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Overview

A Subsidiary Company is also commonly known simply as a subsidiary or a sister company; and the company, which practices control over it, is known as the parent company, or holding company. A subsidiary company can be controlled by the parent company partially or completely.

Definition of a Subsidiary Company

As per Section 2 (87) of the Companies Act 2013, a subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company:

(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital
Either at its own or together with one or more of its subsidiary companies:
Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed.

 

Minimum Requirement for Indian Subsidiary

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

Documents required for registration

  1. An applicant who is a foreign national has to submit the following documents:
  • Passport
  • Driving license
  • Identity proof of the country they are staying in
  1. The Indian Director has to submit the following documents:
  • PAN Card
  • Aadhar card
  • Any utility bill.
  1. The representative of the foreign company has to submit the following documents:
  • Passport
  • Driving license
  • Identity proof of the country they are staying in

DSC for foreign National Directors

A digital signature is required to file the Incorporation documents and the compliance documents for a company. Digital signatures must be obtained for one or more directors of the company. Here are the documents required for obtaining the digital signature for a foreign national:

Foreign nationals residing in the native country.

If the country is a signatory of the Hague Convention:

  1. Identity proof
  2. address proof
  3. The photo on the DSC application (should be notarised by the public notary of that country and apostilled by the competent of that country.

If the naive country is not a signatory of the Hague convention:

  1. identity proof
  2. address proof
  3. The photo on the DSC application (should be notarised by the public notary of that country and consularized by that foreign country's competent authority.
  4. Passport copy and application form with the photo (attested)

By foreign nationals residing in India:

  1. Resident permit certificate issued by the assistant foreigner regional registration officer, an officer of the bureau of Immigration India.
  2. Passport
  3. Visa
  4. Application form with an attested photograph

Procedure for Registration of Indian Subsidiary

  • After minimum requirements (which was described as above) are clearly fulfilled then the owners can begin the procedure of incorporation.
  • First step is to go for incorporation process with subsidiary company, minimum two directors apply for DSC (Digital Signature Certificate), with all the director’s mandatory to apply for DIN (Director’s Identification No).
  • After the above step, the applicant is required to apply for the name of the company in Form INC-1 as per the name application procedure. However, it important to note that name applied must be unique from other company names.
  • After successfully approval of name from ROC (Registrar of Companies) of Ministry Of Corporate Affairs, an applicant is required to file:
  1. Form INC-7, which means application for incorporation of company other than one-person company.
  2. Form DIR-12, Which Means particulars of appointment of directors and key managerial personal.
  3. Form INC-22, which means MOA of the company along with notice of situation clause.
  • Then the filing of the company’s incorporation documents, fees of Registrar of companies have to pay online to ROC zand related Stamp duty is paid by the applicant. (Stamp duty is based on the authorized capital of the subsidiary company).
  • After the related determined fees paid to ROC verifies all filed documents, which was, upload in application. Form all which given above INC-22 and DIR-12 are approved via the Straight-
    Through-Process (STP) and then the ROC verifies Form INC-7 Means application of incorporation of companies in detail manner. The ROC may be suggest some changes in the form or attachment wherever it is required.
  • Finally, the changes have been affected and the ROC is satisfied on the full application and documents requirement, then the Certificate of Incorporation is sent to the applicant via email in detailed manner.
  • If the above mentioned procedure of documents are available and the proper procedure is followed by the applicant, then there will not be any unnecessary delays from ROC and then
    company can be incorporated successfully.

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