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How to Register a Subsidiary Company in India

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    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

     

    1. There should be minimum 2 Directors and 2 Shareholders out of which at least 1 Director shall be an Indian Resident and Indian Citizen
    2. Directors shall be individuals only. Shareholders can be companies also
    3. Local office address in India is required for registering a subsidiary company.
    4. There should be sufficient share capital in the Indian company.
    5. 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:

     

    1. 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.

     

    1. 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.

     

    1. 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.

     

     

    1.  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.

     

    1.  Opening of bank account of the company and bringing share subscription money by all the shareholders in proportion of their shareholding.

     

    1. Applying for certificate of commencement of business

     

    1. Applying for GST registration, Import Export License and other registrations/licenses

     

    1. 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