As per Companies Act 2013, an Indian subsidiary company is defined as a company in which a foreign corporate body or parent body has a minimum of 50% of the entire share capital.
Among Asia's Top 100 Consulting Firm
10,000 + Happy Customers
Lowest Fees
4.5+ Google Rating
Expert Assistance
Overview of Indian Subsidiary Company Registration
There are many foreign investors who are willing to start a business in India as our nation is a place which provides tones of opportunities and it has a fast-growing market. Any entity which is formed and operating outside India or any foreign national except the citizens of Pakistan and Bangladesh can invest in the Indian business market and can own the power to make their Indian subsidiary company registration by getting shares concerning the matters of FDI policy of India. A subsidiary company is also known as a sister company and the company which is controlling the subsidiary company is called holding company or parent company. Parent company has all rights to control the subsidiary company either completely or partly.
Before getting into the process of Indian Subsidiary Company Registration make sure that as a business entity you have at least one Indian Director who must be residing in India and one Foreign Director which is must for forming Indian Subsidiary Company.
Companies Act 2013 regulates the Indian Subsidiary Registration procedure. According to Companies Act 2013, a subsidiary company is defined as a company in which a parent body or foreign corporate body has a minimum of 50% of the entire share capital. Parent company always has a grip or an eye over a subsidiary company. Importantly, it is mandatory for a subsidiary company to obey the laws of the country or nation in which they are contriving to launch or are already established. Therefore, if a subsidiary company is launched in India then it is necessary for the Subsidiary Company to obey and follow the law of the Indian Government.
The most important factor to keep in mind is that a subsidiary company which is having a parent company in foreign nation is considered as a separate legal entity. So a formed subsidiary company is obligated to work according to the norms of the country where it is established. Business personnel should register Indian subsidiary companies in India as a public limited company or a private limited company.
- A public limited company is a company in which the public holds ebullience for it and it is required to adjust to various rules, principles and guidelines as per the Companies Act, 2013.
- A private limited company is not available to the general public and appraises the benefits over Public Company as per the Companies Act, 2013.
Advantages of Indian Subsidiary Company Registration
- Limited Liability
Directors and members of the Indian Subsidiary company have limited liability. This means, the directors and members are strictly limited to their company’s share. Limited liability attribute protects the member and directors of the company in the time of any financial distress or loss in the company. Personal assets and properties of directors and members of the company will not be at risk even if the company suffers due to financial problems.
- Encourages Foreign Direct Investment
The Indian government has sanctioned 100% involvement of FDI or Foreign Direct Investment as it helps for fast-growing business industries. To make it more clear, FDI is allowed 100% without any preceding approval. Even if you are a LLP or a Partnership firm or Proprietorship then you may require an approval in advance from the government for FDI.
- Perpetual Succession
This means that no matter whatever happens to the directors and members of the company, the company will continue to run without any problem. Insolvency, death, change in members, transfer and so on will not affect the existence of the company.
- Scope Of Expansion
An Indian Subsidiary Company gets all the benefits of a Private Limited Company. The growth and development and expansion of business are easy and simple as it raises capital from venture capitalist, financial institutions, and the investor.
- Obtain Property In India
Foreign subsidiary company runs as an independent structure which gives them the right to buy properties in India.
- Borrow Funds
A formal subsidiary company registration in India is allowed to borrow funds from any authorized financial institution in the form of loans.
- Sue And Sued
Indian subsidiary companies work like a legal person; it can be sued and can sue.
Requirement of Indian Subsidiary Company Registration
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
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
Indian Subsidiary Company requires to get enrollment with fair treatment followed by presenting all the archives. A similar procedure is followed as of the Private Limited Company in India.
Yes as the Indian Company requires at least 2 investors and thusly can be 100% subsidiary of the Parent Company.
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.
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
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.
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.
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.
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.
The Indian aides of outside companies can participate in any activities subject to the rules and the regulation as per the FEMA and RBI.
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.
