4 Different businesses to register as an Indian Subsidiary
Indian Subsidiary: 4 Different businesses to register as an Indian Subsidiary and Advantages to register as an Indian Subsidiary
Table of Content
A company under another corporation’s supervision is said to be a subsidiary. A parent company or holding company is the business that has control. The holding company can exercise control as the largest shareholder because it holds the majority of the shares in the subsidiary firm. This article will help you out with the information on 4 different businesses to register as an Indian Subsidiary, Advantages to register as an Indian Subsidiary, Documents required for Business registration as an Indian Subsidiary, and registration of Business as an Indian Subsidiary.
The subsidiary company is owned by the holding company. A wholly-owned subsidiary is a company in which the holding company owns all of the shares. The controlling company may either create or purchase the subsidiary company.
Indian Subsidiary Company Registration
According to Section 2(87) of the Companies Act of 2013, a subsidiary company is defined as, the subsidiary company, which is owned and controlled by the holding company, is registered under the Indian Subsidiary Company Registration process.
In relation to any other company, a subsidiary company is one in which the holding company-
controls the composition of the Board of Directors or exercises or controls more than 50% of the total voting power, either alone or in conjunction with one or more of its subsidiary companies.
Simply put, the holding company must own at least 50 percent of the subsidiary in order to register an Indian subsidiary business.
Advantages to register as an Indian Subsidiary
- An Indian Subsidiary company enjoys the benefit of Separate Legal Identity in the eyes of law.
- Indian subsidiary have a Management structure of its own, different from the parent company.
- Shareholders or the owners of a Company have a limited liability towards the company.
- In case of Indian Subsidiary, FDI is allowed 100% without any prior permission However it requires posts facto filing/intimation to the Reserve Bank of India.
- Parent company can provide a continuous inflow of funds by subscribing to new shares of subsidiary company and thus save it from cost of debt.
- In terms of taxation as well, the Indian subsidiary will have the same tax structure as a domestic company in India.
4 Different businesses structure to register as an Indian Subsidiary
Private Limited Company
For foreign nationals and international businesses, incorporation of a private limited company is the simplest and fastest sort of entry strategy into India. A private limited business or limited corporation may accept up to 100 percent in foreign direct investment via the automatic route, which exempts such investments from Central Government approval. Therefore, the cheapest, simplest, and quickest entry method for foreign corporations and foreign citizens entering India is the incorporation of a private limited company as a wholly owned subsidiary of a foreign company or joint venture.
Partnership Firm or Proprietorship Firm
The most fundamental sorts of business formations are proprietorship and partnership firms, which are typically utilised by extremely small businesses or unorganized players. Prior RBI (Reserve Bank of India) permission is required for foreign investment into sole proprietorship or partnership businesses. Therefore, proprietorship or partnership firms are inappropriate for foreign investment in India from companies or foreign nationals.
LLP (Limited Liability Partnership)
As 100 percent FDI in LLP is now permitted, incorporation of a Limited Liability Partnership (LLP) is also a foreign national’s or foreign citizen’s entry strategy into India. An LLP is a great option for investment vehicles and professional firms because it cannot have shareholders and must be represented by partners.
Project Office, Branch Office or Liaison Office
RBI and/or government approval is required for branch office, liaison office, or project office registration. As a result, registering a branch office, liaison office, or project office for a foreign company will cost more money and take longer than forming a private limited company. Foreign companies are also not permitted to open project offices, liaison offices, or branch offices. As a result, this approach can only be used NRI’s to enter into Indian Markets.
Documents required for Business registration as an Indian Subsidiary
- Photograph of all the Directors and Shareholders.
- Apostille ID Proof of all the Directors (Passport, Driving License or Voter ID).
- Electricity Bill or any other utility bill for the address proof of the Registered Office.
- PAN Card of all the Indian Directors and Shareholders.
- A company must have a registered office in India.
- Bank Statement or electricity bill shall not be older than 2 months.
- The utility bill as address proof shall be submitted to ROC.
- Also, an NOC from the Landlord to use the office as a registered office of a company must be submitted.
Registration of Business as an Indian Subsidiary
The same procedure is used to establish an Indian subsidiary as it is for an Indian private or public company. The applicant company must be aware of the steps required by the authority (MCA) to incorporate a company. The business must be registered with the Companies Registrar.
SPICE+ must be filed in order to be incorporated. SPICE+ FORM is divided into two sections:
Reservation of names
Additional incorporation procedures. It includes all of the incorporation application, including name reservation.
Problem with PAN and TAN
EPFO, ESIC, and professional tax registration are all required to be issued (In Maharashtra).
Account at the company’s bank.
Obtaining a Digital Signature Certificate from the Certifying Authority is a need for incorporation.
The document’s authenticity is ensured by DSC.
A business that wants to grow across geographies and industries will have to create subsidiaries. Subsidiaries let the holding firm expand out to various areas, industry sectors, and nations by serving as an additional set of arms to the main body. An Indian subsidiary company is legally considered to be an Indian company, is regarded as such, and is obligated to follow all regulations that are relevant to Indian Companies.
Indian Subsidiary Registration
Register your business in India. Retain 100% ownership.
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