Companies incorporated or registered in India are governed by the Companies Act 2013.
Shareholders and Directors
There is no need to appoint local director to incorporate a company in India. Foreign nationals can incorporate company in India and hold foreign equity to the extent of 100%, which is dependent upon sector in which company will operate and is subject to approval from either Reserve Bank of India (RBI) or Foreign Investment Promotion Board (FIPB).
Memorandum & Article of Association
The Memorandum of Association states the main, ancillary / subsidiary and other objects of the proposed company. The Article of Association contains the rules and procedures for the routine conduct of the proposed company. It also states the authorized share capital of the proposed company and the names of its first / permanent directors. After that Memorandum of Association and Article of Association are required to be stamped. A stamp duty is required to be paid on Memorandum of Association and Article of Association. The stamp duty depends on the authorized share capital.
Shares must be expressed in a fixed amount. “No par value” or “bearer” shares are not permitted. Shares to be subscribed must be expressed in Indian rupees.
Accounts & Auditors
Every company is required to appoint an auditor each year at its AGM. An auditor must be qualified by virtue of the Institute of Chartered Accountants of India Act 1949 and completely independent of the company. Audited accounts of the company serve as tool for various stakeholders like creditors, bankers, investors and revenue authorities.
All Indian registered companies are legally required to have a registered office address in India. It is the address of a company to which all official letters and reminders will be sent. The registered company address must be in a state in which company is registered. The company registered address must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly. If a company changes its registered office address after incorporation, the new address must be notified to registrar of Companies in Form 18 within 30 days of its change.
If required, we can provide a registered Indian address for your company. This service is particularly useful for companies, such as those being run from home or companies owned by foreigners which will take time to settle down in India, where a separate address for service of routine paperwork from authorities such as Registrar of Companies and the Income Tax Department may be required for various reasons. We would emphasize that the facility is intended solely as an address for service of routine mail only and must not be used as a trading address.
A Virtual registered office is ideal for
- Having a requirement to hold meetings in the city but no requirement for a full time office.
- People who often travel and therefore do not have the need for physical office space.
- Individuals that work from home but require a city identity.
- Those who require an office identity but do not have the budget for a physical office.
- New business start-ups who wish to test a new market and cannot yet justify the cost of setting up a permanent office.