Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Minimums
2 directors, 2 shareholders, and at least one resident director (182+ days in India). Confirm the resident-director day count.
Same person can be both
Two people can serve as both directors and shareholders, so a company can start with just two individuals.
Residence, DIN limits and the cap
A few details sit behind the minimums. The resident-director condition means at least one director must have stayed in India for the required number of days in the financial year (182 days has been the long-standing test, relaxed in a company’s first year of incorporation), so a company with all-foreign founders must still appoint or retain one India-resident director. A director needs a DIN, and an individual can hold directorships in a limited number of companies at once (20, of which not more than 10 can be public companies). Shareholders can be individuals or bodies corporate, Indian or foreign, and a Private Limited company is capped at 200 shareholders (excluding present and former employees holding shares). The same two people can be both the directors and the shareholders, which is how most small companies start. Where foreign shareholders come in, the investment must follow FEMA pricing and reporting. Planning the board and the cap table at the outset — who is resident, who holds what, whether ESOPs or future investors need room — avoids restructuring later. Confirm the current resident-director day count, which has been adjusted from time to time.