Indian Subsidiary Company Registration
Indian Subsidiary Registration
INR 15000/-
Offers Included
Get your business off the ground with ease through our seamless Indian subsidiary company registration services.
Documents Required
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Indian Subsidiary Company
Welcome to Ask Associates, your trusted partner for seamless and hassle-free business setup in India. Expanding your business by registering a subsidiary company in India is a strategic move that promises many advantages. With its vast market potential, burgeoning middle class, improved regulatory climate, access to a diverse talent pool, government incentives, and more, India offers a compelling proposition for business growth.
However, unlocking these benefits comes with its set of challenges. Navigating the Indian business landscape requires a deep understanding of local regulations and the ever-evolving business environment. This is where Ask Associates steps in, offering our expertise to simplify the complex process.
At Ask Associates, we are dedicated to helping you seamlessly establish your presence in India. Our team of legal and business experts is committed to making your subsidiary setup hassle-free, ensuring that you can focus on growing your business.
Subsidiary Company
A subsidiary company is often referred to as a sister company, while the company that exercises control over it is known as the parent company or holding company. The parent company holds the authority to control the subsidiary company, either in part or entirely.
The registration process for an Indian subsidiary company is governed by the Companies Act of 2013. According to the Companies Act of 2013, a subsidiary company can be defined as a company in which a foreign corporate body or parent entity holds a minimum of 50% of the total share capital. In essence, the parent company exerts a significant influence and control over the subsidiary company.
Types of Subsidiaries in India
In India, there are two primary categories of subsidiaries:
Wholly-Owned Subsidiary
In a wholly-owned subsidiary, the parent company possesses 100% ownership of the subsidiary’s shares. However, it’s important to note that wholly-owned subsidiaries can only be established in sectors that permit 100% Foreign Direct Investment (FDI).
Subsidiary Company
In this category of subsidiary, the parent company owns 50% of the subsidiary’s shares.
Before proceeding with the establishment of a subsidiary in India, obtaining approval from the Reserve Bank of India is a crucial prerequisite. This regulatory step ensures compliance with the country’s foreign investment regulations and safeguards the interests of all stakeholders involved.
Advantages of Indian Subsidiary Company
There are several compelling advantages associated with registering a subsidiary company in India:
Entry into the Indian Market
India’s competitive environment offers a plethora of investment opportunities that attract foreign entrepreneurs to establish their subsidiary companies in the country.
Foreign Direct Investment (FDI) in India
FDI involves investments by foreign companies in Indian private companies through share subscriptions or acquisitions. In 2020, the Indian government introduced a provision requiring prior approval for investments from countries sharing a border with India, making Indian subsidiary registration an attractive option for foreign investors.
Perpetual Succession
The concept of perpetual succession ensures that a company’s existence remains intact regardless of events like changes in management, transfers of membership, or insolvency. The company continues to operate seamlessly, providing stability and continuity.
Limited Liability
Limited liability is a significant advantage that encourages individuals to opt for company formation over other business structures. This principle extends to Indian subsidiary companies, protecting the personal assets of shareholders and directors. The company bears responsibility for its debts to third parties, shielding the personal assets of its stakeholders.
Scope of Diversification
Establishing an Indian subsidiary company provides a strategic avenue for foreign businesses to expand their operations. This contributes to the growth and development of the Indian economy and introduces a wide range of goods and services, fostering healthy competition.
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 competent entities as an artificial legal person. It also grants the company the ability to initiate legal actions and respond to allegations before the judicial system in its own name, without direct involvement from its members or directors.
Property Ownership and Rental
A subsidiary company, being a legal entity, possesses the authority and right to purchase or rent properties in India for its business activities. To prevent potential conflicts among company members, it is advisable to acquire such properties in the name of the company itself, aligning with the principle of perpetual succession.
Regulatory Authorities for Indian Subsidiary Company Registration
- Ministry of Corporate Affairs (MCA): Responsible for setting and enforcing the rules and regulations governing company registration and compliance.
- Registrar of Companies (ROC): Offices handle the procedures related to company incorporation, ensuring companies follow legal requirements.
- Reserve Bank of India (RBI): Regulates foreign currency exchange aspects for Indian subsidiary companies, ensuring adherence to financial regulations.
Committed Team, Comprehensive Business Services
Committed Team, Comprehensive Business Services
Documents Required
- Recent Utility Bill
- Aadhaar Card
- Foreign Government – Address Proof
- Board Resolution Authorising Investment
- Investing Company Address Proof
- Name Significance Letter
- Specimen
