Directors, shareholders and capital for an Indian private limited company

How many members and directors do you need?

A private limited company needs at least two members and at least two directors. The maximum board size is 15 directors, and a company can appoint more by special resolution. These rules come from the Companies Act, 2013.

For a foreign-owned company the parent typically holds all but one share, with a group entity or nominee holding the last. That is what makes the company a wholly owned subsidiary in practice. See wholly owned subsidiary.

What is the resident director rule?

At least one director must have stayed in India for at least 182 days during the financial year. The Companies (Amendment) Act 2017 set the current wording, in force from 7 May 2018.

If none of your directors will be in India that long, the usual choices are to appoint an Indian resident as a director or to use a nominee. Our nominee director and registered office service explains that option. A nominee carries duties and liability, so choose one with care and agree in writing what the nominee will and will not do. The resident-director test is met by presence in India, so it also helps to plan who will be in the country during the first financial year.

How do DIN and the digital signature work?

Every first director needs a Director Identification Number (DIN). You apply for it through SPICe+ when you incorporate. Each director also needs a Class 3 digital signature certificate from a certifying authority accepted by MCA.

Apostilled physical documents are enough for the eMoA and eAoA filings. A foreign director needs a valid business visa only if they are signing in India, to prove they were physically present at the time of execution.

What is DIR-3 KYC and when is it due?

MCA replaced the old annual director KYC with a framework effective 31 March 2026. Each director now files DIR-3 KYC once every three consecutive financial years, by 30 June. A DIN allotted in the 2025-26 financial year first falls due on 30 June 2029. Foreign national directors are included.

Changes to mobile number, email or address must still be reported within 30 days. If a director does not file, the DIN is deactivated, and reactivation carries a fee.

What capital do you need?

There is no minimum paid-up capital for a private company. The Companies (Amendment) Act 2015 removed the old floor, and also removed the commencement certificate under the old section 11.

That does not mean any amount will do. Authorised capital drives the MCA fee and the state stamp duty, so it affects your set-up cost. See cost to set up a subsidiary in India. Shares issued later to a non-resident parent must be priced at or above fair value under the FEMA rules, backed by a valuation certificate not more than 90 days old. A valuation certificate is not required for the subscriber shares issued at incorporation. And you need enough funding to pay for the office, people and compliance.

What must the board do in the first months?

• First board meeting: within 30 days of incorporation.
• First auditor: the board appoints within 30 days of registration. If it does not, members can appoint at an extraordinary general meeting within 90 days.
• INC-20A: the commencement declaration is due within 180 days of incorporation, confirming that each subscriber has paid for the shares agreed to be taken.
• Board meeting frequency: under the general rule, at least four meetings a year with gaps not exceeding 120 days.

Do not assume a foreign-owned subsidiary can use the small-company relaxations. The Act excludes holding and subsidiary companies from the definition. At ProLead, we do not apply small-company exemptions to a subsidiary of a parent.

The annual compliance calendar shows what follows the first months. To discuss your board structure, book a free consultation.

Note: Rules and forms change often. This page is general information, not legal or tax advice. Check the current position with a practising Chartered Accountant or Company Secretary before you act.

General information only, not legal or tax advice. Rules and forms change, so confirm the current position with a practising Chartered Accountant or Company Secretary before you act. See our disclaimer.