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    Subsidiary Company Registration

    Formation of subsidiary company is one of most preferred form of business entity registration. The parent company can have 100% ownership, strategic decision making and control of operations through incorporating a subsidiary company in India.

    • Separate legal entity
    • 100% ownership
    • Limited liability of shareholders
    • Easy transferability of ownership
    • Effective control of operation

       



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    1.

    Learn about the service and get all-inclusive price

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    2.

    Pay and submit documents online

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    3.

    Our expert will do requisite filings and get certificate

    Overview of Subsidiary Company Registration


    A foreign company can set up its operations in India in various form like Branch Office, Liaison office, Project office, Subsidiary Company, Limited Liability Partnership, or Joint Ventures. Amongst all these Business entities a subsidiary in India is one of the foreign companies’ most popular forms of Business entity registration.

    The key conditions to incorporate a Subsidiary in India is having One Resident Director and having a Registered Office in India.

    An Indian or Foreign business entity generally incorporates a ‘Subsidiary Company’ or a ‘Wholly Owned Subsidiary Company’ in India to expand its existing business. The difference between the two is that the ‘subsidiary company’ allows parent company to exercise more than fifty percent of the voting power of such subsidiary company while in case of wholly owned subsidiary, 100% of the control over the subsidiary company is exercised by the parent company.

    A subsidiary company is defined under Section 2(87) of the Companies Act, 2013 as a "Subsidiary Company" or "Subsidiary” in relation to any other company (that is to say the holding company), means a company in which the holding company

    1. controls the composition of the Board of Directors;
    2. or exercises or controls more than one-half of the [total voting power] either at its own or together with one or more of its subsidiary companies.

    Note that the subsidiary company of a foreign parent company is a separate legal entity, and the subsidiary company is obligated to function independently and comply with all the applicable laws, rules and regulations made thereunder.

    In India, a Subsidiary Company can be registered as a Private Limited Company or Public Limited Company:

    • A private limited company is not open to the public and enjoys the privileges over Public Company given by the Companies Act, 2013.
    • A public limited company is a company where the public holds an interest in it and it is required to comply with numerous rules and regulations as specified by the Companies Act, 2013.

    Advantages of Subsidiary Company Registration


    • Separate Legal Entity

      As a juristic legal person, both the company and its members have separate legal identity that is distinct from each other. Even a subsidiary is required to manage its operations independently of its Parent Company.

    • No Prior Approval of RBI

      No prior approval of RBI is required for incorporation, if the subsidiary company is related to the sectors in which 100% FDI is permissible under the automatic route.

    • Diversification

      Various opportunities to diversify/expand the business is available to Subsidiary Companies like additional investors to the business venture, any possible joint venture partner to invest in company, any possible merger and acquisition or hiving off any part of business in near future etc.

    • Operational efficiency

      parent company can achieve operational efficiency by splitting a large company into smaller, more easily manageable subsidiary companies.

    Things to Know


    Unique Name

    The proposed name selected should be unique and should not resemble to the name of an existing Company or Limited Liability Partnership. In case a Subsidiary Company wants to opt the name of the Parent Company it has to obtain NOC from the parent company.

    Share Capital

    Share capital of a company is divided into four parts:

    1. Authorized Share Capital: It means such capital as is authorized by the Memorandum of a company to be the maximum amount of share capital that can be raised by a company.
    2. Issued Share Capital: It means such capital as the company issues from time to time for subscription
    3. Subscribed Share Capital: It means such part of the capital which is for the time being subscribed by the members of a company
    4. Paid-up Share Capital: It means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called. There is no minimum paid-up share capital prescribed for a private limited company. However, it is suggestible that the subscribers to the memorandum of association shall bring in some capital for carrying on the business operations of the company.

    Directors

    Director is a person appointed to the Board of a company. Board of Directors of a company are entitled to exercise all such powers and to do all such acts and things as the company is authorized to exercise and do except those which are specifically required to be exercised by a company in general meeting. Minimum two directors are required to incorporate a private limited company and minimum three directors are required in case of a public limited company out of which at least one must be resident in India.

    Subscriber 

    Subscriber means a person who has agreed to subscribe to the share capital of the company and on its registration, whose name is entered as a member in the Register of Members. Minimum two subscribers are required to incorporate a private limited company and Minimum Seven Subscribers are required to incorporate a Public limited Company. Subscribers of a company can be resident in or outside India. There is no restriction on a subscriber of a private limited company to be a director of the same company or vice versa.

    In case of Wholly Owned Subsidiary, 99.99% of the Shares will be held by Foreign company through its Authorized Representative and 0.01% shares will be held by any person on behalf Foreign Company.

    Registered Office

    It is mandatory for every company to have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Registered office of the company must be situated in India.

    Procedure and Timelines for Subsidiary Company Registration


    Step 1.

    Step 1.

    1-2 Days

    Obtaining requisite Documents and information

    Step 2.

    Step 2.

    1-2 Days

    Obtaining DSC

    Step 3.

    Step 3.

    1-2 Days

    Filing of Requisite forms with ROC

    Step 4.

    Step 4.

    2-3 Days

    Certificate of Incorporation

    Document Required for Subsidiary Company Registration


      From Directors

    • Copy of PAN (in case of resident); OR a PAN Declaration* (in case of non -resident);
    • Copy of Passport (in case of non-resident);
    • Copy of proof of identity (Voters ID/Driving License/Passport);
    • Copy of residential proof (Bank Statement/Telephone Bill/ Mobile Bill/ Gas Bill not older than 2 months);
    • Consent to act as directors*;
    • Disclosure of interest in other entities*;
    • Declaration in Form INC-9 for First Directors*

      From Subscribers

    • Copy of PAN (in case of resident); OR a PAN Declaration* (in case of non -resident);
    • Copy of Passport (in case of non-resident);
    • Copy of proof of identity (Voter\'s ID/Driving License/Passport);
    • Copy of residential proof (Bank Statement/ Telephone Bill/ Mobile Bill/Gas Bill not older than 2 months);
    • Declaration in Form INC-9 for First Subscribers*

      From Company

    • Copy of Sale deed/ Property Deed (in case of owned property) or Lease Deed (in case of rented premises);
    • Copy of Telephone or Mobile/Electricity or Gas Bill of registered office (Any one, not older than 2 months) ;
    • No-objection Certificate from the owner of the premises for its use as registered office*;
    • Memorandum and Articles of Association*
    • Board Resolution of Parent Company*
    • Copy of certificate of incorporation of the parent company
    • Details of Authorized Representative and Nominee ((In case of Wholly Owned Subsidiary)
    • No-objection certificate from the parent company for using its name by the subsidiary company*

    Note 1: * Draft will be provided

    Note 2: In case of foreign directors/subscribers, all the aforesaid documents should be notarized and apostilled or consularized. In case documents are not in english, translated copy in english should be notarized and apostiled or consularized. please read the attestation requirements of documents below in FAQs

    Note 3: Since one or more Subscribers are foreign citizen(s), any contribution to capital would be considered as FDI and accordingly, requisite RBI compliance needs to be done accordingly.

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    FAQ's


    Yes, one can incorporate an Indian Subsidiary of Foreign Company with 100% ownership, such a company is termed as a “Wholly Owned Subsidiary” of a Foreign Company.

    As per the provisions of the Companies Act in India, there must be at-least 2 shareholders in any Indian Company, therefore, there must be at least one additional shareholder in case of Wholly Owned Subsidiary Company who shall have only 1 share in order to fulfil the requirement of minimum 2 shareholders. But, the Nominee can be an Indian National or a Foreign National.

    An e-MOA and an e-AOA can not be used by Foreign Companies because, in compliance with Rule 13(5) of the Company (Incorporation) Rules, 2014, MOA and AOA signed by a person residing outside India, which should be apostilled or notarized by the notary of the country of origin.

    The attestation requirement depends on the country in which registered office (in case of body corporate as a subscriber) /residence of the overseas subscriber and / or director is situated. The documents are required to be attested as follows:

    a) Proof of Residence in a country which is part of the Common Wealth, by a notary public of that country;

    b) Proof of Residence in a country which is party to The Hague Apostille Convention, 1961, attestation to be made by a notary public of the said country and duly apostilled in accordance with Hague Convention; or

    c) Proof of Residence in a country outside the Commonwealth, and which is not party to Hague Convention, authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) i.e. attested by Public Notary and authenticated by Indian Embassy in the country of residence.

    Under Rule 13(5), if foreign subscribers arrive on a "Business Visa" to India and sign the documents while staying in India, then the documents are not necessary to be Apostilled and Notarized or Consularised.

    Step 1: Opening of a Bank Account

    Step 2: Remittance of subscription amount in Indian bank a/c (within 2 months of incorporation) through wire transfer from foreign country bank account of the subscriber.

    Step 3: Allotment of shares to subscribers and Issuance of Share Certificates

    Step 4: Obtaining FIRC & KYC docs from the Bank

    Step 5: Reporting in Form FC-GPR within 30 days of date of allotment through FIRMS Portal.

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