Registration of Indian Subsidiary Company
As per section 2(87) of the Companies Act, 2013, a subsidiary company means a company which is controlled by another company. That another company will be known as holding company.
Let us understand the meaning of holding Company, As per section 2(46) of the Companies Act, 2013, a holding company means a company who holds more than 50% stake in another company and it has control over the management in that company, then former company is known as a holding company.
Meaning of Indian Subsidiary Company has been defined Under the Companies Act, 2013. An Indian subsidiary company means a company which is controlled by a foreign company. Hence if the foreign company will own more than 50% of the paid-up share capital of the Indian subsidiary then foreign entity will be considered as the holding company and a subsidiary company can be incorporated as private limited company or public limited company.
Reason to add/ remove partner can also arise when
Advantages of Indian Subsidiary Company Registration
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Foreign Direct Investment in India
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Limited Liability
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Perpetual Succession
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Can purchase property in India
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Separate Legal Entity
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Scope of Diversification
Documents for Indian Subsidiary Company Registration
dentity and Address Proof of Directors and Shareholders
- Passport size photographs of the directors
- Copy of Aadhar Card
- Copy of Driving License or Voter ID or Passport
- Copy of PAN Card
- Copy of bank statement or electricity bill or mobile bill (not older than two months)
- Copy of Passport (in case of foreign national or NRI)
- Copy of electricity or any other utility bill (not older than two months)
- Rent agreement or lease deed(if rented)
- No Objection Certificate (NOC) from the owner of the property
Procedure for Indian Subsidiary Registration
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Application for DSC
The DSC of the director is require to file the online application form for incorporation of company.
DSC can be taken by submitting a DSC application attached with identity proof, address proof, photographs of the respective signatory.
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Reservation of Company Name
During this process, the company has to consider a unique name and not against provisions related to Intellectual Property Law in force in India.
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Get Director Identification Number (DIN):
For appointment of Directors, The directors need to apply for DIN application attached with the address proof and id proof
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Filling of online application for Incorporation
After Name Approval, Application for incorporation of Company shall be made in Spice Form (INC-32). This is a simplified proforma for incorporating a company. This form is accompanied by e-MOA(Memorandum of Association), e-AOA(Article of Association), AGILE-Pro (Details for registration under EPFO & ESIC/ GST / Bank account Opening), PAN and TAN Application.
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Approval of application for Incorporation
Upon verification of documents submitted by the Company, Application for Incorporation of the Company is approved by Ministry of Corporate Affairs.
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Bank Account Opening
After Incorporation, it is Compulsory to open a Current Bank account with any bank. It is mandatory for carrying out different transactions in subsidiary Company.
Bank Account Opening
Document you will get After Registration
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Certificate of Incorporation
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Permanent Account Number (PAN) of the company
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Tax Deduction or Collection Account Number (TAN) of the company
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Articles of Association (e-AoA)
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Memorandum of Association (e-MoA)
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Direction Identification Number (DIN)
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Digital Signature Certificate (DSC)
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EPF and ESIC registration documents
FAQs
Yes it is mandatory to appoint a foreign director for a subsidiary company.
Indian subsidiary company can be incorporated through below mentioned two form:
• Private Company
A subsidiary can be formed as private limited company. There is requirement to have minimum two directors and two shareholders.
• Public Limited Company
A subsidiary can be formed as a public limited company. Such entity is allowed to list its shares in a stock exchange. There is requirement to have minimum three directors and seven shareholders.
OPC (One Person Company) has only one shareholder and one director. Both the shareholder and director is the same person and in this form the shareholder/director has to be a resident of India. For Indian subsidiary Company registration, It is compulsory to have one foreign director. Hence the OPC cannot be used for incorporation of a subsidiary.
Compliances for Indian Subsidiary Company
The following compliances have to be regularly followed by such entity:
1. Companies Act, 2013- A Indian Subsidiary Company has to comply with compliances under the Companies Act, 2013.
2. Foreign Exchange Management Act, 1999- A foreign company which is planning to establish in India has to comply with foreign exchange laws in India.
3. RBI Compliance- the Indian Subsidiary Company has to comply under RBI Compliances.
4. GST Compliance: Indian subsidiary company to comply with GST Act and file the timely returns.
5. Income Tax Act, 1961- Indian subsidiary company has to comply with respective tax rates and file Income Tax Returns.
6. Annual compliance for ROC- Companies also have to file annual compliance with the Registrar of companies.
7. Securities Exchange Board of India- If an Indian subsidiary company lists its securities in a stock exchange, then SEBI (Listing Obligations and Disclosure Regulations) compliance has to be followed.
Let us understand the in detailed explanation provided under different Act.As per Companies Act, 2013
1. Open Bank account: After a formation it is required to open a bank account for the purpose of receiving the subscription money
2. Receive Subscription money:Next, we will receive the subscription money in bank account
3. Allotment of shares: After we receive the subscription money, we will allot the shares in board meeting.
4. Appointment of First Auditor: The next step is to appoint the first auditor within the period of 30 days from the date company registration.
5. Issue Share Certificates: After Incorporation, within the period of the next two months, share certificates will be issued by the company to the subscribers
6. Payment of stamp duty:Stamp duty is required to be paid with the revenue department within the period of 30 days from the date of issuance of share certificates.
7. Letterheads of the company, Share Certificates, Statutory Registers and Printing of MOA & AOA
8. Board Meetings: There is a requirement of hold at least 4 board meetings in a financial year and maximum gap between two board meeting shall not be more than 120 days.
9. Annual General Meeting: It is compulsory to hold first Annual general meeting within the period of 9 months from the date of closure of first financial year and the subsequent AGMs should be hold within the period of 6 months from the date of closure of financial year.
10 . Annual filing of the financial statement and annual return: It is required to file its financial statements within the period of 30 days from the date of AGM in form AOC-4 and annual return within the period of 60 days from the date of AGM in the form MGT-7 with the registrar of the company.
As per FEMA Act
1. Advance Remittance Intimation in ARF form
Indian Subsidiary Company has to inform RBI through AD bank in ARF form within 30 days from receipt of shares subscription money
2. Intimation of share allotment
Indian Subsidiary Company has to intimate about the share allotment to the RBI by filing of online Form FCGPR through AD bank within 30 days from the date of shares allotment to the subscribers.
3 . FLA return
Indian subsidiary company who receives FDI in any of the previous years, is required to file an FLA return on or before the 15th day of July every year for disclosing the foreign assets and liabilities.
4. FRS form
In case of share transfer from resident to non-resident or vice-versa, it is required to file Form FCTRS with the RBI through AD bank within 60 days from the date of receipt of the amount of consideration
DGFT (Director General of Foreign Trade) compliances
1. Obtain Import Export Code (IEC)
IEC (Import Export Code) is required to be obtained by the Indian subsidiary company if the company is doing business of import/ export of goods and services.
2. Modification of details of IEC
If there is any change in details given at the time of IEC registration to department then intimation is required to be given by the company about the changes.
Annual Compliances under GST Act
3. GST registration
It is required for Indian Subsidiary Company to register under Goods & Services Act. GSTIN will be issued by the government.
4. Filing of GST Return
It is required for company to file the monthly and annually returns on the prescribed due dates for providing details of sale and purchase of goods & services and also for the purpose of claiming the input tax credit.
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