In India there are a number of corporate forms for investors (Liaison Office, Project Office, Branch Office, Private Limited, Public Limited, LLP). At this point, however, we will only focus on the - by far the most popular form - the Private Limited Company (Pvt Ltd, the “Indian GmbH”).

Board of Directors

The Private Limited Company is owned by Board of Directors managed or supervised. This body essentially combines the board of directors and the supervisory board. It shall consist of at least two directors, with at least one director required to be a resident of India (Resident Director). A Managing Director can, but does not have to, be chosen. He can manage the business alone - within the scope of his powers (see statutes = Articles of Association).

The powers of the Board of Directors include all management decisions related to the management of the company. Therefore, the majority shareholder should definitely have the majority there.

Board meetings

The Board of Directors must meet at least four times per year (once per quarter). This can happen via video conference. However, directors must be personally present on site in India at least one board meeting per year.

decisions of the Board of Directors are generally made by simple majority. In certain cases (e.g. when investing in other companies) the Companies Act 2013 requires unanimity. In addition, the Articles of Association may also provide for a different majority (2/3 or 3/4) regarding certain matters.

Annual general meeting

Once a year - but no later than 6 months after the end of the financial year - a shareholders' meeting must be held, to which all co-shareholders are invited. They must be invited at least 21 days in advance and provided with the following documents in advance:

  • Copy of the Annual Accounts (Annual financial statements: balance sheet and profit & loss statement)
  • Director's report: Report from the Board of Directors on the course of business.
  • Auditors report: Auditor's report

These above-mentioned documents must be submitted to the Registrar of Companies (RoC) within 30 days of acceptance at the shareholders' meeting (filing). This is one of the annual compliance obligations that we will go into in detail in the course of this blog series and is the task of the so-called company secretary.

This plays a special role, among other things, within the framework of the Board and Annual General Meetings. More on this in next article.