- Business Setup
For Foreign Companies
For Indian Companies
GIFT City
- GCC Setup
- Corporate Services
Taxation Services
Advisory & Regulatory
Accounting Services
- Who We Are
- Contact Us
For Foreign Companies
For Indian Companies
GIFT City
Taxation Services
Advisory & Regulatory
Accounting Services
The idea of starting a business in India surrounds your mind with a lot of questions. Although the registration process is now easy and streamlined by the MCA, it can be confusing navigating the process without a proper understanding of the regulatory system. To move ahead with a clear plan, it is important to first have a checklist as part of your incorporation strategy.
Whether you choose to set up a Private Limited Company or a Limited Liability Partnership, checking all the right boxes is important. This blog work as a starting up a business in India checklist covering the pre-incorporation, incorporation and post-incorporation phases including step-by-step process.
In this checklist blog, we have divided the registration process into three main phases for a better understanding. Here are the steps each phase includes:
Phase 1: Pre-Incorporation
It includes the preparation for company registration:
Phase 2: Company incorporation
In this phase the main incorporation process is done, from registration to receiving the COI.
Phase 3: Post-incorporation compliance
This is the last phase to a successful company incorporation. It ensures a legal conduction of operation.
Let’s discuss about each of the phases and steps in detail.
A proper business plan is crucial before starting the incorporation process. The decision here should be made by understanding the nature of the organisation and how it functions in terms of strategy. In this phase you will take decisions, which will directly impact the flexibility of operation of your business, investment, compliance, eligibility and taxes. Not proper planning or overlooking this phase can cost you heavy penalties or even the closure of your company.
During the pre-incorporation phase, one of the most crucial parts is selecting the right business structure. Let’s look at a comparison between the most preferred types of business registrations in India.
Private Limited Company (Pvt Ltd):
This structure is considered the most appropriate business structure for foreign businesses.
Limited Liability Partnership (LLP)
This structure is less preffered by foreign companies compared to private limited company.
Wholly Owned Subsidiary (WOS)
Most foreign businesses prefer this structure in India. It is a private limited company but with a 100% foreign shareholding.
Ensure that all the core documents required for the incorporation process are correct and valid. Required documents:
Foreign Directors:
Note: All documents that are originating from Hague member countries must be apostilled by the designated competent authority in that country
Foreign Shareholders:
Registered Office Documents:
Company Formation Documents
There are certain eligibility criteria to incorporate a foreign company under the Indian law, which should be taken care of in advance to avoid complications later on. Following are some requirements:
This is where you proceed with the main incorporation process through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
Decide on a name for the company, making sure that it is unique and does not resemble any existing entity. Check this with the RUN (Reserve Unique Name) portal and submit it via the MCA portal. The name is approved within 1-3 working days. You get 2 name options.
Now file Part B of the SPICe+ form. The form includes company incorporation, DIN allotment, PAN/TAN application, GST, EPFO, ESIC, and Professional Tax (in applicable states). Memorandum and Articles of Association filed electronically via SPICe+ portal.
COI will be issued digitally by the Registrar of Companies (RoC) contains CIN (Corporate Identity Number).
After the incorporation process, maintaining compliance becomes the next important thing. The real planning comes after the company incorporation. Most entrepreneurs overlook this compliance which can result in penalties and extension of timeline.
Open a current account by using COI, PAN, MoA/AoA, and board resolution. It is required before any foreign investment. Also, file the INC-20A form, which declares the commencement of business.
Transfer the foreign investment via banking channels and obtain an FIRC (Foreign Inward Remittance Certificate) from the bank.
File FC-GPR with RBI within 30 days of allotting shares to foreign investors. This is mandatory under FEMA,1999.
If your annual turnover exceeds INR 20 lakhs (for services) or INR 40 lakhs (for goods), GST registration is mandatory. GST structure in India allows B2B businesses to register voluntarily. To obtain GSTIN at incorporation, apply via AGILE-PRO-S or separately via GST portal post-incorporation.
Some sectors need specific licenses to conduct operations. It depends on the type of business activity; here are some licenses according to the sector:
Starting up a business in India checklist blog gives you a clear indication of how your incorporation journey in India should look. Starting a business in India becomes much easier when there is clarity in the decisions you make. Lock in the structure, keep the necessary documents ready, and follow the MCA steps. After incorporation, the first 2-3 months are important to get your compliance cycle on track. Open a bank account and make the necessary registrations.
While executing the incorporation process after planning, especially first-time founders, can face difficulties. This is where you need expert guidance. Stratrich Consulting has years of experience guiding new businesses to set up their business in India. Contact today to pave the strongest foundation for your business.
