Company Formation in India
Businesses are looking to incorporate companies in India more and more with the current booming economy.
However, legal complexity, recent tax reform, and foreign trade barriers pose a challenge for company formation in India.
NNRoad’s team of experts guides firms through the complex incorporation process, minimizing risks for smooth market entry.
Below there are the most common types of entities in India:
- Limited Liability Partnership - A Limited Liability Partnership (LLP) is governed by the Limited Liability Partnership Act 2008. Limited Liability partnership provides the advantage of limited liability to its owners and at the same time requires minimal maintenance. The ownership could be transferred easily to another person and there are no minimum capital requirements to be established. The director of a private limited company has limited liability to creditors. In case of default, banks/creditors can only sell the company’s assets and not the personal assets of directors.
- Private Limited Company - A Private Limited Company (Pvt.Ltd) is a privately held small business entity and considered as an independent legal entity on incorporation. It has a minimum of 1 and can have a maximum of 50 shareholders. Unlike Public Limited Companies, Private Limited Companies cannot publicly trade its shares. It can have a minimum of 2 and a maximum of 15 directors.
- Branch Office - Foreign companies engaged in manufacturing and trading activities abroad can set up Branch Offices in India. Branch Offices are not allowed to carry out manufacturing activities on their own but can subcontract those to an Indian manufacturer. Before commencing operations, the branch office requires approval from the Reserve Bank of India (RBI). Commercial activities of any nature are not allowed for a Branch Office.
Most Common Types of Entities in India
||Limited Liability Partnership (LLP)
||Private Limited Company (Pvt.Ltd)
||SMEs (manufacturing and trading activities)
||Min 2, Max Unlimited (at least one designated partner as Indian resident)
||Min 1, Max 50
||Local or foreign parent company
||Separate legal entity
||No legal entity
|Issuance of Shares
||The ownership can easily be transferred to another person
||Restricted stocks trade
||Local or foreign parent company
||Local or foreign
||Board of directors
||2 Directors Min, Max 15
||Local or foreign
NNRoad's Company Formation Solution Includes:
- Confirmation of the selection of a business entity type (e.g. private limited company, limited liability partnership “LLP”, branch office, and liaison office).
- Advise with initial capital amount and shareholding, if applicable.
- Assistance with the selection and application of entity name.
- Assistance with the identification of key persons in the entity (i.e. directors, officers, shareholders, and partners), if required.
- Secure a director’s identification number (DIN) and digital signature; designated partner identification number in an LLP.
- Apply and register with the Registrar of Companies (ROC).
- Apply for a PAN Card for local income tax purposes.
- Obtain TAN for all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
- Assistance with the drafting of charter documents such as the certificate of incorporation, Articles of Association (AOA), Memorandum of Association (MOA) and LLP agreement (for LLP).
- Assistance with bank account opening.
PEO Service/Employer of Record in India
We Can Help You Hire Employees in India. No local entity needed.
NNRoad is a Professional Employer Organization (PEO) that provides Employment Solutions in India, also known as Employer of Record (EoR) services.
Many companies opt to outsource their employment to minimize costs and legal risks when expanding their business operations in India.
NNRoad is specified in helping foreign companies navigate through Indian employment laws and requirements, saving you time so you can focus on core business activities.
- Legally hire local and foreign employees without a legal entity established in India.
- Our PEO service in India includes: monthly payroll management, employer statutory benefits administration, individual income tax compliance, medical insurance, expenses management, and visa application (if employees are foreigners).
- NNRoad becomes your in-country employer of record for dispatched employees in India. You will still be responsible for the management of your employees.
NNRoad's PEO service in India Includes:
Interested in learning more about employee leasing in India? Check out our Hiring in India Guide.
- Hiring and termination of employees/local labor contracts (contract administration – checking right to work legally in India, offer letter, appointment letter, relieving letter, and experience/conduct certificate where necessary).
- On-boarding and off-boarding employees following local law practice.
- Complete payroll solution and statutory benefit administration.
- Employee management – employee record retaining, timekeeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
- Mandatory social security (provident fund and pension fund) compliance according to the local laws.
- Statutory Benefits policy maintenance and updating on a regular basis.
- Foreigner VISA application, if needed.
- Income tax declaration administration (employee personal income tax reporting), if needed.
Payroll Service in India
NNRoad Handles All Your Payroll Administration in India
NNRoad is an expert in payroll outsourcing, and our payroll services in India can help companies improve their business efficiency.
We offer complete payroll service in India, from data collection to salary calculation to payment.
Outsourcing your payroll to NNRoad can serve as a cost-effective and simple method of paying your employees. This allows your company to free up time from the time-consuming and complex process of managing their payroll.
You can also benefit by gaining peace of mind knowing that you are paying the correct wage tax and social security obligations in full and on time by outsourcing your Indian payroll.
NNRoad’s Payroll Service in India Includes:
Read more about our India services here:
- Establishing a tax-efficient salary structure and adjusting the pay cycle per request.
- Registering the necessary company and personnel information for payroll calculation in the payroll software and system.
- Calculation of gross salary, salary deductions (e.g. statutory benefit deductions, unpaid leaves, etc.), and net salary based on information provided by the Company including irregular payments such as incentive/bonus, commission, allowance, severance, retirement payment, etc.
- Providing a monthly payroll summary to the Company.
- Expense claim validation and calculation.
- Payroll disbursement - Issue payment notice to the Company for payroll distribution to employees and employee’s expense claim; release e-payslip to employees and disburse salary to employee’s account.
- Releasing the income tax computation statement to employees.
- Preparation of year-end tax certificate (Form 16).
- Adjustment of taxes owed or to be refunded to the employee based on the cumulative income of the employee for the entire year.
- Prepare annual payroll related reconciliation report.
Tax and Accounting in India
Accounting services are necessary for all businesses to ensure accurate financial information. Also, it is a legal requirement for any business to maintain an appropriate book of accounts to ensure that all relevant taxes are paid and tax filings are made on time. NNRoad’s Tax & Accounting Services is focused on reducing the finance and accounting costs and burden of our clients as we help them manage the accounting and tax preparation needs.
- Preparation and maintenance of daily, monthly, and quarterly accounts.
- Preparation of annual accounts for the annual audit.
- Preparation of Tax returns.
- Assisting in the recovery of debt and required legal action.
- Support on focusing on financial accounting and reporting perspective on the transition to GST.