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flag India India: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labor | Social Partners

 

Setting Up a Company

Sole Proprietorship
Number of partners: One
Capital (max/min): No minimum capital
Shareholders and liability: Unlimited liability.
Partnership
Number of partners: Minimum number is 2, while as the maximum number can be 20 in case of a General Partnersip and with no maximum for all Limited companies.
Capital (max/min): No minimum capital
Shareholders and liability: Liability of the partners is unlimited.
Private Limited (Ltd)
Number of partners: Minimum number is 2, while as the maximum number can be 50
Capital (max/min): Minimum paid up capital of INR 100,000
Shareholders and liability: Limited liability to the amount contributed.
Public Limited (Plc)
Number of partners: Minimum number is 7; while as there is no limit on the maximum number of members/shareholders.
Capital (max/min): Minimum paid up capital of INR 500,000
Shareholders and liability: The liability of a member is limited to the face value of the shares he owns.
Co-operative
Number of partners: Minimum number is 10; while as there is no limit on the maximum number of members. However, the members must be residing or working in the same locality.
Capital (max/min): No minimum capital requirement
Shareholders and liability: The liability of a member is limited to the extent of his capital contribution.
Hindu United Family Business (HUF)
Number of partners: All members of a Hindu undivided family can do business jointly under the control of the head of the family who is known as the 'Karta'. The members of the family are known as 'Co-partners'.
Capital (max/min): No minimum capital
Shareholders and liability: The Karta has unlimited liability while the liability of the other members is limited to the value of their individual interests in the joint family.
The Competent Organization
Ministry of Corporate Affairs

Company Law Board

 
Setting Up a Company India South Asia
Procedures (number) 12.0 7.0
Time (days) 27.0 19.0

Source: Doing Business.

 
Business Setup Procedures
Consult Doing Business Website, to know about procedures to start a Business in India.
Ministry of Corporate Affairs, List of registered Certified Filing Centers.
Kerala Trade Register

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The Active Population in Figures

201120122013
Labor force 487,600,000498,400,000487,300,000

Source: CIA - The world factbook

 
200920102011
Total activity rate -57.60%55.60%
Men activity rate 81.10%80.70%80.70%
Women activity rate 32.80%29.00%29.00%

Source: UN - United Nations

 
For Further Statistics
Ministry of Statistics and Program Implementation
For Further Information About the Labor Market
Employees State Insurance Corporation, New Delhi
Employees' Provident Fund Organization, New Delhi
ILO, The representation of the International Labor Organization in India

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Working Conditions

Legal Weekly Duration
Maximum 48 hours (9 hours a day).
Retirement Age
It varies from 58 to 65 years. Early retirement schemes called Voluntary Retirement Scheme (VRS) also exist in the country.
Working Contracts
1. Permanent (more than 90%)
2. Temporary
3. Fixed-term
Labor Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labor

Minimum Wage
INR 2,990 per month (source: ILO, 2011).
Average Wage
On an average, the industrial wages range from about USD 3 per day for unskilled workers, to over USD160 per month for skilled production workers.
Social contributions
Social Security Contributions Paid By Employers:

 

Contributions by Employer

Provident Fund

3.67% of monthly payroll, plus 1.1% of monthly payroll for administrative costs.

Survivor (deposit-linked) Insurance

0.5% of monthly payroll, plus 0.01% of monthly payroll for administrative costs.

Pension

8.33% of monthly payroll.

Gratuity

An average of 4% of monthly payroll.

Social Assistance

None


Social Security Contributions Paid By Employees:

 

Contributions by Employee

 Contributions by Government

 

Provident Fund

12%

None

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Social Partners

Social Dialogue and Involvement of Social Partners
With some exceptions, India has company unions rather than trade unions. These are often affiliated with national labor organizations. Political parties promote various trade unions. The bargaining power of the unions is declining as the government pushes forward its reform agenda.
Unions

Unionization Rate
Although there are more than 20 million unionized workers, unions represent less than 25% of the workers in the organized sector (primarily in state-owned organizations), and less than 5% percent of the total work force.
Labor Regulation Bodies
Ministry of Labor and Employment

Labor Bureau


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Last Updates: October 2014