What are different structures/formats to start my own company in India?

Legal Structure

Private Limited Company

(Wholly/Partially Owned or Joint venture)

Liaison Office (LO)

Project Office (PO)

Branch Office (BO)

Limited Liability Partnership

Permissible Business Activities

Wide range of activities permitted under automatic route/approval route

Please check the link http://dipp.nic.in/English/policy/changes/press2_00.htm for list of activities under automatic/approval route)

Marketing & branding. No commercial activities that involves revenue generation

Execution of any awarded project in India. Example is project of Installation of Machinery at Airport

All activities of parent company, except manufacturing activities

Wide range of activities permitted under approval route

Legal Composition

• Entire Share Capital can be owned by foreign investor- Wholly Owned Subsidiary-WOS
• 2 or more parties can jointly hold the share capital-Joint Venture -JV

Representative Office only

For executing a time bound project

Representative office of Head Office

Limited Liability Partnership Firm.

Minimum Number of Directors

2 Directors, 1 to be resident in India

1 Representative

1 Representative

1 Representative

2 Partners

Minimum Number of Investors

2

N.A.

N.A.

N.A.

2

Minimum Share Capital

Authorized Capital: Rs. 100,000

Paid-up Capital: No Minimum requirement

N.A.

N.A.

N.A.

NIL

Legal Permission

Automatic Route/Approval by individual Government Departments

Advance approval from RBI

Advance approval from RBI

Advance approval from RBI

Advance approval from RBI

Corporate Liability

Limited to the subscribed share capital

Full liability of parent

Full liability of parent

Full liability of parent

Partners liability up to agreed contribution

Tax Structure

Taxed as Domestic Company @30% plus surcharge

Not Applicable, as there is no revenue/profit

Taxed as Foreign Company @40% plus surcharge

Taxed as Foreign Company @40% plus surcharge

Tax based on highest marginal rate of partners