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COMPANY FORMATION IN INDIA

Company Formation in India: A Comprehensive Guide for Entrepreneurs

Starting a company in India marks the beginning of an exciting journey where entrepreneurial ideas, dedication, and strategic goals converge to create a tangible business entity. While the process might seem daunting, it becomes significantly easier when supported by experienced professionals who can navigate you through every step of the company formation process.

At NGVR AND COMPANY, we offer a one-stop solution to meet all your business setup requirements. From pre-incorporation advisory to post-incorporation support, our team ensures that you can focus on growing your business while we handle the formalities. Our services include:

Business Setup Consultation
Company Formation
Post-Incorporation Support
Bookkeeping & Tax Compliance
Audit and Assurance Services
Payroll Processing
Tax Planning
Registration for Various Licenses (e.g., FSSAI, MSME, Trademark, IEC, LEI)
Tailor-made Services as per Client Requirements

Private Limited Company: An Overview

A Private Limited Company is one of the most preferred structures for business setup in India. Its popularity stems from its ease of registration, fewer regulatory hurdles, and straightforward closure process. This structure is particularly favored by new and growing businesses due to its ability to offer limited liability protection to shareholders while providing them with various benefits. It serves as the foundation for numerous successful businesses.

Minimum Requirements for Private Limited Company:

Capital: No minimum capital requirement.
Subscribers/Members: A minimum of 2 members, with a maximum of 200.
Directors: A minimum of 2 directors, with a maximum of 15. More than 15 directors can be appointed with a special resolution.
Resident Director: At least 1 director must reside in India for a minimum of 182 days during the financial year and in each subsequent year.
Authorized Representative: Required if establishing a wholly-owned subsidiary.

Steps for Incorporation:

Obtain a Digital Signature Certificate (DSC).
Perform a Name Availability Search.
Draft the Charter Documents (Memorandum and Articles of Association).
File the Name Approval Application.
Submit Forms for Incorporation.
Complete Post-Incorporation Registrations.
Deposit the Subscription Amount in the Bank.
File the Form for Commencement of Business.
Report FDI inflow to the Reserve Bank of India (RBI).

Deliverables After Incorporation:

Digital Signature Certificates
Certificate of Incorporation
Director Identification Number (DIN)
Tax Registration: Permanent Account Number (PAN) and Tax Deduction/Collection Account Number (TAN)
Memorandum of Association & Articles of Association
Share Certificates

Documents Required for Directors/Shareholders/Members/Authorized Representatives:

For Indian Residents: Permanent Account Number (PAN), Identity Proof (e.g., Voter ID, Driving License, Passport), Address Proof (e.g., Bank Statement, Utility Bill within the last 2 months), Passport-size Photograph.
For Foreigners/NRI: Passport, Identity Proof, Address Proof (e.g., Bank Statement, Utility Bill), Passport-size Photograph.

Registered Office Documentation:

If Owned: Ownership Deed or House Tax Receipt, Utility Bill (within the last 2 months).
If Rented: Rent Agreement, No Objection Certificate (NOC) from Landlord, Utility Bill (within the last 2 months).

For foreign entities, you will also need a Certificate of Incorporation of the parent company, Board Resolution for setting up a subsidiary in India, and Address Proof for the foreign company.

Limited Liability Partnership (LLP)

An LLP is a hybrid business entity that blends the characteristics of a company and a partnership. It offers limited liability to its partners, meaning that their personal assets are protected from liabilities incurred by the business. LLPs are ideal for collaborative ventures, where partners seek the flexibility of a partnership along with the benefits of limited liability.

Minimum Requirements for LLP:

Capital: No minimum capital requirement.
Designated Partners: A minimum of 2 designated partners is required.
Resident Designated Partner: At least 1 designated partner must reside in India for at least 120 days in the financial year and each subsequent year.
Authorized Representative: Required for foreign companies establishing LLPs.

Steps for Incorporation:

Obtain Digital Signature Certificates.
File the Name Approval Application.
Draft the LLP Agreement and other Documents.
Submit Forms for Incorporation.
File the LLP Agreement Registration.

Deliverables After Incorporation:

Digital Signature Certificates
Certificate of Incorporation
Director Identification Number/Designated Partner Identification Number (DIN/DPIN)
Tax Registration: PAN and TAN
LLP Agreement

Documents Required for Designated Partners/Authorized Representatives:

For Indian Residents: PAN, Identity Proof (e.g., Voter ID, Driving License, Passport), Address Proof (e.g., Bank Statement, Utility Bill), Passport-size Photograph.
For Foreigners/NRI: Passport, Identity Proof, Address Proof (e.g., Bank Statement, Utility Bill), Passport-size Photograph.

For registered office, you will need either the Ownership Deed or Rent Agreement, along with a No Objection Certificate from the landlord if the office is rented.

Public Limited Company

A Public Limited Company allows public ownership and provides the opportunity to raise funds by issuing securities to the public. These shares are tradable on stock exchanges, offering significant investment potential and greater access to capital for business expansion.

Minimum Requirements for Public Limited Company:

Capital: No minimum capital requirement.
Subscribers/Members: A minimum of 7 members, with a maximum of 200.
Directors: A minimum of 3 directors, with a maximum of 15. More than 15 directors can be appointed with a special resolution.
Resident Director: At least 1 director must reside in India for 182 days during the financial year.
Woman Director: Certain public companies must have at least 1 woman director.

Steps for Incorporation:

Obtain Digital Signature Certificates.
File the Name Approval Application.
Draft the Charter Documents (Memorandum and Articles of Association).
Submit Forms for Incorporation.
Deposit Subscription Amount in the Bank.
File Form for Commencement of Business.

Deliverables After Incorporation:

Digital Signature Certificates
Certificate of Incorporation
Director Identification Number (DIN)
Tax Registration: PAN and TAN
Memorandum of Association & Articles of Association
Share Certificates

Documents Required for Directors/Shareholders/Members/Authorized Representatives:

For Indian Residents: PAN, Identity Proof, Address Proof, Passport-size Photograph.
For Foreigners/NRI: Passport, Identity Proof, Address Proof, Passport-size Photograph.

For registered office, you will need either the Ownership Deed or Rent Agreement with a No Objection Certificate from the landlord if the office is rented.

For foreign entities, you will also need a Certificate of Incorporation from the parent company, Board Resolution for incorporating a subsidiary in India, and Address Proof for the foreign company.

By following the above steps and gathering the required documentation, you can easily establish your company in India and begin operations with legal compliance and operational efficiency. Whether you opt for a Private Limited Company, LLP, or Public Limited Company, Mercurius can guide you every step of the way, ensuring a smooth and efficient process.

Section 8 Company

A Section 8 Company is a non-profit entity established to promote social welfare, education, healthcare, environmental sustainability, and other charitable activities. Unlike traditional businesses, these companies reinvest all earnings into their mission rather than distributing profits to members. With legal recognition, tax benefits, and credibility, Section 8 Companies provide a strong foundation for social impact initiatives.

Key Features of a Section 8 Company

Feature	Description
Non-Profit Motive	All earnings are reinvested into the company’s objectives.
No Dividend Distribution	Profits cannot be shared among members.
Legal Recognition	Recognized as a separate legal entity distinct from its members.
Limited Liability	Members’ liability is limited to their shareholding or guarantee.
Asset Transfer on Dissolution	Assets must be transferred to another Section 8 Company with similar objectives.
Government Licensing	Approval from the Central Government is mandatory before registration.

Benefits of a Section 8 Company

Benefit	Description
Tax Exemptions	Eligible for benefits under Sections 12A and 80G of the Income Tax Act.
No Minimum Capital Requirement	Flexible financial structuring through donations and subscriptions.
Distinct Identity	No need to include “Limited” or “Private Limited” in the name; instead, words like Association, Society, or Foundation are used.
Flexible Structure	Can be registered as a private or public company.
Stamp Duty Exemption	Exempt from stamp duty on incorporation documents.
Professional Credibility	Enhances trust among donors, sponsors, and government bodies.
International Collaboration	Can collaborate with international agencies for social projects.

Eligibility and Requirements

Criteria	Requirement
Purpose	Must operate for charitable or social objectives.
Directors	Minimum 2 directors (at least 1 must be an Indian resident).
Shareholders	Minimum 2 shareholders (aged 18+; directors and shareholders may overlap).
Regulatory Compliance	Subject to regular audits and financial reporting.
Merger Restrictions	Can only merge with other Section 8 Companies.
License Revocation	Non-compliance can lead to cancellation of the company’s license.

Registration Process with NGVR AND COMPANY LLP

Step	Description
1. Name Reservation	Apply for name approval through the SPICe+ portal.
2. Digital Signature Certificate (DSC)	Obtain DSCs for directors.
3. Director Identification Number (DIN)	Facilitate the issuance of DINs.
4. Drafting MoA and AoA	Prepare Memorandum and Articles of Association based on objectives.
5. Filing for Incorporation	Submit INC-12 form and supporting documents to the Registrar of Companies.
6. Government Approval	Obtain a license from the Ministry of Corporate Affairs.
7. Post-Incorporation Compliance	Assist with tax registrations, accounting setup, and operational guidelines.

Documents Required

For Directors and Shareholders

Document	Requirement
PAN Card	Mandatory for Indian nationals.
Passport	Required for foreign nationals.
Government ID	Voter ID, Driving License, or Aadhaar.
Address Proof	Recent utility bill or bank statement (not older than 2 months).
Photographs	Passport-sized recent photographs.

For the Registered Office

Type	Documents Required
Owned Property	Property registration proof or house tax receipt and utility bill.
Rented Property	Rent agreement, NOC from the owner, and utility bill.

A detailed business plan outlining the organization’s objectives, expected financials, and proposed activities is essential for a smooth registration process and compliance with regulatory authorities.

NGVR AND COMPANY LLP ensures hassle-free registration and compliance management, allowing you to focus on making a difference while we handle legal and administrative requirements.

One Person Company (OPC)

The One Person Company (OPC) concept was introduced under the Companies Act, 2013, to support entrepreneurs in establishing a single-person venture with limited liability protection. OPC offers a corporate structure with minimal third-party interference, making it an attractive option for small businesses.

OPC Incorporation Requirements

Requirement	Details
Eligibility	Indian citizen and resident (residency requirement: 120 days). NRIs can also register OPC.
Shareholding	Only one person can be a shareholder.
Digital Signature Certificate (DSC)	Required for incorporation.
Nominee Consent	Mandatory consent in writing.
Capital Requirement	No minimum capital requirement.

Our Services

Service	Description
Name Search & Approval	Ensuring availability and reservation of business name.
DSC & DIN Acquisition	Digital Signature and Director Identification Number.
Certificate of Incorporation (COI)	Official company registration document.
PAN & TAN Application	Essential for tax purposes.
Auditor Appointment	Compliance with audit regulations.
Business Commencement Filing (INC- 20A)	Required post-registration.
Bank Account Assistance	Opening a corporate bank account.
24/7 Mail Support	Ongoing assistance and guidance.

Documents Required

Category	Documents Required
Director/ Member & Nominee	PAN, ID proof (Passport/ DL/ Voter ID), Address proof (utility bill), Three passport-sized photographs, Nominee consent.
Registered Office	Owned: House tax receipt/registry proof. Rented: Rent agreement, utility bill, NOC from the owner.

Advantages of OPC

Advantage	Details
Limited Liability	Shareholder liability limited to unpaid securities.
Separate Legal Entity	OPC remains unaffected by the owner’s death.
Easy Management	Single-person decision-making enhances efficiency.
Fewer Compliances	No AGM is required, only two board meetings per year.
Better Borrowing Capacity	Easier access to bank loans than sole proprietorships.

Disadvantages of OPC

Disadvantage	Details
Taxation	Flat 25% corporate tax rate.
Growth Limitation	Single-person control may restrict expansion.
Fundraising Constraints	Cannot raise funds by issuing shares.
Cost	Higher compliance costs compared to proprietorships.

OPCs are a growing business model in India, fostering entrepreneurship and economic development. For a streamlined OPC incorporation process, contact NGVR and Company – your trusted business partner.

Proprietorship Registration Services

A proprietorship is a business entity owned, managed, and controlled by a single individual, commonly referred to as a sole proprietorship or sole trader. The proprietor bears unlimited liability and is accountable for all profits and losses. Unlike other business structures, a proprietorship does not offer benefits such as separate legal identity, corporate existence, limited liability, or perpetual succession. This setup is ideal for small businesses with limited operations, and no government fee is required for registration in India.

Our Services

PAN Acquisition
GST Registration & Compliance
Income Tax Return (ITR) Filing
Trademark Registration
Shops & Establishments Act Registration
Proprietorship Winding-up Services

Key Requirements for Registration

PAN – Essential for tax filings, banking, and The business operates under the proprietor’s personal PAN.
Proprietor Eligibility – Must be an Indian citizen and
Current Account – Banks require proof of business (e.g., GST or Shops & Establishment Registration) for account setup.
GST Registration – Mandatory for businesses exceeding INR 40 lakhs (goods) or INR 20 lakhs (goods & services) in annual turnover.

Registration Process

Business Name Selection – Should not infringe on existing trademarks; optional trademark registration is recommended.
MSME (Udyam) Registration – Provides government benefits, loans, and Requires Aadhaar-based application via the Udyam portal.
GST Registration – Applied through the GST portal and mandatory for applicable turnover thresholds.

Advantages of Proprietorship

Easy Setup – Minimal compliance, no board meetings or ROC filings
Operational Flexibility – Can function from a residential address without a dedicated office space.
Tax Benefits – Income tax exemptions on earnings below INR 5 lakhs and no separate tax filing for the business.

For seamless proprietorship registration and compliance, contact NGVR and Company – your trusted business solutions partner.

COMPANY FORMATION IN INDIA