Legal Question in Business Law in India

Re: Regulations and laws

1] NRI's are permitted to start business in India under various sectors, subject to sectoral limits. This can be beast answered with reference to specific type of activity to be undertaken by NRI.

2]NRI's can form a Limited Company in India. The rules require that a Pvt., Limited Company atleast 2 members and 2 Directors are required and that the members can also be directors. the minimum subscription as paid up capital should be Rupees One lakh. the process involves, ascertaining availability of name and there upon submitting documents for incorporation.

3] Governemnt regulations are with regard to sectoral limits for various types of activity. Documentation for receiving share capital-if under automatic route, then with RBI and if specific approval is required then one has to approach the FIPB.

Re: Regulations and laws

There is no bar under law, for a NRI to start a business in India. The formation and operation of a limited company are governed by the Companies Act, 1956. There are Government regulations for NRI investments in a business in India; however, there is nothing that would hamper the investment. As a matter of fact, things are much easier now than 2 years ago.

Re: Regulations and laws

For starting a business in India the following Laws must be looked at for compliance:

The Foreign exchange Management Act

The Companies Act [for starting a company in India]

The Securities Exchange Board Regulations

It is possible to have a 100% subsdiary of a Foreign Company in India for most industries. Permission and Approval for bringing in Finance and setting up a business in India as a 100% subsidiary of a foreign business is comparatively easy and a single window clearance is possible for all effective licenses and permissions.

Apart from the three major laws listed above, for setting up business, there are other laws which would come into play once the business comes into operation. The Environmental Control laws in respect of setting up a plant, the Factories Act, the Central Excises Act etc. etc.

For better particulars kindly furnish nature of business sought to be established.

Re: Regulations and laws

Your question would be better answered if the nature of business/activity was specified.This is a general reply to the queries:

1. Being a NRI has no bearing on your starting a business in India. NRI's are free to do business in India.If the investment is in a regulated sector, FIPB approval is required for bringing in foreign investment.

2. Companies Act, 1956 governs the formation and operation of companies in India. Companies can be private or public. A private company needs a minimum of Rs. 100,000.00 as authorised share capital and two shareholders and directors.The rules for public companies are much more elaborate.

3. The nature of business/activity determines the applicable regulation. Sales Tax Registration, Income Tax Registration are mandatory. If manufacturing operations are contemplated, license under the Factories Act, permission from the Pollution Control Board etc. are needed.

4. There are no special laws for business other than the laws discussed above. Again, the nature of activity will be the governing factor.

Re: Regulations and laws

You need to follow the following Laws, Rules & Regulations:

1. RBI - Notifications under Foreign Exchange Management Act (FEMA)

2. Income Tax Act

3. Depending upon form of legal entity - Partnership Act or Companies Act.

For exact advise you need to consult a lawyer.