What you should know when registering a company in India

Company registration in India occurs in accordance with the law "About Companies" 1956. Its action covers the entire territory of the state.
Types of Companies in India

Private company - features

• The transfer of shares is prohibited;
• The permissible number of founders is from 2 to 50 people;
• Issuance of debt securities or securities through the involvement of individuals is prohibited;
• Tax rates are set at the highest rates;
• The founders are free to make decisions regarding the work of the company;

An open type of private company is recognized if:

• at least a quarter of the paid-up capital is owned by a company (or several companies) of an open type;
• the company is engaged in accepting deposits from individuals;
• the average annual turnover is over $ 2.5 million.

Characteristics of an open company in India

• Allowed free transfer of shares;
• The minimum number of founders - 7 people;
• There are no restrictions on attracting private investment;
• Taxes are charged at lower rates.

Company registration in India provides for submission of the following documents to the Registration Bureau:

• Certified copy of the Articles of Association or Memorandum of Association. In the case of translation of documents into English, notarized translation is also required. Address of the main or registered office;
• List of managers and secretaries of the company;
• Data on residents of India who have the right to make decisions in the company (names, surnames, addresses);
• The full address of the place where the company will operate;
• Company name;
• Main, auxiliary and other objects and objectives of the company;
• The amount of authorized and registered capital.

Company registration in India ends with the issuance of a registration certificate authorizing the company's business.

It is also necessary to register a prospectus with information about the company for potential investors.

Representative offices and subsidiaries in India

• A foreign company has the ability to create a new company in India, own all of its shares and fully control its activities;
• In accordance with the articles of the Charter of the company and the provisions of local legislation, the rules of taxation and audit of the company's activities are determined
• The Registration Bureau of India also issues permits to open a branch or branch of a foreign company for business purposes;
• All financial receipts from the central office to the account of a representative office in an Indian bank are automatically converted into Indian rupees. Any expenses are made only in rupees.

Any foreign company in India must:

- indicate the name of the country where the company is registered, in any prospectus inviting to purchase shares;

- indicate the name of the company and country in business correspondence.

Taxes in India

1. 30% corporate tax (plus up to 10% additional fee) for Indian companies (registered in the jurisdiction);
2. 40% of corporate tax (plus up to 2.5% additional charge) for foreign companies;
3. 15-30% income tax on wages of foreign specialists;
4. Due to the education tax, the sum of all taxes is increased by 2%;
5. 1% tax on the total value of the entire property of the company (this does not include debt obligations).

 

It sounds interesting, poor Indians suffer from corporations, but who cares!