Indian subsidiary operates as an independent legal entity under Indian laws and is subject to local regulations and compliance requirements. The Indian subsidiary benefits from limited liability, local market access, and the ability to implement the parent company's strategic objectives within India.
Indian Subsidiary
An Indian subsidiary is a company incorporated in India that is controlled by a foreign parent company. The foreign company holds the majority of the share capital of the subsidiary, which operates as an independent legal entity under Indian laws.
Indian subsidiary operates as an independent legal entity under Indian laws and is subject to local regulations and compliance requirements. The Indian subsidiary benefits from limited liability, local market access, and the ability to implement the parent company's strategic objectives within India.
To establish an Indian subsidiary, we generally need to meet the following criteria:
- Legal Structure: Form a private or public limited company under the Companies Act, 2013.
- Ownership: The subsidiary must be at least 50% owned by a foreign parent company.
- Regulatory Compliance: Adhere to Foreign Direct Investment (FDI) regulations and obtain necessary approvals from authorities like the Reserve Bank of India (RBI) and the Registrar of Companies (RoC).
- Local Presence: Have a registered office in India.
- Directors: Appoint at least two directors who are residents of India.
- Capital Requirements: Ensure adequate paid-up capital to support business operations.
- Tax and Compliance: Obtain a Permanent Account Number (PAN) for tax purposes and register for Goods and Services Tax (GST), if applicable.
These are the essential criteria, but specific requirements can vary based on the business sector and nature of operations.
- Legal Structure: Form a private or public limited company under the Companies Act, 2013.
- Limited Liability: Protects the parent company from subsidiary’s debts beyond its shareholding.
- Market Access: Facilitates direct entry into the Indian market.
- Strategic Implementation: Allows the execution of the parent company's strategies within India.
- Regulatory Compliance: Enhances credibility with local clients and partners.
- Tax Benefits: Access to tax incentives and deductions available in India.
- Limited Liability: Protects the parent company from subsidiary’s debts beyond its shareholding.
1. Digital Signature Certificate (DSC)
- Obtain DSCs for all proposed directors of the subsidiary. This is required for filing e-forms with the Ministry of Corporate Affairs (MCA).
2. Director Identification Number (DIN)
- Apply for DIN for the proposed directors of the subsidiary. This is mandatory for individuals intending to become directors in Indian companies.
3. Name Approval
- Submit an application for name approval through the RUN (Reserve Unique Name) service on the MCA portal. The name should be unique and not similar to any existing company or trademark in India.
4. Incorporation Documents
- Draft the Memorandum of Association (MOA) and Articles of Association (AOA). These documents define the company's objectives and the rules for its governance.
- Prepare other required documents such as the declaration by directors, affidavits, and address proof.
5. Filing for Incorporation
- File the incorporation application (Form SPICe+), including the MOA, AOA, and other required documents with the MCA.
- Pay the requisite fees and stamp duty for incorporation.
6. Certificate of Incorporation
- Upon approval, the MCA issues a Certificate of Incorporation (COI), which includes the Company Identification Number (CIN).
7. Post-Incorporation Registrations
- Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the subsidiary.
- Register for Goods and Services Tax (GST), Professional Tax, and other applicable tax registrations.
8. Bank Account Opening
- Open a corporate bank account in the name of the subsidiary.
9. Compliance with Reserve Bank of India (RBI)
- File necessary documents with the RBI under the Foreign Exchange Management Act (FEMA) for reporting foreign investment.
10. Other Legal Compliances
- Obtain necessary licenses and permits specific to the business operations of the subsidiary.
- Ensure compliance with industry-specific regulations and labor laws.
- Obtain DSCs for all proposed directors of the subsidiary. This is required for filing e-forms with the Ministry of Corporate Affairs (MCA).
- DSC and DIN: Passport-size photo, identity proof (PAN or passport), address proof (Aadhaar, voter ID, etc.).
- Name Approval: List of proposed names, business activity description.
- Incorporation: MOA, AOA, declarations (INC-9, INC-10), proof of registered office address, identity and address proofs of directors and subscribers.
- PAN and TAN: Certificate of Incorporation, MOA, AOA, identity and address proofs of directors.
- GST Registration: PAN of subsidiary, COI, MOA, AOA, proof of principal place of business, authorization letter/board resolution.
- Bank Account Opening: COI, MOA, AOA, PAN card, identity and address proofs of directors and authorized signatories, board resolution.
- DSC and DIN: Passport-size photo, identity proof (PAN or passport), address proof (Aadhaar, voter ID, etc.).
- Incorporation: We assist with document preparation, DSC and DIN acquisition, name approval, and filing for incorporation.
- Regulatory Compliance: We ensure compliance with RBI regulations, manage tax registrations, and adhere to corporate laws.
- Ongoing Compliance: We handle annual filings, board meetings, resolutions, and tax filings.
- Additional Services: We offer HR and payroll management, accounting and bookkeeping, and legal support.
- Incorporation: We assist with document preparation, DSC and DIN acquisition, name approval, and filing for incorporation.
Typically 4 to 6 weeks, depending on document preparation and processing.
Regulates foreign investments and requires reporting under FEMA.
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Cancellation & Refund Policy
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The explanations and information provided on this page are general and high-level guidelines on how to write your own Shipping Policy. This article should not be relied upon as legal advice or specific recommendations, as we cannot foresee the exact shipping policies you wish to establish between your business and your customers. We recommend seeking legal advice to assist you in understanding and creating your own Shipping Policy.
Shipping Policy - The Basics
A Shipping Policy is a legally binding document that establishes the legal relations between you and your customers. It provides a framework for outlining your obligations and addressing various potential issues that may arise, and what happens in each case.
A Shipping Policy is good practice and benefits both sides—you and your customers. Customers benefit from being informed about what to expect from your service, while you benefit because clear Shipping Policies can attract more customers by eliminating uncertainties about shipping timeframes or processes.