Every business entity begins with a dream of its founder, forits success and prosperity. But, setting up a business in the real world takes a lot of effort. We, at SRC, understand the intricate needs of a new firm trying to establish itself in today's competitive market and have packaged our services accordingly.

We draw our inspiration from the element 'Earth' when it comes to setting up and registering new business entities. With a view that it can begin its journey with an attitude of fear lessness and a belief in the abundance of nature. The Entity Setup Services we provide ensure that starting a business activity is an encouraging and hassle-free activity for our clients. We understand that the time spent by an investor or entrepreneur is most crucial at this stage. The multitude of tasks that are involved in preparing an entity for multiple registration include voluminous documentary flow and need to be completed within specific time lines.

SRC's Entity Setup Services empowers our clients, at this first stage, by educating them about the necessary formalities and by assisting them in completing the various registrations in time.

Like the earth element, our Entity Setup Services acts as a foundation on which a strong business entity can be built,can take root and can thrive, well into the future.

Company formation in India is governed by the Indian Companies Act 1956, The authority which governs the Company formation is Ministry for Corporate Affairs. Following are the brief Introduction about the Various types of company formation in India.

Types of Companies

• Private Limited Company
• Public Limited Company
• Companies Formed under Part IX
• Non Profit making Companies
• Producer Company.

Following are the detailed procedure for formation of companies

• Private Limited Company

Minimum Conditions and silent features of a Private Limited Company in India are as follows :

1. There should be Minimum Two directors.
2. There should be Minimum Two Shareholders.
3. The minimum capital of company should be Rs. 1 Lac.
4. Maximum Number of shareholders is Fifty.
5. Can start the operation after getting Certificate of Incorporation, No need of taking the Certificate of Commencement of Business

Private Limited company formation in India is generally opted by the business man who wants to have a very closely held company and to carry out their businesses which are closely managed by the promoters.

• Public Limited Company

Minimum Conditions and silent features of a Private Limited Company in India are as follows:

1. There should be Minimum Three directors
2. There should be Minimum Seven Shareholders
3. The minimum capital of company should be Rs. 5 Lac
4. No Maximum Number of shareholders.
5. Can start the business after getting Certificate of Commencement of Business

This form of company is for the business people who want to do their business on very big scale and from the long term prospective they are looking to come out with the public issue of their company’s shares.

• Companies formation under part IX

These companies are the regular private or public limited company, This is a specific procedure provided to converted partnership companies in to companies in order to avoid various legal formalities of re registering the entity various business laws. It have features of a regular company as mentioned. But there are certain conditions which should be fulfilled to convert a partnership firm into a company under part IX

1. The partnership firm shall be registered
2. There should be minimum three directors
3. Minimum shareholders shall be seven.

A Liaison Office is in the nature of a representative office set up primarily to explore and understand the business and investment climate. A Liaison Office is not permitted to undertake any commercial / trading / industrial activity, directly or indirectly, and is required to maintain itself out of inward remittances received from parent company through normal banking channels. The Liaison Office is permitted to undertake following activities only :

• Representing the parent Company in India
• Promoting export/ import from/ to India
• Promoting technical / financial collaborations between the parent companies and companies in India
• Acting as a communication channel between the parent company and Indian companies

Any foreign company intending to open a Liaison Office in India is required to obtain prior approval from the RBI, the apex bank in India. Approval is usually granted for one to three years and can be renewed on expiry thereof.

Suitability of a Liaison Office
The Liaison Office generally acts as a communication channel between the parent company overseas and its present or prospective customers in India. The Liaison Office can also be set up to establish business contacts or gather market intelligence to promote the products or services of the overseas parent company. The Liaison Office cannot undertake any business activity in India nor earn any income in India.

At the time of closure of the Liaison Office, RBI grants permission to repatriate the balance in the Indian bank account to the parent company.

Since the Liaison Office is not permitted to earn any income, it should not constitute a taxable entity in India. However, the Liaison Office would be required to withhold tax from certain payments and hence is expected to comply with the requisite “tax withholding” obligations under the domestic tax law

To open a Liaison office, the parent company has to apply to the Reserve Bank of India and is normally granted permission within 2 to 4 weeks.

Liaison office is subjected to few restrictions; some of them that deserve to be well understood are reproduced here :

• It cannot carry out any commercial operations in India.
• It must maintain a QA22C account with the bank. This is a special account that only allows inflows from abroad.
• It can neither borrow, nor lend money
• All expenses of the office must be met through inward remittances to the office from abroad (parent company) through the bank. It is not subject to taxation in India.
• However, the office must file regular returns to the RBI. Such returns must include Audited Annual accounts and an activity report for the year.

The following documents are required for applying to RBI for setting up the Liaison Office in India :

1. Form FNC 1 *– 3 Copies
2. Letter from the Principal officer of the Parent Company to RBI*
3. Letter of Authority from the Parent Company in favour of local representative*.
4. Two copies of the English version of the Memorandum and Articles of Association (Charter Documents) of the Parent Company attested by Indian Embassy/Notary Public in the country of registration.
5. The latest audited Balance Sheet of the Parent Company.

* These documents would need to be signed by the Principal Officer of the Company that intends to set up the Liaison Office in India.

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

• Export/Import of goods  
• Rendering professional or consultancy services
• Carrying out research work, in which the parent company is engaged.
• Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
• Representing the parent company in India and acting as buying/selling agents in India. 
• Rendering services in Information Technology and development of software in India.
• Rendering technical support to the products supplied by the parent/ group companies.
• Foreign airline/shipping company
• Foreign Banks

Branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

Suitability of a Branch Office
The opening up of branch offices is one of the options by which a foreign company can set up its business operations in India. It needs to obtain a prior permission from Reserve Bank of India (RBI) for setting up such offices in India. As per the guidelines issued by RBI, these branch offices are subjected to the following conditions :-

• The branch office cannot expand its activities or undertake any new trading, commercial or industrial activity other than those which are expressly approved by the RBI
• The entire expense of the branch office in India will be met either out of the funds received by it from abroad through normal banking channels or through income generated by it in India
• The branch office cannot accept any deposits in India
• The commission earned by the branch office from parties abroad for any agency business will be repatriated to India through normal banking channels.

Procedure for Branch Office
For opening a branch office, the foreign company needs to submit its formal application to the Chief General Manager, Exchange Control Department (Foreign Investment Division), RBI Central Office, Mumbai in the form FNC-1. These applications are considered on a case-to-case basis. The RBI generally gives permission in a time span of about 2 to 4 weeks. The application must include the following details :-

• Operating history of the company worldwide
• Proposed interests and activities in India
• Reasons for wanting to open a branch office and
• Any foreign exchange implications for such matters.
• English version of Certificate of Incorporation, MOA and AOA of the company duly attested by the Indian Embassy or Notary in the country of origin.
• Audited balance sheet of the applicant company.
• Details about the activities of the company.

1. Permanent Account Number
PAN is the registration number of the company under the Income Tax authorities. It is the number quoted every time the company has to deal with the Income tax department of India. The PAN Number can be applied online as well as off line. Following are the documents required to get the PAN Number.

• Form 49 A
• Copy of Certificate of Incorporation of Company

The form shall be duly signed by the authorized signatory and send to the department, generally it taken 7-10 days time to get the PAN Card.

2. Tax Deduction Number
TAN is the registration number of the company under the Income Tax authorities. It is the number quoted every time the company does any transaction relating to withholding tax, The TAN Number can be applied online as well as off line. Following are the documents required to get the PAN Number.

• Form 49 B
• Copy of Certificate of Incorporation of Company

The form shall be duly signed by the authorized signatory and send to the department, generally it taken 10-12 days time to get the PAN Card.

In order to carry out the trading activities in India the company has to take the VAT registration for selling or purchasing goods within a state for the interstate transaction the company should have a CST Registration Number.

• MOA & AOA of the company (Duly Attested with Company Rubber Stamp)
• Proof of Address of the company in the name of company (Duly Attested with Company Rubber Stamp)
• Proof of Identity of the Applicant of the company. Passport/Driving Licenses/Election Photo ID/Telephone-Electricity Bill (Duly Attested by Applicant) 
• Proof of Address of the Applicant of the company (Duly Attested by Applicant)
• Once cancelled cheques from the bank as a proof of bank account.
• Copy of PAN Card of Company (Duly Attested by Applicant with Company Rubber Stamp)
• List of Directors with Name, Residential Address, PAN No, Professional Tax No
• PAN Card Copy of All Directors (Duly Attested with Directors)
• Proof of address of all the directors duly attested
• Payment of Rs. 25000/- and 5000/- for sales tax department.

Once the required documents are received it takes 7-10 days time to get the Number and certificate.

Services tax registration is required to be taken by every company which is engaged in providing services of any type, There are more than 150 types of services which are covered under services tax. Following are the documents required to take the services tax registration.

• Duly Filled application form.
• Copy of MOA & AOA of company
• Proof of registered office address of company
• Copy of PAN Card of company.

Import Export Code
IEC Import export code is must for the companies involved in the activities of importing the goods in India or who are exporting any types of goods from India. Without the IEC once can not import goods in India. Following are the documents required to get the IEC.

• Application form duly signed by directors
• Company’s MOA and AOA with Incorporation Certificate
• Company’s PAN Card Copy
• Bother directors Residential Address & Identity Proof
• Bank Certificate as per the enclosed format
• Two Photograph of each director.
• Demand Draft of Rs. 250/- in favour of (Jt. DGFT Mumbai) payable at Mumbai
• Form 18 and 32 of company for address and proof of directors if there is change in address and directors of Company
• One Covering letter in company’s letter head.
• Two Brown Envelope with stamp