India is one of the largest economies in the world, and the Indian government has taken various steps to provide a supportive environment for entrepreneurs and NRIs to set up businesses in India. Entrepreneurs and NRIs can form a company in India but need to comply with the Companies Act, 2013, as well as applicable foreign exchange regulations.

The company formation process has been simplified by the Indian government through online registration of companies, integrating multiple forms and reducing timelines for various processes. This blog explains the step-by-step guide for company formation in India.

Step 1: Deciding Business Structure

You need to choose a type of company which you want to set up, such as a private limited company, Limited Liability Partnership (LLP), Wholly Owned Subsidiary or One Person Company (OPC); it depends upon ownership structure, liability and future growth. NRIs generally opt for private limited companies due to their ease of investment and compliance flexibility.

Step 2: Obtain DSC and DIN

All proposed directors are required to obtain a Digital Signature Certificate (DSC) for signing electronic forms. Director Identification Numbers (DIN) can be applied through the SPICe+ Part B (INC-32) form at the time of incorporation.

Step 3: Name Reservation (SPICe+ Part A)

The name of the company can be reserved by filing SPICe+ Part A on the MCA portal. The name should be different from already registered companies and must align with the company’s main business activity.

Step 4: Documents Required for Company Incorporation

Documents such as the Memorandum of Associations and Articles of Associations, along with declarations of directors and professionals, identity proofs of directors, and the company’s official address proof, are required for company incorporation.

Step 5: Filing Incorporation Application

Submit SPICe+ Part B (INC-32), the main form for incorporation, and AGILE-PRO-S (INC-35); it is a linked form submitted along with SPICe+ for registration of GST, EPFO, ESIC, bank account opening, and professional tax where applicable.

Step 6: PAN, TAN and GST Registration

When incorporation is approved, PAN and TAN are auto-generated and allotted with the Certificate of Incorporation. GST registration is obtained through AGILE-PRO-S if opted for during incorporation.

Step 7: Opening of Company Bank Account & Commencement of Business

A company bank account is mandatory for depositing share capital and conducting business transactions. After capital introduction and initial compliances, the company can legally commence its operation.

Things to keep in Mind for NRIs

• Investments made by NRIs are governed by FEMA and the applicable FDI policy.
• Although most sectors fall under the automatic route, certain sectors require government approval.
• Every company must have at least one Indian resident director.

Conclusion

Now the company incorporation process has been simplified for both entrepreneurs and NRIs, but NRIs need to comply with FEMA regulations.

Professional guidance ensures smooth incorporation and long-term statutory compliance, and if you are planning to incorporate a company in India, G. K. Kedia & Co. can serve as a suitable option, offering end-to-end support in incorporation and regulatory matters.

Written by
Mitransh Jha
Articled Clerk