Kiran Bulusu’s Blog

1. First and foremost identify the Directors of the Company. Minimum of two directors need to present and Maximum of 8 is allowed.
2. All Directors should have DIN (Directors Identification Number). If you do not have one you can apply DIN online
at www.mca.gov.in. FAQ on DIN http://www.mca.gov.in/MinistryWebsite/dca/faq/faq1.html
Documents required for DIN

A. Identity Proof (Any one of the following)
PAN Card
Driving License
Passport
Voter ID Card
Others (to be specified)
B. Residence Proof (Any one of the following)
Driving License
Passport
Voter ID Card
Telephone Bill
Ration Card
Electricity Bill
Bank Statement
Others (to be specified)

3. Once you have got your DIN then you need to apply for Company name. You need to go with 5-6 names in the order which you prefer.If the name is not available then they go to the next one in the order you have provided.

4. You need to apply online for the name availability . You need to Fill in Form 1A. Forms are avilable at this
location.http://www2.mca.gov.in/MinistryWebsite/dca/downloadeforms/eformTemplates/1030-Form1A_help.zip

5. Once you have got your name approved you have to apply for the Incorporation of Company. For this you
will have to prepare Memorandum of Association which will detail what the company;s operations the first list of directors
who are going the be in the board need to be defined in this document. This should be applied along with Form 1
http://www2.mca.gov.in/MinistryWebsite/dca/downloadeforms/eformTemplates/1022-Form1_help.zip. Ocne this has been approved make atleast 10-15 copies of your Certificate of Incorporation and Memorandum of Association and have it in a booklet form.

6. Once your company has been incorporated you can open a Current account in any of the leading banks
for carrying out your operations. You will need to submit a copy of Certificate of Incorporation and Memorandum of Association along with Borad resolution to open the bank account.

7. Thenyou need to apply for TAN and PAN for the Company
https://tin.tin.nsdl.com/pan/form49A.html
https://tin.tin.nsdl.com/tan/form49B.html

8. If your services are in Software related area you can apply for STPI license which will give you certain benefits
like Company need not pay tax for 5 years, there will be no import or expurty duty levied on software/hardware,
You will get office spaces at lower rates at STPI units. These are few of the benefits of becoming an STPI member.

All this you can do on your own or you can outsource these to professional auditor. We did it through Auditor and it took almost three weeks (Upto Step 7 excluding STPI) and all charges(excluding sTPI) would approximately cost you Rs.25,000.

I am not sure how much it would cost if you do it on your own. I read in one of the blogs that in Delhi the whole
process was completed in 30 minutes after the e-Governance was launched.

Good Luck and If you need more information or any guidance drop in a mail.

1. First and foremost identify the Directors of the Company. Minimum of two directors need to present and Maximum of 8 is allowed.
2. All Directors should have DIN (Directors Identification Number). If you do not have one you can apply DIN online
at www.mca.gov.in. FAQ on DIN http://www.mca.gov.in/MinistryWebsite/dca/faq/faq1.html
Documents required for DIN

A. Identity Proof (Any one of the following)
PAN Card
Driving License
Passport
Voter ID Card
Others (to be specified)
B. Residence Proof (Any one of the following)
Driving License
Passport
Voter ID Card
Telephone Bill
Ration Card
Electricity Bill
Bank Statement
Others (to be specified)

3. Once you have got your DIN then you need to apply for Company name. You need to go with 5-6 names in the order which you prefer.If the name is not available then they go to the next one in the order you have provided.

4. You need to apply online for the name availability . You need to Fill in Form 1A. Forms are avilable at this
location.http://www2.mca.gov.in/MinistryWebsite/dca/downloadeforms/eformTemplates/1030-Form1A_help.zip

5. Once you have got your name approved you have to apply for the Incorporation of Company. For this you
will have to prepare Memorandum of Association which will detail what the company;s operations the first list of directors
who are going the be in the board need to be defined in this document. This should be applied along with Form 1
http://www2.mca.gov.in/MinistryWebsite/dca/downloadeforms/eformTemplates/1022-Form1_help.zip. Ocne this has been approved make atleast 10-15 copies of your Certificate of Incorporation and Memorandum of Association and have it in a booklet form.

6. Once your company has been incorporated you can open a Current account in any of the leading banks
for carrying out your operations. You will need to submit a copy of Certificate of Incorporation and Memorandum of Association along with Borad resolution to open the bank account.

7. Thenyou need to apply for TAN and PAN for the Company
https://tin.tin.nsdl.com/pan/form49A.html
https://tin.tin.nsdl.com/tan/form49B.html

8. If your services are in Software related area you can apply for STPI license which will give you certain benefits
like Company need not pay tax for 5 years, there will be no import or expurty duty levied on software/hardware,
You will get office spaces at lower rates at STPI units. These are few of the benefits of becoming an STPI member.

All this you can do on your own or you can outsource these to professional auditor. We did it through Auditor and it took almost three weeks (Upto Step 7 excluding STPI) and all charges(excluding sTPI) would approximately cost you Rs.25,000.

I am not sure how much it would cost if you do it on your own. I read in one of the blogs that in Delhi the whole process was completed in 30 minutes after the e-Governance was launched.

From one of the users post :

or Overseas Company

A foreign company or individual planning to set up business outsourcing in Indian IT can do it as:

1.As a Foreign Company through a Liaison Office / Representative Office, Project Office or Branch Office.
2.As an Indian Company through a joint venture or a wholly owned subsidiary
3.Foreign Company is one that has been incorporated outside India and conducts business inside India. And these companies must comply with the provisions of Indian Companies Act 1956.

Liaison Office / Representative Office:

1.The ERA Act regulates the opening and operation of such offices while the RBIs (Reserve Bank of India) approval is needed for opening these offices.
2.These offices are not permitted to conduct any kind of business or commercial activity or to earn any income here.
3.Commercial activities must be limited to the collection and transmission of information between the overseas Head Office and the prospective Indian customer.
4.The overseas head office, through inward remittance of Foreign exchange, should meet the expenses of these offices.
5.Permission for these offices is granted initially for 3 years and may be extended from time to time.

Project Office

1.With the approval of RBI, overseas companies are planning to execute specific projects in India, which can set up temporary software projects or site offices in India.
2.This is generally for Government approved projects.

Branch Office

Foreign companies engaged in manufacturing and trading activities abroad can set up Branch Offices for business outsourcing in India with the permission of RBI, for the following purposes.

1.To represent the parent company / other foreign companies in various matters in India like buying / selling agents.
2.To conduct research work in the area in which the parent company is engaged, provided the results of the research work are made available to Indian Companies.
3.To undertake export and import trading activities.
4.To promote possible technical and financial collaborations between the Indian companies and overseas companies.
5.A branch office is not permitted to carry out manufacturing activities on its own but is permitted to sub contract these to Indian manufacturers.

As an Indian Company

1.Through incorporation of a company under the provisions of Indian Companies Act 1956, a foreign company can commence operations in India.
2.Foreign equity in such companies can be up to 100% depending upon the business plan of the foreign investor, prevailing investment policies of govt. of India and on the receipt of requisite approvals.

Joint Venture with an Indian partner

By forming strategic alliances with Indian partners, foreign companies can set up their operations in India.
This will benefit the foreign investor in the following ways:
1.Available financial resources of the Indian partner.
2.Already established distribution / marketing set up of the Indian partner.
3.Already established contacts of the Indian partner that help smoothen the process of setting up operations.

Approval of foreign investments

1.Automatic approval Foreign equity up to 50%, 51% and 74 % are given automatic approval by RBI, if they fulfill the prescribed parameters (in certain industries) specified by the Government of India.
2.Govt. approval Foreign equity exceeding 50%, 51% or 74% in both specified and unspecified industries needs prior specific approval from Foreign Investment Promotion Board (FIPB).

Wholly Owned Subsidiary

1.If a foreign investor holds 100% share of an Indian IT Company it has the right to set up a wholly owned subsidiary.
2.Prior approval from FIPB is needed.
3.Only holding operation is involved and all subsequent/downstream investments to be carried out require prior govt. approval.
4.Proprietary technology is sought to be protected or sophisticated technology is proposed to be brought in.
5.At least 50% of the production is to be exported.
6.Proposals for consultancy.
7.Proposals for infrastructure like roads, industrial model towers, industrial parks or estates.