Commission for international trade
I have brokered a trading deal for baby diapers from china to nigeria. The company in China will be shipping directly to the buyer in Nigeria. However, the company in China has agreed to provide a commission to me which would be around 25000 rupees a month. Currently I do not have a registered company in India. Please advice if I need to register a company to accept this payment, and if so what kind of company
Asked in Business Law from Chennai, Tamil Nadu
No, need for registering a company. You seem to have been functioning as a freelance service provider for which you receive commission than a salary.
For this you can continue the same keeping your individual identity and no company is required to be formed.
1) it is not necessary for you to register a company for accepting commission.
2) you can accept commission in your individual name also
3) if you want to form a company in India follow the procedure laid down for formation of company in India
4) you can contact a local lawyer or CA in this regard
5) have your contract for receipt of commission vetted by a local lawyer
1. If you have signed an agreement with the Chinese company wherein it has agreed to pay the commission to you on a monthly basis the agreement can be enforced through the court. This does not require you to incorporate a company.
2. However, if the agreement mandates that you incorporate a company to meet the eligibility to get the monthly commission then you must comply with it.
For the purpose of showing the source of your income you may have to produce the details of the source, hence it is better to open a trading company specifying the transactions and agreements thereon with both the sides so that your activity can be painted with legal color.
You can even register yourself as a broker on commission basis or a brokerage company on proprietorship basis as against the terms agreed between all the parties.