How to Register a Subsidiary Company in India
Subsidiary Company Registration in India
There are many
options available for any foreign entity to set up business in India like in
the form of branch office or liaison office or project office or private
limited company or LLPs or Joint Ventures etc.
However, one of the
most popular and widely used options for entity registration by any foreign
entity in India is in the form of Subsidiary
Company Registration in India.
Establishing
a subsidiary is a wise and preferable method of expanding its foreign business
in India. Several foreign entities have shown lot of interest, of late, in
starting a business in India as our nation offers a lot of profitable
opportunities owing to fastest growing economy.
In
order to become subsidiary, the parent firm must possess at least 50% of the
shares of the subsidiary. When the holding company owns 100% shares of the
subsidiary, the subsidiary is referred to as a wholly-owned subsidiary of the
parent company. Further in this article, we will explore the benefits and requirements
for Subsidiary Company registration in India.
Benefits of Subsidiary company registration
in India
Benefits
of subsidiary company registration in India are as under:
Can use brand of Parent Company- Indian subsidiary can use the brand name of parent company.
Separate legal identity- As per Indian laws, a subsidiary is treated as a legal entity separate
from its parent company.
Easy transfer of shares- Shareholders of a company limited by shares can transfer their shares
to others. Transferring shares is simple and only requires completing and
signing a share transfer form and giving the share certificate to the buyer.
Operate efficiently through a subsidiary- By breaking up a big firm into smaller, more managed entities;
subsidiaries enable the parent company to operate more efficiently.
Acquire property in India- As a subsidiary enjoys the benefit of having a separate legal identity
in the eyes of law, it is permitted to acquire properties in India.
No Restrictions on activities- Unlike branch office and liaison office, subsidiary company do not
require permission of RBI for doing any business activities provided such
business activities are permissible as per law and are covered under automatic
routes and are not falling under prohibited routes.
All the above factors make subsidiary company
one of the most preferable forms of foreign
company registration in India.
Requirement for Subsidiary Company Registration in India
Following
requirements need to be fulfilled for Subsidiary company
registration in India
a)
There should be minimum 2 Directors and 2 Shareholders out
of which at least 1 Director shall be an Indian Resident and Indian Citizen
b)
Directors shall be individuals only. Shareholders can be
companies also
c)
Local office address in India is required for registering
a subsidiary company.
d)
There should be sufficient share capital in the Indian
company.
e)
Any amount of share subscription money received in the
Indian bank account from foreign shareholders would be considered as Foreign
Direct Investment (FDI) for which intimation would be required to be given to
the RBI by filing some prescribed forms online
Documents Required for Subsidiary company registration in
India
The
documents required for Subsidiary
company registration in India are as follows:
For an Indian National
●
Self-attested
copy of PAN Card;
●
Self-attested
copy of Address Proofs (House Tax Receipts, Utility Bills, etc.);
●
Self-attested copy of Identity Proofs
(Aadhaar Cards, Driving Licenses, Passports, Voter Ids)
For a Foreign National
●
Self-attested copy of Passport;
●
Self-attested copy of Address proof in
foreign location [ like latest utility bills, mobile bills, bank statement etc]
●
Certificate of Incorporation of foreign
company
Any
documents relating to foreign directors or foreign shareholders need to be
notarized and apostiled/ consularized in the foreign company.
Steps involved in subsidiary company
registration in India
Following steps are involved in Subsidiary Company Registration in India:
- Apply
for Digital Signature of all the Directors- First step is to apply for
digital signature certificate (DSC) by all the directors of the company.
- Name
application-
Second step is to apply for company name approval by providing 2-3
proposed names of the company, out of which only one name at the
discretion of ROC will get approved.
- Incorporation
of company-
Once name is approved, next step is to apply for Director Identification
number and final incorporation by preparing charter documents of the
company i.e Memorandum of Association and Article of Association, filling
relevant incorporation forms, applying for PAN, TAN and labour
registration numbers.
- Obtaining Certificate of Incorporation of
the Company-
Finally certificate of incorporation is generated containing name and
address of the company and PAN number and TAN number.
- Opening of bank account of the company
and bringing share subscription money by all the shareholders in
proportion of their shareholding.
- Applying for certificate of commencement of business
- Applying for GST registration, Import Export License and other
registrations/licenses
- Intimation RBI about receipt of share subscription money and
allotment of shares.
The above completes the entire process of
subsidiary
company registration in India.
In case
you need any clarification or have any queries, please call @ +919899217778 or
visit our website www.ezybizindia.in
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