G. PriyangaAltacit Global
INCORPORATION OF COMPANY
TYPES OF BUSINESS ENTITY
Sole Proprietorship
Partnership
COMPANY
Charitable organization
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
Company- Derived from a LATIN word “COM”=“WITH” or “TOGETHER”; “PANIES=
BREAD”
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
INCORPORATION
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
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
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).
OTHER COMPANY’S
Section 25 Companies. Companies deemed to be public limited. Holding and subsidiary companies. Government companies. Foreign Companies.
How a Foreign Company can enter into India?
Liaison Office Project Office Unincorporated entity Branch Office
Wholly owned subsidiary
Incorporated entity
Joint Venture
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).
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
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)
THANK YOU
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