Company Incorporation in India by Non-Indian Nationals: Requirements, Documentation and Process

Company Incorporation in India by Non-Indian Nationals

Company Registration in India is regulated by the Companies Act, 2013 and Rules made there under and is administered by the Ministry of Corporate Affairs (MCA - www.mca.gov.in ) through offices of the Registrar of Companies (ROC) in each state.

A. Pre-Requisites for Incorporation of a Private Limited Company

1. SHAREHOLDERS

Shareholders / Members are the persons holding shares in a company. To register a Private Company, there should be a minimum of Two (2) shareholders. The first shareholder should submit copies of their identity and address proof and shall have to execute documents such as the Memorandum and Articles of Association and other related documents for registering the Company.

In case of a Body Corporate is proposed to be the shareholders of the new Company, a formal authorisation from the body corporate is required in favour of a person for the execution of documents on its behalf.

2. DIRECTORS

Directors of company are responsible for the management of the company affairs and legal compliance under various laws. Directors are normally appointed by shareholders. Indian company laws specify that only an individual can be appointed as a director of a company. Where a new company is registered by two or more existing Body Corporates, the body corporate can nominate individuals as directors of the new company.

A Private Company should have a minimum of two directors and One of the directors must be a Resident in India (A person who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year.)

In the process of incorporation, every director of the company shall be allotted with identification number called Director Identification Number (DIN).

3. DIGITAL SIGNATURE CERTIFICATE (DSC)

All the shareholders / representatives must have a valid Digital Signature Certificate (DSC) issued by a Certifying Authority in India.

Digital signature certificates are used by programs on the Internet and local machines to confirm the identity of a third party.

Digital signatures have often confused with scanned copies of a physical written signature, which do not have any legal backing for authentication of electronic documents.

4. COMPANY NAME

A. Company Name Guidelines

The name of a Private Limited company shall end with the words 'Private Limited'. Proposed Company Name shall comply with the Company Name Availability Guidelines under Companies Act 2013

There are TWO ways for reserving a name for a New Company.

1) RUN Name Reservation

RUN (Reserve Unique Name) is an easy and web-based application for reservation of a Company Name. The name approved under RUN Process is valid for a period of 20 days from the date of approval.

2) Name Reservation along with incorporation

The Company name can be reserved through SPICe (Simplified Proforma for Incorporating Company Electronically) incorporation process.

B. Use of Foreign Company Name / Trademark

If the proposed company is going to use the name / trademark of the Foreign body corporate, required No-Objection letters by way of board resolutions / formal authorisation has to be submitted to the Registrar along with other documents.

5. SHARE CAPITAL

There is no minimum capital (Authorised or Paid up Capital) requirement for registering a company. However, the registration fee payable to the Registrar of companies depends on the different slabs of Authorised capital of the company.

6. REGISTERED OFFICE ADDRESS

At the time of registration of a new Company, there are Two options to record the Registered Office Address:

1) Temporary Address:

Any address of Promoters / Directors can be used as Temporary Registered Office for Registration and within 15 days of registration, the company must have a permanent address and the same to be informed to the Registrar of Companies within 30 days of Company Registration.

2) Permanent Address:

Use a Permanent Address for the Company at the time of Registration itself and in this case, there is no filing required after the Registration of the Company.

B. Documentation for Company Incorporation

1. Documents Required and Execution

(a) Documents Required From Directors And Shareholder

Important Notes for Documents - (a)

• Telephone Bill / Mobile Bill/Electricity Bill / Bank Account Statement must be in the name of applicant and should not be older than 2 months.
• In case of documents that are in languages other than English, it should be translated to English with the help of a professional translator, carrying his details (name, signature, address, and seal
• These documents must be Self Attested by the document owner and has to be Notarized by the Public Notary and to be Apostilled / attested by the Indian Embassy of the Country of residence of the document owner.

(b) Execution of Documents by Directors

1) Consent to Act as Director: Form DIR-2

2) Declaration on Permanent Account Number (PAN)

3) Declaration / Details for Director Identification Number (DIN)

(c) Execution of Documents by Shareholders

4) Application for Digital Signature Certificate (DSC)

5) Affidavit by Subscribers & Director: INC-9

6) Company Incorporation Documents

a) Memorandum of Association - MOA

b) Articles of Association – AOA

Important Notes for Documents - (b)& (c)

These documents must be executed and to be Notarized by the Public Notary and to be Apostilled / attested by the Indian Embassy of the Country of residence of the document owner.

(d) Documents Required from Foreign Body Corporate

7) Authorisation for execution to an individual for execution of Company Incorporation Documents

8) Board Resolution / formal authorisation for use of name of Foreign Body Corporate

9) Board Resolution / formal authorisation for use of Trademark of Foreign Body Corporate

(e) Registered Office Address

The following document are required to support the Permanent Address at the time of registration or to file Permanent Address within 30 days of Incorporation.

1) Address Proof:

a) Electricity Bill, Telephone Bill (Fixed Line Only) or Gas Bill (not older than 2 months) in the name of the Owner of Address

b) Tax Paid Receipt or Copy of Registered Sale Deed

2) No-Objection

A letter of no-objection from the Owner of Address to use the address as Registered office of the Company.

C. Process of Company Incorporation

1. Preparation and Filing of e-Forms with MCA: Simplified Proforma for Incorporating Company Electronically (SPICe)

Incorporation Filing process is an integrated single point application for Reservation of Company Name, Allotment of DIN for Directors and Incorporation of a New Company along with allotment of Permanent Account Number (PAN) and Tax Collection and Deduction Number (TAN) to the New Company.

Company Incorporation Process consists of preparation and filing of the flowing E-Forms:

1. e-Form INC-32 - Simplified Proforma for Incorporating Company Electronically (SPICe)

2. e-Form INC-33: e-Memorandum of Association (SPICe MoA)

3. e-Form INC-34: e-Articles of Association (SPICe AoA)

All the documents executed / notarised / attested as detailed in Sl.No. above has to be attached to the e-Form INC-32 / 33/ 34 and the e-Forms has to be digitally signed with the Digital Signature Certificate (DSC) of the proposed shareholders / representatives.

2. Processing of e-Forms by the office of Central Registrar of Companies:

After successful processing of incorporation forms, the Central Registrar of Companies issues the following:

1. Company Incorporation Certificate

2. DIN for Directors

3. Permanent Account Number (PAN)

4. Tax Collection and Deduction Number (TAN) to the New Company.