India operates under a common law legal system, substantially derived from English jurisprudence, wherein judicial precedents are binding pursuant to Article 141 of the Constitution of India.

The principal source of law is the Constitution of India, which governs constitutional structure, fundamental rights, directive principles, and separation of powers.

India has a common law system, with a strong statutory framework with various codified legislations and procedural laws.

Business operations in India may be undertaken through various legal structures, depending upon the nature, scale, and regulatory considerations of the proposed activities. The commonly adopted forms are as follows:

• Private Limited Company: This is the most prevalent form for conducting business in India, offering limited liability of the shareholders and a separate legal identity. A minimum of 2 shareholders and 2 directors are required, including one resident director.
• Public Limited Company: This structure is generally adopted for larger enterprises, particularly where public fundraising is contemplated. A minimum of 7 shareholders and 3 directors are required, including one resident director. Public limited companies may be listed or unlisted. Listed companies and certain classes of public unlisted companies must have at least 1 woman director and at least one-third of the directors must be independent. Unlisted companies with a paid-up capital above INR 10 crore or turnover above INR 100 crore or outstanding loans, debentures, and deposits in aggregate of INR 50 crore or more, must have at least 2 independent directors.
• Limited Liability Partnership (LLP): An LLP is a hybrid structure combining features of a company and a partnership, governed by the Limited Liability Partnership Act, 2008. A minimum of 2 designated partners are required, including one resident designated partner. FDI in LLPs is permissible only in sectors where 100% FDI is allowed under the automatic route of Government of India, and where no FDI-linked conditions are prescribed.

In addition to the aforementioned legally incorporated entities, a foreign company may also conduct business in India through the  following business structures:

1. Liaison / representative office: A liaison or representative office (LO) can be opened in India, subject to approval of Reserve Bank of India (RBI). In certain regulated sectors, such as insurance and banking, prior approval from the respective sectoral regulator is additionally required. An LO is permitted only to act as a communication channel between the foreign parent entity and its Indian counterparts, and cannot undertake any commercial, trading or industrial activity or  earn any income in India.
2. Branch Office (BO): A foreign company can also establish BO with RBI approval to undertake commercial activities such as export/import, consulting, professional services, R&D etc., with the prior approval of RBI.
3. Project Office (PO): A foreign company can establish project office(s) for executing specific projects in India, provided it has secured a contract with an Indian entity for such execution. Where the prescribed conditions are met, including that the project is funded by inward remittances, international financing agencies, or term loans from Indian financial institutions, general permission of the RBI is available. In other cases, prior approval of the RBI is required. A PO is subject to prescribed reporting compliances, including filing an Annual Activity Certificate with the designated AD Category-I bank..

The liability of parent company is unlimited in case of LO, BO and PO.

The primary statutes governing these business structures include the Companies Act, 2013, the Limited Liability Partnership Act, 2008, Foreign Exchange Management Act, 1999 and applicable rules, regulations, and sector-specific laws.

There are various options for a foreign company to access the Indian market without setting up a legal entity. Some such options are as follows:

i. Distributorship / Agency Model
ii. Franchise / Licensing Model
iii. Cross-Border E-commerce / Digital Sales
iv. Export into India
v. Import Procurement / sourcing from India
vi. Service Agreements
vii. Contract manufacturing

When adopting the above structures, it is important for the foreign company to ensure that its arrangements do not result in a fixed place of business or dependent agent, as either may trigger a permanent establishment (PE) under the Income Tax Act, 2025 or the applicable Double Taxation Avoidance Agreement (DTAA). Certain structures, such as service agreements and contract manufacturing, carry heightened PE risk and warrant careful structuring.

There is no minimum prescribed minimum capital requirement for establishing a company or an  LLP in India, and entities may decide their capital structure based on their funding and operational requirements. However, for the establishment of a Branch Office or Liaison Office, RBI requires the foreign parent entity to meet minimum net worth thresholds – USD 100,000 for a Branch Office and USD 50,000 for a Liaison Office – as part of the eligibility criteria. It may further be noted that in certain regulated sectors, such as banking, insurance and NBFCs, minimum capitalisation requirements are separately prescribed by the relevant sectoral regulator.

A brief comparison of how different types of entities are established and major requirements is presented below:

* Renewals are subject to RBI approval and are not automatic. Continued operation is contingent on a satisfactory compliance record and RBI’s assessment at the time of renewal.

** While no minimum capital is prescribed, sectoral regulators may impose capitalisation requirements in regulated industries such as banking, insurance, and NBFCs.

The most preferred entity for a foreign company is a private limited company.

An Indian company is governed through a three-tiered structure involving shareholders, the board of directors, and Key Managerial Personnel – each with distinct roles and functions under the Companies Act 2013.

Shareholders: They are the ultimate owners of the company and exercise control through voting at general meetings by passing resolutions. Their powers include the appointment/removal of directors, approval of major corporate actions such as mergers and alteration of charter documents, and declarations of dividends). Most decisions are taken with simple majority. However, certain significant matters require a special resolutions, which necessitates that a minimum of 75% votes are cast in favour. Shareholders are not involved in the day-to-day operations of the company.

Board of Directors: The Board is responsible for the overall governance and management of the company, including formulating policies and business strategy, overseeing operations and financial performance, delegating authority to the Managing Director, Key Managerial Personnel and other officers for day-to-day management. Board decisions are ordinarily taken at duly convened board meetings by a a majority of directors present and voting, though certain matters may require special majority or are reserved exclusively for the Board and cannot be delegated.

Officers / Key Managerial Personnel (KMP) – KMPs include the managing director, CEO, Whole-time Director, CFO, company secretary, and such other prescribed officers.  They are responsible for implementation of Board decisions and day-to-day management of the company, and are accountable to the Board. They exercise their functions within the scope of authority delegated to them by the Board.

A private limited company in India is required to have a minimum of 2 directors and 2 shareholders, and a public limited company must have a minimum of 3 directors and 7 shareholders.

Every company must have at least one resident director, i.e., a person (including a foreign national) who has stayed in India for a total period of not less than 182 days during the financial year.

There are no nationality restrictions on the appointment of directors, except in the case of nationals of countries sharing a land border with India, for whom prior security clearance from the Ministry of Home Affairs is required at the time of appointment.

Foreign corporations and foreign nationals can acquire shares in Indian companies, subject to FDI guidelines and FEMA regulations.

Foreign entities may undertake business activities in India without establishing a physical presence through contractual arrangements, including:

• Distribution and agency arrangements;
• Franchise models;
• Import and export; and
• Strategic alliances and collaborations, including licensing and technology transfer agreements.

A foreign company may work with trade or commercial agents, resellers, and distributors in India. Such arrangements are primarily governed by contractual terms, subject to general principles of Indian contract law. There is no standalone legislation specifically regulating commercial agency or distributorship in India. However, exclusive distribution and agency arrangements may attract scrutiny under the Competition Act, 2002, and cross-border payments such as commissions and royalties are subject to compliance with the Foreign Exchange Management Act, 1999 and the rules framed thereunder.

Foreign companies adopting any of the above routes must carefully structure their arrangements to avoid establishing a permanent establishment in India for tax purposes.

There are no specfic corporate governance codes or equivalent for privately owned companies. Corporate governance in India is primarily governed by the following legal and regulatory framework:

• The Companies Act, 2013, read with the rules framed thereunder, which prescribes the foundational governance structure applicable to all companies, including board composition and processes, financial disclosures, and shareholder rights. Certain enhanced governance obligations — such as the constitution of an Audit Committee and Nomination and Remuneration Committee, and the appointment of independent directors — apply to all listed and certain unlisted public companies meeting prescribed thresholds, but do not extend to private companies;
• The Secretarial Standards issued by the Institute of Company Secretaries of India, specifically SS-1 (Board Meetings) and SS-2 (General Meetings), which are mandatory for all companies under Section 118(10) of the Companies Act, 2013;
• The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), applicable to listed entities, which impose enhanced governance, disclosure, and compliance obligations on listed entities and are not applicable to privately owned companies; and
• Oversight by sectoral regulators such as the Competition Commission of India (CCI), the Reserve Bank of India (RBI), and other industry-specific authorities, depending on the nature of the business.

The Ministry of Corporate Affairs (MCA) has also issued the Corporate Governance Voluntary Guidelines, 2009, which, while not binding, encourage privately held companies to adopt best practices in areas such as board composition, audit, and risk management.

With respect to groups of companies, India does not have a specific group-level corporate governance framework. Governance obligations are imposed at the level of individual companies within the group, each of which is independently subject to the applicable provisions of the Companies Act, 2013 and other relevant regulations.

Companies in India may raise working capital through a combination of equity, debt (including through debentures, loans from shareholders or third parties, and External Commercial Borrowings from foreign lenders), and hybrid instruments (such as compulsorily or optionally convertible preference shares and debentures, etc.). Each funding route is subject to applicable provisions of the Companies Act, 2013, the Foreign Exchange Management Act, 1999 (FEMA), and allied regulations, including sectoral FDI caps, entry routes (automatic or approval), pricing guidelines, and reporting requirements.

Companies in India may return capital or distribute profits to stakeholders through the following mechanisms, subject to applicable legal and regulatory requirements:

• Dividends – freely repatriable, subject to applicable withholding tax;
• Repayment of loans —External Commercial Borrowings may be repaid subject to RBI guidelines and applicable pricing and reporting requirements;
• Buy-back of shares: subject to prescribed limits, solvency requirements, and procedural compliances. From April 1, 2026, buy-back proceeds are taxable in the hands of the shareholder as capital gains;
• Royalties and technical fees – repatriable under contractual arrangements, subject to applicable withholding tax and FEMA compliance.
• Capital reduction – a company may return surplus capital to shareholders subject to NCLT approval and applicable procedural requirements.

Decisions of the shareholders are taken at general meetings (or through postal ballot, as prescribed), where resolutions are passed in the following manner:

Ordinary Resolution: Decisions on most matters are  passed by a simple majority, i.e., more than 50% of the votes cast by members entitled to vote and present (in person or by proxy) in favour of the resolution.

Special Resolution: Certain significant matters require the approval of not less than 75% of the votes cast by members entitled to vote and present (in person or by proxy) in favour of the resolution. These include, among others, alteration of charter documents, mergers and amalgamations (subject to NCLT approval), voluntary liquidation, change of name or objects, variation of shareholder rights, and removal of auditors.

In India, the ability of shareholders to give binding instructions to management is limited and structured by company law principles under the Companies Act 2013

Shareholders exercise their powers through resolutions passed in general meetings and do not ordinarily participate in the day-to-day management of the company, which vests in the Board of Directors. Shareholder intervention in management is limited to matters expressly reserved under the Companies Act, 2013, the Articles of Association, and/or any shareholders’ agreements.

In private companies, shareholders have more flexibility to take decisions as generally these are family-owned companies and the shareholders and/or their family members are also the directors. However, public companies, including listed companies, have more stringent compliances and reporting requirements for their decisions.

Directors, in turn, owe fiduciary duties to the company under Section 166 of the Companies Act, 2013 and are required to exercise independent judgment and act in the best interests of the company. They cannot act solely on shareholder instructions where such directions are unlawful, contrary to the Articles, or inconsistent with their fiduciary obligations.

As regards consequences, directors who act on improper shareholder instructions, in breach of their fiduciary duties or statutory obligations, may be held personally liable. Conversely, minority shareholders who are prejudiced by the conduct of majority shareholders or management may seek relief under Sections 241 to 244 of the Companies Act, 2013, which provide remedies against oppression and mismanagement.

The employment law protections are derived from:

(i) the Constitution of India;

(ii) the four labour codes, i.e., The Code on Wages, 2019 (Wage Code); The Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code); The Code on Social Security, 2020 (SS Code); and The Industrial Relations Code, 2020 (IR Code), which have consolidated and replaced numerous central laws. Pending notification of their draft rules, the older statutes continue to operate;

(iii) judicial precedents; and

(iv) the employer’s internal policies/employee handbooks.

B. Anti discrimination and equality:

• The Constitution of India prohibits discrimination on grounds of religion, race, caste, sex, or place of birth in public employment.
• The Wage Code mandates equal pay for men and women for work of same or similar nature, and prohibits gender based discrimination in recruitment, promotion, and conditions of service.
• Specific protections are prescribed for employees with disabilities, transgender employees and employees with HIV/AIDS, including through mandatory Equal Opportunity Policies under applicable laws, for ensuring non-discrimination, accessibility, and dignity in the workplace.

C. Minimum Wage:

• Employers must pay at least the minimum wage to its employees/workers, which cannot be below the ‘national floor wage’ set by the central government.

D. Working hours, leave and working conditions:

• The OSH Code limits daily and weekly working hours, mandates rest intervals, weekly off, and leave entitlements such as annual leave and sick leave, and requires payment for overtime at twice the ordinary rate.
• Women are entitled to paid maternity leave of up to 26 weeks, along with additional benefits under the SS Code. Women are protected from dismissal during maternity leave.
• Women can work night shifts only with their prior consent and are entitled to special protections to ensure their health, safety, and welfare.
• Employment of children below 14 years of age is prohibited in any establishment, factory, mine, or hazardous occupation under The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986. Adolescents aged between 14–18 years are permitted to work only in non-hazardous roles.

E. Protection against unfair dismissal

• Employment cannot be terminated without just cause. Permissible grounds include misconduct, poor performance, and redundancy, subject to applicable procedural compliances including notice and opportunity to be heard.
• Summary dismissal is prohibited except in some cases of gross misconduct. Workers are entitled to challenge dismissal, lay off, or retrenchment before industrial tribunals or labour courts.
• Protections, including mandatory prior government approval for retrenchment and closure, apply to ‘workers’ in industrial establishments employing 300 or more workers under the IR Code. Managerial and supervisory employees rely primarily on contractual protections.
• Retrenched workers are entitled to statutory retrenchment compensation at the rate of 15 days’ average pay for every completed year of continuous service.
• The IR Code restricts termination of workers during an ongoing industrial dispute.

Termination of employment must be for cause, such as misconduct and redundancy. In cases of misconduct, employers are required to conduct a fair domestic inquiry adhering to principles of natural justice (For e.g., issuing a charge sheet, providing an opportunity to defend, recording of evidence, etc.). .

For redundancy-related dismissal of workers, such as business closure/ transfer, downsizing and restructuring, whether individual or collective, the IR Code requires employers to comply with the following:

a. advance notice of 1 to 3 months (depending on establishment size), or payment in lieu thereof;

b. retrenchment compensation equivalent to 15 days’ average pay for every completed year of continuous service or part thereof exceeding six months;

c. application of the “last in first out” principle among workers of the same category; and

prior intimation to the appropriate government where the number of workers employed is below 300; and prior government approval where the number of workers exceeds 300.

Employee representation is facilitated through the following mechanisms under the IR Code:

• Grievance Redressal Committee: Mandatory in industrial establishments with 20 or more workers, comprising equal representation of employer and workers, for resolution of individual grievances.
• Works Committee: Mandatory in industrial establishments employing 100 or more workers, serving as a forum for employer-worker consultation on matters of mutual interest and resolution of day-to-day disputes.
• Trade Unions: Workers may voluntarily form and register a trade union with a minimum of seven members. Where a single registered trade union represents 51% or more of workers, the employer is obligated to recognise it as the sole negotiating union. Where multiple unions exist, a sole negotiating union is chosen, or a negotiating council is constituted in accordance with the IR Code.

Managerial and supervisory personnel are excluded from these representation frameworks. Establishments below the prescribed workforce thresholds are exempt from constituting the relevant committees.

India has a well-established legal framework to combat bribery and corruption, primarily governed by the Prevention of Corruption Act, 1988 (as amended in 2018) (PCA). The PCA criminalises the solicitation, acceptance and, following the 2018 amendments, the giving of undue advantage in connection with official acts by public servants. The 2018 amendments also introduced corporate liability, extending culpability to commercial organisations where persons associated with in bribery on their behalf.

The framework is supplemented by statutes such as the Prevention of Money Laundering Act, 2002, which addresses the laundering and illicit movement of proceeds of crime, and provides for attachment, seizure, and confiscation of assets. Indian law also contemplates whistleblower protection in limited regulatory contexts; the Whistleblowers Protection Act, 2014, while enacted, has not yet been brought into force.

The regime prescribes stringent penalties, including imprisonment and monetary fines, for individuals and entities found guilty of corruption-related offences.

It is worth noting that Indian law does not comprehensively address private sector bribery, which remains a gap relative to international standards such as the UK Bribery Act.

In terms of extra-territorial reach, Indian anti-corruption law has limited application beyond its borders. The PCA applies to Indian public servants irrespective of where the offence is committed. However, India does not have legislation with broad extraterritorial reach over private sector bribery abroad, unlike the US Foreign Corrupt Practices Act or the UK Bribery Act. Cross-border matters are addressed through principles of territorial nexus, extradition treaties, and mutual legal assistance arrangements. India is also a signatory to the UN Convention Against Corruption (UNCAC), which facilitates international cooperation in corruption-related matters.

India has a comprehensive statutory framework to address economic offences, including money laundering, corruption, tax evasion, securities fraud, and corporate misconduct. The principal legislation includes:

• Prevention of Money Laundering Act, 2002 (PMLA): criminalises money laundering and provides for attachment and confiscation of proceeds of crime. It also addresses terrorist financing. The Enforcement Directorate (ED) is the primary investigating authority under this statute; the Financial Intelligence Unit – India (‘FIU-IND’) receives and analyses suspicious transaction reports.
• Prevention of Corruption Act, 1988: penalises corruption and bribery involving public servants and, in certain cases, commercial organisations.
• Benami Transactions (Prohibition) Act, 1988 (as amended in 2016): prohibits and penalises benami property transactions, investigated by the Income Tax Department.
• Companies Act, 2013: addresses fraud, misrepresentation, and corporate governance failures. The Serious Fraud Investigation Office (SFIO) is empowered to investigate serious corporate fraud.
• Income-tax Act, 1961: penalises tax evasion, wilful concealment of income, and related offences.
• Foreign Exchange Management Act, 1999 (FEMA): contraventions are generally civil offences (as opposed to criminal), subject to penalties and compounding, though serious contraventions may be referred to the ED under the PMLA.
• SEBI Act, 1992 and allied regulations (including Prohibition of Insider Trading Regulations, 2015 and Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003): regulate the securities market and address insider trading, market manipulation, and investor protection.

Reporting obligations and compliance framework:

There is no general obligation on private persons or entities to report economic crimes. However, sector-specific reporting obligations exist:

• Under the PMLA, specified “reporting entities” (including banks, financial institutions, intermediaries, and certain professionals) must maintain records and file Suspicious Transaction Reports (‘STRs’) with FIU-IND.
• Under the Companies Act, 2013, auditors are required to report fraud to the Central Government (where the amount exceeds INR 1 crore) or to the Audit Committee/Board (for amounts below that threshold) under Section 143(12).
• Regulated entities (including intermediaries, listed companies, and financial institutions) are subject to additional sector-specific reporting and disclosure obligations under SEBI, RBI, and other regulatory frameworks.

The framework for regulation of money laundering and terrorist financing in India comprises a combination of statutes, subordinate legislation, and institutional enforcement mechanisms. The key components are as follows:

• Prevention of Money Laundering Act, 2002 (PMLA): the principal legislation governing money laundering, providing for attachment, confiscation, and prosecution in respect of proceeds of crime. It also incorporates obligations relating to KYC, customer due diligence, record-keeping, and suspicious transaction reporting.
• Unlawful Activities (Prevention) Act, 1967 (UAPA): addresses terrorist activities and terrorist financing, including provisions for the designation of individuals/entities as terrorists and freezing, seizure and forfeiture of assets linked to terrorism.
• Enforcement Directorate (ED): the primary enforcement agency for the investigation and prosecution of money laundering offences under the PMLA, with powers to conduct searches, seizures, and attachment of property.
• Financial Intelligence Unit – India (‘FIU-IND’): the central national agency responsible for receiving, processing, and analysing Suspicious Transaction Reports (‘STRs’) and other financial intelligence from reporting entities, and disseminating the same to enforcement agencies.
• Mandatory reporting obligations “reporting entities”: banks, financial institutions, intermediaries, and specified professionals are required under the PMLA  to conduct KYC and customer due diligence (CDD); maintain transaction records; and file suspicious transactions reports (STR) with FIU-IND. Detailed operational guidelines are issued by sector regulators, including the RBI (for banks and NBFCs) and SEBI (for securities intermediaries), by way of Master Directions and circulars.
• Foreign Contribution (Regulation) Act, 2010 (FCRA): regulates receipt and utilisation of foreign contributions by specified persons and entities, with a view to preventing misuse for activities prejudicial to national interest.

India is a member of the Financial Action Task Force (FATF) and has progressively aligned its AML/CFT framework with FATF recommendations. Accordingly, the Indian regime is PMLA-centric, supported by UAPA for terrorist financing, sector specific regulatory frameworks administered by RBI and SEBI, and a robust reporting and intelligence architecture anchored by FIU-IND and enforcement led by the Enforcement Directorate.

India does not have a single, comprehensive law equivalent to the UK’s Modern Slavery Act, the Dutch wet kinderarbeid, or the French Loi de Vigilance. Instead, supply chain compliance is addressed through a combination of prohibitory legislation, labour law, and increasingly, ESG disclosure frameworks:

Prohibitory and Labour Legislation:

i. Bonded Labour System (Abolition) Act 1976 – abolishes bonded labour and related practices throughout the supply chain.

ii. Child and Adolescent Labour (Prohibition and Regulation) Act 1986 – prohibits employment of children in hazardous occupations and regulates adolescent labour.

iii. Contract Labour (Regulation and Abolition) Act, 1970: regulates engagement of contract labour through intermediaries, with direct relevance to supply chain structures.

iv. Bharatiya Nyaya Sanhita 2023 – criminalises trafficking, forced labour, and exploitation

ESG and Supply Chain Disclosure Frameworks:

v. SEBI Business Responsibility and Sustainability Reporting (BRSR): mandatory for the top 1,000 listed companies by market capitalisation since 2022-23, the BRSR requires disclosures on supply chain-related ESG matters. The BRSR Core framework (applicable from 2023-24) additionally requires reasonable assurance on key performance indicators, including supply chain disclosures, making it the closest Indian equivalent to European supply chain due diligence regimes.

vi. National Guidelines on Responsible Business Conduct (NGRBC), 2019: issued by the Ministry of Corporate Affairs, these guidelines set out nine principles for responsible business conduct, including supply chain due diligence and human rights. While voluntary, they form the conceptual basis of the BRSR framework.

Unlisted and private companies are not subject to mandatory supply chain due diligence obligations, though they may be contractually required to comply with supply chain standards imposed by listed or multinational counterparties.

Companies in India are required to prepare their annual financial statements comprising the balance sheet, statement of profit and loss, statement of changes in equity, cash flow statement, and notes thereto. Companies meeting prescribed thresholds (including listed companies and those with a net worth of INR 250 crore or more) must follow Indian Accounting Standards (‘Ind AS’), converged with IFRS; other companies follow Accounting Standards (‘AS’) issued by the ICAI.

The financial statements must first be approved by the Board of Directors under Section 134 of the Companies Act, 2013, accompanied by a Directors’ Report containing prescribed disclosures. They are then audited by a statutory Chartered Accountant appointed under the Companies Act, 2013. Listed and certain other companies are subject to mandatory auditor rotation.

The audited financial statements are placed before shareholders for adoption at the Annual General Meeting (‘AGM’), which must be held within six months of the close of the financial year. The adopted financial statements, audit report, and Directors’ Report must be filed with the Registrar of Companies within 30 days of the AGM. Certain companies must file in XBRL format.

Listed companies are additionally required to submit quarterly and annual financial results to the stock exchanges under the SEBI LODR Regulations within prescribed timelines.

Indian companies are subject to ongoing annual and event-based compliance requirements under the Companies Act, 2013 and rules framed thereunder. Key annual compliances include:

i. Board meetings: minimum 4 meeting of per calendar year, with a maximum gap of 120 days between consecutive meetings, conducted in accordance with Secretarial Standard-1 (‘SS-1’).

ii. Annual General Meeting (AGM): to be held within 6 months of the close of the financial year, conducted in accordance with Secretarial Standard-2 (‘SS-2’);

iii. Annual filings with the ROC: audited financial statements within 30 days of the AGM, and annual return within 60 days of the AGM, along with the Directors’ Report. Additional returns (e.g., relating to deposits, MSME outstanding etc.) are also required to be filed in a timely manner.

iv. Director KYC: all directors must file KYC with the MCA every third year.

v. Secretarial Audit: mandatory for listed companies and certain prescribed classes of unlisted public companies, conducted by a practicing Company Secretary.

vi. Event based filings: such as changes in directors, registered office, appointment of auditors, creation or satisfaction of charges, etc.

vii. Statutory registers: maintenance of registers of members, directors, key managerial personnel, charges, allotment and transfer of shares, among others.

viii. Minutes books: preparation, signing, and maintenance of minutes of all board and shareholders meetings.

Under the Companies Act, 2013, every company (other than a One Person Company) is required to hold an Annual General Meeting (AGM) of its shareholders within 6 months from the end of the financial year. The first AGM must to held within 9 months from the end of the first financial year.
Typically, the following matters are placed before the shareholders for their approval at the AGM:

i. adoption of audited financial statements;

ii. declaration of dividend (if any);

iii. appointment/re-appointment of directors retiring by rotation;

iv. appointment of auditors for a 5-year term (ratification at each AGM is no longer mandatory following the 2017 amendment); and

v. Approval of managerial remuneration (for public companies, as applicable).

Additional matters may be transacted at the AGM or, where permitted, through postal ballot or remote e-voting.

In addition to the AGM, companies may convene Extraordinary General Meetings (‘EGMs’) at any time during the year to transact urgent or significant business that require shareholder approval and cannot await the next AGM.

Under Section 90 of the Companies Act, 2013 read with the Companies (Significant Beneficial Owners) Rules, 2018, every company is required to identify and ensure compliance in relation to its Significant Beneficial Owners (SBOs).

An SBO refers to an individual who, acting alone or together, or through one or more persons or trusts, holds a beneficial interest of not less than 10% in the shares of a company, or exercises significant influence or control over the company.

Companies are required to make necessary disclosures and file forms with the Registrar of Companies. Non-compliance may attract penalties for the company and its officers, and shares held by an undisclosed SBO may be subject to restrictions.

Separately, reporting entities under the PMLA are required to identify and verify UBOs of their customers as part of KYC and customer due diligence obligations.

The SBO framework currently applies to companies. LLPs are not subject to an equivalent mandatory UBO disclosure regime.”

The principal taxes applicable to businesses in India are as follows:

• Corporate Income Tax: levied on profits. Ranges between 15% to 30% plus surcharge and cess. Foreign companies are taxed at 40%. Indian subsidiaries of foreign companies are considered as domestic companies and taxed accordingly.
• Withholding Tax (TDS): applicable on specified payments including interest, dividends, royalties, and fees for technical services, at rates varying by payment type, residency of recipient, and applicable DTAA.
• Goods and Services Tax (GST): a destination-based consumption tax levied on the supply of goods or services under a four-tier rate structure of 0% (exempt), 5%, 12%, 18% and 28%. Certain goods additionally attract a compensation cess.
• Customs Duty: levied on import and export of goods at rates ranging between 0% to 100%, depending on the nature of goods and country of origin.
• Capital Gains Tax on sale of shares – long term capital on listed securities are taxed at 12.5% (holding period: 12 months) and at 20% with indexation benefit on unlisted securities  (holding period: 24 months). Short term capital gains on listed securites are taxed at the rate of 20%. Surcharge and cess apply.

India offers a range of tax and fiscal incentive regimes aimed at promoting investment, innovation, and sectoral growth. Key incentives include:

• Production Linked Incentive schemes: sector-specific incentives linked to incremental production and investment, covering industries such as electronics, pharmaceuticals, automobiles, and renewable energy.
• Special Economic Zones (SEZs): units operating in SEZs are eligible for a staged income tax holiday under Section 10AA (100% exemption for the first 5 years, 50% for the next 5 years), along with customs duty waivers, electricity at lower rates, stamp duty exemption, etc.
• GIFT City (IFSC): units operating in India’s International Financial Services Centre at GIFT City, Gujarat, benefit from significant tax concessions including exemptions on capital gains, dividend income, and interest income, making it an attractive hub for financial services businesses;
• Start-up Incentives: DPIIT-recognised start-ups are eligible for a 3-year income tax holiday under Section 80-IAC, exemption from angel tax on share issuances, and tax deferral benefits on ESOPs granted to employees; and
• R&D Incentives: weighted deductions are available for expenditure on approved scientific research and in-house R&D, encouraging innovation-led investment.

India maintains a managed capital account under the Foreign Exchange Management Act, 1999 (FEMA). While inward capital flows are broadly liberalised, outbound flows are subject to regulatory conditions and limits.

Inward remittances: Foreign direct investment must be reported to the RBI via Form FC-GPR. External Commercial Borrowings (ECBs) require a Loan Registration Number (LRN) from the RBI prior to drawdown. No withholding tax applies on inward equity investment.

Outward remittances: Outbound investments by Indian entities are governed by the Overseas Direct Investment (ODI) framework under FEMA. Resident individuals may remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme (LRS). All outward remittances require filing of Form 15CA (remitter’s declaration) and Form 15CB (Chartered Accountant’s certificate) with the income tax authorities.

Withholding taxes: outward remittances in the form of dividends, royalties, fees for technical services, and interest are subject to withholding tax under the Income Tax Act, 1961, at rates ranging from 10% to 20%, subject to relief under an applicable DTAA. Capital gains on sale of Indian assets are also subject to withholding tax prior to repatriation.

Transactions involving transfer of securities and immovable property in India attract the following tax and duty implications.

Securities:

• Capital gains tax applies on transfer of securities – at 12.5% for long-term gains (holding period exceeding 12 months for listed and 24 months for unlisted securities) and 20% for short-term gains on listed securities, plus applicable surcharge and cess;
• Listed securities are subject to securities transaction tax (STT) at prescribed rates;
• Stamp duty on transfer of shares has been standardised at the central level at 0.015% of the consideration amount for delivery-based transfer of dematerialised shares;
• Transfer of securities below fair market value may attract income tax as a deemed gift under Section 56(2) of the Income Tax Act, 1961.

Immovable Property:

• Transaction involving transfer of immovable properties are subject to capital gains tax and stamp duty.
• Stamp duty is state-specific, generally ranging between 5% to 7% of the transaction value (levied on the higher of the agreement value or the applicable government circle rate) along with the registration charges (typically 1% of the transaction value).
• Transfer of under-construction properties attracts GST, whereas completed properties are generally exempt.

Public takeovers in India are primarily governed by the Companies Act 2013, and the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Code”) issued by the Securities and Exchange Board of India (SEBI), which are applicable to listed companies.

Key provisions of the Takeover Code include:

• Mandatory open offer: an acquirer crossing the threshold of 25% shareholding or voting rights, or acquiring control of a listed company, must make a mandatory open offer to public shareholders to acquire at least an additional 26% of total shares;
• Creeping acquisition: an acquirer already holding between 25% and 75% may acquire up to 5% additional shares per financial year without triggering a mandatory open offer;
• Open offer pricing: the offer price must be the higher of the negotiated acquisition price, volume-weighted average market price, and other prescribed parameters, ensuring fair value to public shareholders;
• Indirect acquisitions: the Takeover Code also applies to indirect acquisitions of a listed company through acquisition of its holding company; and
• Voluntary open offer: an acquirer may also make a voluntary open offer subject to prescribed conditions.

The framework is designed to protect minority shareholders, ensure transparency, and promote orderly acquisitions. Large transactions may additionally require prior approval of the Competition Commission of India (‘CCI’) under the Competition Act, 2002.

India’s merger control regime is governed  by the Competition Act, 2002, administered by the Competition Commission of India (CCI), read with the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations), 2011, and relevant notifications issued by the Ministry of Corporate Affairs (MCA) from time to time.

The regime applies to “combinations” (acquisitions, mergers, and amalgamations) that meet prescribed jurisdictional thresholds based on assets or turnover of the parties in India and globally, subject to specified exemptions including de minimis/target-based exemptions and specified intra-group restructurings.

Transactions that exceed the prescribed thresholds are required to obtain the prior approval of the CCI. The CCI must complete its Phase I review within 30 working days of a valid filing. Complex transactions may proceed to Phase II, which can extend up to 150 working days. Transactions with no competitive overlaps may be filed under the green channel route, under which deemed approval is granted upon filing.

The CCI may approve the transaction unconditionally, approve with modifications, or reject it if found to be anti-competitive. Transactions completed without requisite CCI approval are void, and the parties may be subject to significant penalties.

Indian law does not impose a standalone legal duty to negotiate in good faith. However, the Indian Contract Act, 1872, indirectly encourages honest and fair dealing through provisions governing fraud, misrepresentation, undue influence and free consent; conduct falling short of these standards may render a contract voidable.

Where parties expressly incorporate a good faith obligation in a letter of intent, term sheet, or contract, such obligation is enforceable as a contractual term. Indian courts have also increasingly applied good faith principles in interpreting long-term commercial contracts and public procurement arrangements, though a general pre-contractual duty of good faith remains unrecognised.

Additionally, the Specific Relief Act, 1963 provides courts with discretion to refuse specific performance where a party has acted unconscionably. In certain regulated sectors, such as insurance and banking, good faith obligations are separately prescribed by regulation.

In practice, good faith operates less as a rigid legal requirement and more as a guiding commercial standard, the breach of which may give rise to claims in misrepresentation, fraud, or unjust enrichment rather than an independent cause of action.

India does not have any specific legislation for the protection of employees affected by a merger, acquisition or any such similar deal between two or more entities. Protections are instead derived from the IR Code and apply primarily to ‘workers’ as defined therein. Managerial and supervisory employees rely on contractual protections.

Share Deal: In a share deal, the employer entity remains unchanged. Employment contracts continue automatically and statutory retrenchment provisions are generally not triggered. Employees are therefore afforded continuity of protection in a share deal structure.

Asset Deal: In an asset deal or business transfer, employment contracts do not automatically transfer to the acquirer under Indian law. Employees must be formally re-engaged by the acquiring entity. Where workers are not re-engaged or their terms are adversely affected, they are entitled to notice and retrenchment compensation as if retrenched, unless:

a. the service of the worker has not been interrupted by the transfer;

b. the terms and conditions after the transfer are in no manner less favourable than those applicable to the worker immediately before the transfer; and

c. the new employer assumes liability to pay retrenchment compensation to the transferred worker (if applicable) on the basis that service has been continuous and not been interrupted.

India does not impose mandatory information and consultation obligations on employers in M&A transactions. However, where a transaction affects workers, consultation with the works committee or the recognised trade union may be considered to ensure a smooth transfer or separation, as the case may be.

Where a merger or amalgamation is sanctioned by the NCLT under the Companies Act, 2013, employee matters form part of the scheme and the NCLT may impose conditions for employee protection as part of its approval process.

India’s Foreign Direct Investment (FDI) regime is governed by the Foreign Exchange Management Act, 1999 (FEMA), read with the Consolidated FDI Policy and relevant rules/regulations/notification issued by the Government of India.

Entry routes:

• Automatic route: the majority of sectors permit 100% FDI under the automatic route, requiring no prior government approval. Investments are subject to sectoral caps, FEMA pricing guidelines, and reporting requirements;
• Approval route: certain sectors require prior government approval beyond prescribed thresholds, including defence (above 74%), banking (above 74%), broadcasting and media, and print media; and
• Prohibited sectors: FDI is prohibited in lottery businesses, gambling and betting, chit funds, Nidhi companies, real estate business (other than development of townships), and tobacco products, among others.

Land border restriction: nationals and entities from countries sharing a land border with India — being China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan — require prior government approval for any FDI in India, irrespective of sector or entry route (Press Note 3 of 2020).

Key compliance requirements for corporate acquisitions:

• Pricing: shares cannot be issued to or acquired by a foreign investor below fair market value, determined in accordance with FEMA pricing guidelines;
• Reporting: inward FDI through fresh issuances must be reported to the RBI via Form FC-GPR; secondary transfers of shares between residents and non-residents must be reported via Form FC-TRS; and
• Downstream investment: where a foreign-owned Indian entity makes further investments in other Indian entities, downstream investment regulations under FEMA apply and must be complied with and necessary reporting is to be done.

India maintains exchange control primarily by the Foreign Exchange Management Act, 1999 (FEMA).

FEMA draws a fundamental distinction between:

• Current account transactions — including trade payments, remittances of dividends, interest, royalties, and fees for technical services — which are generally freely permitted subject to documentation, disclosure, and applicable withholding tax compliance; and
• Capital account transactions — including cross-border investments, external borrowings, and acquisition of foreign assets — which are subject to restrictions, conditions, and in certain cases, prior RBI approval.

All foreign exchange transactions must be routed through Authorised Dealer (‘AD’) Category-I banks, which are responsible for ensuring regulatory compliance at the transaction level.

Resident individuals may remit up to USD 250,000 per financial year for permitted purposes under the Liberalised Remittance Scheme (LRS). Outbound investments by Indian entities are governed by the Overseas Direct Investment (ODI) framework.

India has significantly liberalised its exchange control regime. Most current account transactions and a wide range of capital account transactions are permitted without prior approval, subject to prescribed documentation and reporting. Contraventions of FEMA are treated as civil offences subject to penalties and compounding, distinguishing the current regime from the more stringent criminal framework under its predecessor legislation.

Entities in India may be wound up, liquidated, or dissolved through the following principal legal routes, depending on their financial position and operational status:

1. Voluntary Liquidation: Governed by the Insolvency and Bankruptcy Code, 2016 (IBC) and related regulations. Available to solvent companies with no default. Initiated by a special resolution of shareholders, supported by a declaration of solvency by the directors. A licensed insolvency professional is appointed as. The process concludes with a dissolution order is passed by the National Company Law Tribunal (NCLT). Indicative timeline is 12-18 months.
2. Corporate Insolvency Resolution Process (CIRP) (IBC, 2016)– Applicable to insolvent companies with a minimum default of INR 1 crore. Initiated before the NCLT by a financial creditor, operational creditor, or the corporate debtor itself. A resolution plan requires approval by ≥66% of the committee of creditors. If no plan is approved within 330 days (including extensions), the company proceeds to liquidation under the IBC. Asset distribution in liquidation follows the statutory waterfall under Section 53 of the IBC.
3. Strike-off (Fast-track Exit): Governed by the Companies Act, 2013. This route is available to inactive or non-operational companies. Approval of shareholders with minimum 75% majority is required. An application is required to be made to the Registrar of Companies (RoC) in the prescribed form. The RoC may also suo motu strike off defunct companies. Upon approval, the company is struck off the register and dissolved.
4. Compulsory Liquidation (Tribunal-driven): Initiated before the NCLT under the Companies Act, 2013 or IBC in specified circumstances including inability to pay debts, fraudulent conduct, or on application by regulators or the government.
5. LLP Dissolution: LLPs may be wound up voluntarily by partners or compulsorily by tribunal order under the Limited Liability Partnership Act, 2008, on grounds analogous to those applicable to companies.