Subsidiary Company
Forming a subsidiary foreign company in India involves establishing a separate legal entity that is controlled by a foreign parent company. This legal structure allows the parent company to conduct business operations and expand its presence in the Indian market.
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Overview
An Indian subsidiary company is established to facilitate the expansion of a foreign parent company’s operations in the Indian market. It enables the parent company to have a local presence, engage in business activities, and access opportunities in India. It is a type of entity that is controlled or owned by a foreign parent company. It operates as a separate legal entity in India, in which majority of the Shareholder is the foreign company having control over the business operation.
Required Documents For Subsidiary Company
Promoters
PAN Card of each Director & Shareholder
Address Proof (Driving License, Passport, Aadhar Card)
Latest Residence Proof (Electricity Bill, Water Bill, Gas Bill, and Bank Statement)
Passport Size Photograph of each Director & Shareholder
All the above documents of foreign directors and foreign parent company, need to be apostilled and notarized from the origin country
Office Premises
Latest Electricity Bill, Gas Bill of Office Premises
NOC from Owner /Rent Agreement
Benefits Of Subsidiary Company
Limited Liability
Limited Liability means being legally responsible for the debts of the company. Thus, the liability of the members will be limited only to the shares held by them. It means, if the company cannot make its payment towards its debts in the future, then the liability of members will only be to the extent of the number of shares held by them.
Separate Legal Entity
A company is an artificial person created by law; it is considered as a legal person, which means it can enter into contracts and own assets in its own name. Subsidiary Foreign Company acts as a distinct legal entity from the parent company.
Perpetual Existence
It means that a private limited can continue indefinitely. The continuation of the business will not get affected by the condition of its owners. Private limited can only be dissolved by the corporation itself or the controlling authority.
Better Accountability
Foreign Subsidiary company accounts are easily available at the Ministry of Corporate Affairs (MCA) Portal. Anyone can access them and this acts as a transparency to their work and this helps in taking better investment decisions for others.
Compliances For Subsidiary Company
First-time Compliance:-
After company incorporation, it needs to comply with the following list of Compliances with MCA –
Commencement of Business (INC 20A) – This needs to be filed within 180 days of Company Formation, once the Bank account is opened and the share application money is transferred into that account.
Share Certificate Franking and Stamping – The company needs to issue a share certificate to all the shareholders and be stamped.
Auditor Appointment – This Needs to be done within 30 days of Company Formation after holding an Annual General Meeting.
Process
ExploreDigital Signature Certificate (DSC)
1
Persons who will be acting as a director and shareholders of the proposed company, need to apply for DSC. It is required to sign and validate all the documents.
Name Approval
2
Proposed name needs to be approved by ROC. ROC will check the name availability on different parameters and then will issue the approval letter.
Company Incorporation
3
Once the name is approved, the application needs to be made for the formation of the Company in Form Spice+ and the same is verified by a professional CA, CS or CMA.
Drafting of MOA & AOA
4
Along with Spice+, the MOA & AOA of the Company also need to be filed. A Memorandum of Association (MOA) defines the fundamentals of the company and the Articles of Association (AOA) contains the rules & regulations of the Company.
Incorporation Certificate
5
After verification of Spice+, Roc will issue the Certificate of Incorporation. Incorporation Certificate gets issued within 3-4 working days.
PAN & TAN Allotment
6
With a certificate of incorporation pan and tan allotment will be made and a soft copy of pan and tan will be received by mail from the Department.
Opening Bank Current Account
7
After receiving COI and other relevant documents, Private Limited can open the bank’s current account in the name of the Company.
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