Timelines for Private Limited Company Registration in India
Company incorporation in India involves lot of documentation and is quite time consuming. Further, the time involvement and documentation part also depends upon whether the directors and shareholders are Indian Resident or also involved foreign nationals and Residents.
In
case, the foreign entity hold more than 50% shares in the Indian company,
Indian company would become subsidiary company of such foreign company in
India.
Further,
in case hundred percent or equivalent shares of Indian company is held by
foreign company/parent company, such Indian company becomes wholly owned
subsidiary of foreign company.
It
may further be noted that subsidiary
company registration in India is
one of the most popular and preferable mode of entity registration by foreign
companies in India. Typically, the legal status of such subsidiary company in
India is that of an Indian company. Subsidiary company registration may takes
place either in form of private
limited company in India or public limited company.
In this write up, we would try to evaluate the total time involved in private limited company
registration in India as well as time involved in post incorporation
compliance.
1.
Registration
Procedure
Company
registration in India usually takes about 18-20
working days from receipt of all the documents. However, in case of subsidiary
company registration in India which involves foreign shareholders and foreign
directors, this time increases substantially due to the fact that all the KYC
and other documents which is required from foreign shareholders or foreign
directors need to get signed, notarized and apostiled in home country i.e
foreign country. This increase the time as getting aforesaid documents from
foreign country consumes lot of time.
Following steps are involved in company
incorporation In India:
a) Engaging
a professional firm like CA/CS/Lawyer to assist in private limited company
registration.
b) Entering
into an agreement between the service provider and the parent holding.
c) Agreement
between the parent company and the shareholders as well as the initial
directors of the subsidiary company
d) Checking
the availability of name for the company.
e) Applying
to MCA/ROC for reserving a suitable name for the company.
f) Formulating
and preparing the chartered documents of the subsidiary such as Memorandum of
Association (MoA) and Articles of Association (AoA).
g) Appointing
the Initial Directors of the company.
h) Filing
the final incorporation form along with the appropriate stamp duty and
registration fees.
i)
Obtaining Certificate
of Incorporation of the Company.
j)
Issuing the shares to
the initial shareholders in the subsidiary.
k) Preparing
the minute book for the meetings.
l)
Printing the share
certificates.
2.
Post
Registration Procedure
Post
company registration in India, following further procedures need to be
completed.
1)
Opening
a bank account for the new company:
Nowadays,
the name of the preferred bank is given at the time of applying for final
company incorporation. Further, once the company is incorporated and final
certificate of incorporation is granted, the newly registered company shall
approach the preferred bank and its branch for completion of bank account
opening formalities.
It
involves approx... 10-12 working days from submission of application for
getting bank account opened.
2)
Registrations
for taxes:
Every
newly registered company are required to apply for PAN and TAN. This is
nowadays applied along with final incorporation form and is received along with
certificate of incorporation. Both PAN and TAN numbers are mentioned in the
certificate of incorporation.
3)
Registrations
for Goods and Service Tax ; professional tax and Registration under Shops and
Establishment laws:
Every
newly registered company needs to also apply for GST registration in case the
estimated sales or turnover is likely to exceed Rs 40 lac in a year. Further,
in case such companies are involved in interstate trade or provision of
services, then such companies need to apply for GST registration irrespective
of their total turnover or receipts. Professional taxes are applicable in some
states and union territories and its registration need to be applied for in
each such state.Similarly, in some states it is compulsory to apply for shop
and establishment registration before starting the business where as in other
states, it is optional and at the discretion of the company.
All
such registrations are completed within the 10-15 working days from the opening
of bank account.
4)
Import
Export License:
In
case the company is engaged in the business of import and/or export, before
doing such business activity, it is mandatory to apply for Import Export Codes
(IEC) from DGFT.
It
normally takes 8-12 working days from filing online application and submission
of all relevant documents.
5)
Certificate
of Commencement of Business
Post
company
registration in India, every company shall apply for certificate of
commencement of business by filing necessary forms with ROC/MCA. Same needs to
be applied on or before 180 days from date of incorporation. Failure to do so
would involve substantial penalty and interest.
6)
Reporting
of FDI to RBI and issuance of shares
In
case of subsidiary company registration in India, share subscription money
received in Indian company’s bank account from foreign shareholders are
considered as FDI and post receipt of such money, RBI compliance need to be
done by way of filing form FCGPR in Single master form by login into RBI
website. Further, shares need to be allotted and necessary forms need to be
filed with ROC.
Also,
RBI raises some queries relating to such FDI which needs to be replied from
time to time before getting final approval letter.
It
involves approx. 30-40 working days
From above, it may be inferred that private
limited company registration in India, whether in form
of subsidiary or normal private company, usually takes approximate 10-15
working days for completion of entire registration procedure. Further, this
time may increase further in case any of the directors or shareholders are
foreign national or foreign citizens.
However,
post registration procedure may take approx. 15-20 working days for normal
company and approx. 40-45 working days for subsidiary company.
Further,
aforesaid timelines may also increase or decrease depending upon state to state
in India.
We, at EzyBiz India provides complete hand holding
to domestic and international clients in entire company registration procedure
in India and also in all post incorporation procedures and compliances under
various laws like Income Tax Filing, GST filing, ROC filing, FEMA/RBI
compliance, Accounting and Payroll Outsourcing etc
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