Indian Subsidiary Company
Indian Subsidiary Company Registration Service
Many of the foreign investors are willing to start their business in India as our nation provides tonnes of opportunities because of its fast-growing market. Any foreign national apart from the citizen of Pakistan and Bangladesh or an entity formed and operating outside India can invest in the Indian market and holds the power to make their own subsidiary company in India by Indian Subsidiary Company Registraion service and can obtain shares pertaining to the matters of FDI policy of India. 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.
After incorporation of wholly owned subsidiary company, it is also called sister company and the main company which has control over it is called parent company or holding company. Parent company holds the right to control the subsidiary company either partially or completely.
Companies Act 2013 controls the Indian Subsidiary Company Registration process. As per Companies Act 2013, a subsidiary company can be defined as a company in which a foreign corporate body or parent body has minimum 50% of the entire share capital. Parent company has a grip over a subsidiary company. It is necessary for a subsidiary company to abide by the laws of the nation in which they are planning to establish or are already established. Hence, if a subsidiary company is established in India then it is crucial for the company to follow the law in force in India.
An important thing to keep in mind is that a subsidiary company of a foreign parent company is regarded as a separate legal entity and subsidiary company is obliged to work as per the norms of the country where it is situated. Business personnel can register an Indian subsidiary company as a private limited company or a public limited company.
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 Registration for Foreigners
- Brings Foreign Direct Investment:
Indian government has approved 100% involvement of FDI in case of fast growing business industries; that is to say, FDI is permitted 100% without any foregoing approval. Although if you are a Partnership firm or LLP or Proprietorship then you may need a beforehand approval from government for FDI. Limited Liability:
Directors and members of the company have limited liability. They are stringently limited to their company’s share. Limited liability trait protects the Director or member of the company in the time of any loss or financial distress bore by the company. Personal assets of Directors and members will not be at risk due to the loss suffered by the company.- Perpetual Succession:
Perpetual succession means no matter what happens to the members or directors of the company, the company will continue to exist. Insolvency, change in members, death, transfer etc will not have any effect on the existence of the company. - 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:
A fully-owned subsidiary company registered in India has the benefit of borrowing funds from financial institutions in the form of loans. - Sue And Sued:
Indian subsidiary company acts like a legal person; it can sue and can be sued. - Obtain Property In India:
Foreign subsidiary company incorporated in India, works on an independent structure which gives them the authority to buy properties in India.
Documents Required for Indian Subsidiary Company Registration
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
Characteristics of Indian Subsidiary Companies
- Beforehand approval is not required for the repatriation dividend
- Indian subsidiary companies follow Indian transfer pricing framework
- Union budget 2020 says that dividend distribution tax is nil