Blog

How Foreign Nationals Can Open a Bank Account in India

Key Requirements and Documents for Company Incorporation in India


Introduction

So, you're thinking about starting a company in India? That's awesome! But before you get caught up in logo designs and office decor, there's a critical first step you can’t skip — company incorporation in india. Think of it as getting a birth certificate for your business. Without it, your business technically doesn’t exist in the eyes of the law.

Let’s dive into everything you need to know — the paperwork, the process, the pitfalls — and how to get your company up and running legally in India.

Types of Business Entities in India

1. Private Limited Company

This is the go-to option for most startups and small businesses. It offers limited liability and is easier to raise funds under this structure.

2. Public Limited Company

Ideal for large-scale businesses. A public company can raise capital from the general public by issuing shares but comes with stricter compliance.

3. One Person Company (OPC)

Perfect for solo entrepreneurs who want the benefits of a company without a co-founder. Limited liability, full control — best of both worlds.

4. Limited Liability Partnership (LLP)

More flexible and ideal for professionals like consultants, designers, or legal firms. LLPs offer the benefits of a partnership and limited liability company.

Pre-Incorporation Requirements

1. Choosing a Business Structure

First things first — decide what kind of company you want to register. Your decision will affect everything from how you pay taxes to how you raise capital.

2. Selecting a Unique Company Name

Your business name must be unique and not violate any trademarks. You can check name availability using the MCA (Ministry of Corporate Affairs) portal.

3. Appointing Directors and Shareholders

A private limited company requires at least 2 directors and 2 shareholders. For an OPC, you need just one. All directors must have a valid DIN.

4. Defining the Company’s Registered Office

You’ll need a physical address in India as your registered office. This is where all official correspondence will go.

Mandatory Documents for Company Incorporation

1. Identity and Address Proof of Directors and Shareholders

To incorporate a company, each director and shareholder must submit:

2. PAN Card

Mandatory for Indian nationals. It serves as the primary identity proof.

3. Aadhar Card / Passport / Voter ID

Used for address verification. For foreign nationals, a notarized passport is required.

4. Proof of Registered Office Address

Utility bills (like electricity or water bills) and a rental agreement or ownership deed are needed. These should not be older than two months.

5. Digital Signature Certificate (DSC)

Used to digitally sign documents on the MCA portal. Every proposed director must obtain a DSC from a certified authority.

6. Director Identification Number (DIN)

A unique number required for each director. You can apply via the SPICe+ form or separately using Form DIR-3.

Other Essential Documents

1. Memorandum of Association (MoA)

Outlines your company’s main business objectives and powers. It defines the scope of your business activities.

2. Articles of Association (AoA)

Details the rules for internal management and operations. It’s like a rulebook for running your company.

3. Declaration by Professionals (INC-8)

A declaration signed by a chartered accountant, advocate, or company secretary confirming all compliance requirements are met.

4. Consent to Act as Director (DIR-2)

Every proposed director must sign a DIR-2 form to confirm their willingness to take the role.

5. Affidavit and Declaration by Subscribers (INC-9)

Each subscriber must declare that they are not convicted of any offence related to company formation or management.

Step-by-Step Company Registration Process

Step 1: Get Digital Signature Certificate (DSC)

Apply through a certified agency. You’ll need ID and address proof and a passport-size photo.

Step 2: Apply for Director Identification Number (DIN)

This can be done within the SPICe+ form or separately through DIR-3.

Step 3: Name Approval via RUN or SPICe+

Submit a name approval request. Make sure it’s unique and in line with naming guidelines.

Step 4: File SPICe+ Form (INC-32)

This integrated form includes everything — DIN, name approval, incorporation, PAN, and TAN. Attach required documents like MoA, AoA, and proofs.

Step 5: PAN, TAN & Bank Account Opening

Once approved, you’ll receive the Certificate of Incorporation (COI), PAN, and TAN. Then, head to the bank to open a business account.

Timeline and Cost of Company Incorporation

Typically, incorporation takes 7–10 working days. The cost depends on professional fees and the type of company. On average:

  • Private Ltd. Company: ₹6,000–₹15,000
  • LLP: ₹4,000–₹12,000
  • OPC: ₹5,000–₹10,000

Common Mistakes to Avoid During Incorporation

  • Choosing a name too similar to existing brands
  • Submitting unclear scanned documents
  • Not verifying DIN/DSC properly
  • Selecting the wrong business structure
  • Ignoring compliance deadlines post-registration

Post-Incorporation Compliance

1. Opening a Company Bank Account

Use your Certificate of Incorporation and PAN to open an account in the company’s name.

2. Applying for GST Registration

If your turnover exceeds ₹40 lakhs (₹20 lakhs for services), GST registration is mandatory.

3. Statutory Books and Records

Maintain registers of members, directors, shareholding patterns, and more.

4. Filing ROC Annual Returns

File your company’s annual returns and financial statements with the Registrar of Companies. Late filings = heavy penalties!

Conclusion

Starting a company in India is exciting, but it comes with responsibilities. If you tick all the right boxes — from choosing the right structure to filing every document properly — you’ll save yourself a lot of headaches down the line. Remember, incorporation is not just paperwork — it’s the legal birth of your business. So take it seriously, and get it done right.

FAQs

  1. What is the minimum capital required to start a private limited company in India? There’s no minimum capital requirement as per the Companies Act, 2013. You can start even with ₹1 as capital.

  2. Can a foreign national be a director in an Indian company? Yes, but at least one director must be an Indian resident.

  3. How long does it take to register a company in India? Typically, 7–10 working days, depending on document readiness and government processing.

  4. Is it mandatory to have a professional like CA or CS for incorporation? Yes, for filing SPICe+ forms, a practicing CA, CS, or advocate must digitally sign and verify documents.

  5. What happens if I don’t comply with ROC filing requirements? Heavy penalties, disqualification of directors, and possible strike-off of the company — so don’t risk it!

For more information Click here