Private Limited Company Registration with OCI holder in India 

 Introduction

India has emerged as one of the fastest-growing economies in the world, attracting entrepreneurs and investors from across the globe. The government of India has implemented several reforms to simplify the business registration process, making it more efficient and transparent. Understanding the legal and procedural framework for business registration is crucial for anyone looking to establish a company in India.

The Companies Act, 2013, governs the incorporation and regulation of companies in India. The Ministry of Corporate Affairs (MCA) oversees the administration of the Act and has introduced various online services and forms to streamline the registration process. Key among these are the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form and the RUN (Reserve Unique Name) service, which have significantly reduced the time and complexity involved in company registration.

For foreign nationals, including Overseas Citizens of India (OCI) and Non-Resident Indians (NRIs), specific requirements and procedures need to be followed. These include notarization, apostilling, or legalization of documents to ensure compliance with Indian regulations. Moreover, the Foreign Exchange Management Act (FEMA) governs foreign investments and transactions, making it essential for foreign investors to understand the implications and requirements under FEMA.

With the introduction of the Goods and Services Tax (GST)  and other regulatory reforms, India offers a conducive environment for setting up businesses. The ease of doing business has been a focal point of the government's economic policy, reflected in India's improved rankings in global indices.

This article provides a complete guide to the Private Limited Company Registration process in India, detailing the steps involved for both domestic and foreign entrepreneurs, and highlighting the regulatory requirements that must be adhered to. Whether you are looking to incorporate a private limited company or a Limited Liability Partnership (LLP), skill these processes will help ensure a smooth and compliant business setup.

Business Registration Process in India

As a Company

  1. Name Availability and Reservation:
    • Check the availability of the proposed company name and any registered trademarks.
    • Reserve the name through the online service RUN on the MCA website or apply via SPICe+.

  2. Digital Signature Certificate (DSC) and Director Identification Number (DIN):
    • Obtain a DSC for at least one proposed designated Director.
    • Apply for DIN through form SPICe+.

  3. Incorporation Application:
    • Fill and submit Form INC 32 (SPICe+) to the RoC for incorporation.
    • PAN and TAN will be auto-generated based on details in the SPICe+ form.

  4. Memorandum and Articles of Association:
    • File the electronic Memorandum of Association (eMoA - INC 33) and electronic Articles of Association (eAoA - INC 34) through SPICe+.
    • For foreign subscribers, execute and attach physical MoA and AoA.

  5. SPICe+ Upload and Payment:
    • Confirm upload and fee payment via MCA.

  6. Document Verification:
    • Central Registration Centre (CRC) verifies and scrutinizes all documents and forms.
    • Make any necessary changes as suggested by CRC.

  7. Certificate of Incorporation (CoI):
    • Obtain CoI. CIN, PAN, and TAN numbers are allotted at registration.

  8. Declaration of Subscription Amount:
    • File a declaration of receipt of the subscription amount and verification of the registered office within 182 days of incorporation and prior to the commencement of business.

  9. Notarization & Apostilling:
    • Mandatory for foreign subscribers/Directors.

  10. State-specific Registrations:
    • Depending on the state and nature of business, additional registrations may be required.
    • Obtain GSTIN, ESIC, and EPFO registrations by filing the AGILE form at the time of incorporation.

Requirements for Notarization and Authentication of Documents for Foreign Nationals (Including OCI Holders/NRI) Subscribing to a Memorandum for Incorporating a Company:

  1. Commonwealth Country:
    • The subscriber's signatures, address on the memorandum and articles of association, and proof of identity must be notarized by a Notary Public in that Commonwealth country.
  2. Hague Apostille Convention Country:
    • The subscriber's signatures, address on the memorandum and articles of association, and proof of identity must be notarized by a Notary Public of their country of origin and then apostilled according to the Hague Convention.
  3. Non-Commonwealth and Non-Hague Apostille Convention Country:
    • The subscriber's signatures, address on the memorandum and articles of association, and proof of identity must be notarized by a Notary Public of that country.
    • The notary certificate must then be authenticated by a Diplomatic or Consular Officer empowered under relevant laws, or by other designated officials if no such officer is available.
  4. Subscriber Visiting India:
    • Incorporation is allowed if the subscriber has a valid Business Visa.
    • Persons of Indian Origin or Overseas Citizens of India are exempt from the Business Visa requirement.

Foreign Exchange Management Act (FEMA) Compliance for OCI Shareholders:

  1. FEMA Applicability:
    • FEMA regulations govern foreign exchange transactions in India, including investments made by non-residents.

  2. NRO/NRE Accounts:
    • NRO Account: For managing income earned in India.
    • NRE Account: For managing income earned abroad.
    • Payments from these accounts can be made on a repatriation basis (transferable abroad) or a non-repatriation basis (non-transferable abroad).

  3. Declaration by OCI Shareholders:
    • OCI shareholders may need to provide a declaration to the bank before making investments into Indian accounts.
    • This declaration likely concerns the nature of the investment (repatriation or non-repatriation) and other relevant details as required by FEMA regulations.

  4. Investment in Share Capital:
    • OCI shareholders investing in Indian companies by purchasing shares must comply with FEMA regulations.
    • Compliance may involve providing declarations to the bank regarding the nature of the investment and other relevant details.

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