What is Subsidiary Company Registration?

The Indian subsidiary Company is the company whose interests are held and controlled or held by another company. The preference share capital and the paid-up equity share capital of the Subsidiary company can be used to determine the holding company, subsidiary company relationship between two companies. It can either be owned or owned in part by another company. It should be noted that the company that owns the subsidiary is known as a parent company or a holding company. Although, a holding company does slightly differ from a parent company Besides, a company owned 100% by another company is said to be a Wholly Owned Subsidiary of the company who had made 100% investment in it.

Features of Indian Subsidiary Company

1. Indian transfer pricing system regulation is applicable to the Indian subsidiary companies.
2. Equity, debt and other internal accruals are the available funding mechanisms The Indian Subsidiary Company is treated same as the other Indian Company, the applicability of all laws and guidelines are same and also the tax laws are same for the Indian Subsidiary.
3. The dividend distribution tax is nil now as per the Union budget 2020.

Minimum Requirement for Indian Subsidiary

1. Minimum two directors are required for incorporation of the Company. At least one should be a resident of India.
2. No minimum capital required to form an Indian Subsidiary Company in India.
3. Indian Subsidiary Company must have minimum of two shareholders. Shareholders can be either individual or any entity or a combination of both.
4. The Parent Company must hold 50% of total equity share capital.
5. Director Identification Number for all Directors.

Advantages of Indian Subsidiary registration

1. Brand Name: It provides the benefits to both parent company and as well as to the subsidiary company.
2. Control: Benefit to a parent company who can execute strategic control over its subsidiary company.
3. Common financial system: It provides a benefit of cost synergies by using a common financial system, sharing the administrative cost and other expenses between parent & subsidiaries.
4. Limited Liability: There is a limited liability for both the companies.
5. Global Strategy: It provides protection and security to the company’s trade secrets, expertise and technical knowledge along with the control over the operations.

Rietway Consultants Subsidiary Company Package

The Services which are included in our package are as Follows:
✅ Digital Signatures
✅ DIN of Directors
✅Filing of Spice form
✅Issue of Incorporation Certificate along with PAN and TAN
✅Memorandum of Association
✅Articles of Association
✅Provisional PF ESI Registration
✅GST Registration
✅MSME Registration

Subsidiary Company Procedure

Step -1 Arrange all Required Documents:
The first step is to arrange all the documents and send the same over the email / WhatsApp to us. Once all the Documents are Received, we will Start the Further Process.
Step -2 DSC and Name Availability:
The Next Step is to Start the Further Process of Digital Signature and Checking the Name availability.
Step-3 Preparation of Documents:
The Next Step is Preparation of Documents to be Submitted at Department.
Step-4 Filing of Spice Form:
The Next Step is Submission of Spice 32 Form at Department.

Documents Required for Subsidiary Company Incorporation

1. Passport of foreign directors
2. Incorporation certificate issued by the foreign government
3. For opening a subsidiary company in India, a resolution from LLC/INC
4. A copy of Voter’s ID/Driving license/Passport & PAN Card of Indian director
5. Photograph of all directors and shareholder
6. Rent Agreement if Applicable

Annual Compliances of Indian Subsidiary Company

All Indian Subsidiary companies are needed to comply with Companies Act, the Income Tax Act, FEMA guidelines, transfer pricing guidelines. Time to time, they are liable to file an income tax return with the income tax department, annual return with the registrar of companies and other mandatory filings with the reserve bank of India or securities and exchange board of India etc. However, the requirement is based on the type of industry, turnover, and the number of employees.

FAQ on Subsidiary Company Registration

Q1. How to Set Up Indian Subsidiary Company?
In order to incorporate an Indian subsidiary, the legal entity must be registered with the Registrar of Companies (ROC), by completing a set of forms requested by the institution. This procedure has to be conducted once the ROC has accepted the company's trading name.

Q2. Can Indian Company be a 100 % subsidiary of the Parent Company? Of course, the Indian Companies Act requires that there should be at least two shareholders and foreign companies hence must hold 99.99% of shares of an Indian subsidiary. Besides, minority balance holding is nominated and held under the Indian Companies Act in the name of an individual.

Q3. Are there any restriction on activities of Indian Subsidiary Company?
The reserve bank of India has some guidelines that define activities for foreign Companies under the following broad categories:
-A foreign company is freely allowed for the activities to engage in without obtaining any permission.
-A foreign company is allowed for the activities to participate subject to conditions.
-A foreign company is prohibited for the activities to engage in. Such activities are further elaborated under various circulars of RBI under FEMA.

Q4. Can a Company form OPC as its Subsidiary?
Only a natural person who is an Indian and resident in India is eligible to incorporate OPC as per the rule 3 of the Companies rules, 2014. Hence, the question of any “body corporate” or other organization form being the single member.