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