Foreign subsidiary Company Registration in India

Foreign subsidiary Company Registration in India

There are essentially four legal limited entity recognized for setting up a foreign subsidiary company. You can go it alone by being a one person company, team up to form LLP Registration or operate a private limited company. Choosing the relevant one is important.

There are two types of limited company – those that are public limited company and those that are private limited company. A limited or limited liability company is different from a sole proprietor or partnership firm. If you’re a sole proprietor or partnership firm, you will be personally liable for the outstanding liabilities can be met from your personal property.

A PVT LTD company, however, is a separate legal entity and can own assets, incur liabilities, and can be sure and be sued. Any business dealings are made by the directors and shareholders on behalf of the company. The share holder is only liable for the capital invested.

A Private LTD company registration  must have at least two directors to manage the business affairs and to make sure all the rules and regulations are followed and statutory registrars’ maintained.

Incorporation and running a Private limited company requires more legal documentation than a sole proprietorship or partnership firm. However, while the promoter of the company is personally responsible for any liabilities incurred by a sole proprietorship business, a PVT LTD company is a separate legal entity and the liabilities is limited to the paid up capital. P & L accounts belong to the company, and the company has perpetual succession.

Private companies pay corporation tax on their profits and directors are taxed as employees of the company. The debt risk is restricted to the capital invested in the company and any limited by guarantees. However, if the director fails to do his duties like non filing of annual returns, will be disqualified as a director in any another company.

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