Launch Your Start Up

Private Limited Company

Are you thinking of starting a company? If so, you’ll need to register your business with the government. This process can seem daunting, but we’re here to help. In this blog post, we’ll walk you through the basics of company registration in India. First, you’ll need to choose a business structure. This will determine the legal framework for your company and how it will be taxed. Common business structures include sole proprietorships, partnerships, limited liability partnerships (LLPs), and Companies. Once you’ve chosen a business structure, you’ll need to obtain a business license or permit from your local government. This will allow you to operate your business legally.

Next, you’ll need to register your company with the government. This will usually involve filing paperwork with your local business registry. In some cases, you may also need to register with national or regional level organizations. Finally, you’ll need to obtain any necessary licenses or permits required to operate your business. This could include a license to sell certain products or services, or a permit to operate in a specific location. With all of this in mind, let’s take a closer look at the specifics of company registration in India.

Services Covered

DSC (2 nos)
Filing of SPICe+ Form
Issue of Incorporation Certificate along with PAN and TAN
Includes Govt Fees & Stamp duty for Authorized Capital upto Rs. 1 Lakh except for the states of Punjab, Madhya Pradesh and Kerala
Excludes foreign national / Body Corporate as director or business needing RBI/SEBI approval
Assistance in Opening Bank Account

Who Should Buy

Businesses looking to expand or scale operations on higher level
Startups looking to raise capital and issue ESOPs
Businesses looking to convert their existing firm structure into private limited company
Businesses aiming to work globally or with reputed clients

How It's Done

Businesses looking to expand or scale operations on higher level
Startups looking to raise capital and issue ESOPs
Businesses looking to convert their existing firm structure into private limited company
Businesses aiming to work globally or with reputed clients

How It's Done

DSC Application
Name approval form filing
Preparation of Incorporation Documents
Getting those docs signed by the respective stakeholders
Filing of e-Forms with ROC
Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.

Documents Required

Name, Contact Number and Email Id of all the Stakeholders.
Directors Identification Number, if already.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.
Latest Month Personal Bank statement of all the Stakeholders.
Specimen Signatures of all Stakeholders.
Few Proposed Business Names along with Objects.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office, If Owned. (Download Template)
Rent Agreement from Landlord, If Rented/Leased. (Download Template)
Brief description of main business activities of the proposed Company.
Shareholding pattern (50:50 or 60:40) between the Stakeholders.
Authorised & Paid Up Share Capital of the Company.

Choose from the best curated options for you!

Name, Contact Number and Email Id of all the Stakeholders.
Directors Identification Number, if already.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.
Latest Month Personal Bank statement of all the Stakeholders.
Specimen Signatures of all Stakeholders.
Few Proposed Business Names along with Objects.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office, If Owned. (Download Template)
Rent Agreement from Landlord, If Rented/Leased. (Download Template)
Brief description of main business activities of the proposed Company.
Shareholding pattern (50:50 or 60:40) between the Stakeholders.
Authorised & Paid Up Share Capital of the Company.

Choose from the best curated options for you!

What is Private Limited Company Registration?

Private Limited Company Registration is the most common and trustable type of company. A Private Limited Company Registration is the most popular form of structure for businesses. A Private Limited Company must have at least two active directors as to any given point of time the maximum number of director fifty members in a typical private limited company. There can only be 20 directors in a Banking company. The unique feature of a private limited company is that its directors have limited liability to creditors. It comes in handy in a case of default, where banks/creditors can not touch the company’s director, neither can they sell their assets. The creditors can only sell the company’s assets. If you want to start a company in India, make sure you incorporate a Private Limited. It is essential to incorporate your company as a registered company with multiple advantages from easy to incorporate and dissolve.

Minimum Requirement for Private Limited Company Registration

A minimum number of two Directors who are adults are required for Private Limited Company Registration.
One of the Directors of a Private Limited Company has to be an Indian Citizen and Indian Resident.
The other Director(s) can be a Foreign National for Private Limited Company Registration.
It is also required to have two Shareholders of a company for Private Limited Company Registration.
The Shareholders can be natural persons or an artificial legal entity for Private Limited Company Registration.

Guidelines for Choosing Company Name

The process of incorporating a company in India can be a bit daunting, especially if you’re not familiar with the language and business culture. There are a few key things to keep in mind when incorporating a company in India, including the company name. Here are a few tips on choosing a company name in India:

Make sure the name is unique and not already in use by another company.
The name should be reflective of the company’s business.
Avoid names that are too generic or too specific.
Keep it simple and easy to pronounce.
Make sure the name is available as a .com domain.
Avoid using initials or abbreviations in the name.
Conduct a trademark search to make sure the name is not already trademarked.
Get creative! A unique name will help your company stand out from the crowd.

Choosing a company name in India can be a bit of a challenge, but it’s worth taking the time to get it right. By following these tips, you can ensure that your company name is both unique and reflective of your business.

Basic Features & Characteristics of a Private Limited Company Registration:

Separate Legal Entity

An entity means something which has a real existence; a thing with distinct existence. A company is a legal entity and a juristic person established under the Act. A juristic person is a person who is not a natural person or human being. Therefore a company form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts. Hence, a pvt ltd company is a legal entity separate from that of its members.

Uninterrupted Existence

A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership. Perpetual succession is one of the most important characteristics of a company.

Limited Liability

Limited Liability means the status of being legally responsible only to a limited amount for debts of a company. Unlike proprietorships and partnerships, in a limited liability company the liability of the members in respect of the company’s debts is limited. In other words, the liability of the members of a company is limited only to the extent of the face value of shares taken up by them. Therefore, where a company is limited by shares, the liability of the members on a winding-up is limited to the amount unpaid on their shares.

Free Transfer of Shares

Shares of a company limited by shares are transferable by a shareholder t any other person. The transfer is easy as compared to the transfer of interest in business run as a proprietary concern or a partnership. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.

Owning Property

A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern. The shareholders are not the owners of the company’s property. The company itself is the true owner.

Capacity to Sue & Be Sued

To sue means to institute legal proceedings against or to bring a suit in a court of law. Just as one person can bring a legal action in his/her own name against another in that person’s name, a company being an independent legal entity can sue and also be sued in its own name.

Dual Relationships

In the company form of organization it is possible for a company to make a valid and effective contract with any of tis members. It is also possible for a person to be in control of a company and at the same time be in its employment. Thus, a person can at the same time be a shareholder, creditor, director and also an employee of the company.

Borrowing Capacity

A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.

Reliability

Having a private limited company has its own advantages in getting credibility and weightage globally since the company is registered with Ministry of Corporate Affairs. Financial Institutions and Investors prefer Private Limited Company for any kind of funding and related projects

Private Limited Company Registration Process

Private Limited Company Registration in India is complete an online process. Recently the Ministry of Corporate Affairs has replaced the earlier SPICe form with a new web form called SPICe+ (SPICe Plus). Hence, Private Limited Company Registration is even easier now.

Now you can complete the Private Limited Company Registration, with a single application for Name Reservation, Incorporation, DIN Allotment, Mandatory issue of PAN, TAN, EPFO, ESIC, Profession Tax (Maharashtra), and Opening of Bank Account.

SPICe+ is divided in two parts as follows:

Part A: Apply for the Name Reservation of the company in Part A of the form Spice+. It can be used for taking the name approval of the proposed Company and also for filing Company Registration in one go.
Part B: In Part B of the Form Spice+, apply for the following services:

Incorporation
DIN (Director’s Identification Number) allotment
Mandatory issue of PAN
Mandatory issue of TAN
Mandatory issue of EPFO registration
Mandatory issue of ESIC registration
Mandatory issue of Profession Tax Registration(Maharashtra)
Mandatory Opening of Bank Account for the Company and
Allotment of GSTIN (if so applied for)

Tax Benefits of a Private Limited Company

Companies for the purpose of Income Tax include Indian companies, body corporates incorporated under the laws of a countries outside India, body corporates / institutions being assessed as companies as per the earlier laws in force, body corporates – Indian or not, incorporated or not, declared as a company by general or special order of the Board, for the period specified in such declaration/ order.

Further, Companies that are not domestic companies, are termed as foreign companies for Income Tax purposes. As we are aware, Companies, having separate legal identity being an artificial person created by law, are also included in the definition of a ‘person’ for Income Tax purposes. Such that, any provisions which is applicable to a person would be applicable to a company as well unless specifically excluded. Some of the noteworthy benefits available to companies are discussed as under:

Tax rate reduced to 25% from 30%

With effect from financial year [“FY”] 2018-19, the income tax rate stands reduced to 25% (plus applicable surcharge and cess) for domestic companies with total turnover or gross receipts not exceeding Rs. 250 crores for the year ended 31 March 2017.

Provisions of Minimum Alternate Tax [“MAT”] are made inapplicable to certain foreign companies

The provisions of MAT are made inapplicable to foreign companies that have opted for presumptive taxation. Foreign companies that are engaged in the business of shipping, air transport, oil exploration, and turnkey construction projects are benefited by this.

Transfer of certain capital assets not treated as transfer for income tax purposes

For the purpose of Income Tax, sale, relinquishment or extinguishment of rights in assets would be considered as transfer of assets. Further, any gains arising out of such transfers to a person who is transferring such capital assets, is offered to tax as capital gains. However, in order to facilitate merger of uneconomic units with financially sound Indian Companies, in the interest of increased efficiency and productivity, certain transfers are specified that are not to be treated as transfer for income tax purposes. Some of the significant transactions specified in this regard are discussed as under:

Transfer of capital asset by a parent company to its wholly owned Indian subsidiary
Transfer of capital asset by a wholly owned subsidiary company to its Indian holding company. Provided, conditions prescribed in this regard are satisfied.
Transfer of capital asset in a scheme of amalgamation by amalgamating company to Indian amalgamated company.
Transfer of capital asset in a scheme of merger by demerged company to Indian resulting company
Allotment of shares of Indian amalgamated company to the shareholders in the amalgamating company in lieu of their amalgamation
Transfer of capital assets by a private limited company or unlisted public company to a limited liability partnership [“LLP”] in course of conversion of company into LLP. However, the same would be subject to satisfaction of certain conditions prescribed in this regard.

Deduction on expense incurred in relation to setting up/ extension of a business

Any expenditure incurred by a Company for setting up of a business or for extension, is eligible to be amortised and claimed as an expense over a period of five consecutive years beginning from the year in which the business commenced/ expansion of business is completed. This enables a Company to defer the claim of expenditures incurred towards preparation of project report, feasibility report, legal charges for drafting agreements, incorporation fee etc. over a period of 5 years. However, such claim shall be restricted to 5% of capital employed by the Company.

Further, any expenditure incurred by a Company in course of amalgamation or demerger could also be amortised and claimed over a period of five consecutive years.

Deduction specific to the nature of the business of the Company

Tax incentives are generally introduced to encourage businesses to venture into certain sectors that are significant for the economic development of the nation. Any company engaged in such specified business, would be eligible for tax holiday or deduction with respect to the profits earned from such business for a period prescribed in this regard. However, it is important to note that many of such incentives introduced earlier are now in their sunset period.

Indian Companies engaged in developing, maintaining and operating infrastructure facility, conducting scientific and industrial research and development etc. are some of the companies that are benefited by this.

Deduction specific to contributions made

100% of the amount contributed, by medium other than cash, to any political party or electoral trust is allowed as a deduction to a Company for tax purposes.

Reduced rate of tax on dividends received from certain companies.

Dividends received from a foreign company wherein the Company holds 26% or more shares are subject to tax at a reduced rate of 15%. Further, the dividends received from such companies are to be reduced from dividends distributed/ payable in computation of Dividend Distribution Tax [“DDT”], which in turn reduces the DDT liability.

Insolvency resolution

Loss making companies under insolvency may carry forward and set off their losses even if there is a change in shareholding by more than 49%.

Restrictions of a Private Limited Company

One of the main disadvantages of a Private Limited Company is that it restricts the transferability of shares by its articles.
In a Private Limited Company the number of shareholders in any case cannot exceed 50.
Another disadvantage of Private Limited Company is that it cannot issue prospectus to public.

In stock exchange shares cannot be quoted.

Difference Between a Limited & Private Limited Company

Ltd and Pvt Ltd are both types of business entities that are popular in India. Both have their own advantages and disadvantages, so it is important to understand the difference between the two before deciding which one is right for your business. Ltd is short for limited liability company. This type of company is owned by shareholders who have limited liability for the debts and losses of the company. Ltd companies are required to have at least two shareholders and a maximum of fifty. Pvt Ltd is short for private limited company. This type of company is owned by a maximum of fifty shareholders. Pvt Ltd companies are not required to have a minimum number of shareholders, but most have two or more.

There are some key differences between Ltd and Pvt Ltd companies. Ltd companies must have their financial statements audited by a chartered accountant, while Pvt Ltd companies are not required to do so. Pvt Ltd companies also have more restrictions on share transfer and cannot list their shares on a stock exchange. So, which type of company is right for your business? It depends on a number of factors, including the size and structure of your business and your goals for the future. If you are unsure, it is always best to speak to a professional before making a decision. For detailed comparison visit here

Frequently Asked Questions:

What is Spice+ Process of Incorporation ?

SPICe (Simplified Proforma for Incorporating Company electronically) is the new modus operandi for Registrar Of Company works. Its a fast track registration procedure initiated by the Ministry of Corporate Affairs, enabling a single form application process of Private Limited Company Registration. The regular Private Limited Company Registration route can take up to thirty days, but with SPICe, the whole process can be closed within seven days.
WITCORP aims at rendering premium services and speedily delivering them. Therefore, the incorporation services always follow the SPICe route.

I want to start a business in App Development. What other registrations will apply to me?

Company along with GST & Trademark will be good to start with.

Apart from getting your GST registration, it would help to protect your brand by registering the trademark. If you are building any proprietary software of a unique kind or any other intellectual property, you must apply for the copyright. Our professionals can assist you with trademark and copyright registration.

Do I need to be physically present during this process?

No, your physical presence is not required during the process. Only a few signed documents emailed to us or couriered to us is sufficient for the procedure.

How can i become eligible to get benefits under the Startup India initiative?

Only the below-stated entities qualify as a “Startup” for Government schemes.

👉 Private Limited Company

👉 Registered Partnership Firm

👉 Limited Liability Partnership Further conditions are:

👉 It’s newer than five years have passed from the date of its incorporation/ registration.

👉 Turnover has been below INR 25 crore.

👉 It works towards innovation & commercialisation of new product.

👉 It is working towards the development or deployment of the service sector

👉 It has a process driven by technology or intellectual property of a new kind.

Our experts shall guide you on getting registered under the Startup India Initiative and avail the benefits.

I need to raise capital from external sources. I am considering approaching Investors. Do i get any advantage on getting registered as a private limited company over other forms?

Apart from getting your GST registration, it would help to protect your brand by registering the trademark. If you are building any proprietary software of a unique kind or any other intellectual property, you must apply for the copyright. Our professionals can assist you with trademark and copyright registration.

Is stamp duty payable during incorporation process?

Yes, the State government in which the registered office is located imposes Stamp duty charges. The charges are on MOA, AOA & INC32 form. These charges are all included with our costing for all the states. We will inform you before any commitment for the additional charges, if any.

Can an NRI also become a director in company? And what additional documents will be required to be submitted?

Yes, an NRI or foreigner can be a director in a Private Limited company. But such a person can be taken as a director only when one director is a Resident of India. Additional documents required:

👉 1. Identity Proof – Copy of Passport Copy (Appostiled by Consulate of Indian Embassy or Foreign Public Notary)
👉 2. Address Proof – Copy of Driving License or Business Visa

👉 3. Utility Bill – Bank Statement or Electricity Bills copy or Any Property Tax Payment Receipt attested by Consulate of Indian Embassy or Foreign Public Notary.

RBI approval is required for foreign capital contribution. Therefore, additional charges will be applicable for RBI approval. Our experts will advise you on the applicable charges

Limited Liability Partnership

Limited Liability Partnership Compliances & Filing

Running any business is hard. It requires money, time, and determination. Besides this, there is a lot of paperwork including registration, GST filings, and others that are cumbersome. However, our team of experts at Witcorp will help you with all legal requirements, such as filing all the mandatory forms, suggesting the right lawyer for you (if you need one), or verifying your documents. Witcorp helps you to avoid penalties for not filing the required forms on time. Let’s see about LLP compliance for India.

About This Plan

A end to end hand holding for your annual requirements is what we have in this plan. Witcorp will assist you in matters like drafting, appointing, filling and much more.

It Usually takes 5 to 7 working days.

Services Covered

Accounts Preparation & Advisory
Managing Direct & Indirect Taxation
Secretarial services of preparing board resolution, post AGM
Yearly filing of Annual Forms with ROC & ITD
Assistance in appointment of Auditor, if required

Who Should Buy

Companies want to comply to the Annual Compliance as mandated my ROC/MCA

How It’s Done

Purchase the plan
Share the documents/details as requested by us.
We shall prepare the documents as required & get signed by you.
Prepare the form as applicable & file it.

Documents Required

Bank Statement of the Company along with mentioning nature & party to whom paid or received (If not already audited & needs to be audited by us)
Shareholders & Shareholding Details of the company. (Including any transfer of shares, if any)
Bank Account Number & IFSC of All Active Bank Accounts.
Resignation Letter from Previous Auditor & Challan of Form ADT-3, if any
DSC Tokens of the Directors.
Email & Contact Number of the Company
Copy of MoA, AoA, COI
Copy of board resolution
List of shareholders with holdings
Details of board composition
Last year’s tax return
Particulars of penalties or compounding offences (if applicable)

Choose from Wide Range of Applicable Compliances Accounts Preparation

Accounts Preparation

Outsource Your Books of Account Preparation to Professionals.

GST Compliance

Let us manage your GST Compliance for a seamless experience.

TDS Compliance

TDS Filing is mandatory for a Private limited company in India.

PayRoll Compliance

Managing Payroll is more complicated than it seems.

Income Tax Filing

Every year company has to file its annual tax return to Income Tax Department.

Add Partner

Now easily add a new partner into your company hassle free.

Remove Partner

Due to any reasons you can remove or replace an existing partner.

Change Address

Moving to a new place? Do not forget to update it with ROC.

Change LLP Name

You can change your LLP's name for any reason in simple steps.

Change/Amend Agreement

Update Object or Anything in LLP Agreement.

LLP Annual Filing

File Annual ROC Forms LLP Form 11 & 8 with ROC

LLP Income Tax

File Income Tax Return for the LLP by 31st July without Audit

What are the Compliances to be Done by a LLP in India ?

Advantages of a LLP

- In an LLP, one partner is not answerable or liable for another partner’s misconduct or negligence
- The partners have the right to manage the business directly
- An LLP provides limited liability protection for the owners
- If the number of partners reduces less than 2, the sole partner can still find a new partner to fill the position
- Post incorporation, an LLP can have limitless partners
- If there is only one partner in an LLP, there is time to find a new one, without dissolution of the LLP
- It is a separate legal entity
- LLPs have assets and liabilities that are separate from that of the promoters
- An LLP can raise funds from partners, banks, and NBFCs.

All LLPs with the MCA and need a statement of accounts and annual returns for every financial year. Whether or not the LLP has done business or achieved profit filing a return is still mandatory. There are three compulsory compliances when you own an LLP.

Filing of annual returns
Books of accounts
Filing of income tax returns

In an LLP, a person should file two types of MCA annual returns every financial year. The two forms are Form 8 and Form 11.

The Structure & Key Features of a LLP

The structure and key features of an LLP are-

The structure of an LLP is a separate legal entity and enjoys perpetual succession.
Limited Liability Partnership Act, 2008 governs the LLP.
To form an LLP minimum of 2 partners are required.
Ministry of Corporate Affairs administers the working of LLP.
After LLP incorporation, it can deal with any trade or business.
The partners of an LLP are treated as an agent but are not liable for any liability caused by a partner.
The liability of the partners is limited to his stake in the capital except in the case of fraud and negligence.
The assets and liability of an LLP are separate from their partners.
LLP Agreement determines the rights and duties of the partners in an LLP. It is required to file an LLP Agreement to the ROC.

LLP Compliance Checklist

Various LLP compliances are required to be fulfilled by an LLP-

Disclosure in the account about the contribution made by each partner-As per Section 32 of the LLP Act read with sub-rule (1) of Rule 23; every LLP shall disclose in their account the contribution of each of the partner along with the nature of the contribution.
Books of Account to be preserved for a specified period-The Books of Account of an LLP are required to be preserved for a period of 8 years from the date on which the BOA is made.

The Books of Account shall be maintained by an LLP which relates to its affairs for each year of its existence. It can be on a cash basis or an accrual basis. The books of account shall be kept at its registered office.

Filing of Annual Return -As per Section 35 of the Act, every LLP is required to file an Annual Return (FORM-11) with the registrar of the LLP within 60 days from the closure of the financial year.
Filing statement of Account and Solvency-Every LLP shall file Form 8 consist of the statement of Account and Solvency. Along with the fee, within 30 days from the end of 6 months of the financial year.

The form must be certified by a chartered accountant, auditor or the accountant of the company and 2 designated partners must sign the form digitally.

Other Events Based Compliance for a One Person Company

The event-based LLP compliance includes all compliances that are liable to be followed on the occasion of an occurrence of the concerned event. Event-based hassle-free compliances are aforementioned to maintain legal comprehensiveness and avoid disputes in the course of the business.

They are:

Appointment or Resignation of a Partner;
Change in the statutory auditors;
Increase of Capital Contribution;
Change of Name of LLP;
Change in Registered Office Address
Registration/Modification of Charge
Appointment of Auditor
Statutory Audit of Accounts
ITR and Audit requirement

Why Should You Choose Witcorp?

At Witcorp, we provide you with comprehensive, hassle-free LLP compliance which would be dealt with by our professionals within a short time frame. Our team takes care of the documentation and aids in providing you with the realistic estimation of LLP Compliance costs. With a team of highly qualified professionals at your service, there is no way your one-person company compliance can go wrong.

We will stand by you and help you grow and manage your business while we take care of your tax compliances. You can always get in touch with our certified professionals at any point in time for deliberation and assistance concerning compliances throughout your journey with witcorp.

Proprietorship

Sole Proprietorship firm Registration

When a single person runs a business, such a Business is called a proprietary Business, and the company owner is named proprietor. A proprietorship is a common form of Business in India. You can start and operate the Business with minimum regulatory compliance. However, there is no complete-fledged way available to register your proprietorship by the Indian Government. Tax registration and other business registration is the right way to show your proprietary Business’s existence. Following registrations can be used to indicate the presence of your proprietary Business

→ Professional Tax Registration.

→ GST Registration.

→ Shop and Establishment Registration.

The owner of a sole proprietorship business typically signs contracts in their name because the sole proprietorship business has no separate identity under the law. The sole proprietor owner will generally have customers write checks in the owner’s name, even if the company uses a fictitious name. Sole proprietor owners can mix personal and business property and funds, something that partnerships, LLP’s, and Private Limited Companies cannot do.

Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner.

Service Covered

Session with Witcorp Expert
PAN Application (if proprietor PAN not available)
Registration under Shop & Establishment Act and GST Act
Advisory on other applicable government registrations

Who Should Buy

Service providers providing services online or offline to clients
Businesses manufacturing goods
Traders and merchants selling goods

How It’s Done

Purchase of Plan
Session with Witcorp Expert
Upload Documents on Vault
Filing of application
Receipt of Registration Certificate

Documents Required

Name, Contact Number and Email Id of Stakeholder.
Self Attested PAN, Aadhar & Passport size photo of Stakeholder.
Specimen Signatures of Stakeholder.
Latest Electricity Bill/Landline Bill of Registered Office.
NOC from owner of registered office. (If Owned)
Rent Agreement from Landlord. (If Rented/Leased)
Brief description of main business activities of the proposed Company.

Features of Proprietorship Firm

One Man Ownership

In a proprietorship, only one man is the owner of the enterprise.

No Separate Business Entity

No distinction is made between the business concern and the proprietor. Both are the same.

So Separation between Ownership and Management

In a proprietorship, management rests with the proprietor himself/herself. The proprietor is a manager also.

Unlimited Liability

Unlimited liability means that In case the enterprise incurs losses, the private property of the proprietor can also be utilized for meeting the business obligations to outside parties.

All Profits or Losses to the Proprietor

Being the sole owner of the enterprise, the proprietor enjoys all the profits earned and bean the full burnt of all losses incurred by the enterprise.

Fewer Formalities

A proprietorship business can be started- without completing many legal formalities. There are some businesses that, too, can be started simply after ‘obtaining necessary manufacturing license and permits

Characteristics of Sole Proprietorship – How does it Looks Like!

Single Ownership

A single individual always owns a sole proprietorship form of business organization. That individual owns all assets and properties of the business. Consequently, he alone bears all the risks of the business.

Thus, the business of the sole proprietor comes to an end at the will of the owner or upon his death.

No Sharing of Profit and Loss

The entire profit arising out of sole proprietorship business goes to the sole proprietor. If there is any loss, it is also to be borne by the sole proprietor alone.

Nobody else shares the profit and loss of the business with the sole proprietor.

One man’s capital

The capital required by a sole proprietorship form of business organization is arranged by the sole proprietor.

He provides it either from his resources or by borrowing from friends, relatives, banks, or other financial institutions.

One-man Control

The controlling power in a sole proprietorship business always remains with the owner.

The owner or proprietor alone takes all the decisions to run the business. Of course, he is free to consult anybody as per his liking.

Unlimited Liability

The liability of the sole proprietor is unlimited.

This implies that in case of loss, the business assets, along with the personal properties of the proprietor, shall be used to pay the business liabilities.

Less Legal Formalities

The formation and operation of a sole proprietorship form of the business organization require almost no legal formalities. It also does not require to be registered. However, for the business and depending on the nature of the business, the sole proprietorship has to have a seal.

He may be required to obtain a license from the local administration or the health department of the government, whenever necessary

Frequently Asked Questions

What is a Proprietorship?

A proprietorship/sole trading firm is a business that is owned and run by an individual person. The owner and the business are treated one and same. Proprietor is personally liable for all business debts i.e his personal property may also be used to repay business debts.

Proprietorships are not regulated by any particular Act, hence there is no registration. Every business needs registration under Shop & Establishment Act whether it is providing a service or dealing in goods. Other registrations such as GST etc depend upon nature of product/service.

What are the government fees applicable for registration under Shop and Establishment Act?

These are the government fees applicable for registration under Shop and Establishment Act. These depend on the state and the number of employees.

Andhra Pradesh

0 Employees: Rs. 30;

1 to 5 employees: Rs. 100;

6 to 10 employees: Rs. 200;

11 to 20 employees: Rs. 1000

Delhi

0 Employees: Rs. 5;

1 to 10 employees: Rs. 15;

10 to 25 employees: Rs. 30;

25 and above employees: Rs. 50

Madhya Pradesh

0 Employees: Rs.100

1 to 3 employees: Rs.150;

3 to 10 employees: Rs. 200;

More than 10 employees: Rs. 250

Maharashtra

0 employees: Rs. 100;

1 to 5 employees: Rs. 300;

6 to 10 employees: Rs. 600;

11 to 20 employees: Rs. 1000;

21 to 50 employees : Rs. 2000;

51 to 100 employees : Rs.3500;

101 or more employees: Rs. 4500

1.I need to get my business registered in multiple locations within Maharashtra. Do I need to apply separately?

If you have multiple places of businesses in same state, you can get them all registered under a single GST registration application. Give the name of your registered business place as primary place of business, the other branches can be added as additional places of business at no additional cost. There is no limit on number of branches that you can add under a single GST registration application, provided all the branches are in same State.

2.I am a sole trader. Do I need TAN registration?

TAN is Tax Deduction and Collection number which is needed if you are responsible for deducting tax at source on behalf of Income Tax Department. It is also quoted in various challans, returns etc. Not every proprietor is required to get a TAN unless it is required due to the nature of his business or profession. ClearTax expert will advise you if you need to obtain TAN.

3.Is there any guideline on choosing Proprietorship firm’s name?

The name of the firm should not contain any words which indicate the approval/support of the government unless the government has given its written consent for the use of such words as part of the firm’s name. The name of the firm can be reserved by getting trade mark registration.

4.What is the objective of the Shops & Establishments Act?

Every Indian state has enacted certain rules and regulations with regard to conditions of work. The objective is to secure uniform benefits for employees working in different establishments, from shops, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment.

5.When is a Shops and Establishments Act license required?

Every shop and establishment needs to register itself compulsorily under this Act within 30 days of commencement of work. As this is such a basic license, many other licenses require this as proof of a commercial business. For example, most banks will require you to furnish it if you want to open a current account.

6.What are the records to be maintained under the Shops and Establishment Act?

Under the Shop and Establishment Act, every business has to seek approval from Department of Labour and keep up-to-date registers regarding details of employment, fines, deductions and advances, salary and holidays. The requirements may vary from state to state. Files related to annual holidays and number of employees need to be submitted to the office of the Municipal Corporation annually

7.What is GST and GSTIN?

Goods and Services Tax(GST) is a comprehensive tax levied on manufacture, trade and services across India. From 1st July, 2017 GST has replaced most of Centre and State imposed indirect taxes like VAT, Service Tax , Excise etc. Goods and Services Tax Identification Number (GSTIN) is a 15 digits state-wise PAN-based number to be used to identify businesses registered under GST.

Indian Subsidiary

Legal Entity (Foreign Subsidiary)Registration In India

Are you planning to grow your business beyond boundaries? Planning to start your legal entity in India? Our experts can help you with this process for hassle-free incorporation, no matter what your requirements may be. Few major things that you will need to even to start are:

→ Choosing the Right Form of Legal Entity to Start With

→ Resident Indian Director

→ Registered Office Address in India

→ Authorised Representative for various Tax Registrations & Licenses in India

→ Professional Guidance through out the process

At Witcorp we can proudly say that we have helped 100’s of Legal Entities launched in India and have been guiding them to success throughout from all over the globe. Let’s get into more details so that you can be the next one 🙂

Service Covered

Pre Incorporation Advisory and Consultation for Choosing right form of Legal Entity.

Incorporation of Legal Entity in India.

Post Incorporation Support

Assistance in Bank Account Opening

Resident Director Services

Registered Office Address

Support in Operations and Compliances

Who Should Buy

Businesses or Individuals aiming to work globally or with reputed clients in India

How It’s Done

DSC Application

Name approval form filing

Preparation of Incorporation Documents

Getting those docs signed by the respective stakeholders

Filing of e-Forms with ROC

Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.

Documents Required

Name, Contact Number and Email Id of all the Stakeholders.

Apostiled ID & Address Proof of Foreign/NRI Stakeholder.

Latest Month Personal Bank Statement of the Stakeholders.

Few Proposed Business Names along with Objects.

Latest Electricity Bill/Landline Bill of Registered Office.

Rent Agreement from Landlord. (If Rented/Leased)

Brief description of main business activities of the proposed Company.

Shareholding Ratio, Authorised & Paid Up Share Capital of the Company.

Requisites for Legal Entity Registration in India

Resident Indian Director

A Resident Indian Director is an essential requirement for establishing a legal entity in India in accordance with current regulations. If you don't have one, don't worry – we have a solution for you. Our services include the provision of a Qualified Resident Indian Director for both the incorporation process and potential management of your operations after the entity is established.

Registered Address in India

Chartered Accountant

Professional Guidance

Witcorp is a one stop solution for all your Financial & Taxation Requirements Globally, therefore we shall provide you with everything which may be needed to launch your legal entity in India in a hassle free manner. Let’s schedule a virtual meet to discuss this through and get you started without wasting anymore time because “Time is Money”

Procedure for Foreign Subsidiary Company Registration in India:

Step 1: Selecting the Type of Legal Entity to Incorporate

According to FEMA guidelines, Foreign Direct Investment (FDI) is not allowed in the case of Proprietorship, Partnership FirmandOne Person Company. Though investment in LLP’s is allowed, it requires prior approval of the RBI. Hence, the easiest and Fastest Way to incorporate subsidiary of foreign company in India by NRI’s and Foreign Nationals/Entities is through the incorporation of a Private Limited Company

Step 2: Minimum Requirements to Incorporate a Legal Entity in India

Directors: Minimum two directors are required to incorporate a Private Company in India. Both should be individuals and at-least one of whom should be a resident of India. (A resident of India is a person who has stayed in India for at-least 182 days in the previous year).

Shareholders: Companies Act, 2013 requires that a Private Limited Company have a minimum of two shareholders. There is no condition for residential status of shareholders. Shareholders can be either individuals or entities or a combination of both.

Step 3 : Name Approval for proposed Legal Entity

Selecting a unique and acceptable name for the proposed Company is one of the important steps in the whole Incorporation process. The name should be in consonance with the Object of the Company and should not be identical to existing entities or Undesirable by Law. For Name Approval we need to file a form called RUN (Reserve Unique Name) for incorporating subsidiary of foreign company in India. Check out these Name Guidelines

Step 4 : Apostilling & Notary of Documents of Foreign/NRI Stakeholder

Apostilisation & Notarising of the documents of Foreign National is a must for verifying them as per International Standards which makes them acceptable in any foreign country including India to be legally acceptable. In easy language you need to visit Indian Embassy in your country with Self Attested Photo Copy of your Identity and Address Proof as required for Incorporation along with Original to get the signed and stamped by the Official in your physical presence. This process is now online as well and can be done through Notary Agents virtually.Along with Foreign National’s Address & ID Proof, few documents such as Memorandum of Association, Articles of Association, INC 9, DIR 2 etc shall be prepared by us which also has to be Apostiled, in case the Foreign National is not visiting India on Business Visa for Incorporating the legal entity.

Step 5 : Applying for Digital Signature Token (DSC’s)

The next step towards incorporating legal entity in India is applying for the DSC (Digital Signature Certificate) of the Directors. The primary documents required for obtaining the DIN and DSC are as under:

For Foreign National:

Passport Copy
Business Visa
Utility Bill (Bank Copy, Driving License, Electricity Bill)
Passport size Photograph
Phone Number & Email Address

– If their passport or Visa be in any other language other than english, than in that case it must be transcripted and english; that transcripted copy along with the original must also be apostilled by the Indian Embassy in their country (If they are not in India).

– All the documents for foreign citizens should be apostilled by the Indian Embassy in their country (If they are not in India).

– All the documents for foreign citizens should be apostilled by their own country’s Embassy in India (If they are in India).

Step 6: Application for Incorporation

This is the most vital step in the Incorporation of Legal Entity in India. It requires filing of the Memorandum and Articles of Association of the Company digitally along with various other documents duly executed by the proposed directors and shareholders.

List of Incorporation documents to be executed:

👉 Subscriber sheet of Articles of Association

👉 Subscriber sheet of Memorandum of Association

👉 Declaration by Director in form DIR 2

👉 Declaration of Director in Form INC 9

Generally, the incorporation documents are required to be self-attested by Indian Nationals. However, in case of Foreign Nationals, the process is as under for Incorporation:

In the documents are signed outside India, then the same have to be notarised by a Public notary of the residence country and consularized or apostiled by the competent authority, as the case may be. If the documents are signed in India, then copy of Business Visa and stamped passport, proving his/her presence in India at the time of signing is required.

If the subscriber is a foreign entity, then the Incorporation documents should be signed by the representative of the foreign entity. An Authorisation Letter duly stating the name of the Authorized Person and the number of shares subscribed should be notarised, consularized or apostiled, as the case may be in the home country of the subscriber company. Once the Incorporation application is approved, the Registrar would issue a Certificate with a Corporate Identification Number (CIN). The PAN and TAN of the Company would also be allotted simultaneously.

Step 7: Mandatory Post Incorporation Compliances

Once the legal entity is incorporated there are list of mandatory compliances to be done on immediate basis:

Adopting Rubber Stamp, letter heads, Stamps, Name Board, Sign Board, minutes sheets, Binders etc. and affix Board outside the Registered office as per Sec- 12(3)(c).

Opening of Current Account for the Legal Entity in India

Receipt of Share Subscription Amount

Submission of ‘Commencement of Business Form’ with RBI/ MCA in Form INC 20A with MCA

Appointment of Auditor and related filling of documents with MCA

Creation of “Entity User” and “Business User” with RBI

Allotment of Shares to Subscriber and Issue of Share Certificates

Facilitate payment of relevant stamp duty for issuance of share certificate

Issuance of Company Secretary Certificate under FEMA

Submission of Form FCGPR with RBI and related formalities like FIRC issuance, etc

Additional Compliances for being a Foreign Entity

A two-stage reporting procedure is to be followed when a company is raising funds from a foreign investor:

👉 On receipt of funds: The Company has to provide details in an “Advance Reporting Form” to the RBI within 30 days of receiving funds from foreign investor(s).

👉 The company has to issue shares within 180 days from the date of receiving funds.

👉 On allotment of shares: The company has to report in specified form (FC-GPR) to the RBI, within 30 days from the date of issue of shares along with:

– A Certificate from the Company Secretary certifying that the company has complied with the procedure for issue of shares as laid down under the Foreign Direct Investment (FDI) Scheme, and,

– A Certificate from a Chartered Accountant indicating the manner of arriving at the price of the shares issued to the foreign investors. Apart from the above, Annual return on Foreign Liabilities and Assets is required to be submitted reporting all the investments received during the year.

Q.What are the Foreign Company Compliance in India?

Foreign Subsidiary Company Registered in India are required to maintain various additional compliance under the Companies Act, 2013.

Form FC-1

Foreign Subsidiary Companies registered in India are required to file Form FC-1 within a period of thirty days of the establishment of its place of business in India. The application must be supported with an attested copy of approval from the Reserve Bank of India under the terms of Foreign Exchange Management Act or Regulations, and too from other regulators, if any, sanction is necessary.

Financial Statements

All foreign companies registered in India are required to organise financial statement of its Indian business operations in an agreement with Schedule III of the Companies Act, 2013. Thus foreign companies are required to furnish the following information/statements together with the financial statements of the company to be filed with the Registrar of Companies:

Statement of Associated Party Transaction

Statement of transfer of funds (including dividends if any) which shall, in the relation of any fund transfer between the place of business of the foreign company in India and any other related party of the foreign company

Statement of repatriation of profits

The documents that are referred to above in this rule must be delivered to the Registrar of Companies within a period of six months from the end of the financial year of the foreign company.

Audit of Accounts of Foreign Company

All foreign companies must get its accounts, pertaining to the Indian business operations organised in agreement with the necessities of clause (a) of sub-section (1) of section 381 and rule 4 and audited by a practicing Chartered Accountant in India.

Form FC-3

All foreign companies are required to file with the Registrar of Companies, Form FC-3 detailing the list of places of business of the foreign company along with the financial statements of the company.

Annual Returns

The foreign subsidiaries company registered in India must prepare and file the annual return of the company in Form FC-4 within a period of sixty days from the final day of its financial year. Any document which should be delivered from a foreign company can be delivered to the Registrar of Companies with jurisdiction over New Delhi.

Authentication of translated documents

All foreign subsidiary companies registered in India must get its accounts, pertaining to the Indian business operations organised in agreement with the necessities of clause (a) of sub-section (1) of section 381 and rule 4 and audited by a practicing Chartered Accountant in India.

Frequently Asked Questions

Q. How many directors are required to register a Foreign Subsidiary company?

Minimum of 2 directors are required to register a private limited company. Out of which one director who has stayed in India for total period of not less than 182 days in the previous calendar year (Indian resident).

Q. How long will it takes for the entire registration process to complete?

It depends on the documents provided by you and the Registrar of Companies approval process. It normally takes about 7 to 10 working days.

Q. Should there be a registered office address in India?

In order to register the company, you need to provide us with a local address proof i.e. Proper electricity Bill where the company is proposed to be registered. We would also need a Valid rent agreement or No Objection Letter from the owner of the premise.

Q. Will i get a legal representative also to run and manage that Foreign Subsidiary company?

Absolutely, you will have your representative of choice, who will act as a representative of yours.

Q. Who can be the promoter/shareholder of the wholly owned subsidiary?

There must be a minimum of 2 shareholders to incorporate the company.

Q. Do I have to submit physical documents?

Yes. You can either visit our office during working hours or send the documents via courier to our office.

Q. Will you also help in regulatory compliance?

Yes, Team Witcorp will also assist you with accounting, tax filing and regulatory compliance. The fee for these services depends on the requirements and is on case to case basis.

Q. Can you arrange some sort of address to register a Foreign Subsidiary company?

Yes, of course! At Witcorp we have fully functional Plug & Play Co working office located in Heart of Delhi. Most of our clients boast of a Multi City presence on the basis of Our Virtual office. Here you will get a dedicated receptionist, who will answer to every call that you will get, will receive the mails and parcels from banks and other agencies. will arrange a board room and a conference room , if you or any of the executive plan to drop by sometime

Witcorp India Advisors LLP