• Regarding USA Business and Business here

Hey there,

We have an LLC in the United States that wants to acquire or operate the PVTD in India. 

How do you go about making an international agreement like this?

Basically, the LLC would own the PVTD. 

The main head quarters are in the USA and I want to make sure that own the subsidaries set up in India
Asked 2 years ago in Business Law from United States
1. You have to form another PVT ltd. Company in India with at least 2 Indian Directors.
2. The said newly Indian incorporated company can acquire the shares of the existing Indian companies ans stake control of the same.
3. once at least 51% shares of the existing company is acquired, you can control the same and it would be treated as your own company as far as management and decisions are concerned.

While doing so this Circular of RBI will have to be kept in mind.

Master Circular on Foreign Investment in India

Foreign investment in India is governed by sub-section (3) of Section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended from time to time. The regulatory framework and instructions issued by the Reserve Bank have been compiled in this Master Circular. The list of underlying circulars/notifications is furnished in Appendix. In addition to the above, this Master Circular also covers the area of ‘Investment in capital of Limited Liability Partnership, partnership firms or proprietary concern’ which is regulated in terms of Section 2(h) of Section 47 of Foreign Exchange Management Act, 1999, read with Notification No. FEMA 24/2000-RB dated May 3, 2000.

2. This Master Circular is being updated from time to time as and when the fresh instructions are issued. The date up to which the Master Circular has been updated is suitably indicated.

3. This Master Circular may be referred to for general guidance. The Authorised Persons and the Authorised Dealer Category – I banks may refer to respective circulars/ notifications for detailed information, if so needed.
Devajyoti Barman
Advocate, Kolkata
5248 Answers
54 Consultations
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Hi,
 if you have already set up a PVT Ltd. company , you can in- corporate it under  your international LLC, by acquiring the shares of it.

make it as a subsidiary company is a private limited company incorporated in India  with the parent company your LLC as its shareholder. For small to medium-sized foreign businesses, a subsidiary company is the most preferred choice of registration in in India
Your private company can be also a branch office in India, A branch office is registered in India  as an extension of its parent company and not as a separately incorporated entity. The liabilities of a branch office extend to its parent company.
 Another  option is that as a  representative office is registered in  India as a temporary arrangement for conducting marketing research activities. However ,a representative office does not have any legal status and cannot be engaged in any profit yielding activities.

So depending up on your requirement of business and the nature of work, you can chose to either entirely start as a subsidiary of your LLC , a Pvt.Ltd.here in India , or take the stake of the already incorporated one .

The procedure  can be decided on the basis of the existing company documents and its clauses.
it is advisable that you engage an advocate or a CA and give the details of both LLC registration and Indian  Pvt.Ltd.
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
5.0 on 5.0
1) LLC can set up 100%subsidiary in india as a pvt limited company 

2) where 100%FDI is permitted no prior approval of RBI is necessary 

3) pvt ltd company will be treated as domestic company  under tax laws  and entitled to  exemptions , deductions ,  benefit applicable to any other indian company 

4) pvt ltd company requires 2  directors , 2 shareholders 

5) minimum authorised and paid up capital of Rs 1 lakh 

7) funding can be way of share capital or loan
Ajay Sethi
Advocate, Mumbai
23386 Answers
1229 Consultations
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1. If your team has already set up a Pvt Ltd Company in India, you can now take over 51% of its share,

2. You being a LLC can also set up your subsidiary in India by forming Pvt Ltd. Company,

3. Pvt Ltd. Company in India requires atleast 2 nos. directors and 2 nos. shareholders with minimum share capital of Rs. 1 lakh,

4. To set up a Pvt.Ltd. Company in India by a LLC formed abroad in the sector for which 100% FDI has been permitted, you won't have to take any prior permision from RBI.
Krishna Kishore Ganguly
Advocate, Kolkata
12143 Answers
233 Consultations
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