Subsidiary Registration

An Indian subsidiary company is a corporation whose interests are held, controlled, or partially owned by another corporation. The relationship between two corporations is determined by the preference share capital and paid-up equity share capital of the Indian subsidiary, either wholly or in part. The corporation owning the Indian subsidiary is referred to as a parent company or a holding company, with a distinction between the two.

A wholly-owned subsidiary is one where another corporation owns 100% of its shares.

Key features of Indian Subsidiary Companies include:

• No prior approval required for repatriation of dividends.
• Financing mechanisms available through debt, equity, and internal accruals.
• Subject to Indian Transfer pricing regulations.
• Treated as an Indian company for all applicable laws and income tax.
• Taxed at a rate of 30% compared to the 40% rate for foreign corporations.
• Dividend distribution tax (DDT) is 16.995%.

Requirements for Indian Subsidiary Registration Online:

• At least 2 Shareholders
• Minimum Capital of Rs. 1 lac
• DIN for every Director
• Parent company should hold 50% of total equity capital.

Documents required for Indian Subsidiary Company Registration Online:

From All Directors and Shareholders:

• Utility bills (any)
• Copy of a rent agreement with NOC from the landlord.

For Proposed Registered Office:

• Passport of foreign directors
• Incorporation certificate issued by the foreign government
• Resolution from LLC/INC for opening a subsidiary in India
• Copy of Voter’s ID/Driving license/Passport and PAN Card of Indian director.
• Passport-sized Photo of all directors and shareholders

Indian Subsidiary Registration Process:

• Obtain DSC & DIN: Apply for Digital Signature Certificate (DSC) and Director Identification Number (DIN).
• Name Approval: Apply for company name approval.
• MoA and AoA Submission: Prepare Memorandum of Association (MoA) and Articles of Association (AoA).
• Certificate of Incorporation, PAN, TAN, Bank Account: File for obtaining Certificate of Incorporation (CoI), PAN, TAN, and Bank Account.
• Congratulations! Your work is done. Download your Incorporation certificate and Incorporation kit from your dashboard after company incorporation. Receive your kit & certificate via email.

Steps by ETaxwala:

• Obtain DSC & DIN: ETaxwala will apply for Digital Signature (DSC) and Director Identification Number (DIN).
• Name Approval: ETaxwala will apply for company name approval.
• MoA and AoA Submission: ETaxwala will prepare MoA and AoA.
• Certificate of Incorporation, PAN, TAN, Bank Account: ETaxwala will file for obtaining CoI, PAN, TAN & Bank Account.
• Congratulations! Download your Incorporation certificate and kit from your dashboard. ETaxwala sends your kit & certificate to your registered email.

FAQs:

1. What is a Wholly Owned Subsidiary?


Ans: A Wholly Owned Subsidiary (WOS) is a business entity in which the entire shareholding is held by a foreign company.

2. What is automatic route?


Ans: Foreign investments made under an automatic route do not require prior approval from regulatory bodies established by the Indian government. A post facto intimation to the RBI within 30 days of shares being allocated to overseas investors is the only requirement.

3. Does a director/shareholder have to be physically present for incorporating an Indian Subsidiary?


Ans: No, it is not mandatory for a director/shareholder to be physically present for incorporating an Indian Subsidiary.

4. Can NRIs/Foreign nationals hold shares in an Indian Subsidiary?


Ans: Yes, NRIs/Foreign Nationals can hold shares in an Indian Subsidiary, provided they adhere to the FDI guidelines issued by the government before issuing shares..

5. Is it possible for a foreign company to use e-MoA and e-AoA for incorporating an Indian Subsidiary?


Ans: No, the MoA and AoA signed by an overseas national must be duly notarized/apostilled in the country of origin, as required by Rule 13(5) of the Company (Incorporation) Rules under the Companies Act, 2013.

6. What is the qualification for an individual to be a director of an Indian Subsidiary?


Ans: There is no mandatory qualification for an individual to be a director of an Indian Subsidiary, and any natural person above the age of 18 can become a director.

7. What is a DIN?


Ans: A DIN, or Director Identification Number, is a unique identifier for a company director. When a person is appointed as a company director, the DIN must be mentioned in the relevant documentation.

8. What is DSC?


Ans: A Digital Signature Certificate (DSC) is an electronic signature of a person in encrypted form. DSC is used for signing e-forms (electronic forms) while filing documents for company registration.