INDIA Law and Practice Contributed by: Raj Ramachandran, Kartik Jain, Mannat Nirola and Anmol Mahajan, JSA Advocates & Solicitors
with limited liability protection and is commonly used for professional service businesses, holding struc - tures and joint ventures. There is no minimum capital requirement. An LLP must have at least two partners and two designated partners, one of whom must be resident in India. 3. Company Companies are incorporated under the Companies Act, 2013 as either private limited companies or pub - lic limited companies. A private limited company must have at least two shareholders and two directors, one of whom must be resident in India. Shareholders’ liability is limited to the unpaid amount on their shares. There is no mini - mum capital requirement. Private companies are the most common vehicle for start-ups, greenfield pro - jects, wholly owned subsidiaries and joint ventures due to their separate legal personality, limited liability and flexibility. A public limited company must have at least seven shareholders and three directors. Listed public com - panies are subject to enhanced governance, disclo - sure and compliance requirements, including inde - pendent director requirements. Public companies are typically used where access to public capital markets is contemplated. The Companies Act also recognises specialised forms such as One Person Companies (OPCs), small com - panies and Section 8 companies established for chari - table or not-for-profit purposes. 4. Branch Office, Liaison Office and Project Office Foreign companies may establish a BO, LO or PO in India, subject to applicable RBI regulations. These offices do not constitute separate legal entities and operate as extensions of the foreign company. An LO may undertake only liaison and communication activities and cannot carry on commercial operations. A BO may conduct specified business activities per - mitted under applicable regulations, while a PO may be established for execution of a specific project in India. These structures are generally used where a for -
eign company wishes to maintain a limited presence in India without incorporating a subsidiary. 3.2 Incorporation Process A company is incorporated by filing an application with the jurisdictional Registrar of Companies (RoC) through the Ministry of Corporate Affairs’ integrated SPICe+ (Simplified Proforma for Incorporating Com - pany Electronically Plus) portal. The principal steps are as follows: • reservation of the proposed company name; • preparation and execution of the incorporation documents, including the memorandum of asso - ciation and articles of association; • filing of the incorporation application with the RoC, together with prescribed declarations, consents, particulars of the subscribers and first directors, proof of identity and address documents, and other required information; • scrutiny and registration of the incorporation docu - ments by the RoC; and • issuance of the Certificate of Incorporation and allotment of a Corporate Identity Number. Following incorporation, the company must complete certain initial compliance requirements, including veri - fication of its registered office, appointment of its first auditor, holding its first board meeting, maintaining statutory registers and records, and filing the pre - scribed declaration for commencement of business. The incorporation process is largely electronic, and where all documents are in order and no regulatory approvals are required, incorporation is typically com - pleted within three to seven business days from the date of filing. Delays may arise where the RoC raises queries or additional approvals are required. 3.3 Ongoing Reporting and Disclosure Obligations Private companies are required to file annual financial statements and annual returns with the RoC within the prescribed timelines. Financial statements must be approved by the board of directors and adopted by the shareholders at the annual general meeting prior to filing.
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