Incorporation of companies

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G. Priyanga Altacit Global INCORPORATION OF COMPANY

Transcript of Incorporation of companies

Page 1: Incorporation of companies

G. PriyangaAltacit Global

INCORPORATION OF COMPANY

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TYPES OF BUSINESS ENTITY

Sole Proprietorship

Partnership

COMPANY

Charitable organization

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SOLE-PROPRIETORSHIPSOLE-PROPRIETORSHIP PARTNERSHIPPARTNERSHIP

1. No registration required

2. Unlimited liability

3. Used for small business or by professionals

4. No separate legal entity

1. Registration not compulsory.

2. Two types:a. Limited liabilityb. Unlimited liability

3. Sharing of profits by those agreed upon.

4. Governed by Indian Partnership Act.

BUSINESS ENTITY

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Company- Derived from a LATIN word “COM”=“WITH” or “TOGETHER”; “PANIES=

BREAD”

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COMPANY

“An association of persons who took their meals together” Legal Formation An Artificial person Has a separate legal entity Has a Perpetual Succession Company seal Common capital with transferable shares Carries limited liability Democratic management

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INCORPORATION

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Description Private Limited Public Limited

Definition Which by its article restricts:

1. Number of members to 50

2. Transfer of shares3. Invitation of public to

subscribe its debentures, shares etc.

4. Acceptance of deposits from person other than the shareholders and directors.

Which is not private

Governing Laws

Companies Act, 1956 Companies Act, 1956, SEBI Act, 1992

Incorporation time

2-3 weeks 2-3 weeks

Minimum no. of shareholders

2 7

Maximum no. of Shareholders

50 (exclusive of employees and ex-employees)

Unlimited

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Description Private Limited Public LimitedMinimum no. of directors

2 3

Minimum paid up capital

INR 100000 INR 500000

Transferability of shares

Restricted Free to transfer the shares. If the company is listed then through Stock exchange.

Foreign Directors Yes YesAppointment of Whole time director(WTD)/ Managing director(WTMD)

Not compulsory and no restriction on appointment

Appointment:1.Not compulsory if paid up capital < 5 Cr.2.Compulsory if paid up capital =>5 Cr.

Foreigner as WTMD/WTD

No restriction With the approval of Central Government

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Procedure for Incorporating a Company

STAGE I: PRE REGISTRATION PROCEDURE Obtain a DIN-Director Identification Number.

DSC-Digital Signature Certificate.

STAGE II: NAME AVAILABILITY Name approval.

STAGE III: DOCUMENTATION Preparation of Memorandum & Articles of Association

Vetting of Memorandum & Articles, Printing, Stamping & Signing

STAGE IV: FILING & REGISTRATION Form 1 (Declaration) Form 32 (Details of Directors) Form 18 (Details of Registered Office of the company).

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OTHER COMPANY’S

Section 25 Companies. Companies deemed to be public limited. Holding and subsidiary companies. Government companies. Foreign Companies.

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How a Foreign Company can enter into India?

Liaison Office Project Office Unincorporated entity Branch Office

Wholly owned subsidiary

Incorporated entity

Joint Venture

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FOREIGN COMPANY

A foreign company planning to set up business operations in India has the following options:

•Investment under automatic route; and No prior approval is required for FDI under the Automatic Route. Only information to the RBI within 30days of inward remittances or issue of shares to Non Residents is required.

•Investment through prior approval of Government.

Foreign Investment proposed not covered under the ‘Automatic Route’ are considered for Governmental Approval on the recommendations of the Foreign Investment Promotion Board (FIPB).

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Automatic route for which foreign investment is not available

Banking NBFC's Activities in Financial Services Sector Civil Aviation Petroleum Including Exploration/Refinery/Marketing Housing & Real Estate Development Sector for

Investment from Persons other than NRIs/OCBs. Venture Capital Fund and Venture Capital Company Investing Companies in Infrastructure & Service

Sector Atomic Energy & Related Projects Defense and Strategic Industries Print Media Broadcasting Postal Services

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FDI is Prohibited in

• Retail Trading• Atomic Energy• Lottery Business• Gambling and Betting• Housing and Real Estate business• Agriculture (excluding Floriculture, Horticulture,

Development of seeds, Animal Husbandry, Pisiculture and Cultivation of vegetables, mushrooms etc. under controlled conditions and services related to agro and allied sectors) and Plantations (Other than Tea plantations)

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THANK YOU