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Why Incorporate a Company in India?

Company incorporation has come a long way in India since the Companies Act of 1956. More so, after the Companies Act, 2013, which marked a significant landmark with the easing of processes of setting up and registering a company in India.

With this and other initiatives by the Indian Government put in place over the last five years, the country is now ranked 63rd in the World Bank’s Ease of Doing Business rankings 2020. According to the World Bank, the country is now moving closer to international best practices. Notably, India jumped from 142nd place in 2014 to 63rd place in 2020.

While improved access to funding and mentorship are obvious benefits, catering to one of the world’s largest middle-class of almost 350 million with increasing disposable incomes, are major attractions of why domestic and foreign entrepreneurs as well as foreign companies, should seriously consider registering their company in India.


What Are the Types of Business Entities in India?

Planning for your new business set-up? Before registration, it helps to understand the different types of business entities permitted in India.

1. Sole-Proprietorship

Here, one person owns all the assets of the business and reports revenues from this business along with this person’s income tax return. Importantly, no legal formalities are required to establish this type of business entity other than appropriate licensing and business name registration if it differs from the sole-proprietorship.

2. One Person Company (OPC)

Introduced by the Act in 2013, an OPC means a company with only one person as a member. Here, the shareholder can make only one nominee, who shall become a shareholder in case of death/incapacity of the original shareholder. In essence, the OPC structure enables a sole-proprietor to carry on his work while being part of the corporate framework.

3. Public Limited Company

This type of business entity in India has – minimum of seven shareholders with the transfer of shares not restricted under shareholders’ rights and has to publish a prospectus in case of public issue.

4. Partnership Firm

The Indian Partnership Act, 1932 governs these firms in the stated country. The maximum number of partners in a partnership firm should not be more than 100, with profits and losses shared in manner agreed in the partnership deed. These deeds are created and registered when establishing the firm.

5. Limited Liability Partnership (LLP)

This structure was introduced in India by the Limited Liability Partnership act, 2008. It provides the benefits of limited liability of a company, while allowing the flexibility of organizing the internal management of the company based on a mutually-agreed agreement like in a partnership firm.

6. Private Limited Company (PLC)

This is the most common type of business entity in India. It has the following key requirements:

  • Minimum of 2 Shareholders*
  • Minimum of 2 Directors**
  • 1 Corporate Secretary
  • Rs 1 Minimum Paid-Up Capital
  • Local Registered Address

*100% foreign shareholdings allowed
**Mandatory to have one resident director

Step 1 Step 2 Step 3 Step 4
Get name approval for proposed company registration in India Incorporate an Indian Company Post-incorporation company formalities and work visa applications Relocate to India to run your new business operations

 

Note: The general timeline for a startup company’s registration in India  takes about a month, taking into consideration that the subscribers/ directors are based outside India and there is movement of documents through courier and Embassy Attestation process, etc.


How Can InCorp Help You Set Up Your Business in India?

With massive improvements in the entrepreneurial environment in India in recent years, a company registration specialist such as InCorp can help an entrepreneur incorporate a business entity in India in the least possible time, with all the company formations procedure pre-incorporation duly fulfilled.

We also help manage several post-incorporation requirements including annual filing requirements with ROC and MCA, accounting and bookkeeping, and payroll management, among other company secretarial and compliance services.

In summary, engaging the services of a corporate service provider to register an Indian company is recommended as entrepreneurs – either local or foreign – may not be fully familiar with India company law and compliance requirements.

And we, at InCorp, are best placed to do this, as we have helped thousands of global entrepreneurs and companies launch their Indian ventures successfully. Count on our experienced team at InCorp Group for the incorporation and compliance of your company, and select the package suitable to you from our range of options.

FAQs

What are the 6 types of business entities for company registration in India?

For your company registration in India, you can choose any one of the following 6 business entities:

  • Sole Proprietorship
  • One Person Company (OPC)
  • Public Limited Company
  • Partnership Firm
  • Limited Liability Partnership
  • Private Limited Company

What are the key requirements to register a Private Limited Company (PLC) in India?

For your company registration in India as a Private Limited Company (PLC), you have to fulfil the following requirements:

  • Minimum 2 Shareholders
  • Minimum 2 Directors, with one of them being a resident
  • 1 Corporate Secretary
  • Rs 1 minimum paid-up capital
  • Local registered address

How long does it take for a startup company’s registration in India?

For startup company registration in India, the whole process will likely take about a month.

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Contact Our India Team

Amit Kothari

Amit Kothari

Head

Debt Advisory and Business Development

Our team of experienced CPA can make your India company incorporation a breeze