How to Register a Trading Company in India
A trading company deals with the sourcing of different products from factories and offering them to the customers. The customers might be the end consumers or small retail stores. These kinds of companies are usually preferred for their ability to offer a wider range of products to the customers. They can also source multiple products from a single factory and distribute them across the country.
Investors seeking to set up a trading company in India should keep in mind that they must have the required knowledge of foreign procedures and the Indian market. It is essential to have an understanding of the local laws governing import-export and customs duties. Investors should make sure that their proposed directors have a Director Identification Number (DIN) and a Digital Signature Certificate. This is necessary for signing various company documents with the Registrar of Companies.
If investors decide to register a private limited company, they need to file the Memorandum of Association (MoA) and the Articles of Association (AOA) with the Registrar of Companies (RoC). The company will be assigned a 21 digit Corporate Identity Number (CIN), after the filings are approved. Then, it can start export-related proceedings and open a Demat and trading account with one of the depositories – NSDL or CDSL.
Investors can also choose to register a cooperative society, which is ideal for agricultural or cottage industry-related products. This kind of business entity is eligible for tax benefits, but it has compulsory statutory meetings and higher minimum share capital requirements than a Pvt Ltd company.
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