Kerala State Industrial Development Corporation
0471-2318922 I Malayalam
General Guidelines

Incorporating your Business Venture

Today, it is extremely easy to establish a business venture in Kerala. A business unit can be formed as Proprietary Concern, Partnership Firm, Private Limited Company or Public Limited Company. Most ventures with foreign participation are either Private Limited or Public Limited Companies. A Private Limited Company will have at least two and a maximum of 50 shareholders and a minimum of two directors. A Public Limited Company is required to have a minimum of seven shareholders and three directors -there is no limit on the maximum number of shareholders. The documents and procedures for incorporating a Public or Private Limited Company - Memorandum of Association, Articles of Association, Prospectus etc - are taken care of by accounting firms. The Kerala State Industrial Development Corporation (KSIDC) will also provide comprehensive support for investors who are planning projects in Kerala. The process of incorporation will take less than four weeks.

Ownership of your Company

With the new liberalized policies, upto 100% direct foreign ownership is permitted, subject to certain conditions. Ownership of a company is through the holding of its equity. Management is controlled through directors, elected on simple majority.

If the company chooses to have a broad-based equity distribution, it can achieve this through a Public Issue. The management of the company can be controlled with low equity shares provided the rest is widely disbursed. The shares could be offered to the general public through the Stock Exchange.

How to set up your Project

Procedures for setting up a project in India have been thoroughly streamlined. Once a project is formulated Kerala State Industrial Development Corporation (KSIDC) will act as your nodal agency in India to help obtain all clearances from the Government of India and the Government of Kerala within the shortest possible time. All clearances can be obtained within 45 - 60 days.

Industrial Licenses are now required only if the article to be manufactured is included in the list of industries which are subject to compulsory licensing (15 industries) or the project is located within 25 kms of the standard urban area limits of a city having population exceeding one million. Six industries are reserved for the public sector and a certain number of low technology, low value items are reserved for the small scale sector. Those requiring licences have to apply in Form IL to the Secretariat for Industrial Approvals (SIA), Ministry of Industry, Government of India, New Delhi. Approvals are normally available within 6 to 8 weeks.

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