Company Incorporation

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About NDM Advisors LLP

NDM Advisors LLP is a multidisciplinary professional services firm consisting of experienced Chartered Accountants, Certified Public Accountants, Lawyers, Company Secretaries and Cost Accountants catering to diverse needs of businesses
NDM is headed by partners having wide experience in working with the Big Four consulting firms (KPMG, EY, Deloitte and PwC) in areas of Finance, Audit & Assurance, International Taxation, Transfer Pricing, Foreign Regulatory, Corporate Laws, Auditing, etc.
Our partners have been advising large domestic and international corporates on some of the most intricate and complex fixed asset and inventory management issues and solutions
NDM has been knowledge partner at events and seminars organised by ICAI, Income Tax Department and other organisations. Partners of NDM actively participate as speakers at various events and conferences
NDM’s objective is to collaborate with clients and support them in their business development
At NDM, we aim to be the best at all that what we do. It is this passion for perfection that fuels us and makes us truly different

Entity Types in India

Generally, five types of entities can be formed in India in order to carry on the business activities. These are Sole Proprietorship, Partnership, One Person Company, Company (Private or Public) and Limited Liability Partnership (‘LLP’)
Sole Proprietorship and Partnership carries with unlimited liability and hence, are not advisable from a long term business perspective;
For One Person Company, the person incorporating the company should be resident of India and hence, this also does not suit long term business requirements;
Hence, for the large players, Company and LLP are most feasible options. We have provided below, few pertinent characteristics for both options.

Entity Types in India- Pertinent Features

Particulars	Private Company	LLP
Law Applicable	Companies Act , 2013	Limited Liability Partnership Act, 2008
Minimum Share Capital / Contribution	There is no minimum share capital requirement	There is no minimum capital contribution requirement
Number of Directors/ Partners	It requires minimum 2 members as directors and maximum 200 members. It is mandatory to have a minimum one India resident Director	It requires minimum 2 members as partners and there is no limit on the maximum no of partners. It is mandatory to have a minimum one India resident partner
Board Meeting	Mandatory required to hold 4 board meeting in each calendar year	There is no mandatory requirement to hold board meetings
Foreign Direct Investment (FDI)	It is eligible to received FDI under Automatic and Government Route	It is eligible to received FDI under Automatic Route
Compliance	High	Low
Statutory Audit	It is mandatory to have statutory audit under Companies Act, 2013	Would apply only if partner’s contribution exceeds INR 25 lakhs or annual turnover exceeds INR 40 lakhs

Entity Types in India- Tax Consideration

Particulars	Private Company	LLP
Base Tax Rate	22%	30%
Surcharge (levied on tax amount)	10%	12% – Income > INR 10 Million
Cess (levied on base tax and surcharge)	4%	4%
Tax treatment of upward movement/repatriation of profits (distributed as dividends) (Pleas refer following slide)	Taxable in the hands of shareholder (20% plus applicable surcharge and cess or rate as per tax treaty, whichever is beneficial)	Tax exempt

Entity Types in India- Tax Consideration

Profit Repatriation – Illustration

Particulars	Private Company	LLP
Profit before tax	100	100
Less: Tax	25.17	30
Profit available for distribution to investors	74.83	70
Less: Taxes on pay-out of profits @ 20.56% (in the hands of shareholders)	15.39	–
Profits distributed	59.44	70
Total Tax Outflow	40.558	30

Based on the analysis under the previous slides, it can be seen that as compared to a Private Company, a LLP enjoys the following key benefits:

Exemption of profit share in the hands of the partners
Tax free exit in case of non-resident shareholders can be explored
Relatively less corporate law compliances under the LLP Act as compared to Companies Act 2013.

SCOPE OF SERVICES

1.Incorporation of Entity in India

Every company/ LLP in India is required to be registered with Ministry of Corporate Affairs (‘MCA’) under the provisions of The Companies (Incorporation) Rules, 2014 and The Companies Act, 2013 or Limited Liability Partnership Act, 2008. In this regard, we provide end to end assistance in incorporation of the proposed Indian entity along with the allied secretarial compliances with the following:

Obtaining Digital Signature Certificates for signatories in India (Proposed Shareholders/ Partners and Directors);
Assistance with name approval procedures and application (E-web Form);
Assistance with preparation and filing of company incorporation forms (E-web Forms);
Applying for taxpayer’s registration number- Permanent Account Number (‘PAN’), Tax Deductor’s Account Number (‘TAN’), GST (‘Goods and Services Tax’) Identification Number, Bank Account Opening Form;

Preliminary secretarial compliances such as holding of mandatory initial board meeting, share certificate issuance, auditor appointment etc.;
Secretarial filings pertaining to increase in Authorised Share Capital (if any).

2.Directorship Services

The newly set-up entity would be in need of a qualified professional to act as its director and signatory in India for various purposes (on instructions of the overseas counter-part). In this regard, we would provide the entity with qualified professional acting as director / signatory of the Company for the following purposes:

Indian Director/ Partner as per mandatory government regulations;
Signatory for the purposes of Indian regulatory filings/ compliances;

3.Registered Indian Address Services

The Entity would be in need of registered office address for establishing its India presence. In this regard, we would provide the Entity with registered office address for the following purposes:

Providing Indian correspondence address (New Delhi, India);
Coordination / handling correspondence related to business with the government/ non-government agencies;

4.Post-Incorporation Compliances

After incorporation, the Entity would be requiring services pertaining to the day-to-day compliances depending upon the scale of operations and applicability of compliances. We offer full range of services to assist the newly set-up entities with following compliances: