Category - Incorporation Services

ADVANTAGES OF STARTING BUSINESS IN INDIA BY FOREIGNER:

INDIA Today is the consider to be one of the main forces in the global economic markets the majority of the world’s leading developed nations keep to have expand their business in India. If you are thinking to where to starts the business then look no further than India. If for nothing else, do so because of its large populations. According to IMF, India is one of the emerging economics leading the worlds output by the 5.9% which is double of the US at 2.5%.

Why starts business in India?

1. INDIA IS THE EMERGING ECONOMY:

In terms of GDP, India is seventh in the world and third in PPP. It also has the largest growing economy, which has attracted several global enterprises. India’s growing economy affords investors not only a large young population but also a strong export sector. India’s potential consumer base is more than that of most developed and developing nations. The median age in India is 25.10% which is better when compared to that of the United States that is 36.9%

2. ORGANISED EMPLOYABILITY: 

Employability is undoubtedly the deciding factor for any business starting operations in a new market. India boasts of a labour force of nearly 530 million, of which the majority is under 30 years of age. The proportion of the Indian population in the working age group (18-59 years) is likely to reach more than 64 per cent by 2021. In fact, the median age in India is 27.6 years, compared to the U.S.’s 37.9, which means that more years of service are available in the Indian market. Further, the aspirations of the Indian youth have changed.

3. AVALABILITY OF PROPER STARTUP ECOSYSTEM:

For any new organisation, the business culture of the economy is very important. Introducing a differentiating aspect in the business idea can be tough, but it differs globally. India is a hub for certain kinds of start-ups, including technology, e-commerce, and financial services. The fact that the Indian market is open to accepting new business ideas makes it easier for new businesses to enter it. Of course, you need to ensure that you have the right strategy as that can guide you through the tough times, as well.

4. BUSINESS-FRIENDLY LAWS:

Additionally, the Indian government’s Make in India initiative focuses on 25 industrial sectors and aims at building best-in-class manufacturing infrastructure by enabling foreign investments, promoting innovation through skill development, and focusing on intellectual property protection. These business-friendly laws make it easy for international players to actualise their plans of entering India. On implementation, these Bills will increase the efficiency in the movement of products across India. But, the most important law is the Land Acquisition Bill that promotes the twin objectives of social justice and industrial development in the country.

5.GOVERNMENT’S ROLE IN INDIA:

The government of India has taken several initiatives to attract foreign investments in India’s diverse sectors. It has announced a number of attractive schemes and policies from time to time to lure investments. The individual ministries of different industries have made special attempts to ease the rules and regulations related to foreign investment in the industry.

LIST OF GOVERNMENT AGENCIES FOR STARTING BUSINESS IN INDIA:

  • Ministry of Corporate Affairs-: They are in charge of regulating corporate affairs in India through the Companies Act and other allied Acts, Bills and Rules Registrar of Companies-: The Registrar of Companies in India is the official agency that carries out the administration of Companies Act. It is through them you can check if a company name is registered already.
  • Income Tax Department-: It ensures that tax is collected on income and checked via PAN card.
  • Professional Tax Office-: This is a tax levy by the state government.
  • Employees Provident Fund organization-: This is created and managed by the Central Government Trust, and oversees the contributions of both employers and employees towards a purse for the well-being of the employee throughout his tenure with the business.

TOP 5 BEST CITIES TO STARTS BUSINESS IN INDIA

India has one of the fastest growing economies in the world with cutting edge technology as well as disruptive innovation. If your aim is to start a business in India, then you should be guided on the best cities in which will give your business the success it deserves. Here is a list of top 5 best cities to do business in India:

  • Bengaluru
  • Gurgaon, National Capital Region near New Delhi
  • Hyderabad
  • Delhi
  • Mumbai.

CONCLUSION: Starting business operations in new markets is not a decision to take lightly. You need to give a lot of consideration to this move because it can easily go wrong and businesses can be compelled to incur grave losses. Because of its several advantages, foreign businesses can clearly take advantage of what the Indian economy has to offer, in order to execute growth and expansion strategies.

PROCEDURE AND REGULATIONS FOR THE APPOINTMENT OF ADDITIONAL DIRECTORS (UNDER COMPANIES ACT 2013)

Under the Companies Act 2013, every director is appointed by the members of the company, but appointment of Additional Directors is the exceptions to this:

Under Section 161(1) board of directors have the power to appoint any person other than a person who fails to get appointed as director in a general meeting, as an additional director at any time .such director shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.

PROCCEDURE OF THE APPOINTMENT OF ADDITIONAL DIRECTORS:

  1. Make the application for the DIN U/S 153 by filling e-form DIR -3 with the following documents:

      Form DIR-2 section 152(5) consent to act as the director.

      Form MBP1 SEC 184(1) -discloser of the interest.

      Form DIR 8 SEC 152(4)-Qualified to become a director.

2. Hold Board meeting and pass board resolutions for the appointment of the additional director u/s 161(1)

3. Filling of E-form DIR-12 by the company with the registrar within 30 days of passing of board resolutions.

PROCEDURE TO MAKE THE ADDITIONAL DIRECTORE AS A NORMAL DIRECTOR:

1. Hold board meeting for calling AGM and dispatch detailed statement with notice of AGM to the members .

2.  Pass the ordinary resolutions for the appointment as director in the general meeting .

3. After filling the E FORM DIR 12 with the registrar for the intimation of change in designation from, Additional Director to the Director of the company.

4. maximum number of the additional  directors and  Power to appoint shall be fixed in the AOA .      

5. Power of the additional director is same of normal director

REQUIRMENT OF THE FORMS:

1. E-form DIR 3 application for allotment of din

2. DIR 2 consent to act as director

3. DIR-8 not disqualified to appoint as director

4. MBP 1 discloser of interest .

5.  e-form dir 12 :particulars of appointment of directors.

RELATED SECTIONS [161(1) ,152,153,Schedule I, Table F, Under The Companies Act 2019

Distinction Between Private Limited Company and LLP

Understand the Difference Between Pvt. Ltd. Company and LLP before taking decision to start Business.

When we plan to start business than so many form of business form are available and private limited company and Limited liability partnership (LLP) are the most popular form of business structure among others.

Before selecting the proper structure, first we should understand our requirement, scalability of business, control over business, funding and finance etc. because there are some benefit and limitation in both form of business structure which has been differentiate in below table.   

The Concept of Corporate Structure is years old but LLP is relatively a new concept.

The Present structure of LLP’s and Companies in India are governed by the LLP Act, 2008 and Companies Act, 2013 respectively. One the other side the traditional form of Partnerships and Company Structure is not suitable for everyone because they have their own limitations. The Companies Act, 2013 repealed the erstwhile Companies Act, 1956 to remove the inefficiencies of the later up to certain extent.

The company business structure is old and traditional and used extensively on the other side LLP id new concept and introduce in India first time in 2008 to provide flexibility to entrepreneurs to operate as a traditional partnership at the same time providing the benefits of a Corporate form which is already tried and tested by some advanced countries like UK, USA, etc.

The Table below shows the difference Between the two forms of Business Structure:

S. No Points of Distinction Pvt Ltd Company LLP
1 Regulating Act Companies Act, 2013 Limited Liability Partnership Act, 2008
2 Name Style Pvt Ltd/ Private Limited LLP/Limited Liability Partnership
3 Structure Type Plain Hybrid (Partnership + Company)
4 Liability of Owners Limited Liability Limited Liability
5 Entity Separate Legal Entity Separate Legal Entity
6 Type of Ownership Equity Share Holders Partners
7 Form of Owners Funding Share Capital Partners Contribution
8 Management Structure Directors Collectively referred as Board of Directors Partners and Designated Partners manages the LLP and Designated Partners are additionally responsible for regulatory compliances.
9 Charter Documents Articles and Memorandum of Association (MOA & AOA) LLP Agreement
10 Bank Funding More possibility to raise funds from Banks and others compare to LLP. Possible due to Separate Legal Status
11 Minimum  Members 2 2
12 Maximum Members 200 No Limit
13 Minimum Directors 2 Not Applicable
14 Maximum Directors 15 unless increased. Not Applicable
15 ROC Compliances More Compliances over LLP Lesser as Compared to Pvt Company
16 Statutory Audit Mandatory, even if no turnover Only if Partners Contribution exceeds INR 25 lacs or Turnover Exceeds INR 40 Lacs in any Financial Year
17 Tax Compliances More Complex as far as procedural requirement is concerned for tax rates kindly refer Income Tax. Simple Procedure as Compared to Company and for tax rates refer Income Tax.
18 Goodwill Enjoys more goodwill over LLP because a Company has more powers. Less as Compared to Pvt Company but overall good image over traditional partnership. Rather many MNCs are operating as LLP.
19 Registration Compliance More registration requirement Simple as compared to Pvt Company
20 Conversion Can be Converted to LLP Can be Converted to Company
21 Liquidation Only though Legal Process the death of Shareholders doesn’t impact the existence. Same and the death of partners doesn’t impact the existence.
22 Recommended for Comparatively more Capital Intensive Businesses. Less Capital Intensive preferably for Service Sector or small entrepreneurs.

Above text surely give better understanding for distinction between a traditional Corporate Pvt Ltd Company and a Modern LLP form of Business.

We are team of make my filing help you to choose best business structure to fit your future requirement and to fulfill your business goal so fell free to contact us.