Doing business in India

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Setting up of Business in India
Commencement of Foreign Investment can take place in broadly three forms in India :-
  1. Incorporation of a Company in India as an Indian Company
    • The Investment can take place in the form of a Joint Venture
    • A Private Limited or Public Limited Company, Wholly Owned Subsidiary, in accordance with the Companies Act, 2013.
  2. Foreign Company set-up
    Under this the RBI guidelines prescribe the establishment of a Liaison Office, Branch Office, Project Office. These are as follows-
    • Liaison Office : An office that represents the parent company in Indian Territory
    • Branch Office : An office that undertakes activities such as Export, Import, research, consultancy etc.
    • Project Office : Office set-up to execute a project/projects in accordance with a Contract.
    The Companies Act, 2013 states that only an Indian Resident, with PAN, can be appointed for receiving notices in India for foreign companies.
  3. Limited Liability Partnership
    • Governed by the provisions of the LLP Act, 2008
Business Registration Process
    Company
    • Company’s Incorporation - Check whether a name or registered trademark is available for the incorporation. Then, with the help of the service RUN reserved the proposed name of the Company on the website of the Ministry of Corporate Affairs.
    • Digital Signature Certificate - A DSC must be obtained for at least one of the prospective Directors of the Company. The same can be applied via only the SPICe Forms available on the MCA Website.
    • Form INC 32 (SPICe) - In order to get the company incorporated the aforementioned form is to be filled and submitted to the RoC. Based on the details of the SPICe form, PAN and TAN shall be generated.
    • E-Memorandum of Association - E-MoA (INC 33 at SPICe) has to be filed. In case of foreign subscribers, physical mode of the MoA is to be executed and attached.
    • E-Articles of Association - E-AoA (INC 34 at SPICe) to be filed and in case of foreign subscribers physical AoA is to be executed and submitted.
    • SPICe upload and payment to be approved/confirmed by the MCA
    • Scrutinisation of Documents and Forms - to be by the Central Registration Centre (CRC). Any changes suggested by the CRC have to be incorporated in the documents accordingly.
    • Certificate of Incorporation (CoI) - CoI is to be obtained and at the time of registration TAN, PAN and CIN will be allotted.
    • Company with Share Capital - Incase a company has Share Capital, then a declaration of receipt of subscription amount and verification of registered office is to be filed within 182 days days of incorporation and prior to the business commencement.
    Llp
    • Digital Signature Certificate (DSC)- A Class 2 or Class 3 DSC is to be obtained in the name of the designated partners of the LLP.
    • Checking Company Name and Registered Trademark - In order to check the aforementioned, a facility is provided by the MCA, which displays names/trademarks similar to that of the LLP.
    • RUN-LLP/ FiLLiP - both these platforms can be used for approval of the company’s proposed name by the Registrar of Companies.
    • Incorporation of the LLP - the FiLLiP form is to be duly filled and submitted to the RoC for the incorporation. For a FLLP (Foreign LLP), form 27 is to be filled and signed and a DPIN shall be obtained by FiLLiP.
    • Form 3 - Form 3 is to be filed within 30 days of the incorporation of the LLP in case any changes have been made with regards to the information of the LLP Agreement.
Approval and Compliances
    Setting up Legal Existence of the Entity
    • Approval for proposed Company Name - filing the RUN-LLP form with the Central Registration Centre
    • Consent to Establish and Operate - A ‘Certificate of Incorporation’ is issued by the CRC for the same, after approval of all the forms.
    • Obtaining Digital Signature Certificates (DSC) for proposed Directors/Partners
    • Filing CRC E-Forms
    • Finalisation of Supporting Documents - These include the Association of Articles, the Memorandum of Association, which are to be filed in physical form in case of a foreign subscriber, and payment of stamp duty/filing fee.
    • Grants for BIS License - the application is to be submitted in the prescribed form and Self-Evaluation-cum-verification report.
    • Obtaining Director Identification Number (DIN) - it is issued by the MCA as a unique code for a partner of an existing LLP or an applicant intending to become director of the company.
    • Obtaining Permanent Account Number (PAN)- allotted on the basis of the information filed in SPICe form.
    • Receival of Quality Marking Certificate - provided by Quality Marking Centre of the State Government.
    • Registration for Tax Account Number (TAN) - allotted based on the information filled in Form SPICe
    • Verification of the Documents
    Starting/Registering a Unit in the State
    • State Incentives - it is optional in nature and can be applied by a company/LLP for customised incentives offered by States for Megaprojects
    • Registration of IEM/EM - industrial undertakings exempt from the requirements of industrial licensing, including existing units undertaking substantial expansion, are required to file information in the prescribed form for Industrial Entrepreneurs Memorandum (IEM), i.e. “Form IEM”, with the Secretariat of Industrial Assistance (SIA), Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, and obtain an acknowledgement. No further approval is required.It is optional for MSMEs and medium service-sector enterprises and mandatory for manufacturing sector medium enterprises.
    • Registration of MSME - it is optional in nature and is to be done in accordance with MSMED Act; that provides schemes and incentives for MSMEs.
    • Unit Registration in State - in order to commence manufacturing process, the company has to get itself registered as a MSME or large or Mega project in accordance with the Industrial Policies of the respective State.
    Post-Commissioning Phase
    • Hazardous waste authorization - Application to be made to the State Pollution Control Board for the same.
    • Building Completion Certificate - A completion certification (CC) is to be obtained from Application to Town and Country Planning , or Local municipality , development authority or agricultural department or other local bodies such as Nagar Nigam or Gram Panchayat as applicable) with plan, scrutiny fees and land allotment copy.
    • Central Excise Certificate - to be filed to the Superintendent of Central Excise with jurisdiction of the premise.
    • Consent to Operate - to be received from the respective State Pollution Control Board
    • Special Valuation Branch - is a branch of the Custom House that specializes in investigating the transactions involving relationships between the supplier and the importer.
    • Employees' State Insurance Corporation (ESIC) - Employee registration should be done with the ESIC for benefits and Form 1 by ESIC should be filled by the employers for the same.
    • Registration with the Employees' Provident Fund Organization (EPFO)
    • Fire Approval - to be taken from the respective State Authority
    • GST Registration - Any business whose turnover exceeds the threshold limit of INR 20 lakhs (INR 10 lakhs for North Eastern and hill states) will have to register under GST.
    • Importer-Exporter Code - a registration required for persons importing or exporting goods and services from India and is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India.
    • Power Supply Application to be made to the State Electricity Distribution Company.
    • Professional Tax Registration - to be done in accordance with the section 5 of the Profession Tax Act.
    • Shops and Establishment Act - Registration to be done by the respective State government.
    • TradeMark/Brand Registration
    • Water Connection - State Industrial Development Corporations for approval for water connections; to State Industrial Promotion Boards (where applicable) where source of water is river/ canal/ dam; and to Central Ground Water Commission in case of ground water extraction.
    Pre-Commissioning Phase
    • Acquisition of Land - Application to respective State DI/ State Industrial Development Corporation (SIDC)/ Infrastructure Corporation/ Small Scale Industrial Development Corporation (SSIDC)
    • Approval for Lifts and Escalator- to be received from respective State Authority
    • Building Plan Approval - to be obtained in accordance with the provisions of Building Byelaws, Master plan and Local Body Acts.
    • Consent to Establish- application is to be made to concerned bodies at the state pollution board and central level for environment clearance.
    • Environment, Forest and Wildlife Clearance- Application needs to be made at the online platform by MoEF.
    • Factory Layout Plan Approval - required in accordance with Factory Act, 1948
    • Registration of Factory- to be done in accordance with Industries (Development & Regulation) Act 1951.
    • Industrial License- it is regulated by the IDRA, 1951 Act, and is approved by the Secretarial of Industrial Assistance (SIA) on the recommendation of the licensing committee.
    • Permission of Land use incase industry is located outside Industrial Area- State Directorate of Industries (DI), Department of Town and Country Planning, Local authority/ District Collector are the concerned authorities.
    • Pollution Board- Application to State Pollution Boards before commencement of construction activities and production activities under Water Act and Air Act for Consent to Establish and CTO respectively is to be made
    • Power of Construction- Application to State Electricity Distribution Company
    • Provisional Fire Approval- Approval from State Fire and Safety department.
    • Registration of Boilers- is mandatory and to be done in accordance with the Boiler Act 1923
    • Registration under Building and other Construction Workers Act, 1996- granted by the Respective States Labour Department.
    • Registration under Contract Labour Act, 1970 - Approval in accordance with the Contract Labour (Regulation and Abolition) Act, 1970 is required and is granted by the Labour’s Department of each state however, the competent authority may vary from state to state.
Winding up of Business
  • Hold Board meeting and a declaration of solvency is to be prepared.
  • Approval of shareholders, creditors to be obtained and a liquidator is to be appointed.
  • A public notice is to be issued for invitation of claims.
  • Realise assets, discharge liabilities and repatriate funds if any
  • Preliminary report on verification of claims to be submitted via the liquidator.
  • Statutory authorities and bankers to be intimated.
  • Winding up application to be filed.
  • The dissolution order shall be passed by the National Company Law Tribunal.