Are You Intending to Incorporate Company in India? Quick Lookouts!
Before you move too fast with incorporating an entity in India
Generally, it is seen that while
Incorporating any entity/business form in India, the focus is more on documentation rather than the other important aspects such as whether foreign investment in a particular sector is permitted or not, what should be the composition of Board etc. Thus, blocking the investment path for future operations and smooth functions.
You need someone to help you have a holistic understanding of all aspects of your business, not just restricted to procedural aspect of #companyregistration (“someone” = us!).
Here are a few common perils we see when you are not guided beyond incorporation, while advising on the incorporation process (and these can really, really hurt, so let us save you a ton of time and money!)
1. Did you do the Trademark Search for the “Proposed Name”?
While Incorporating a Company in India, the first step is to make an application with the Registrar to reserve the desired name (Proposed Name) of the Proposed Company.
One of the important aspect in the above process is to do a Trademark Search in order to check whether the proposed name is already registered as a Trademark in any of the 45 Classes of Trademark as per provisions of the Trade Marks Act, 1999 and Rules.
In case the Proposed Name is already registered against any other owner of the Trademark, then without obtaining the No-Objection (NOC) from that owner, then such application made to the Registrar for reservation of name is capable of being rejected.
2. Have you considered a #Residentdirector on “Board”?
Subsidiaries of foreign companies in India are required to have at least 1 (One) Resident Director on their board in accordance to the Companies Act, 2013 and Rules framed thereunder.
Who is a Resident Director?
A director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year. Therefore, while complying with the minimum number of Directors for the Composition of Board, it is mandatory to include a Resident Director.
3. Have you checked the Foreign Direct Investment (FDI) Policy before investing in India?
Foreign Direct Investment (FDI) is an investment made by a firm/entity or individual located in one country (Home Country) into business interests located in another country.
There are two routes through which FDI is permitted in India.
Automatic route: There are certain sectors and sectoral caps prescribed in the FDI policy of India under which FDI is permitted in India without the prior approval of the Government or the Reserve Bank of India.
Government route: Some specific sectors require prior approval of the Government (Concerned Ministry) for bringing FDI in India.
Our firm, through a dedicated team of experts, serves in providing detailed opinion regarding the FDI Policy for any proposed investments to be made in India.
4. Did you check the Sectoral Cap for making Investment in India?
Sectoral Cap means the maximum prescribed limits of foreign investment imposed by the Government of India from time to time based on the Business Activity in which such investment is proposed to be made.
While in most of the sectors 100% #FDI is allowed, however, few sectors such as Air Transport Services, Digital Media etc. there are sectoral limits set by the Government of India.
It is advisable to go through the Sectoral Caps before making Investment in India.
Think Beyond!!