Objects and the investment cap are linked
Selecting Your Business Activities in India
Your stated objects determine your sector, and your sector determines whether foreign investment needs approval.
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The activity decides the investment route
An Indian company’s constitution sets out its main objects, and the activity code selected at incorporation classifies it. Those choices are not merely descriptive: the sector they place you in determines the foreign investment cap, whether approval is required, and in some cases whether the model is permitted at all — the restrictions on certain e-commerce models being the clearest example.
- Objects and codes aligned with the investment route you need
- Sector caps and model restrictions checked before drafting
- Scope set wide enough for planned growth
20+
Mainland, free zone and offshore jurisdictions we file in — so the recommendation is based on your activity, not on which authority we happen to be registered with.
7,000+
Companies successfully established.
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What the activity decides
Why the choice matters here
It governs the investment route.
| It affects | How |
|---|---|
| Investment route | Automatic or government approval. |
| Sector cap | Maximum foreign shareholding permitted. |
| Model restrictions | Some models are restricted within permitted sectors. |
| Licences | Sector approvals follow the activity. |
| Registrations | Activity drives tax and labour registrations. |
| Amendments | Objects can be altered by special resolution. |
Sector caps, investment routes, model restrictions and activity classifications are set by the policy and the authorities and change. Yours are checked before drafting the constitution. Every Indian company must have at least one director resident in India, and foreign share subscription must be reported to the Reserve Bank of India within a short period after allotment.
How it works
From business model to constitution
Policy check, then drafting.
01
Describe the model precisely
What the business will do and how it will earn, in enough detail to place it correctly and spot any model restriction.
02
Check the policy
Sector cap, investment route and any restriction on the specific model, since all three follow from the activity.
03
Draft and classify
Objects drafted to cover current and planned activity, and activity codes selected consistently with them.
- What the business will do
- How it will earn revenue
- Whether you will hold inventory
- Whether you will sell on your own account or as a marketplace
- Whether you will manufacture
- Whether the sector is capped for foreign investment
- Whether a sector licence is needed
- Planned activities over three years
- States where you will operate
- Whether you will import or export
- Expected revenue
- Whether downstream investment is planned
Scope
What is included, and what is not
Stated plainly, so nothing is added once the engagement starts.
Included in the service fee
- Activity and sector policy check
- Investment route determination
- Model restriction assessment
- Objects clause drafted for current and planned activity
- Activity code selection
- Sector approval identification
- Objects amendment where the business changes
- One adviser co-ordinating it
Not included, quoted separately
- Government fees, paid at cost
- Sector licensing, quoted separately
- Government approval decisions
- Market research
- Legal opinions on policy interpretation
- Audit and accounts preparation
- Tax advice outside India
- Bank onboarding decisions
Verify independently
Official Indian authorities
We file directly with these bodies on your behalf.
Reserve Bank of IndiaMinistry of Corporate AffairsRegistrar of CompaniesIncome Tax DepartmentAuthorised dealer banksController General of Patents, Designs and Trade Marks
Questions
Choosing India business activities — FAQs
Does my activity affect foreign ownership?
Directly. The sector your activity places you in determines the cap and whether government approval is needed.
Are some business models restricted?
Yes. Within otherwise permitted sectors, specific models can be restricted — the limits on certain e-commerce structures being the best known example.
How broadly should the objects be drafted?
Wide enough to cover planned activity, since amendment requires a special resolution and filing. But not so wide as to cross into a capped or restricted sector unintentionally.
What are activity codes used for?
Classification at incorporation and in filings. They should be consistent with the objects and with how you actually describe the business elsewhere.
Can objects be changed later?
Yes, by special resolution and filing. It is straightforward but avoidable with sensible initial drafting.
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