Online Indian Subsidiary Registration
A sister company, also known as a subsidiary, is under the control of a parent company or holding company. The parent company possesses the authority to govern the subsidiary, whether partially or wholly. In India, the procedure for Indian Subsidiary Registration follows the guidelines of the Companies Act of 2013.
As per this act, a subsidiary is characterized by a foreign corporate body or parent entity holding at least 50% of the total share capital. Essentially, the parent company wields substantial influence and control over the subsidiary.
Advantages of Indian Subsidiary Registration
Indian Subsidiary Registration in India comes with numerous compelling advantages:
1. Entry into the Indian Market
India’s competitive business landscape offers a multitude of investment opportunities that attract foreign entrepreneurs to establish their subsidiary companies in the country.
2. Foreign Direct Investment (FDI) in India
FDI involves investments by foreign companies in Indian private enterprises through share subscriptions or acquisitions. In 2020, the Indian government mandated prior approval for investments from countries sharing a border with India, making the registration of Indian subsidiaries an appealing option for foreign investors.
3. Perpetual Succession
The concept of perpetual succession ensures that a company’s existence remains unaffected by events such as changes in management, transfers of membership, or insolvency. The company operates seamlessly, providing stability and continuity.
4. Limited Liability
Limited liability is a significant advantage that encourages individuals to choose company formation. This principle extends to Indian subsidiary companies, safeguarding the personal assets of shareholders and directors. The company bears responsibility for its debts to third parties, shielding the personal assets of its stakeholders.
5. Scope of Diversification
Establishing an Indian subsidiary company provides a strategic avenue for foreign businesses to expand operations, contributing to the growth of the Indian economy. It also introduces a variety of goods and services, fostering healthy competition.
6. Separate Legal Identity
According to the Companies Act, a company is recognized as a distinct legal entity separate from its shareholders and directors. This legal status empowers the company to engage in agreements with other entities, initiate legal actions, and respond to allegations before the judicial system in its own name.
7. Property Ownership and Rental
As a legal entity, a subsidiary company has the authority and right to purchase or rent properties in India for its business activities. Acquiring such properties in the company’s name aligns with the principle of perpetual succession and helps prevent potential conflicts among company members.
Regulatory Authorities for Indian Subsidiary Registration
The Ministry of Corporate Affairs (MCA) holds the pivotal responsibility of formulating and enforcing the comprehensive framework of rules and regulations that govern the intricate processes of company registration and compliance in India.
Within this regulatory landscape, the Registrar of Companies (ROC) offices play a crucial role, overseeing and managing the procedural intricacies involved in the incorporation of companies. Their oversight extends to ensuring that companies meticulously adhere to the legal requirements, fostering an environment of accountability and adherence to statutory norms.
Complementing this regulatory structure is the indispensable role played by the Reserve Bank of India (RBI), which assumes a pivotal position in regulating the foreign currency exchange aspects pertinent to Indian subsidiary companies. The RBI’s vigilant oversight is instrumental in ensuring the meticulous adherence of these companies to the intricate financial regulations in place. This extends to overseeing foreign investments, acquisitions, and transactions, safeguarding the financial integrity of Indian subsidiary companies and upholding the overall stability of the financial ecosystem.
In essence, this collaborative triad of the Ministry of Corporate Affairs, Registrar of Companies, and Reserve Bank of India establishes a robust and comprehensive regulatory framework that not only facilitates the seamless registration and functioning of companies in India but also guarantees the strict adherence to legal and financial norms, thereby fostering an environment of transparency, accountability, and financial prudence within the corporate sector.
Procedure for Indian Subsidiary Registration
Establishing an Indian subsidiary company involves a comprehensive series of steps and compliance measures. Below is a detailed guide outlining the step-by-step process for Indian Subsidiary Registration in India:
1. Determine the Type of Company
Decide on the specific type of subsidiary company you intend to establish.
2. Obtain Digital Signature Certificate (DSC)
Since the registration process is conducted online, secure a Digital Signature Certificate (DSC) for the proposed directors of the company. This certificate is essential for electronically signing the necessary documents during the registration process.
3. Apply for Director Identification Number (DIN)
Directors of the subsidiary company must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA). This is achieved by submitting the DIN application online.
4. Name Approval
Choose a distinctive name for your subsidiary company and apply for its approval through the MCA’s online portal. Ensure that the chosen name complies with the naming guidelines provided by the MCA.
5. Draft Memorandum of Association (MoA) and Articles of Association (AoA)
Prepare the legal documents, MoA and AoA, which delineate the company’s objectives, rules, and regulations, following the guidelines of the Companies Act 2013.
6. File Incorporation Documents
Once the chosen name is approved, file the incorporation documents, including MoA, AoA, and other required forms, with the Registrar of Companies (ROC) through the MCA’s online portal. The SPICe+ form is typically used for the incorporation process on the Ministry of Corporate Affairs portal.
7. Payment of Registration Fees
Pay the applicable registration fees to the ROC based on the authorized capital of the subsidiary company.
8. Obtain a Certificate of Incorporation (COI)
If all submitted documents and information are in order, the ROC will issue a Certificate of Incorporation, officially confirming the registration of the subsidiary company.
9. Apply for Permanent Account Number (PAN) and Tax Registration
After obtaining the COI, apply for a Permanent Account Number and a Tax Deduction and Collection Account Number from the Income Tax Department for the subsidiary company.
10. Open Bank Account
Conclude the process by opening a bank account in the name of the subsidiary company in India.
11. Compliance with Other Regulations
Apart from the company registration process, ensure compliance with other relevant regulations.
12. Obtain a GST Number
Goods and Services Tax (GST) registration is required after completing the aforementioned steps, particularly if the company engages in various business activities. Every Indian company must apply for a GST number for taxation purposes.
13. Initiating Business Operations
Once all the preceding steps are completed, the subsidiary company can commence its business operations. This marks the culmination of the comprehensive process of registering and initiating operations for an Indian subsidiary company.
Summary
We simplify the entire registration process, guiding you through key steps such as choosing a distinctive name, acquiring vital Director Identification Numbers (DIN) and Digital Signature Certificates (DSC). Additionally, we offer assistance with PAN and TAN applications and facilitate the establishment of a dedicated company bank account. Our proficient team is dedicated to ensuring strict adherence to regulatory standards, encompassing compliance with the Foreign Exchange Management Act (FEMA), Companies Act, 2013, Reserve Bank ofIndia (RBI) regulations, and the Income Tax Act, 1961. With Registerkaro as your partner, you can initiate and grow your Indian subsidiary business confidently and efficiently.
Source
https://www.registerkaro.in/indian-subsidiary-registration
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