A Summary of Online Indian Subsidiary Registration in India
As a result of its rapidly expanding market, India attracts a lot
of international investors who want to launch their businesses there. Aside
from citizens of Pakistan and Bangladesh and entities created and operating
outside of India, any foreign individual has the ability to invest in the
Indian market and possesses the authority to establish their own subsidiary
business in India by acquiring shares related to the country’s FDI policy. Make
sure that as a business entity you have at least one Indian Director who must
be a resident of India and one Foreign Director, which is required for founding
an Indian Subsidiary Company, before beginning the process of Indian Subsidiary
Company Registration.
The corporation that controls a subsidiary is referred to as the
parent company or holding company. A subsidiary is also known as a sister
company. The parent firm has the authority to exercise partial or whole control
over the subsidiary company.
The Indian Subsidiary Company Registration procedure is governed
by the Companies Act 2013. According to the Companies Act of 2013, a subsidiary
company is one in which a foreign corporate body or parent body owns at least
50% of the total share capital. A subsidiary firm is under the control of the
parent corporation. A subsidiary business must follow by the regulations of the
country where they have already established itself or seek to do so. Therefore,
it is essential for a corporation to abide with Indian law if a subsidiary is
founded there.
It’s vital to remember that a subsidiary company of a foreign
parent business is treated as a separate legal entity and is required to
operate in accordance with local laws in the nation in which it is located.
An Indian subsidiary company can be registered as either a private
limited company or a public limited company by business employees.
- A private limited organization isn’t available
to the general population and appreciates the benefits over Public Company
given by the Companies Act, 2013.
-
A
public limited company is where the public holds an enthusiasm for it and it is
required to conform to various principles and guidelines as indicated by the
Companies Act, 2013.
Advantages of Indian Subsidiary CompanyRegistration Online in India
Brings
Foreign Direct Investment
For fast-growing corporate sectors, the
Indian government has given the go-ahead for 100 percent FDI participation; in
other words, FDI is allowed without any prior clearance. However, you could
require a prior government clearance for FDI if you are a partnership entity,
LLP, or proprietorship.
Limited
Liability
Limited liability applies to the company’s
directors and members. They are strictly confined to the stake of their firm.
In the event that the firm suffers a loss or financial difficulty, the limited
liability attribute shields the director or member. The loss incurred by the
firm will not put the personal assets of the directors and members at danger.
Perpetual
Succession
No matter what happens to the business’s
directors or members, the company will continue to exist under perpetual
succession. Insolvency, a member change, a member’s passing, atransfer, etc. won’t have any impact on the
company’s continued existence.
Scope
of Expansion
An Indian Subsidiary Company enjoys all the
privileges of a Private Limited Company. The growth and expansion of business
is easy because it raises capital from financial institutions, venture
capitalist, and the investor.
Borrow
Funds
Borrow Funds – A fully-owned subsidiary
company in India has the benefit of borrowing funds from financial institutions
in the form of loans.
Sue
and Sued
Indian subsidiary companies work like a legal
person; it can be sued and can sue.
Documents required for Indian Subsidiary Company registration in India
For Indian National
- PAN Card
- Address Proof
- Identity Proof such as Driving
License, Aadhaar Card, Voter Id
For Foreign National
- Passport
- Address Proof which must be
certified by Indian Consulate
- Identity Proof which must be
certified by Indian Consulate
And other important basic documents
- DIN or Directors Identification
Number
- DSC or Digital Signature
Certificate
- Residential Proof
- Article of Association (AOA) for
the company
- Memorandum of Association (MOA)
for the company
- No Objection Certificate from the
owner of the registered business place
- Certificate of Incorporation issued by the foreign government
Check out the characteristics of Indian Subsidiary
Companies
- Approval in advance is not required
for the return or repatriation dividend
- Approval in advance is not
required for the return or repatriation dividend
- As per Union budget 2020 the dividend distribution tax is nil
Registration Procedure of Sole Proprietorship Firmin India
Ministry
Of Corporate Affairs has introduced a new simple form to make the process of
Indian Subsidiary Company registration easy. The name of the form is SPICe+
form and it comprises of 2 parts:
PART A has Name Reservation process and
PART B process starts once the Name reservation process
is completed, this part of process includes all the incorporation steps and
they are:
Once
Name reservation process is done, it includes all the incorporation application
and these are:
- DIN Application
- Issuance of PAN and TAN
- Opening a Bank Account for the company
- Allotment of GSTIN
The
registration process of Indian Subsidiary Company is incomplete without getting
a Digital Signature Certificate or DSC from the Concerned Authority. DSC is a
prerequisite need for any type of company.
Capital
No minimum capital is needed for the
registration process.
Directors
Indian Subsidiary company registration
requires a minimum of two directors and importantly one of the two directors
has to be the resident of India.
Shareholders
The registration process requires a minimum
of two shareholders to form the Indian Subsidiary Company.
Equity Shares
About 50% of the equity share capital must
be owned by the parent company.
DIN
DIN or Director
Identification Number of all Directors is mandatory.
Annual Compliances of Indian Subsidiary Company are as follows
- Compliance as per Companies Act,2013
- Compliance as per Income Tax Act, 1961
- Guidelines as per MCA, Ministry of Corporate Affairs
- FEMA Guidelines
- Income Tax Return
- Annual Return with the Registrar of Company (ROC)
- Filing with the Reserve Bank of India or RBI
- Filing with the Securities and Exchange Board of India or
SEBI
Indian Subsidiaries is just
same like any other Indian registered Company and the structure pertaining to
the Indian Company are also the same for the Indian Subsidiary Company. If the
applicant or parent company successfully follows all the above-mentioned
registration procedure with all needed documents then the company will receive
the COI or Certificate of Insurance on time.
Frequently Asked Questions
How
to set up Indian Subsidiary Company?
Indian Subsidiary Company requires to
getenrollment with fair treatment followed by presenting all the archives. A
similar procedure is followed as of the Private Limited Company in India.
Can
Indian Company be 100% Subsidiary of a Parent Company?
Yes as the Indian Company requires at least
2 investors and thusly can be 100% subsidiary of the Parent Company.
Do I
need to be present during the registration process?
Indian Subsidiary Company Registration is a
100% online procedure. No one should be available truly at our office or
service of corporate issues. We will send our individual to your home or office
for record signature.
What are the documents required at the time
of registration of Indian Subsidiary Company?
Indian National
- PAN Card information
- Address Proof
- Identity Proof such as Aadhaar
Card, Driving License, Voter Id
Foreign National
- Passport
- Address Proof (Indian Consulate
must certify the document)
- Identity Proof (Indian
Consulate must certify the document)
Other Crucial Documents
- Directors Identification Number
(DIN)
- Digital Signature Certificate
(DSC)
- Memorandum of Association (MOA)
and Article of Association (AOA)
- No Objection Certificate from
the person who owns the property of business place
- Certificate of Incorporation
granted by the foreign government
- Residential Proof
What
is DSC?
The DSC is nothing but a Digital Signature
Certificate issued by certifying authorities (TCS and n-Code) using that
certificate you can sign electronic documents. As, all documents need a DSC to
start up a Private Limited company in India.
What
is the Director Identification Number or DIN?
Director Identification Number is a unique
number issued by the Ministry of Corporate Affairs to applicants on whose name
the application is produced, which permits the individual to be a Director in
the Company.
How
to set up a Subsidiary Company in India?
Subsidiary Company can be set up in India by
enrolling the registration process with fair treatment followed by presenting
all the needed documents. A registration process of Indian Subsidiary company
is just similar to the registration process of a Private Limited Company in India.
Do I
need to be physically present during the registration process?
Indian Subsidiary Company Registration is a
completely online procedure. No there is no need to be available in person at
our office or service of corporate issues.
Are
there any limitations on the activities of the Indian Subsidiaries of foreign
companies?
The Indian aides of outside companies can
participate in any activities subject to the rules and the regulation as per
the FEMA and RBI.
What are the minimum requirements for Indian Subsidiary Company
Registration?
A minimum two investors and two executives are
needed for Indian Subsidiary Company Registration, DIN for all directors and
members. The Parent Company should hold half of all out value share capital of
the Subsidiary Company.
