Startup Services / Setting Up Company in India

Most Start-up companies invariably face the problem of not being able to reach out to the experts for certain services required for their business.

Our Startup Services include :

  • Advisory on the various Schemes and Incentives of the Govt. of India under the “Startup India” and its benefit to any startup company.
  • Advisory on Various Income Tax advantages for a Startup Company registered under the Startup Plan of the Govt. Of India.
  • Assistance on designing the right business structure keeping in mind the future investors and venture capitalist who would want to be a part of these startup activities.
  • Incorporation of the Company.
  • Obtaining all the necessary registration for starting the operations of the company
  • Ongoing Support, which includes designing of accounting systems, payrolls, book keeping, timely filing of various statutory returns and compliances, virtual CFO services, etc.

We at SGA, provide Start-up Services, as a single window solutions for incorporating the company and start-up advisory services.

Our team of experts includes experienced professionals who are trained in different services like Incorporation of a company, Statutory registrations, Legal Assistance, Taxation, Accounting and Finance, Outsourced CFO services, Secretarial Compliances, Payroll, Virtual office space.

Setting up Company in India :

Also We at SGA , offer our professional expertise to domestic and foreign investors & companies for setting up their businesses in India . We not only advise you about the foreign investment policy & procedures of the Government of India but also obtain all the necessary approvals required.

  • Limited Liability Partnership (LLP)/ Company Incorporation
  • Assisting in reviewing all the contracts and agreements to protect the interest of the company as well as investors.
  • Helping in obtaining all the clearances and approvals from the Reserve Bank of India (RBI) and Foreign Investment Promotion Board (FIPB).
  • Helping in acquiring all the one-time registrations to start up the business activities.
  • Helping in setting up the bookkeeping/ accounting processes and systems.

If there is any foreign company that is planning to set up business operations in India, they have two options –

  • As an Indian Company
  • As a Foreign Company

A foreign company can commence operations in India by incorporating a company under the Companies Act, 2013 through:

Joint Venture With An Indian Partner :

Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners. Joint Venture may entail the following advantages for a foreign investor:

  • Established distribution/ marketing set up of the Indian partner
  • Available financial resource of the Indian partners
  • Established contacts of the Indian partners which help smoothen the process of setting up of operations

Foreign equity in such Indian companies can extend up to 100% depending on the equity caps in respective sectors and areas of activities as per the regulations prescribed under the Foreign Direct Investment (FDI) policy in place on the date of investment. Basically Reserve Bank of India through its Foreign Direct Investment Policy has two routes. One is an Automatic Route and other is a Prior Approval of FIPB Route. SGA, can assist in understanding the details of the FDI policy, sectoral equity caps & procedures on a specific request.

Foreign Companies can set up their operations in India through:
  • Liaison Office/Representative Office
  • Project Office
  • Branch Office

Such offices can undertake any permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Liaison office acts as a channel of communication between the principal place of business or head office and entities in India . Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India . Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India . Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI).

Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India . RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

  • Export/Import of goods
  • Rendering professional or consultancy services
  • Carrying out research work, in which the parent company is engaged.
  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
  • Representing the parent company in India and acting as buying/selling agents in India .
  • Rendering services in Information Technology and development of software in India .
  • Rendering technical support to the products supplied by the parent/ group companies.
  • Foreign airline/shipping company.

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

We provide complete, online back office operations. From book-keeping to pay roll payroll processing, audit and assurance services and business enterprise services which includes all the statutory compliances required by a company in India. Opening Bank Account Assistance and signatory services for opening and operating Bank account in India with all major international banks are also provided by SGA.

Companies in India are required by law to place on public record their statutory annual accounts, which must be audited. These must comply with a range of disclosure requirements set out in the Companies Act, 2013. SGA, ensure that all disclosure requirements are met, and are authorised to carry out independent statutory audits. Our approach to audit concentrates effort where it's most needed, keeping costs to a minimum and providing a useful management tool. Our advice isn't just an annual event but clients rely on our experience all year round. As your profits grow, we advise on corporate tax planning and compliance. Whenever cross border / intra group transactions arise, the difficult issue of transfer pricing is never far behind. We can help you to determine fair prices and ensure that the documentation required by the tax authorities is in place. Financial and tax planning for business owners and key employees is just as important to maximise your financial growth and minimise tax bills.

Our service list allows you to pick and choose to specifically match your needs. Our outsourcing capability allows you to achieve India fiscal compliance cost-effectively. We look after the peripheral issues leaving your company time to concentrate on what's really important: succeeding in the India .

Company Formation Process In India

Companies Act:

Companies incorporated or registered in India are governed by the Companies Act 2013.

Shareholders and Directors:

  • One local resident director is mandatory to incorporate a company in India
  • Foreign nationals can incorporate company in India and hold foreign equity to the extent of 100% which is dependent upon sector in which company will operate and is subject to approval from either Reserve Bank of India(RBI) or Foreign Investment Promotion Board (FIPB) as may be applicable.

Memorandum & Articles of Association:

The memorandum and articles are the primary legal document of a company. Memorandum contains the name of the company, authorized share capital, initial members and object clause. Articles are a set of internal regulations that govern the day to day operations of the company. Both memorandum and articles have to be filed with Registrar of companies at the time of incorporation or if there are any changes thereafter. At least two subscribers (shareholder) are required in the memorandum and each of the subscriber must subscribe to at least one share in the company.

Share Capital:

Shares must be expressed in a fixed amount. Shares to be subscribed must be expressed in Indian rupees.

Annual Meetings:

An annual general meeting (AGM) must be held once in every financial year and not more than 6 months after the end of financial year. However, a company can hold its first AGM until 18 months from its incorporation.

Public Filings

The names and personal particulars of the directors and secretary, register of charges, share capital, registered office address etc. must be filed with the Companies Registry.

Accounts & Auditors:

Every company is required to appoint an auditor each year at its AGM. An auditor must be qualified by virtue of the Institute of Chartered Accountants of India Act 1949 and completely independent of the company. Audited accounts of the company serve as tool for various stakeholders like creditors, bankers, investors and revenue authorities.

How to Form a Company In India

Broad Steps to be taken for incorporating a private limited company:

  • Identify the Local and Foreign Directors
  • Obtain Digital Signature Certificates of all the Directors
  • Obtain DIN (Director's Identification Number) for all the Directors
  • Identify & Reserve the Name for the Company
  • Ensure that the name does not resemble the name of any other company already registered.
  • Apply to the concerned ROC to ascertain the availability of name. along with the necessary filing fees.
  • Drafting of the Memorandum and Articles of Association.
  • Get the Memorandum and Articles signed by the subscribers (at least two subscribers) in their own hand.
  • Obtain the Final Certificate of Incorporation from ROC.

LLP : Limited Liability Partnership under the LLP Act 2008 :

  • LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
  • The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
  • The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
  • Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
  • Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

Difference between a LLP and a Company :

A basic difference between an LLP and a company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 2013) whereas for an LLP it would be by a contractual agreement between partners.

  • The management-ownership divide inherent in a company is not there in a limited liability partnership.
  • LLP will have more flexibility as compared to a company.
  • LLP will have lesser compliance requirements as compared to a company


The government has waived the tax that would have been paid on investments in qualifying startups that were more than their fair market value. ... Additionally, investments made by incubators in excess of fair market value are excluded from taxation. Income Tax is levied on the income as per the below-mentioned schedule of Taxes. Type of Business Entity Income and its Tax applicable
Proprietorship/ Individual As per Income Tax Slab Rates
Partnership/ LLP Firm - 30% of Income
Indian Company - 25% of Income

The qualifying period has been extended until the end of March 2022, thanks to Budget 2021. Startups in this category would be entitled to a tax credit of 100 percent on profits for three years in a block of seven years, provided that their annual revenue does not exceed Rs. 25 crores in any one financial year during that time.
Only if a startup meets the requirements of an "Eligible Startup" can it use all of the tax incentives available to it.

Exemptions from SECTION – IAC- Eligible startups may claim up to 100% of profits and gains for three consecutive years during a 10-year period, provided that the company's annual revenue does not exceed 100 crores in any of the prior financial years.
This tax is referred to as the Angel tax. However, the government has exempted all government-recognized companies from the Angel tax with the latest announcement. Entrepreneurs may now save money on taxes and use it for funding by using this area.

Numerous startups are in the service business, which means they are subject to service tax. They may offset the VAT paid on purchases (say, office supplies) against the service tax on their sales under the GST scheme, something they cannot do under the existing structure. As a result, it will significantly boost the startup business, which is mainly focused on offering services. It will result in cost savings, hence improving working capital for cash-strapped firms.

This plan was open to startups that were established between April 1, 2016, and March 31, 2021. Starting in the first year, such companies would be entitled to a tax credit of 100 percent on profits for three years in a block of seven years, provided that their annual turnover does not exceed Rs. 25 crores in any financial year.

The expenditures associated with forming an LLC are tax-deductible, but you must be aware of critical limitations, exclusions, and guidelines in order to deduct these costs legitimately.
The Internal Revenue Service (IRS) imposes restrictions on the number of deductions available for LLC starting fees.
If your beginning expenditures are less than 50,000, you may deduct up to 5,000 for initial organizational costs.


Sachin Gujar & Associates,
Chartered Accountants
47/22, Erandwana, Law College Road,
Ekta Apts, 3rd Floor, Above Nirmitee Furniture,
Pune - 411004

© Copyright 2020 All Rights Reserved.