{"id":106,"date":"2022-10-17T10:59:04","date_gmt":"2022-10-17T10:59:04","guid":{"rendered":"https:\/\/lawyer-india.com\/?p=106"},"modified":"2023-03-07T17:41:29","modified_gmt":"2023-03-07T17:41:29","slug":"types-of-companies-in-india","status":"publish","type":"post","link":"https:\/\/lawyer-india.com\/types-of-companies-in-india\/","title":{"rendered":"Types of Companies in India"},"content":{"rendered":"\n<p>The main&nbsp;<strong>types of companies in India<\/strong>&nbsp;include the&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/open-an-llc-in-india\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>limited liability company<\/strong><\/a>, the limited liability partnership, the association, the representative office as well as the branch of a foreign company. Foreign investors enjoy the same rights as local entrepreneurs and can open any one of these business types.<\/p>\n\n\n\n<p>Investors who need specialized legal aid in choosing the type of company and handling the incorporation can request the services offered by our&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>attorneys in India<\/strong><\/a>.<\/p>\n\n\n\n<p>If you are interested in&nbsp;<strong>immigration to India<\/strong>, you can know that foreign nationals can open companies here.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #002e5b;color:#002e5b\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #002e5b;color:#002e5b\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/lawyer-india.com\/types-of-companies-in-india\/#business-entity-types-in-india\" title=\"Business entity types in India\">Business entity types in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/lawyer-india.com\/types-of-companies-in-india\/#company-incorporation-in-india\" title=\"Company incorporation in India\">Company incorporation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/lawyer-india.com\/types-of-companies-in-india\/#company-taxation-in-india\" title=\"Company taxation in India\">Company taxation in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/lawyer-india.com\/types-of-companies-in-india\/#doing-business-in-india\" title=\"Doing business in India\">Doing business in India<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"business-entity-types-in-india\"><\/span><strong>Business entity types in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The table below summarizes the characteristics of the main types of legal entities in India.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Company Type<\/td><td>Characteristics<\/td><\/tr><tr><td>Private limited company<\/td><td>Has a restricted number of members and cannot offer its shares to the public<\/td><\/tr><tr><td>Public limited company<\/td><td>Can publicly trade its shares and there is no limit to the number of members&nbsp;<\/td><\/tr><tr><td>Limited liability partnership<\/td><td>This is a separate legal entity from its founders, formed by at least two partners our of which one must be a resident<\/td><\/tr><tr><td>OPC<\/td><td>This is the one-person company, there are requirements for residency with this business type<\/td><\/tr><tr><td>Branch<\/td><td>The branch and the representative office are two manners in which a foreign company can establish its presence in India<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>When foreign investors open one of the existing types of companies in India, they should consider how the business model will apply to the Indian operations. In some cases, opening a local private or public limited company will confer more credibility, compared to a branch office or a liaison office. For foreign companies, this means that a wholly owned Indian subsidiary can be a suitable choice to engage in any business activity, as permitted under the foreign direct investment policy.<\/p>\n\n\n\n<p>Some of the main issues to take into account when choosing a business form include the following:<\/p>\n\n\n\n<ul>\n<li>the nature of the activities;<\/li>\n\n\n\n<li>the duration of the investment and the business model;<\/li>\n\n\n\n<li>tax considerations;<\/li>\n\n\n\n<li>any residency considerations for foreign investors, as may be applicable for a certain business form (for example, the one-person company).<\/li>\n<\/ul>\n\n\n\n<p>Investors who wish to know more about a certain type of business entity can reach out to the experts at our&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/about-us\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Indian law firm<\/strong><\/a>.<\/p>\n\n\n\n<p>Irrespective of the type of company foreign investors choose to incorporate in India, if they plan to remain in the country for more than 180 days, they will need to apply for a residence permit. This will allow them to remain in the country to oversee the registration of the business, as well as manage the new company during its early months or years. You can reach out to us for details on<strong> immigration to India<\/strong>.<\/p>\n\n\n\n<p>If you have already opened a company in the country and have spent a number of years lawfully residing here in order to manage your business, you can be a candidate for Indian citizenship. The process and the minimum number of years depending on the application route (by registration or by naturalization in most cases) and our team can answer your questions according to your situation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"company-incorporation-in-india\"><\/span><strong>Company incorporation in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Company formation in India is governed by the Companies Act. Issues like the types of shares, the management of the company and the requirements for members are included in this Act. One of our&nbsp;<strong>lawyers in India<\/strong>&nbsp;can give you more details on the provisions of the Companies Act and can answer specific questions such as the types of shares and the transfer of shares or the capital increase\/decrease. Below, we briefly list the main steps needed to open a company in India:<\/p>\n\n\n\n<ol>\n<li>Apply for the director identification number: this is submitted with the Ministry of Corporate Affairs and the applicant attached proof of identification as well as the filled-in application form; any individual interested in becoming company director in India follows this procedure;<\/li>\n\n\n\n<li>Apply for the company name: the name of the new company needs to be unique and can be applied for with the Ministry of Corporate Affairs;<\/li>\n\n\n\n<li>Prepare the company documents: for the private and the public company, these are the Articles of Association; other business forms, like the partnership, do not have such complex incorporation documents;<\/li>\n\n\n\n<li>Register the business: the company is registered with the Ministry of Corporate Affairs and once this is complete other registrations for the permanent account number and the tax account number also take place.<\/li>\n<\/ol>\n\n\n\n<p>Please keep in mind that this is only a brief list of steps, applicable in case of the private or public limited liability companies. We advise interested investors to reach out to our team of lawyers in India as soon as they are ready to apply for the director identification number (DIN).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"company-taxation-in-india\"><\/span><strong>Company taxation in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Investors who decide to open one of the available business forms should be aware of the applicable taxation policies. Our team of tax lawyers lists below some of the most important taxes for corporations:<\/p>\n\n\n\n<ul>\n<li>Corporate tax: 15%, 22%, 25%, 30%, for domestic companies the maximum tax is calculated at 34.944% when including surcharge and for foreign companies this is 40% without the surcharge;<\/li>\n\n\n\n<li>Withholding tax: dividends paid to a resident Indian company are generally subject to a 10% rate;<\/li>\n\n\n\n<li>Value-added tax: this is the goods and services tax in India, with several different rates, at 0%, 5%, 12%, 18% and 28% as well as special rates of 0.1%, 0.25% or 3% in some cases;<\/li>\n\n\n\n<li>Other taxes: included here are social security contributions, the transfer tax, stamp duty, and others.<\/li>\n<\/ul>\n\n\n\n<p>India has signed almost 100 double tax treaties. The tax year is calculated from 1 April to 31 March the following year.<\/p>\n\n\n\n<p>It is not mandatory to&nbsp;acquire residency for the purpose of company incorporation, however, if you wish to apply, our lawyers can assist you.<\/p>\n\n\n\n<p>Foreign investors who wish to open one of the types of companies described herein can also reach out to us if they have questions about <strong>residency in India.<\/strong> Remaining in the country for long-term purposes is understandable when foreign investors wish to closely manage their Indian company. Our team can give you details about the types of visas that allow you to do so.<\/p>\n\n\n\n<p>Some investors may wish to remain in the country permanently after having conducted business for a number of years. If this is the case, we can help those interested in<strong>&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/immigrate-to-india\" target=\"_blank\" rel=\"noreferrer noopener\">immigration to India<\/a><\/strong>.<\/p>\n\n\n\n<p>Our team can offer complete assistance during the process of obtaining&nbsp;<a href=\"https:\/\/www.lawyer-india.com\/indian-citizenship-by-investment\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Indian citizenship by investment<\/strong><\/a>.<\/p>\n\n\n\n<p>Each of the business forms described in this article has its own characteristics and may be more advantageous for certain types of businesses. While the limited liability company is the most widely used type of legal entity, investors can explore other options with the help of our&nbsp;<strong>Indian lawyers<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"doing-business-in-india\"><\/span><strong>Doing business in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>India has one of the largest economies in the world and an important developing country that is among the top global traders. According to the&nbsp;<a href=\"https:\/\/www.wto.org\/index.htm\" target=\"_blank\" rel=\"noreferrer noopener\">World Trade Organization<\/a>, the profile on India indicated the following figures:<\/p>\n\n\n\n<ul>\n<li>Merchandise exports in 2019 amounted to 324,218 million US$; for most of these, the main destination was the United States of America (16.8%);<\/li>\n\n\n\n<li>Commercial services experts has a value of 213,731 million USD in 2019;<\/li>\n\n\n\n<li>As far as industrial property is concerned, there were 26,220 trademark applications submitted by non-residents in 2018.<\/li>\n<\/ul>\n\n\n\n<p>There are many sectors in which foreign direct investment is automatic, however, in some cases investors will need to obtain a prior approval from the Foreign Investment Promotion Board (for example, in the mining or the telecommunications sectors). The country also maintains a list of prohibited activities, examples including gambling and betting and atomic energy, fields in which foreign investment is not permitted. Nonetheless, many sectors are open to foreign investments 100% and the English-speaking workforce makes is an important element in attracting investments, particularly in fields such as information technology.<\/p>\n\n\n\n<p>Investors who are interested in starting one of the company types in India mentioned in this article and need assistance investing in a particular business sector, can reach out to our incorporation agents for information on the investment policies as well as the special permits and licenses that are required.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.lawyer-india.com\/contact\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Contact us<\/strong><\/a>&nbsp;for complete details about the requirements for setting up a business or for other legal services in India, including those offered by our&nbsp;<strong>immigration lawyers in India<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The main&nbsp;types of companies in India&nbsp;include the&nbsp;limited liability company, the limited liability partnership, the association, the representative office as well as the branch of a foreign company. Foreign investors enjoy the same rights as local entrepreneurs and can open any one of these business types. Investors who need specialized legal aid in choosing the type [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":75,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[12,25,11,26],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Types of Companies in India - Detailed by our Lawyers<\/title>\n<meta name=\"description\" content=\"There are several types of companies available for incorporation, presented in this article by our team of lawyers in India. 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