India LLC / Limited Liability Company
Posted: May 26, 2019
Limited Liability Company / Indian Limited Liability Company is a common platform for foreigners who wish to become 100% owners of a South Asian company.
The 2013 Corporate Law regulates limited liability companies along with the way they are formed and allowing and resolving business activities.
India is a former British colony that became independent in 1947 after nearly 90 years of British rule and became a federal republic in 1950. Its official name is the Republic of India.
Its political system is a federal parliamentary constitutional republic with a president and chairman of the legislature (parliament).
The Icelandic Limited Liability Company (LLC) gets these benefits:
- 100% foreign ownership: Foreigners can own all shares of a limited liability company.
- Limited liability: Owners are responsible for the amount of social capital they have contributed.
- Two shareholders: At least two shareholders (who may be foreigners) are required to form an LLC.
- Lower minimum capital: The minimum authorized capital for limited liability companies is low.
- English: Although Hindi is the official language, as a former British colony, most citizens speak English. All documents can be prepared in English.
The Company’s name
A limited liability company must choose a name that is not used by any other legal entity in India.
Once the name of the company is approved, incorporation documents must be submitted to the Ministry of Corporate Affairs. Required documents include: certificates and declarations of directors of justice, memorandum of incorporation, incorporation system, subscriber paper and proof of registered office address.
Participation in the Articles of Association and the Memorandum of Association indicates the intentions of shareholders to own the Company’s shares. Subscriptions must be documented.
Limited liability companies are legal entities separate from their shareholders. Liability is limited to their contributions to social capital. If a limited liability company is sued in a court of law, shareholders will not be liable for personal liabilities or debts of the company.
LLC can be formed with at least two shareholders from any country. Shareholders may be natural or legal persons. There is a maximum limit of 50 shareholders. Ownership of 100% of shares can be between a group of foreign nationals and foreign companies.
In a limited liability company, equity is restricted in the transfer of shares. The public is not authorized to participate in commitments or actions. The shareholder is not allowed. However, stocks can be issued in different ratings. A record of the shareholders of the registered office is required and maintained.
A Stamp Duty of 0.50% of the value of transferred shares is imposed.
India LLC must have at least two directors who may be citizens and reside in any country. Legal entities can not be directors. However, members of the board of directors must include a director of a citizen and resident of India. The Indian Director is not required to be a contributor. Therefore, the majority of foreigners who create a limited liability company choose to have three members of the board of directors, including two foreign nationals and one is the required Indian citizen and resident.
The record of the board members is required and must be kept in the registered office.
The minimum paid-up share capital is Rs.1 million (currently, about $ 15,555).
Real estate india Capital can be in Euros only because foreign currency is not allowed. However, similar contributions are allowed instead of cash, such as computers, office equipment, vehicles, etc.
Registered Office Agent
Each limited liability company must have a registered office address in India. However, a local registered agent is not required.
Company officials are not required unless LCC’s capital is 50 million Brazilian rials (currently, about US $ 778,000) or more requiring the appointment of a company secretary.
Corporate tax rate is 30%. However, India has a minimum alternative tax rate of 19% to 20% for foreign companies.
Limited liability companies must submit an annual income tax declaration, whether they earned a profit or showed a loss.
Taxation is required on profit payments in addition to payment of interest and royalties to non-residents.
Accounting and auditing
Each limited liability company must provide an audited statement of its annual accounts.
In addition, standard accounting practices are required. Maintenance of the Company’s books and records is required at the registered office or elsewhere in the same city.
Annual General Meeting
Annual general meeting is required for shareholders. Board meetings can be held anywhere in the world. However, shareholder meetings must be held in India. Records of meeting minutes are required and must be kept in the registered office.
Ministry of Corporate Affairs records are publicly available. This includes access to shareholder records, managers, audit and financial records.
It is estimated that the registration and approval of the Limited Liability Company will take between 10 and 15 working days.
Shelves for companies
Rack companies are available for purchase to speed up the registration process.
A limited liability company (LLC) in India obtains these benefits: 100% foreign ownership, limited liability and required from two shareholders (who may be foreigners), low social capital, English speaking, and widely used in all documents.
Starting How Can Startups Retain Their Best Employees articles a staff life can also be difficult because each deadline could lead to a company collapse. This means that many employees choose a more stable job with a former company.