INDIAN SUBSIDIARY COMPANY REGISTRATION

 

 

Basic information

 

With the ease of doing business and Indian Government initiative like Make in India, Start-up recognition and promotions along with various other benefits and access to the best human resources in the World, foreign companies are keen to start their operations in India. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entities incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. In addition, minimum one resident Indian Director is required for incorporation of wholly owned subsidiary of an Indian Company.

 

Broadly, there are two entry routes for Foreign Company viz.: automatic route and approval route. Under automatic route, prior approval of Government through competent ministry or the department concerned is required. And under automatic route, there is no requirement of prior approval.  Certain filings/intimations with the Reserve Bank of India within 30 days of receipt of investment money in India and filing of prescribed documents and particulars of allotment of shares within 30 days of allotment of shares to foreign investors. TO facilitate ease of doing business, upto 100% Foreign Direct Investment is allowed under the automatic route in most activities/sectors in India. Investment in activities / industries where automatic route is not available can be made with the approval of the Government. LEGALRAJ will assist in business set up in India.

 

What is the Private Limited Company ?

 

 

Indian Subsidiary Company is may be a closely held or widely held business entity which involves foreign funding and managerial personnel. Basically the Indian subsidiary companies are promoted by the Foreign holding body corporates by subscribing to the memorandum of Association and Articles of Association of the proposed Indian Company with foreign funding. This form of business organizations are based on Multi National Companies (MNCs) which tie up with the local business organizations for technology absorption and development, entering into new and unexplored markets, research and developments and many more objectives are there. Indian Subsidiary Companies may be in the form of Joint Ventures (JV) or Strategic Alliance (SA) or may the Wholly Owned Subsidiary (WOS) Companies.

 

What will you receive in Company registration package ?

 

 

  1. DIN of the Directors
  2. DSC of all promoters
  3. Name Reservation
  4. MOA & AOA
  5. Incorporation Certificate
  6. Directors Appointment
  7. PAN & TAN
  8. GST Registration
  9. Post Incorporation compliances
  10. Filing of Declaration of Commencement of Business

 

 

Advantages of Private Limited Company Registration

 

 

1. Separate Legal Entity (Management & ownership is separate):

 

Private Limited Company is a legal entity and a juristic person established under the Companies Act, 2013. Hence, a company has a wide range of legal capacities and the members (Shareholders/Directors) of a company have no personal liability to the creditors of a company for company's debts.

 

2. Perpetual succession gives longest business life:

 

Private Limited Company has 'perpetual succession', which means uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by death or other departure of any member and it continues to be in existence irrespective of changes in ownership.​​​​​​​

 

3. Large scale Borrowing Easily available:

 

Subsidiary Companies can raise equity funds or borrowed funds as per the requirements. Companies can also issue equity shares, preference shares, debentures and accept deposits with RBI permission. Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns.​​​​​​​

 

4. Easy share transfer process:

 

Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificate is sufficient to transfer ownership of a company. In a private limited company, the consent of Board of Directors is required to effectuate share transfers.​​​​​​​

 

5. Owning Property in own name:

 

Subsidiary Company being an artificial person, can acquire, own, and alienate, property in its own name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company - as long as the company is a going concern.​​​​​​​

 

6.Growth & expansion:

 

A Subsidiary Company is based on a principle of Fast growth and controlled management systems which generates potential achieve greater outputs due to 100% focus is on a business.​​​​​​​

 

7. Advantage of Technology knowhow and upgradation:

 

Subsidiary Company bring technological support as it is being the Indian subsidiary company of the Foreign Company its very purpose is to cater to the need of the customers for technology, products, services across the globe and grow the business at the international level. Hence, it is the biggest advantage of the collaboration with the foreign companies with local business organization to enter the new market horizons which have never been explored before.

 

8. Start up registration for Income Tax benefits:

 

If your business is uniquely identified and has potential for generating the large scale employment opportunities, then you can register your Private limited Company under Govt.’s Start-Up India Scheme and take huge Income Tax Benefits for at least 5 years.

 

What are the minimum requirements for Registering a Company in India?

 

 

  1. DIN of 2 Directors
  2. Minimum 2 Shareholders *
  3. There is no minimum capital requirements
  4. DSC of the promoter - shareholders of proposed Company
  5. DIN of the proposed Directors
  6. Unique Name for the proposed Company
  7. Registered office Address of the Company

* (The Directors and Shareholders can be the same persons.)

 

 

What is next after registration of Company ?

 

 

  1. Appointment of 1st Auditors
  2. Opening of Bank Accounts
  3. Filing of Declaration for Commencement of Business in form INC-20A
  4. Minutes of Board meeting and their committees
  5. GST registration of the Company
  6. Obtaining the IEC No.
  7. Trade Marks/ Copyright Registration
  8. Start up registration
  9. Share Certificates to the subscribers
  10. Statutory Registers preparations
  11. Filing of Form AOC-4
  12. Filing of Form MGT-7

 

What is the procedure for Company registration ?

 

Step 1: Obtain the DSC Tokens of all the shareholders

Step 2: Apply for Name Reservation

Step 3: Prepare and filing of Form Spice Form INC-32 for incorporation

Step 4: Obtain the Certificate of Registration

Step 5: File Form INC-20A for Declaration of Commencement of Business

 

The entire process for registration of Company will take at least 7 to 15 working days from the receipt of all the necessary documents and filing with the ROC.

 

What Documents are required for Company Incorporation ?

 

  1. Copy of PAN Card of all Directors & Promoters
  2. Passport size photograph of Directors & Promoters
  3. Copy of Aadhaar Card/ Voter identity card/ Passport/ voting ID card of Directors & Promoters
  4. Passport for the foreign nationals
  5. Copy of Rent agreement (If rented property)
  6. Electricity/ Gas bill/ Water Bill/ Electricity Bill/ Bank Statement for Office of Company
  7. Copy of Index II or Property Tax Receipt (If owned property)
  8. Landlord NOC (Format will be provided)

 

Note: Every single document of the foreign national must ne apostiled or consularised from their country of residence.

 

Precautions to be taken while name reservation

 

 

1. Meaningful: The name of your company should have some meaning even though more than two words combination is used. The name taken by the promoters of the Company should not be able to be challenged by anyone.

 

2. Unique: It should not create resemblance with the existing Company or LLP names or even the Trade Marks (either registered or in the process of registration).

 

3. Activity reflecting: In the name of your proposed Company, activity or main business object should be reflected or represented.

 

4. Should not be illegal / offensive: The name of your company should not be against law. It should not be abusive or against the customs and beliefs of any religion.