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    Business Fundamentals

    Topic 11 of 12

    Setting Up Your Company

    The practical basics of incorporating in India or the US, receiving money from abroad, and the rules that govern cross-border money.

    General information only — confirm current rules and your specific situation with a CA or company secretary before acting.

    The 6 decisions this topic covers

    1. Ready to register the company?You register online with the Ministry of Corporate Affairs (MCA) using a single integrated form.
    2. Pvt Ltd or LLP — which one fits?A Private Limited company is built for raising equity and scaling — it can issue shares and ESOPs, which investors need.
    3. Setting up in the US from India?No — you don't need to live in the US or be a citizen to set up a US company.
    4. Delaware, or somewhere cheaper?If you're raising US venture capital, Delaware is the default — investors know and trust it.
    5. Billing a client abroad?You receive foreign payments into your company's bank account through a bank wire (SWIFT) or a licensed payment platform.
    6. Money crossing the border?FEMA (the Foreign Exchange Management Act, 1999) is the law that governs all money moving in and out of India.

    The questions, answered

    Incorporation IndiaReady to register the company?You register online with the Ministry of Corporate Affairs (MCA) using a single integrated form. In practice: pick a structure (usually a private limited company), get digital signatures, reserve a name, and file the incorporation form — which also gets you your PAN, TAN and other registrations together.Pvt Ltd vs LLPPvt Ltd or LLP — which one fits?A Private Limited company is built for raising equity and scaling — it can issue shares and ESOPs, which investors need. An LLP is simpler and cheaper to run but can't easily take equity investment. If you plan to raise from VCs, you almost certainly want a Private Limited company.Incorporation USSetting up in the US from India?No — you don't need to live in the US or be a citizen to set up a US company. You can do it remotely as a non-resident. You'll need a registered agent in your chosen state, and then you apply for a tax ID (EIN) and a bank account.US state choiceDelaware, or somewhere cheaper?If you're raising US venture capital, Delaware is the default — investors know and trust it. If you're bootstrapped and just want low cost, states like Wyoming or Nevada can be cheaper. The right choice depends mainly on whether you'll raise from US investors.Overseas paymentsBilling a client abroad?You receive foreign payments into your company's bank account through a bank wire (SWIFT) or a licensed payment platform. Your bank gives you a certificate proving the money came from abroad, which you'll need for compliance. And exporting services is usually GST-free if you file the right declaration.FEMAMoney crossing the border?FEMA (the Foreign Exchange Management Act, 1999) is the law that governs all money moving in and out of India. It's administered by the RBI (Reserve Bank of India), with enforcement by the Enforcement Directorate. If your company touches foreign money at all — investment, billing, or spending abroad — FEMA applies.

    Who answers these

    The guide is written by the people who do this work for founders every week.