WOS or JVC in India can be incorporated as a Private Limited Company or a Public Limited Company.
Governing Authority- Governing Authority for incorporation of Private Limited or Public Limited Company in India is Registrar of Companies.
Governing Law- The Companies Act, 2013 and the rules and regulations made thereunder.
Apart from the difference from the compliance point of view, the basic difference between a Private Limited Company and a Public Limited Company are as follows:
|Particulars||Public Company||Private Company|
|Minimum Authorized Capital||Nil||Nil|
Foreign Direct Investment in India in WOS or JVC is permitted under the following two routes:
a) Automatic Route:
Indian companies can issue shares under the automatic route up to 100% of their paid-up capital in those sectors wherein Foreign Direct Investment is permitted up to 100%.
In certain other sectors, the foreign investment is limited to a prescribed percentage ceiling.
b) Government Approval:
All other cases where the automatic route is not applicable require prior specific approval from the Foreign Investment Promotion Board (commonly referred to as FIPB).
Time Period- There is no particular time limit as to the duration of Private/Public Limited Company. These entities shall carry on their business in India till the time they wound under the provisions of The Companies Act, 2013.
Permitted Activities- WOS/JVC can carry on the business activities as permitted by Foreign Direct Investment policy of India.
Establishment of WOS/JVC in India
The Following issues are to be decided upfront by the parent Company: –
- Individuals proposed to be appointed as Director;
(Minimum 2 for Private Limited Company and 3 for Public Limited Company)
*One of the Proposed Directors should have stayed in India for 182 days in the previous calendar year)
- Number of Shareholders and their shareholding ratio;
(Minimum 2 for Private Limited Company and 7 for Public Company)
- Authorised and Paid up Share Capital;
- Business Objects;
(In Principle Approval of appropriate authority/institute shall be required in case of certain objects)
- Proposed Name;
- Address for Correspondence till Registered Office is established;
- Registered Office location;
(Name of the Indian City/State, where the Company proposes to establish its Registered Office once the company has been incorporated.)
Preparation of Documents: Basic documents required are
- Attested Identity (ID) and Address proof of the individuals proposed to be appointed as Directors;
- Attested Board Resolution for Name Approval and Incorporation;
- Attested Authority Letter/Power of attorney in favour of ‘KNM’;
- Memorandum and Articles of Association of the proposed WOS;
- Attested Subscriber sheet required to be attached with Memorandum and Articles of Association (This sheet needs to be filled by subscribers in their own handwriting);
- Attested Articles of Association and Certificate of Incorporation of the Parent Company;
- Attested Verification of Proposed Director for application for DIN (Director Identification Number)
- Attested Consent Letter from Individuals proposed to be appointed as Directors;
- Attested Affidavit from the following persons declaring that one is not convicted of any offence in connection with the promotion, formation or management of any company:
- Each subscriber individually;
- Every person named as first Director
- Proof of nationality of the subscriber to the Memorandum and Articles of Association.
- Proof of Identity and Address of subscriber to the Memorandum and Articles of Association.
- Declaration by the registered owner not holding a beneficial interest in shares, if any.
(Applies to those shareholders who act through nominees)
- Declaration from any one Director to commence the business of the proposed Indian Company.
Filing of documents with the relevant Government authority and subsequent follow up.
Flow Chart- Incorporation of WOS/JVC in India
- Obtaining Director Identification Number (DIN) of all the Individuals proposed to be appointed as Director and Digital Signature Certificate (DSC) of any one of the individual proposed to be appointed as Director.
The Filing of Documents shall be done with DIN Cell of Ministry of Corporate Affairs for obtaining DIN.
DSC shall be issued by Registration Authority.
- Filing of Necessary Documents with the Registrar of Companies and obtaining Name Approval of the Proposed Company.
- Filing of necessary documents with the Registrar of Companies
- Payment of Incorporation Fee
- Follow up with the office of Registrar of Companies and obtaining Certificate of Incorporation
- Receipt of foreign inward remittance from Subscribers and Issue of Shares to Subscribers and Share Certificates
- Filing of declaration of commencement of business