Company Law Service

We
are a well recognized chartered accountant firm, providing consultations and
services in Company Law Matters. Our services are customized in accordance to
your specific requirements. We assist you from the very initial processes of
company establishment to company maintenance process, etc. Our services include:
NGO's (Non Government Organisations)
/ Societies and Trust

We
assist in the registration procedures of Societies and Trusts as well as in
the process of formationof memorandum of association (MOA). We guide them through
the modes and methods, procedural formalities and the process of documentation.
We also counsel them regarding the benchmark required for registration.
Our panel of accountants with their sound professional information help organizations
to meet the requisite criteria to register themselves as licensed charitable
or non-profit institutions. Moreover, solutions regarding income tax, statutory
and internal audit and many more services are offered by us
How one can enter
in Indian Market
One
can enter the Indian market in more ways than one. These are:
Liaison office
Branch Office
100% Owned subsidiary
Project Office
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Joint venture with an Indian partner
Foreign Direct Investment (FDI)
Public Holding of Part Share
Appointing Agent or Distributor
Maintenance and support arrangement
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Liaison
Office
A Liaison Office is in the nature of a representative office set up primarily
to explore and understand the business and investment climate. A liaison
Office is not permitted to undertake any commercial / trading/ industrial
activity, directly or indirectly, and is required to maintain itself out
of inward remittances received from abroad through normal banking channels.
Activities Permitted:
- Representing in India the parent Company / group Companies
- Promoting export/ import from/ to India
- Promoting technical / financial collaborations between the parent
/ group companies and companies in India
- Acting as a communication channel between the parent company
and Indian companies
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Approval / Incorporation
Any foreign company intending to open a liaison Office in India is required
to obtain prior approval from the RBI, the apex foreign exchange management
authority in India. Approval is usually granted for three years and can
be renewed on expiry thereof.
In addition to above, the foreign company is also required to obtain a
Certificate of establishment of place of business in India from the Registrar
of Companies (ROC).
Suitability
of a Liaison Office
The liaison office generally acts as a communication channel
between the parent company overseas and its present or prospective customers
in India. The liaison office can also be set up to establish business
contacts or gather market intelligence to promote the products or services
of the overseas parent company.
The liaison Office cannot undertake any business activity
in India nor earn any income in India.
The liaison Office has to meet its entire expenses from
funds received from the parent company through normal banking channels.
At the time of closure of the liaison Office, the RBI grants permission
to repatriate the balance in the Indian bank account to the parent company.
Since the liaison Office is not permitted to earn any
income, it should not constitute a taxable entity in India. However, the
liaison Office would be required to withhold tax from certain payments and
hence to comply with the requisite tax withholding requirements under the
domestic tax law.
I n s h o r t
Liaison Office procure order & send the same to parent company, parent
company to supply the ordered goods and payment can pursued by liaison office.
However payment too be directly remitted to the parent company. No Income
Tax in India, only liability of Fringe Benefit Tax (FBT) will arise.
Branch
Office
A branch would mean an establishment carrying on substantially the same activity
as its Head Office.
Activities Permitted:
As per the guidelines laid down by the RBI, the Branch Office in India is
allowed to carry on only the following activities:
Export / Import of goods
Rendering professional or consultancy services
Carrying out research work, in which the parent company
is engaged
Promoting technical or financial collaboration between
Indian companies and parent or overseas group companies
Representing the parent company in India and acting as
buying / selling agent in India
Rendering services in Information Technology and development
of software in India
Rendering technical support to the products supplied
by parent / group companies
Approval / Incorporation
Foreign companies intending to open a Branch Office in India need to obtain
prior permission of RBI which would encompass even approval to the scope of
activities that are intended to be carried out in India.
In addition to above, the foreign company is also required to obtain a Certificate
of establishment of place of business in India from the Registrar of Companies
(ROC).
Typical
Points about Branch Office
This is considered a part of the foreign company and
is not treated as a separate legal entity.
The office can undertake trading activities, but not
manufacturing.
It is subject to taxation in India at 41.82% on income
accrued in India.
If there is a double taxation agreement with the country
in which the foreign company is incorporated, the tax paid in India can
be set off against the total tax payable by the parent company abroad.
Branch offices may repatriate profits to their Head Office
without obtaining prior approval.
The Branch Office would not expand its activities or
undertake any new trading, commercial or industrial activity other than
that is expressly approved by the RBI
The entire expenses of the Branch Office in India will
be met either out of the funds received from abroad through normal banking
channels or through income generated by it in India
The Branch Office will not accept any deposits in India;
Repatriation of
Profits
A Branch Office can remit the profits (net of any withholding tax) generated
out of its operations in India on production of the prescribed documents,
and on establishing that it has earned a net profit by undertaking the permitted
activities. The Branch Office need not retain any profits as reserves in India
I n s h o r tt
Branch Office can do only business activities similar to that to its parent
company. No new activity permitted. In the highest tax slab of Indian Income
Tax Lab(40%). The profit so earned net of taxes can be remitted
to parent company.
100%
Owned subsidiary
Form a Company and the parent Company will hold 100%
of Shares in the Company.
The Company can take up any business in India.
NO RBI permission.
Will be treated as Domestic Company
Tax Rate Slab will be 30%
Approval / Incorporation
The Company is required to obtain a Certificate of establishment of place
of business in India from the Registrar of Companies (ROC).
Can be independently promoted by Parent Company
Can be promoted by any two person in India and than the
holding of this person can be purchased by the Parent Company. (If this
is the case, intimation about the transfer of share is required to be informed
to Reserve Bank of India).
Typical Points about 100%
Subsidiary
The profit earned in India can only be taken away by
parent Company in the form of dividend after payment of dividend tax @ 15%.
No easy exit.
Transfer pricing issues if purchases made from sister
concern
In s h o r tt
100% Subsidiary can take up any business in India. In the tax slab of domestic
Indian company Tax Lab(30%). The profit so earned after payment of 30%
+ 15% can be remitted to parent company in the form of dividend.
Project Office
Foreign Companies planning to execute specific projects in India can set up
temporary project/site offices in India. RBI has now granted general permission
to foreign entities to establish Project Offices subject to specified conditions.
Such offices cannot undertake or carry on any activity other than the activity
relating and incidental to execution of the project. Project Offices may remit
outside India the surplus of the project on its completion, general permission
for which has been granted by the RBI.
Joint Venture
With An Indian Partner
Foreign Companies can set up their operations in India by forging strategic
alliances with Indian partners.
Joint Venture may entail the following advantages for a foreign investor:
Established distribution/ marketing set up of the Indian
partner
Available financial resource of the Indian partners
Established contacts of the Indian partners which help
smoothen the process of setting up of operations
Foreign
Direct Investment (FDI)
India's foreign trade policy has been formulated with a view to invite and
encourage Foreign Direct Investment in India (FDI). The process of regulation
and approval has been substantially liberalized. The Reserve Bank of India
has prescribed the administrative and compliance aspects of FDI.
FDI can be divided into two broad categories: investment under automatic route
and investment through prior approval of Government.
Procedure under automatic route
FDI in sectors/activities to the extent permitted
under automatic route does not require any prior approval either by the Government
or RBI. The investors are only required to notify the Regional office concerned
of RBI within 30 days of receipt of inward remittances and file the required
documents with that office within 30 days of issue of shares to foreign investors.
Procedure
under Government approval
FDI in activities not covered under the automatic
route, requires prior Government approval and are considered by the Foreign
Investment Promotion Board (FIPB). Approvals of composite proposals involving
foreign investment/foreign technical collaboration are also granted on the
recommendations of the FIPB.
Investment by
way of Share Acquisition
A foreign investing company is entitled to acquire the shares of an Indian
company without obtaining any prior permission of the FIPB subject to prescribed
parameters/ guidelines. If the acquisition of shares directly or indirectly
results in the acquisition of a company listed on the stock exchange, it would
require the approval of the Security Exchange Board of India.