A guide for foreigner for incorporation of Private Limited Company in India 

Introduction  

Registration or incorporation of a Private Limited Company is the simplest kind of company set up in India for foreign citizens and also foreign companies. The automatic route requires no Central Government approval. Foreigners or foreign companies need to have at least 2 directors, and one director should be a resident of India. In this blog, we will explain the requirements and registration process of setting up a Private Limited Company in India. 

What is a Private Limited Company? 

A limited group of individuals manages a small business known as a private limited company. Members of a Private Limited Company are only responsible for the number of shares they actually own. Private Limited Company shares cannot be offered to the public in the Indian market.

Basic requirements for a Private Limited Company

The four prerequisites for creating a private limited company in India are listed below before we go on to the business registration procedure.

1. As per the provisions of the Companies Act, 2013, a minimum of 2 individuals are required, of which one should be a resident of India to incorporate the Private Limited Company in India.
2. In a Private Limited Company, there should be two shareholders. One of them can be a person or a corporate body. If it is a corporate body, then the individual who is authorised has to represent the company as a shareholder.
3. The most important requirement for foreigners while setting up a Private Limited Company is that the address of the Registered Office must be in Indian Territory.
4. The foreigners must ensure that the company name is unique enough. The name must also include a suffix that describes the company's area of work, such as Mother Dairy Fruit & Vegetable Pvt. Ltd. The company deals with dairy goods, fruits, and vegetables only by looking at the name. 

Procedure for setting up a Private Limited Company 

The provision related to the registration process of Private Limited Company in India is given under the Companies Act, 2013 and the same is governed by the Ministry of Corporate Affairs (MCA), which is concerned with the appropriate functioning of regulations and rules according to laws. The two major factors related to the fees of the MCA Registration Form are Stamp Duty and Normal Form filing. One thing to keep in mind is that the stamp duty on the Registration Form differs from state to state and varies based on the authorised capital.

Now let us discuss the procedure for registering a Subsidiary Company by foreigners as a Private Limited Company.

Step 1 Collect all the needed documents from the foreign company.

Step 2: The individuals or members of foreign corporation must discuss and decide a name for the Indian Subsidiary.

Step 3 Drafting of Articles of Association and Memorandum of Association for the Subsidiary Company.

Step 4 Application for attachment enrolment in the specified form i.e. SPICe+ Form:

Spice+ Form is divided into two corridors:

Part A: Apply for the name reservation of the company in Part A of the form Spice+. It can be used for getting the name approval of the suggested Company and for filing Company enrolment in one single step.

Part B: In Part B of the Form Spice+, apply for the following services:

1. Incorporation
2. DIN allotment
3. Mandatory issue of PAN
4. Mandatory issue of TAN
5. Mandatory issue of EPFO registration
6. Mandatory issue of ESIC registration
7. Mandatory issue of Profession Tax registration(Maharashtra)
8. Mandatory Opening of Bank Account for the Company and
9. Allotment of GSTIN (if so applied for)

Step 5 Open a Bank Account in India for trade. 

Checklist of required documents 

Here is a collection of all the shareholder and director documentation required to establish a company in India.

For Indian Citizens

• Self-Attested PAN card copy of all the Directors and members.
• Passport size photo.
• Copy of Aadhar card.
• Self- Attested evidence of Identity of Directors and Members (Voter ID/Passport/Driving License).
• Self-Attested address as an evidence, which should be in the name of the Director or shareholder (Mobile Bill/Telephone Bill/Electricity Bill/Latest Bank Account Statement showing name & address along with the last runner of sale with recent condition).

For Foreign Citizens

• All the documents should be notarized in the case of a foreign director or shareholder.
• A passport-sized photograph
• Foreign national subscribers need to give a passport as evidence of nationality.
• Address evidence, including a driving licence, bank statement, or utility bill, not older than 2 months.

Documents for the Registered Office

• Copy of the Rent Agreement (if the property is rented).
• No objection Certificate from the Proprietor of the Property 

Conclusion 

Foreign corporations investing their capital always want to maintain partial or full control over their global operations. The best option is to establish a subsidiary company as a Private Limited Company in India. A subsidiary company is that which holds at least 100% of the total share capital. The company must follow the laws of the country where it intends to conduct business.