We advise considering the risk or possible liability of a business and then deciding your company’s business structure.

One can see that a small retail shop has almost nil risk or liability in comparison to a business that is in foreign trade or dealing in hazardous chemicals.

From the perspective of Risk and Liability, the business structure may be divided into two categories.

The first category is where the owner’s liability is limited to the capital that he has promised to pay into the business and another where the owners have unlimited liability.

Generally, FDI is permitted in India; there are two routes through which foreign direct investment can come to India. Most of the sectors are open for 100% FDI under automatic route.

Automatic Route: One is known as an automatic route where there is no need to obtain prior permission before setting up a company or subscribing to the shares in an existing company.

Approval Route: Few strategic sectors and the FDI originating from a country that shares land boundaries with India, such as China, Pakistan, Afghanistan, Afghanistan etc., are considered under the Approval Route.