1. BUSINESS ORGANIZATION Indian Institute of Foreign Trade NEW DELHI 12 TH FEBRUARY 2005 by SAMEER RASTOGI Advocate International Corporate Legal Consultant
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3. Sole Proprietorship No registration required Unlimited liability Used for small business or by Professionals No Separate Legal Entity Business Organisation
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6. Types of Companies in India Business Organisation DESCRIPTIONS PRIVATE COMPANY PUBLIC COMPANY Definition Which by its article restricts: Numbers of members to 50 Transfer of shares Invitation of public to subscribe its debenture, shares etc. Acceptance of deposits from person other than its shareholders and directors Which is not * private Governing Laws Companies Act, 1956 Companies Act, 1956 SEBI Act, 1992 and allied laws.
7. Types of Companies in India Business Organisation DESCRIPTIONS PRIVATE COMPANY PUBLIC COMPANY Incorporation Time 22 to 3 weeks 2 to 3 weeks Minimum Paid up Capital INR 1,00,000/- INR 5,00,000/- Maximum No. of shareholders 50 (Fifty) No limit Minimum No. of Shareholders 2 (Two) 7 (Seven) Transferability of Shares Restricted Freely. If company is listed then through stock exchange(s) Minimum No. of Directors 2 3
8. Types of Companies in India Business Organisation DESCRIPTIONS PRIVATE COMPANY PUBLIC COMPANY Whether a Foreigner can be Director YYes Yes Whole Time Director (WTD) / Managing Director (WTMD): Appointment Appointment not compulsory and No restriction on appointment Appointment : Not compulsory, If paid up capital < Rs. 5 Cr. Compulsory. If paid up capital => Rs.5 Crs WTD / WTMD: Remuneration No restriction As per schedule XIII, otherwise permission of Central Government . Foreigner as WTM D / WTD No restriction With the approval of Central Government
9. Types of Companies in India Business Organisation DESCRIPTIONS PRIVATE COMPANY PUBLIC COMPANY Loan to Director etc. YYes With the previous approval of Central Government Contracts with Director etc. Yes With the consent of Board, If paid up capital of the company is (One) 1 Cr. or more, approval of Central Govt. is necessary Loan, Investment & Guarantee by the company No restriction Some restrictions
10. Charitable Organization Business Organisation - Trust - Society - Section 25 Company It can do business and earn any amount of profits, but the distribution of profits cannot be made to Shareholders / trustee
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12. Law relating to JV & Foreign Cos. in India - FDI In India TELECOM – 49% ( 74%) INSURANCE – 26% (Proposed 49%) POWER – 100% PETROLEUM REFINING – 100% DRUGS & PHARMA – 100% HOTELS – 100% ROADS – 100% Business Organisation
13. FDI in India Automatic Route for FDI is not available for Domestic Airlines Petroleum Sector (except for private sector oil refining) Investing companies in Infrastructure & Services Sector Defence and Strategic Industries Atomic Minerals Print Media Broadcasting Postal services Courier Services Establishment and Operation of satellite Development of Integrated Township Tea Sector
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