India is the 7th largest and 2nd most populous country in the world. It is also the 4th largest economy in the world. Today India is one of the most exciting emerging markets in the world and therefore a hot destination from entrepreneurs across the globe to set up a shop in India.

The Government of India  has been liberalizing the policies relating to Foreign Direct Investment  in India and at present Foreign Direct Investment is allowed on automatic route in almost all sectors except :-

1. Proposals that require an industrial licence and cases where foreign investment is  more than  24%  in the equity capital of units manufacturing items reserved for small scale industries.
2. Proposals in which the foreign collaborator has a previous venture/tie-up in India.
3. Proposals relating to acquisition of shares in an existing Indian company in favour of a Foreign/Non-Resident Indian (NRI)/Overseas Corporate Body (OCB) investor; and
4. Proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted and/or whenever any investor chooses to make an application to the Foreign Investment Promotion Board and not to avail of the automatic route

The principal forms of business organization in India are:

1. Companies - both public and private
2. Partnerships
3. Sole proprietorships.

Companies incorporated in India and branches of foreign corporations are regulated by the Companies Act, 1956 (The Act). The Act, which has been enacted to oversee the functioning of companies in India, draws heavily from the United Kingdom’s Companies Acts and although similar, is more comprehensive. The Registrar of Companies (ROC) and the Company Law Board, (CLB), both working under the Department of Company Affairs, ensure compliance with the Act.