[ESTABLISHING A BUSINESS ENTITY IN INDIA]
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B. Return of Particulars of Directors and Key-Managerial Personnel’s (“ KMP ”) – Return containing such particulars and documents of the director and other KMP shall be filed with the Registrar within 30 (thirty) days from the date of appointment/resignation of every director and KMP and also within 30 (thirty) days of any change taking place; C. Return of appointment of Managing Director (“ MD ”), Whole Time Director (“ WTD ”) and Manager, Chief Executive Officer (“ CEO ”), Company Secretary (“ CS ”) and Chief Financial Officer (“ CFO ”)– Company is required to file a return within 60 (sixty) days of the appointment of a MD, WTD or Manager, CEO, CS or CFO; D. Filing of Income Tax returns is required to be done every year by the entity operating in India in addition to the TDS return which is required to be submitted with the tax authorities quarterly; E. Filing of returns with the Goods and Services Tax Department is required to be done periodically by the Indian entity in addition to deposit of the Goods and Services Tax with the tax authorities; F. Other periodical filings under different legislations such as labour laws, professional tax and municipal laws. Relatively, the operational on-going and maintenance requirements with respect to companies incorporated under Indian laws are quantifiably more than LLPs as well as Liaison Office/Branch Office/Project Office. That said compliances for companies also defer based on their classifications. For example: Public Limited companies have more compliance in general as compared to Private companies. Small companies and one-person companies
do not have so many compliances, as compared with the larger/more traditional forms of companies etc. 3.4 Requirements for local shareholding/directors: It is mandatory for every company and LLP to have at least 1 (one) resident director or designated partner, respectively, i.e., a person who has stayed in India for a total period of not less than 182 (one hundred and eighty-two) days during the financial year/immediately preceding 1 (one) year, as specified by the law. However, there is no such requirement in the case of shareholders, and all the shareholders can be non-resident. However, if the shareholder is a non-resident, then the FDI rules and regulations are to be complied with and appropriate FDI reporting is required to be done before RBI. 3.5 Minority shareholders’ rights and protection: Companies Act 2013 has sought to empower the minority shareholders in many ways including the class action suit. Under the concept of class action suit, a suit may be instituted against the company as well as the auditors of the company by the minority shareholders. Companies Act, 2013 further provides for provisions relating to oppression and mismanagement which empowers minority shareholders to file an application for relief to the Tribunal in case of oppression and mismanagement. Under Companies Act, 2013, the Tribunal may also waive any or all the requirements given under Companies Act, 2013 and allow any number of shareholders and/or members to apply for relief, though this power to waive is rarely exercised by the Tribunal.
ILN Corporate Group – Establishing a Business Entity Series
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