ESDM & FDI QUERIES
Citizens / Entities of Pakistan , Bangladesh , Sri Lanka , Other Forms : Afghanistan , Iran , and China can establish a branch or a liaison office or a project office or any other place of business with the approval of the Reserve Bank of India which takes a decision on the application in consultation with the Government of India .
General permission ( No prior approval required ) has been provided to project / branch office which satisfies few conditions and is not from the countries mentioned above or is not under the government route . The details can be on the following linkhttp :// www . rbi . org . in / scripts / BS _ CircularIndexDisplay . aspx ? Id = 7312
Section II
Queries relating to setting up
Given below are rules and regulations relating to setting up of : |
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Company |
2 . |
Extension of foreign entity ( Liaison / Branch / Project office ) |
3 . |
Limited Liability Partnership |
Information on starting a company in India is not a private company . A subsidiary of Indian public company is also treated as a public company . A public company is required to have a minimum paid-up capital of INR 500,000 with minimum of 7 shareholders and 3 directors .
Private limited company : The key features of a private limited company in India are as follows :
Q-8 What are the rules and regulations for setting up a company in |
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It requires a minimum of two shareholders and two |
India ? |
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directors ( both of them can be foreigners ). |
A foreign corporate can invest and start its operations in India |
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It can be formed with a minimum capital of INR 100,000 . It |
by incorporating a wholly-owned subsidiary under the |
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can raise loans from banks , financial institutions , etc . |
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provisions of Companies Act 1956 . It is treated at par with a domestic company and all rules and regulations applicable to an Indian company equally apply to wholly owned subsidiaries .
Another option is to enter into a joint venture with an Indian by forming a company . The management and running of the JV is influenced by the terms stated in the shareholders agreement .
A company set-up in India can either be private limited or public limited .
Public limited company : A public company is defined as one that
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n
The number of shareholders cannot exceed 50 . It cannot invite the public to subscribe to its shares or debentures . n
It can raise debt in foreign currency in the form of external commercial borrowings .
Generally for foreign investors opening a private limited company is considered as the most popular mode of entry .
Process for setting up a private limited company in India by foreigners : The brief steps required for setting up a company are as follows :
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Phases
FAQs on various aspects related to Foreign Direct Investment in ESDM sector
Activity Steps
Limited Liability Partnerships
Government Route
Only in sectors in which 100 % FDI is permitted under the automatic route and there are no FDI linked performance conditions .
For example : In ESDM 100 % FDI is allowed in LLP under the government approval route except in manufacturing of defence electronics & brownfield investments in medical devices manufacturing in which FDI in LLP is not allowed .
I
Obtaining Director ’ s Identification Number # ( DIN ) & Digital Signature ( DSC ) for the proposed directors a . Obtaining the proof of identity and proof of address from the proposed directors ( notarized and apostiled in case of foreign directors ) b . Filing of DIN for the proposed directors and obtaining DSC c . At the time of incorporation of company , it is mandatory to submit particulars of registered office .
II |
Filing of name approval |
a . Filing of form for seeking name availability with Registrar of Companies ( In case there are corporate shareholders , the company would have to draft a board resolution for seeking name approval . The board resolution and powers to incorporate a company ). b . Obtaining name approval |
III
Filing of charter , location of registered office and details of directors a . Drafting of charter of company ( memorandum and articles of association ) and other forms for filing with ROC . b . Sending the subscriber ' s sheet for execution & authentication , in case of non- . resident shareholders c . Filing of forms with ROC d . Obtaining Certificate of Incorporation
IV |
Post incorporation formalities |
a . Obtaining permanent account number ( PAN ), opening the bank accounts , tax |
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deduction account number ( TAN ) for the company . |
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b . Filing with Reserve Bank of India for the subscriber ( initial ) capital . |
Spotlight on Indian Electronics 2016 | 46