• USA LLC and setting up Indian offices

Hi guys, 

Here is my current situation. Please let me know how you can help personally, and I will use one of your services! 

1. My name is Rehan Hussain and I am located in the United States in the Boston Area. I have an LLC that is established here. It's primary purpose is that we build websites and Mobile Apps. I am looking for advice on how to properly set up subsidaries of this LLC that will be development offices in India for us. We have set one up, but I don't think it was done properly.
2. I have partners in India and I am afraid that they have not set up the company properly. They have registered a company "In-Jeneyus PVTD", however I am not listed as a shareholder and there is no trace of Elahi LLC being the owner of that company. How do I go about making sure that Elahi LLC is the proper owner of this company? See- We have made external contracts, but I don't think that is enough. 
3. What paperwork is involved, does Elahi LLC need to be on any of the paper work, shareholders or what? Does it need to be an external contract?
4. What is the exact process of making this legally binding? 
5. Next- I am planning to open another office in Bangalore. However, I would like to set this up myself as a subsidarie of Elahi LLC
6. Can I set up an PVTD with out actually physically being in India? Can I do it from the USA? 
7. How do I go about making sure that I am legally safe in this situation?

1. I am also planning on opening another office in Bangalore. Should I register a new PVTD? Or, if I can correct the existing one above, can the office in Bangalor fall underneath this PVTD, thus falling under the LLC? 
2. Do I have to be in India to set up a PVTD there? 
3. If not, how I do go about registering a PVTD under my name in India if I am here in the USA?
4. How would I go about doing this legally when I am in the USA?

Basically, I want to make sure that the existing PVTD that we created is owned by my LLC as well as any new offices are properly structured as subsidary/assets of Elahi LLC. 

Looking forward to using one of you!
Asked 3 years ago in Business Law from United States
First of all you need  Colour Photograph, ID Proof, Address Proof and Passport all duly attested by Embassy in Four Individual Sets for your Foreign Directors as without it we can't apply for DIN which you require for becoming Director on any Company. To make DIN applications you require DSC.     

Once DIN is approved we can apply for Approval of Name with the ROC. We want to know what is proposed Name as need to check whether that name is available 0r not. What is the amount of Investment you are going to make for it. Which are the Directors are investing and  how much. You need take care FDI limits on minds and how the profits n remuneration are to be shared.   

Once they are Directors of Company  they can get the Visas easily even Indian Director of Company can sponsor them. Lot more other information and details are required like where this businesswill be opened whether you have owned that property or not if it is rented then also we require Property Tax receipt of the Premises for Forming the Company n obtaining other licenses to run the business.

This can be done in your absence.
Devajyoti Barman
Advocate, Kolkata
13100 Answers
174 Consultations

5.0 on 5.0

1) we had already advised you that you can set up subsidiary as pvt ltd company . 

2) funding can be way of share capital or loan and that minimum authorised and paid up capital should be Rs 1 lakh 

3) pvt limited company would need 2  directors and 2 share holders . 

4)The steps to be followed for registering a Private Limited or a Public Limited company are enlisted here.
Step 1 [Obtaining Director Identification Number]: A Private Limited Company must have a minimum of two directors and two shareholders. And the directors must have a valid Director Identification Number (DIN), allotted by the Ministry of Corporate Affairs. The provisional DIN can be obtained by filing application Form DIN-1 online. This form is available on the Ministry of Corporate Affairs portal (www.mca.gov.in). The provisional DIN is immediately issued (provisional DIN is valid for a period of 60 days). The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and proof of address. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. It takes about 3-5 days to issue the permanent DIN. For more information, please visit: http://www.mca.gov.in/MCA21/RegisterNewComp.html.

Step 2 [Obtaining a Digital Signature]: At least one of the directors should have a valid Digital Signature Certificate issued by the Certifying Authorities (CA) and approved by the Ministry of Corporate Affairs (MCA). Every document prescribed under the Companies Act, 1956, is required to be filed with the digital signature of the managing director or director or manager or secretary of the company.  To use the new electronic filing system under Ministry of Company Affairs (MCA), the applicant must obtain a Class-II Digital Signature Certificate. The digital signature certificate can be obtained from one of six private agencies authorized by the MCA. For more details on the six agencies, please visit: http://www.mca.gov.in/MCA21/certifying-new.html.

Step 3 [Approval of Company Name]: The first step in the process of formation of a company is the application for MCA’s approval of the desired name for the proposed company. Application for name approval can be made online via MCA’s portal MCA 21. Select, in order of preference, a few suitable names, not less than four, indicative of the main objects of the company. Ensure that the name does not resemble the name of any other company already registered and also does not violate the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950. The Registrar shall intimate, within two to three days, whether the proposed name is available or not. Once, the Company name is allotted, company registration documents are filed with respective Registrar of Companies (ROC) for registration.

Step 4 [Preparation of Documents]: After obtaining name approval from the Registrar of Companies the following documents must be prepared to incorporate the company
•	Memorandum of Association (MOA): The MOA is a document that sets out the constitution of the company. It contains, amongst others, the objectives and the scope of activity of the company and also describes the relationship of the company with the outside world.
•	Articles of Association (AOA): The Articles of Association contain the rules and regulations of the company for the management of its internal affairs. While the Memorandum specifies the objectives and purposes for which the Company has been formed, the Articles lay down the rules and regulations for achieving those objectives and purposes. It also states the authorized share capital of the proposed company and the names of its first / permanent directors.
•	Form 1 – providing details of promoters of the company
•	Form 18 – providing details of registered office of the company
•	Form 32 – providing details of Director, Manager or Secretary of the company
Professional help is to be sought in the drafting of the MOA and AOA, as it contains the governing policies, rules and by-laws of the proposed venture. The draft must be carefully vetted by the promoters before printing and stamping. The MOA and AOA must be signed by at least two subscribers in his/her own hand, his/her father’s name, occupation, address and the number of shares subscribed for and witnessed by at least one person. The the MOA and AOA are then required to be stamped and filed with the ROC.  Stamp duty is required to be paid on the MOA and on the AOA. The stamp duty depends on the authorized share capital and varies between states/provinces in India. E-Stamping facility is now available via MCA’s portal. The document preparation process may take five to seven days.

Step 5 [Submission of Documents to ROC and Payment of Fee]: Submit the following documents to the ROC with the filing fee and the registration fee:
•	The stamped and signed copies of the Memorandum and Articles of Association (3 copies).
•	Form-1, 18 & 32 in duplicate.
•	Any agreement referred to in the Memorandum and Articles of Association
•	Any agreement proposed to be entered into with any individual for appointment as Managing or whole time Director.
•	Declaration of Compliance by an advocate or company secretary or chartered accountant or director, manager or secretary of the company
•	Name availability letter issued by the Registrar of Companies.
•	Power of Attorney from the subscribers in favor of any person for making corrections on their behalf in the documents and papers filed for registration. The power of attorney should be given on Non-Judicial stamp paper of appropriate value and shall be submitted to the Registrar
The fees payable to the Registrar at the time of registration of a new company varies according to the authorized capital of a company proposed to be registered. Payment for the Registration and Filing Fee must be made by Demand Draft/Banker’s Cheque if it exceeds Rs.1000/.

Step 6 [Obtaining Certificate of Incorporation]: The ROC will issue a Certificate of Incorporation after careful review of documents submitted. Section 34(1) cast an obligation on the Registrar to issue a Certificate of Incorporation, normally within 7 days of the receipt of documents. A Private Limited Company can start its business immediately on receiving the Certificate of Incorporation.

Step 7 [Obtaining a Permanent Account Number]: Visit an authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd to obtain a Permanent Account Number (PAN). Under the Income Tax Act, 1961, each person must quote his or her permanent account number (PAN) for tax payment purposes. The application for PAN can also be made online but the documents still need to be physically dropped off for verification with the authorized agent. For more details, see www.incometaxindia.gov.in, www.utiisl.co.in, and www.tin-nsdl.com.

Step 8 [Obtaining a Tax Account Number]: The application for allotment of a TAN must be filed using Form 49B and submitted at any Tax Information Network (TIN) Facilitation Center authorized to receive eTDS returns. Locations of TIN Facilitation Centers are at www.incometaxindia.gov.in and http://tin.nsdl.com. The processing fee for both applications (a new TAN or a change request) is INR 60 (plus applicable taxes).

Step 9 [Get registered under Shops and Establishment Act]: A statement containing the employer’s and manager’s name and the establishment’s name (if any), postal address, and category must be sent to the local shop inspector with the applicable fees. 

Step 10 [Get registered for VAT at the sales tax office]: VAT is levied on sale of goods. Any business entity proposing to carry out a works contract or trade in goods needs to register for VAT.

Step 11 [Get registered for Profession Tax]: According to section 5 of the Profession Tax Act, every employer is liable to pay tax and shall obtain a certificate of registration from the prescribed authority.

Step 12 [Get registered for Excise Tax]: Excise is an indirect tax levy on manufacture of goods. For more information, please visit: http://www.aces.gov.in/.
Step 13 [Register the company with the Employees’ Provident Fund Organization]: The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 applies to an establishment, employing 20 or more persons and engaged in any of the 183 Industries and Classes of business establishments, throughout India. The employer is required to provide necessary information to the concerned regional Provident Fund Organization (EPFO) in prescribed manner for allotment of Establishment Code Number.

Step 14 [Register for Employees’ State Insurance (ESI) Corporation for medical insurance]: The ESI Act applies to all establishments employing 20 or more persons. The ESI Act provides for sickness benefits, medical relief, maternity benefits for women workers, compensation for fatal and other employment injuries, etc. Every employee who receives wages up to Rs. 10,000 per month is covered by this Act. As per the Employees’ State Insurance (General), Form 01 is the form required to be submitted by Employer for registration. It takes 3 days to a week for the Employer Code Number to be issued. 

Steps to be taken for formation of a Public Limited Company
Apart from the 14 steps discussed above, the following must be undertaken to incorporate a Public Limited Company. 
•	Consent of Directors to act as such in Form No.29.
•	Arrange for payment of application and allotment money by Directors on shares taken or agreed to be taken.
•	File the Statement in Lieu of Prospectus with the ROC in schedule-iv of the Companies Act.
•	File a declaration in Form-20 duly signed by one of the Directors.
•	Obtain the Certificate of Commencement of Business.
Ajay Sethi
Advocate, Mumbai
46601 Answers
2756 Consultations

5.0 on 5.0

1. You have already been asvised that you can either takeover 51% controlling share of the already opened company named "In-Jeneyus PVTD" or form a Pvt Ltd Company afresh which will act as your subsidiery,

2. For your Bangalore operation you need not open another Company at Bangalore. Uou can open a branch office of your subisidiery at Bangalore,

3. Contact a CA or a CA Firm in India who will get your job of forming the said subsidiery done,

4. You can talk to the directors of the "In-Jeneyus PVTD" already formed in India offering the director to buy 51% of the total share of the said Company in which case time for forming a new company will be saved and you will be able to start your operation in India fast.,
Krishna Kishore Ganguly
Advocate, Kolkata
18730 Answers
452 Consultations

5.0 on 5.0

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