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There is no problem in this kind of an arrangement with the amount of information you have provided. However, we need the information on who are these Indian/ Foreign clients. If they are the developers/ designers/ manufacturers etc.c of your product, this kind of agreement is perfectly legal.
Howeve...
Wazzeer Professional Network
ProfessionalCan a one-person company (OPC) develop a product and get into a profit-sharing agreement with foreign/Indian clients based on the number of sales of that product? Is it legal?
-
Wazzeer Professional Network
ProfessionalThere is no problem in this kind of an arrangement with the amount of information you have provided. However, we need the information on who are these Indian/ Foreign clients. If they are the developers/ designers/ manufacturers etc.c of your product, this kind of agreement is perfectly legal.
However, if you are taking financial help from them then the issue is, how do you show that amount in your books of accounts.
Indian firms can get the money in their account only as follows:
- Investment in the Equity capital of the company
- As debt to the company
- Revenue for a sale of any asset of the company
- Revenue for sale of product/ service provided by the company
If they are not revenue then the funds should be either for equity or debt securities. You will have to comply with rules relating to equity and Debt Investments. As an OPC you definitely cannot go for equity route since OPC can have only one shareholder
over 2 years ago
View answer
Can a one-person company (OPC) develop a product and get into a profit-sharing agreement with foreign/Indian clients based on the number of sales of that product? Is it legal?
-
Wazzeer Professional Network
ProfessionalThere is no problem in this kind of an arrangement with the amount of information you have provided. However, we need the information on who are these Indian/ Foreign clients. If they are the developers/ designers/ manufacturers etc.c of your product, this kind of agreement is perfectly legal.
However, if you are taking financial help from them then the issue is, how do you show that amount in your books of accounts.
Indian firms can get the money in their account only as follows:
- Investment in the Equity capital of the company
- As debt to the company
- Revenue for a sale of any asset of the company
- Revenue for sale of product/ service provided by the company
If they are not revenue then the funds should be either for equity or debt securities. You will have to comply with rules relating to equity and Debt Investments. As an OPC you definitely cannot go for equity route since OPC can have only one shareholder
over 2 years ago
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