprietorship business in India, anyone can easily start it without any professional help or prior knowledge. If you are dealing with some specified commodity, you just need a license or permit to sell the same.
This is a business structure in which two or more than than two people handle the business operations following the objectives and terms stated in the Partnership deed. This structure has become a less viable option for people after the introduction of limited liability partnerships where partners are not liable to pay from their personal assets. However, easy and optional registration, low-cost setup, and minimum compliance makes it a good choice for several small scale businesses.
The partners in the business are liable to pay off all the debts of the firm if it fails to do so. Also, if the partners choose to opt for registering the firm, the process may be very costly. Therefore, if you don’t have a comparatively small business then choosing a general partnership structure is not a good ideas.
If you do not wish to register your firm then your business can start just after your partnership deed is ready. However, if you wish to register the firm then also the time taken will be less in comparison to the LLP registration process.
Since there are not many minimum compliances associated with General partnership, it is easy to start. The registration process is also very basic and not so lengthy, as in the case of an LLP.
This is an improvement in the general partnership because the partners have limited liability and offer each of the partner protection from misdeeds. negligence, or incompetence of the other partners. It is also considered as a relatively cheaper approach to incorporate features of a Private Limited Company.
Starting an LLP is comparatively cheaper than setting up a private limited company because there no compliance costs or paid-up capital associated with it.
If your business does not require an equity funding then LLP is the most suited option because it incorporates features of both Private limited company and general partnership.
The tax surcharge applicable to companies with profits above 1 crore does not apply to LLPs. Also, the loans given to partners are not taxable.
No limit is defined on the number of partners in an LLP.
This is a newly introduced business structure that gives the single business owners entire control over the operations of his/her company and limits his/her liability towards the business. There is no scope of raising an equity capital since the owner of the company is also the director and the only shareholder.
It is made to suit the limited liability requirement of a sole-proprietor. However, after exceeding a certain turnover or profit amount, the OPC needs to get converted into a Private Limited Company.
The owner will have to comply with various requirements of the MCA like conducting a statutory audit, submitting annual and IT returns because there are no such AGMS of an OPC.
There are some industry-specific benefits that an OPC enjoys, just like a Private Limited Company. However, taxes are payable at a flat rate of 30% on profits, MAT applies, as does DDT. But, if you are looking for a business structure with a maximum tax benefit, then LLP is a better option.
This type of business structure is increasingly preferred by startups because it allows outside funding’s to be raised easily, limits shareholder’s liability and gives them permission of offering ESOP for attracting top talents in the organization. Since private limited companies are required to hold board meetings and file an annual return to the MCA, they are seen as more credible organizations as compared to any other mentioned-above.
A public limited company has the capacity to offer shares directly to the general public and can also accept foreign direct investments.
For setting up this kind of entity, there must at least be three directors and at least seven shareholders. One of the three directors must be an India resident.
The business must strictly hold statutory meetings along with government approvals for appointing people on the management positions. Shareholders can transfer their shares at ease and their liability is limited to the extent of their capital contributions.
Before commencing with the operations, the company must have a trading certificate and a published prospectus.
A Liaison Office can be established with the Government of India’s approval. The basic role of a Liaison Office is very limited and involves promotion of exports/imports, collection of information, and facilitation of technical/financial collaborations.
A Liaison office is not entitled for undertaking any sort of commercial activity directly or indirectly.
Foreign companies who have a plan of executing specific projects in the Indian territory can set up temporary site offices in India where activities only relating to that project can be carried out. The Indian Government has now granted general permission to foreign entities for establishing project offices which are subjected to specified conditions.
Foreign companies that are engaged in trading and manufacturing activities abroad are allowed to set up a Branch Office in Indian Territory for the enlisted purposes:
A branch office does not have the permission of carrying out the manufacturing activities all by its own but it is permitted to subcontract those activities to any random indian manufacturer. Branch Offices that are established with the RBI’s approval, may remit profit from outside India of that branch, net of the Indian taxes applicable and subject to the guidelines and Permissions from RBI for setting up branch offices is granted by the RBI itself.
At least one director must apply for the Digital Signature Certificate (DSC), which is mandatory for filing the company registration documents. Only a few scanned documents and details will be required for completing the procurement process. DSC is compulsory for signing the E-forms relating to incorporation life Form INC-1 and other documents of the company.
Every individual who intends to be appointed as the director of a company shall compulsorily make an application for allotment of DIN in form DIR-3 to the Central Government in such a manner and along with such fees as may be prescribed in the law.
Select, in order of your preference, a few names, not less than four, that indicate the main objectives of the proposed company. Don’t forget to ensure that the name doesn’t resemble the name of any other company that is already registered and also doesn’t go against the provisions of the Emblems and names Act, 1950.
Apply to the concerned ROC for ascertaining the availability of names in INC-1 of General Rules and Forms along with the prescribed fee. If the name you propose is not available then apply for a fresh name on the same application form. MCA has duly prescribed certain rules for the name availability step, so it is advisable to thoroughly check guidelines for the same before actually applying.
After the name approval of the applicant, the ROC will immediately issue a Name availability letter concerning approval for the availability of a name for your proposed company. The name will have validity for a period of sixty days from the date on which the application for the reservation was made. The applicant is eligible to apply for registration of the new company by filing the required forms INC-1, within six months of completion of the name approval.
The following documents are necessarily required to be filed with the ROC for setting up a private limited company:
After filing the documents on the MCA online portal, you are required to pay the necessary fees.
After the form is received along with applicable fees, the ROC verifies and scrutinizes all the documents and attachments and suggests necessary changes, if required.
If the registrar is completely satisfied that all the necessary requirements have been complied with by the company, it will register the company and issue a Certificate of Incorporation to the company. The date mentioned in the certificate is the main date of incorporation of your company.
Small structures of business like sole proprietorship firms, HUFs, and partnership firms have unlimited liability associated to them. This implies that in case any default happens in loan amounts, the entire money of that loan or liability will be recovered from the partners or members engaged in their profit sharing ratio. There, the risk towards your personal assets is higher in these selected cases.
On the other hand, LLPs and Companies only have a limited liability towards their owners. This indicates that the liability of its members will be restricted only to the amount of contribution they are making or the value of shares every member is holding.
The income tax rates that are applicable on a sole proprietorship and an HUF are ordinary slab rates in India. In a sole proprietor’s case, the income of business is the same individual’s other incomes.
However, in the case of any other entity like a partnership or a company, the rate of tax applicable is 30%.
Massive Market Potential
Operation Cost is Low
Government Incentives are attractive
All companies operating in India are entitled to fabulous economical incentives such as:
Our sole aim is to offer all our services under a single umbrella to eliminate the need for companies, especially foreign companies, to coordinate business with different service entities. While helping you with your company registration in India we strive to minimize the regulatory, transaction and other related risks so your business can run smoothly.
We at IMC Group will ensure a seamless process if you are looking for company formation in India. Let us discuss the right legal framework for your type of business based on your objectives so we can structure the right strategy to incorporate your company.
We appreciate your interest in IMC and are eager to address your needs.
To ensure we address your needs accurately and promptly, please fill out this form. This will help us in identifying and connecting you with the appropriate team of experts in our organization.
We take pride in our responsiveness and aim to get back to you within a span of 1-2 business days. Your journey towards solutions starts here.
Process of registering a company as a Private Limited in India
How to Register your Own Company in India from USA
© 2023 IMC Group. All Rights Reserved.