Question 1

What are the documents involved in formation of Limited Liability Partnership in India?

Accepted Answer

a) Proof of identity and residential address of the Designated partners;
b) Proof of Registered office address and Copy of utility Bills not older than 2 months; 
c) NOC from owner of the premises;
d) Details of Partners and Designated Partners;
e) Details LLP(s) and Company(s) in which Partners are interested; 
f) Subscribers' sheet including consent of Partners;
g) Copy of certificate of incorporation of the foreign LLP;
h) Copy of Authority under which Foreign Limited Liability Partnership is establishing the place of business in India;
i) Power of Attorney in favour of Authorised Representative;

If LLP’s name is applied with the incorporation application:
a) Approval of the owner of the trademark or the applicant of such trademark for registration of Trademark if the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act.
b) Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government;

Note: All the documents to be signed by the Foreign Directors and Foreign subscribers requires notarization and apostillation from the foreign country.

Question 2

What is a NIDHI company?

Accepted Answer

A NIDHI Company is notified under section 620-A of the Companies Act and is classified as "Mutual Benefit Financial Company" by the RBI. Essentially, a Nidhi Company differs from a regular finance investment company or a Non-Banking Finance company (NBFC), as it deals only with its shareholders or members, for mutual benefits of its members. A Nidhi Company accept deposits only its members and lends funds only to them on demand. A Nidhi Company is not entitled to carry out business/activities related with hire purchase financing, leasing finance, chit funds, acquisition of securities issued by any corporate body, etc. or issue any debt instruments (such as preference share, debentures, etc.) in any form.

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Question 3

What is the valid period of existence of a Liaison Office? Can the period of existence of a Liaison Office be extended?

Accepted Answer

Permission to set up a Liaison Office is initially granted for a period of 3 years and this may be extended from time to time by the Authorized Dealer Category – I Bank in whose jurisdiction the Liaison Office is set up.

Question 4

How many resubmissions are permitted for SPICe forms?

Accepted Answer

Two resubmissions are premitted for SPICe forms.

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Question 5

Can more than one Liaison Office be set up?

Accepted Answer

Yes. Requests for establishing additional Liaison Offices may be submitted through fresh FNC form duly signed by the authorized signatory of the foreign entity in the home country to the Reserve Bank of India.

Question 6

Is it mandatory for the name of the company to be indicative of the nature of its business?

Accepted Answer

No, it is not mandatory for the name to be indicative of the nature of its business.

Question 7

Is Unique Identification Number (UIN) obtained by Project office (PO)?

Accepted Answer

No, Authorised Dealer Bank (AD Bank) need not obtain UIN from Reserve Bank of India (RBI) for PO.

Question 8

Is it allowed to use words “India” “Global” “International” in the name of an Indian entity?

Accepted Answer

“India” can be used by foreign company which is incorporating its subsidiary company in India. The original name of the holding company as it is may be allowed with the addition of word “India” or name of any Indian state or city, if otherwise available.
The words “Global” “International” can be used in the name of an Indian company.

Question 9

How can I apply for a Company Name?

Accepted Answer

A proposed name can be reserved for the purpose of incorporation of a company or change of name of an existing company through the RUN service by logging into the MCA portal along with a fee of Rs. 1000/-.
Further, you may use the SPICe form for the integrated process of name reservation and incorporation of a company.

Question 10

In case of an overseas Subscriber and Director, are the documents required to be Notarised and Apostilled for incorporation of a company?

Accepted Answer

As per Rule, 13 of the Companies (Incorporation) Rules, 2014, where the subscriber to the Memorandum of Association (“MOA”) or a Director to be appointed is a foreign national residing outside India, the MOA, Articles of Association (“AOA”), proof of identity as well as address proof shall be attested in the following manner which is based on the country where the Subscriber/Director reside or the registered office is situated in case of a body corporate being the subscriber:


	Residing in a country which is part of the Commonwealth – by a Notary (Public) in that part of the Commonwealth;
	Residing in a country which is party to the Hague Apostille Convention, 1961 – by a Notary (Public) and duly apostilled in accordance with the said Hague Convention; and
	Residing in a country which is not party to the Hague Apostille Convention, 1961 – the documents shall be notarized before the Notary (Public) of such country and the certificate of the Notary (Public) shall be authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) e. attested by Public Notary and authenticated by Indian Embassy in the country of residence. Some of the counties which falls under the list of Hague Convention are: United Kingdom of Great Britain and Northern Ireland United States of America, Singapore, Switzerland, Malaysia, Australia, China, People's Republic of, Japan, Germany.

Question 11

Can I apply for a company name online?

Accepted Answer

Yes, you can avail the RUN service at MCA portal for reserving a name online.

Question 12

Is it mandatory to appoint a Resident Director in a Company?

Accepted Answer

Yes, there is a mandatory requirement to appoint at least One (01) Resident Director in a Company. Section 149(3) of the Companies Act. 2013 (“The Act”) states that every Company should have at least one Director who has stayed in India for a total period of not less than 182 days in the Financial Year.

Question 13

Which act governs Company formation and operations?

Accepted Answer

Ministry of Corporate Affairs via Companies Act 2013 regulates incorporation of the company, responsibilities of a company, directors, dissolution of a company.

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Question 14

Is it mandatory to appoint a Resident Designated Partner in an LLP?

Accepted Answer

Yes, pursuant to the provisions of the Limited Liability Partnership Act, 2008, it is required to have one Resident Designated Partner in an LLP.

Question 15

What are the most common structures employed to constitute a Joint Venture (JV)?

Accepted Answer

The most common structures employed to constitute a Joint Venture (JV) are:

a) Unincorporated Joint Venture (UIJV) which include Cooperation Agreement/Strategic Alliances/Consortium. UIJV is preferable as no separate entity is required to be formed in case of UIJV. Merely, an Unincorporated Joint Venture Agreement is required to be entered among the parties.

b) Incorporated Joint Venture which include either Company or Limited Liability Partnership (LLP)

Question 16

What are the Important clauses included in a Joint venture Agreement?

Accepted Answer

Some of the important clauses in a Joint Venture Agreement are as below:
a) Object and scope;
b) Equity Participation by local and foreign investors;
c) Lock in Clause;
d) Financial Arrangements;
e) Composition of Board and Management arrangements;
f) Remedying a deadlock;
g) Roles & Responsibilities of the Parties;
h) Exit Clause;
i) Representations, Warranties & Covenants of the Parties;
j) Confidentiality;
k) Dispute Resolution;

Question 17

What are the documents involved in formation of wholly owned subsidiary in India?

Accepted Answer

a) Proof of Registered office address;
b) Copy of utility Bills not older than 2 months;
c) NOC from owner of the premises;
d) PAN Undertaking by the proposed Directors;
e) Interest of first director(s) in other entities;
f) Consent Letter from the Directors in Form DIR-2;
g) Declaration from the First Directors and Subscribers in Form INC-9;
h) Board Resolution and Certificate of Incorporation from the foreign company;

If company’s name is applied with the incorporation application: 
a) Copy of approval, in case the proposed name contains any word(s) or expression(s) which requires approval from central government; 
b) Approval of the owner of the trademark or the applicant of such trademark for registration of Trademark, if the proposed name is based on a registered trademark, or is subject matter of an application pending for registration under the Trade Marks Act;

Note: All the documents to be signed by the Foreign Directors and Foreign subscribers requires notarization and apostillation from the foreign country.

Question 18

Is it permissible for Start-ups to secure foreign funding?

Accepted Answer

RBI via the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 (FEMA 20) has allowed startups to issue convertible notes to foreign investors apart from FDI in startups by foreign venture capital investors through subscribing to equity or equity-linked instruments or debt instruments.

For more information, click here.

Question 19

What does Person of Indian Origin (PIO) stand for?

Accepted Answer

‘Person of Indian Origin (PIO)’ means a citizen of any country other than Bangladesh or Pakistan, if


	They at any time held Indian Passport, or,
	They or either of their parents or grandparents was a citizen of India by the Constitution of India or the Citizenship Act, or,
	The person is a spouse of an Indian citizen or a person referred to in sub-clauses (1) or (2).


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Question 20

What does the FDI policy entail with regards to issuing equity shares under government route?

Accepted Answer

Issue of equity shares under the FDI Policy is allowed under the Government route for the following:


	Import of capital goods/ machinery/ equipment (excluding second-hand machinery)
	Pre-operative/pre-incorporation expenses (including payments of rent, etc.)


However, these are subject to compliance with several conditions, as mentioned in sub-section (iv), section (6) of Annexure-3 of the Consolidated FDI Policy

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Question 21

What is apostille and how to get the documents apostilled and notarized from the foreign country?

Accepted Answer

An "apostille" is a form of authentication/certification issued to documents for use in countries that participate in the Hague Convention of 1961. Apostille is to confirm the legal authenticity of any document. A list of countries that accept apostilles is provided by the US State Department.
Apostilles are affixed by Competent Authorities designated by the government of a state which is party to the convention.
A list of these authorities is maintained by the Hague Conference on Private International Law. Examples of designated authorities are embassies, ministries, courts or (local) governments.
An Apostille Certificate is official government Certificate printed or stamped onto the reverse side of a single page document or attached to multiple paged documents with green notary ribbon making it become one inseparable document. It authenticates the seal and or signature of the public official or authority such as a notary or registrar issuing the document.

Question 22

Can one increase the Company's authorized capital to get more external funding?

Accepted Answer

The authorized capital of a Company can be increased at any time as per the Companies Act, 2013 and in case the Article of Association does not allow this, the AoA can be amended by passing a “special resolution”. One may also consider getting External Commercial Borrowings.

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Question 23

How can foreign investors put money in Portfolio Investments in India?

Accepted Answer

Investment by FPI registered in accordance with SEBI guidelines including deemed RFPI (erstwhile FII) is permitted in the capital of an Indian Company under the Portfolio Investment Scheme. Investment by individual FPIs should be less than 10% of the paid-up capital of the Indian Company on a fully diluted basis. The aggregate investment by FPIs should not exceed 24% of the paid-up capital of an Indian Company on a fully diluted basis. This aggregate limit of 24% can be increased by the Indian Company concerned up to the sectoral cap/ statutory ceiling, as applicable, with the approval of its Board of Directors and its General Body through a resolution and a special resolution, respectively and subject to prior intimation to RBI. The aggregate FII/FPI investment, individually or in conjunction with other kinds of foreign investment, cannot exceed sectoral/statutory cap.

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Question 24

What are the regulations for a foreign company to set up business operations in India?

Accepted Answer

A foreign company can set up business in India via Foreign Direct Investment (FDI) either by incorporating an Indian company or foreign company or LLP under the Companies Act, 2013 or by setting up a Liaison Office, Project Office or a Branch Office of the foreign company. Entry into India is however as per the provision of FDI policy and FEMA rules.

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Questões?

Quais são as estruturas mais comuns utilizadas para constituir uma Joint Venture (JV)?

Quais são as cláusulas importantes incluídas em um acordo de joint venture?

Quais são os documentos envolvidos na constituição de subsidiária integral na Índia?

Nota : Todos os documentos a serem assinados pelos Diretores Estrangeiros e Assinantes Estrangeiros requerem reconhecimento de firma e apostilação do país estrangeiro.

Quais são os documentos envolvidos na formação da Sociedade de Responsabilidade Limitada na Índia?

Nota : Todos os documentos a serem assinados pelos Diretores Estrangeiros e Assinantes Estrangeiros requerem reconhecimento de firma e apostilação do país estrangeiro.

O que é uma empresa NIDHI?

Qual é o período válido de existência de um Escritório de Ligação? O período de existência de um Escritório de Ligação pode ser prorrogado?

Quantos reenvios são permitidos para formulários SPICe?