Indian Subsidiary Company

Overview of the Indian Subsidiary Company Registration procedure in India:

The Indian Subsidiary Company registration procedure falls under the Companies Act, 2013. A foreign corporation owns an Indian Subsidiary Company’s 50% shares, which is regarded as its parent company. The parent company looks over all the operations of a subsidiary company. However, the Subsidiary must abide by the laws of the country where it is being established, in this case, India.

The Indian Market is an evolving and, therefore, a crucial opportunity for foreign investors. The citizens of any country except Pakistan and Bangladesh can choose to start a subsidiary company in India. Despite being a part of the parent company, a subsidiary company is regarded as a separate legal entity and is registered as a Public Limited Company or a Private Limited Company.

Advantages of registering an Indian Subsidiary Company:

There are many benefits of registering an Indian Subsidiary Company as the Indian Market is still evolving; let’s look at these advantages:-

• Limited Liability: In the case of financial anguish or burden of debt, the directors’ and members’ personal assets and properties aren’t at risk of being taken away. This is the benefit of Limited Liability in an Indian Subsidiary Company.
• Increased chances of expansion: An Indian Subsidiary Company can borrow or raise funds from various sources similar to a private limited company; thus, it has the ability to expand.
• Get loans from Indian institutions: As mentioned before, similar to a private limited company, an Indian subsidiary company can borrow from banks or other financial institutions in India.
• Own an Indian property: It is a separate legal entity and therefore has the right to purchase a property in India in its name.
• Continues to exist: Even in the case of the directors and members’ death, transfer, insanity etc. An Indian Subsidiary Company continues to exist as a separate legal entity.
• Encourages FDI: Unlike an LLP or a Partnership Firm, there’s complete involvement if FDI is in an Indian subsidiary company in India.

Requirements to fulfil while setting up an Indian Subsidiary Company:

There are a few requirements to be met when setting up an Indian Subsidiary Company depending on the following factors:-

• Number of Directors: A minimum of two directors is necessary, with at least one being an Indian citizen is mandatory for the registration of an Indian Subsidiary Company.
• Equity Share: 50% of the equity shares must be owned by the parent company.
• Number of Shareholders: A minimum of two shareholders is required to register an Indian Subsidiary Company.

What are the documents required when registering your Indian Subsidiary Company?

The authorities demand various documents depending on the nationality of the directors and members:

• PAN Card if an Indian citizen
• Aadhar Card, Voter Id, Driving License etc. as identification proof if Indian Citizen
• Address proof in the form of utility bill if Indian Citizen.
• Passport if foreigner
• Indian consulate certified address proof and identity proof
• DIN and DSC of the Directors
• AoA and MoA for the company
• Office Address Proof
• NOC and rental agreement if the rented place
• COI from the foreign country

Step by Step guide of the Indian Subsidiary Company:

The registration process for the Indian Subsidiary Company has become easier now with the SPICe+ form. This form has details to be filled in two parts:-

• Part A – Name Registration process
• Part B – The Incorporation steps

Let’s see what falls under the Part B of the form:-

• Applying for DIN and DSC
• Applying for PAN, TAN and a Bank Account for the company
• GST Registration of the company

Frequently Asked Questions