Doing Business in India - RSM Austria

No Dividend Distribution Tax (currently at an effective rate of 16.61%
for FY 2010-11) on profits distributed to the partners of LLP.
Remuneration receivable by partners of LLP will be taxed in the
hands of the partners as “Income from Business & Profession”.
The benefits of presumptive taxation are not applicable in case of
LLPs.
2.0 SETTING UP A COMPANY
2.1 Incorporation of a Company
The steps involved in the incorporation of a company include availing a suitable
name for the company, determining the location of the registered office of the
company, determining the authorised share capital, drafting the Memorandum of
Association and Articles of Association and thereafter submitting the necessary
documents and returns to the Registrar of Companies (ROC). The Ministry of
Corporate Affairs has introduced MCA-21 e-Governance programme with a view to
providing all services relating to ROC offices on-line in e-Governance mode.
Accordingly all filings with the ROC including compliances with respect to
Incorporation of a Company have to be done electronically duly authenticated by
digital signatures of the authorized persons.
A minimum of seven subscribers are required for incorporation of a public limited
company (two in case of a private limited company). The procedure of incorporation
generally takes 4-6 weeks.
All documents pertaining to incorporation of a company having foreign individuals /
foreign companies residing outside India as shareholders shall be certified by an
official of the Government to whose custody the original is committed and be duly
apostillized/notarized in accordance with Hague Convention.
2.1.1 APPROVAL OF NAME
Companies Act, 1956 governs the operations of a corporate enterprise. First step in
incorporation of a company is to seek approval for the proposed name from the
Registrar of Companies (‘ROC’) of the State/Union Territory, in which the registered
office of the company is proposed to be situated. The promoters of the company
have to apply to the Registrar of Companies for availability of the proposed name of
the company. The approval is granted subject to conditions namely; the name
should not be ambiguous or similar to an existing company, etc. Further, the words
‘Limited’ and ‘Private Limited’ should form the last part of the name of a public or
private company respectively. The compliances regarding application of name is to
be made electronically through the portal of the Ministry of Corporate Affairs
(www.mca.gov.in).
The documents that are to be filed with the ROC for the purposes of incorporation of
a company include, along with other forms, the Memorandum of Association (’MoA’)
and Articles of Association (‘AoA’). After obtaining approval, the Memorandum and
Articles of Association of the proposed company are filed with the Registrar of
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