3
ENTRY OPTIONS
Indian regulations allow investment in all industries expect those in the negative list 6 . Additionally , there are sectoral caps 7 for investing in certain industries . FDI is not permitted beyond these caps . FDI can be brought into India through the automatic approval route and , for certain activities , on obtaining prior government approval . A foreign enterprise can consider the following routes for doing business in India
1 . Corporate entity
• Joint Venture with an Indian partner ( JV )
• Wholly Owned Subsidiary ( WOS )
• Limited Liability Partnership ( LLP )
2 . Non-corporate entity
• Project Office ( PO )
• Liaison Office ( LO )
• Branch Office ( BO )
3 . Foreign Institutional Investors ( FII )
3.1 Corporate Entity
Companies in India can either be public or private . Further , a private company can be limited by shares or by guarantee . In the former , the personal liability of members is limited to the amount unpaid on the share subscription , while in the latter the personal liability is limited by a pre-decided nominated amount .
3.1.1 Private vs Public Private vs Public Limited Company S No Detail Private Limited Company Public Limited Company
1 |
Commencement of |
Immediately on |
Only after obtaining |
|
Business |
obtaining the certificate |
certificate of commencement |
|
|
of incorporation |
of business |
2 |
Number of Members |
Minimum 2 and |
Minimum 7 with no |
|
|
Maximum 50 |
Maximum cap |
3 Number of Directors Minimum 2 Minimum 3
4 |
Authorized Capital |
Minimum ` 100,000 |
Minimum ` 500,000 |
|
|
( US $ 1,835 approx ) |
( US $ 9177.68 approx ) |
6
Schedule 3
7
Schedule 3
19