How to set up a pharma company in Ahmedabad?

How to set up a pharma company in Ahmedabad?

The high-profit margin levels are making pharma companies one of the most sought after options to start and initiate a business in. A pharmaceutical company is your gateway to help and make a difference in the lives of people by becoming their samaritan in curing and healing diseases. Ahmedabad, one of the most popular cities in Gujarat, has become the first option for people looking forward to a pharma company.

Thanks to the city for becoming the hub of the pharma industry, having the best research labs to provide large and superior quality of medical formulations. After the recent changes in Government of India’s law governing various factors like excise duty, ease of starting a business, and tax regimes; a golden road has been paved for companies to see Gujarat as an established cluster for pharma companies, access to ports, easy availability of electricity, and a prime location for carrying out business activities like manufacturing and processing.

Why choose Ahmedabad?

The former capital of the Indian state of Gujarat, Ahmedabad has emerged as an undisputed industrial and economic hub of India. Once named as the third fastest-growing city of the decade by the Forbes, Ahmedabad still carries the sheen of being the city that will be favourable to start a pharma company.

Starting a company in Ahmedabad makes the whole process of carrying out business relatively safer, easier, and protected. If you register your pharma company in Ahmedabad, you can significantly decrease your tax liability and any potential tax burden. A registered pharma company in Ahmedabad makes the process of future dealing with parties, hiring or engaging with other registered companies, and creating a positive perception and reputation of your company a lot easier and seamless. One of the biggest advantages of starting a company in Ahmedabad is that you can raise significant capital for your business here.

Once you register your company, the process of attracting investors and raising money gets easier. Depending on your business and legal structure, the tax regime can be understood and paid at very reasonable charges and at the same time, the business can raise money for expansion and development.

Types of Pharma Company In Ahmedabad

Private pharma company

A private pharma company holds private ownership. They can have shareholders and they can issue stocks but the shares of their company don’t trade on public exchanges or have initial public offerings (IPOs). They are further broadly divided into three types.

First is the sole proprietorship where the company is owned by only one person and all the assets and liabilities are on the shoulder of just one person. Second is limited liability partnership or LLP where the company has multiple owners who share liability and ownership and profits are divided accordingly. Third is corporations or companies that cannot have more than 100 shareholders and they don’t have to pay taxes on their profits and the companies have their own legal entity.

Public pharma company

A public pharma company has shareholders whose ownership is distributed amongst the general public and they have equity ownership of the company. They purchase stock on the exchange or over the counters through various platforms. These companies raise capital by going public.

One can turn a private company into a public one by meeting regulatory requirements to become a company that opts to raise capital through the public. These shares offered can be either equity or preferential shares that depend upon the shareholder and his preferences and priorities. As mentioned, a public company can make additional offerings that can generate revenues through the creation and sale of shares in the market.

Feasibility check before starting a pharma company in Ahmedabad

A feasibility study is an imperative consideration for the development of medicine. A reliable feasibility check clearly states the objectives and a series of experiments that can determine all the pre-existing issues, if any. A feasibility plan also identifies critical factors of processing that coalesce to produce high-quality drugs.

Choosing the right legal structure for Set up a Pharma Company In Ahmedabad

The legal structure varies from company to company depending upon the type of entity with its own advantages and disadvantages. One must select the legal structure as per the priorities of the set by your company.

It’s important to select the legal structure carefully and after making all the considerations before incorporation of the company as once decided it can be a complex and expensive process to change the legal structure. Below we have mentioned a few legal structures you can choose from-

Sole proprietorship

In a sole proprietorship, you are the only person who has control over the business, and it does not produce a separate entity. All the assets and liabilities are a part of your personal assets and liabilities, which means in the case of debts and liabilities, you are solely responsible for its payment, and in the case of profits and assets, you enjoy all of it.


Partnership is a business structure with two or more people doing business together. Partnership can be further divided into two types, limited partnership and limited liability partnership. The former one generally has only one partner with unlimited liability while other partners enjoy limited liability.

The limited liability partners have limited control over the business and enjoy limited profits. While the latter type of partnership is almost the same but only all the partners enjoy limited liability and the partners protect each other from the debts and other liabilities and won’t be responsible for actions of other partners.

Limited liability company (LLC)

It is the most popular option to choose from as its a unique blend of a corporation and partnership business. Your personal assets remain out of risk zone in case of bankruptcy or loss.

The profits and losses you earn gets through your personal income without facing any taxes which you would otherwise have to face in case of a corporation.

What are the steps for the registration of a company?

Documents required for setting up a pharma company

Documents required for registration in a private or public limited company

Benefits of registering a company in Ahmedabad

Limited liability

The first benefit is for the directors and shareholders of the company as they have limited liability conferred upon them by the business. In a limited liability company, the personal assets of the directors and shareholders are not risked in case of loss or bankruptcy.

Easy transferability

In case you would want to sell the company in the future, you won’t have to go through a complex process as you need to only transfer the complete shareholding to the purchaser while facilitating the easy transfer of ownership and management. This will also save a lot of time and money as stamp duty is saved.

Perpetual succession

One of the striking features of a company is the perpetual succession as the stakeholders and directors of the company may come and go but the existence of the company remains forever as the company is a separate legal entity on its own. For a company to completely dissolve, it has to go through a set of provisions established by law. Death, disability, or retirement of the members doesn’t affect the company’s existence.

If you are looking for an opportunity to build a successful pharma business in India, then Ahmedabad has to be your first option on the list. Ahmedabad has been the hub for pharmaceutical business because of the various advantages and benefits it provides for ease of business for over decades now. By registering and complying under required laws and rules, you can definitely run a smooth, hiccup less and successful business.