It’s challenging to set up a subsidiary in India. Your firm must find the resources—both time and money—to grow while becoming familiar with all applicable Indian laws. Another layer of intricacy is added by the fact that state and regional laws and regulations differ.

This blog will provide in-depth explanations of what an Indian subsidiary is, the paperwork needed to register an Indian subsidiary, and other details related to the registration of an Indian subsidiary. Anywhere in India is a viable location to establish a wholly-owned subsidiary. There are no laws unique to each state. The Indian Subsidiary system is governed by a single national law. To start operations, all you need is a resident Indian director (who need not be a shareholder and may instead be an employee) and a rented (virtual) workspace. Your parent firm retains complete ownership, operational control, and all strategic decisions.

Subject to the FDI Policy of India, a Foreign National or an entity registered outside of India may invest and register a company in India by purchasing shares of the company. Repatriation of cash is simple and rapid once activities are underway.

Definition of Indian Subsidiary

A corporation whose interests are owned, controlled, or controlled by another company is said to be an Indian subsidiary. The preference share capital and paid-up equity share capital of the subsidiary company can be used to determine the relationship between the holding company and the subsidiary company. Another corporation may possess it entirely or in part. It is important to note that the term “parent company” or “holding company” refers to the entity that owns the subsidiary. In contrast, a holding company is a little different from a parent firm.

Benefits of Registering an Indian Subsidiary

  • Employees will feel secure joining the private limited company if an Indian subsidiary is registered, suppliers will feel secure extending credit, investors will feel secure making investments, and clients will feel confident and trusting when using the company’s products or services.
  • A private limited company’s directors and members are only accountable for their shares. This means that the personal assets of the company’s owners, members, and directors won’t be seized by lenders, creditors, or the government if the firm incurs a loss or encounters financial difficulties as a result of its primary business activity.
  • In India, foreign direct investment is allowed across all commercial endeavors and sectors without prior consent. However, proprietorships and partnerships are not allowed to accept foreign direct investment, and LLPs need prior government approval.
  • Due to the advantages of less liability and greater transparency, as well as the ease of raising money from venture capitalists, financial institutions, and angel investors, there is a higher possibility for expansion.

Here is a list of the paperwork needed by the Indian Subsidiary.

  1. A snapshot of each Director and shareholder
  2. PAN cards for all Indian shareholders and directors
  3. All Directors’ Apostle ID Proof (Driver’s License, Passport, Voter ID)
  4. Utility bills, such as electricity bills, can serve as evidence of a registered office’s address.

The bare minimum for an Indian subsidiary is:

  • The Company must have a minimum of two directors to be incorporated. One of them must be an Indian citizen.
  • To establish an Indian subsidiary company in India, there is no minimum capital needed.
  • A minimum of two shareholders are required for an Indian subsidiary company. Individuals, businesses, or a combination of both can be shareholders.
  • 50% of the entire equity share capital must be owned by the parent company. Director Identification Number for all Directors.

Indian Subsidiary Company Registration Procedure

To make the registration process simpler, the MCA has released a new form. The form is known as the SPICe+ form, and it is divided into two parts: Part A (Name Reservation Process) and Part B. (which includes all the incorporation applications)

PART A

Reservation of names

PART B

Once the name reservation process is complete, all incorporation applications, including:

The registration process for an Indian subsidiary company is not complete without a digital signature certificate from the certifying authority. DSC is a requirement.

Capital

There is no minimum required capital.

Directors

A subsidiary company cannot be incorporated without a minimum of two directors, one of whom must be an Indian resident.

Shareholders

It takes a minimum of two shareholders to start an Indian subsidiary company.

Equity Stock

The parent firm should own 50% of the equity share capital.

DIN

All Directors must have a DIN or Director Identification Number.

The following are the steps for incorporating a subsidiary company using the SPICe+ form:-

Login to SPICe+

  1. You must first log in to the Ministry of Corporate Affairs (MCA) website.
  2. Please select MCA services from “SPICe+” after that.

Spice+ Section A

  • The user must fill out the suggested name of the subsidiary company’s class, type, subcategory, and category, then click the auto-check button to complete the process. The proposed name is automatically checked at the first level for any inconsistencies with the name rules via auto-check.
  • After completing Part-A, the user has the option to submit a name reservation for the business, proceed with incorporation, or cancel the process as necessary.
  • If the user chooses to proceed with incorporation, part-b of the web form—which displays several sections—becomes active.

SPICe+ Section B

  • You must be aware that Part B of the SPICe+ features a “Save & continue button” before proceeding. You can examine the form validations that will take place for every section segment.
  • You must provide fundamental information about the subsidiary company, such as the registration or correspondence address, the names of the subscribers and directors, the capital data, etc.
  • To issue a PAN (Permanent Account Number) and TAN, you must submit the necessary information (Tax Deduction Account).
  • Additionally, you need to double-check the key declarations in the web form, upload the required attachments, click on pre-scrutiny, and then click on submit after pre-scrutiny is successful.
  • Additionally, the user will receive a confirmation message just once after successfully submitting a web form to the portal.
  • It should be noted that you, the user, can download the Spice+ Part-B pdf file from the dashboard to attach the DSCS.
  • Additionally, based on the fields and settings that the user sets in the Part-B form, all relevant linked forms are enabled and made available for the user to fill out and submit.

AGILE – PRO

It stands for “Application for Goods and Services Identification Numbers, Employees State Insurance Corporation Registration plus Employees Provident Fund Organization Registration,” and the new AGILE -PRO web form has replaced the previous AGILE form (INC-35). To fulfill the following conditions, AGILE-PRO must be registered as associated with Spice+: –

  • ESIC registration.
  • GSTIN registration.
  • Bank account number.
  • Signing up with EPFO.
  • Tax Registration for Professionals.

Forming EMEA and EAoA

  • The company’s charter, known as the Electronic Memorandum of Association (MLA), can be submitted using Spice+ as a connected form to obtain incorporations.
  • All of the rules about the internal operations of the subsidiary company are provided in the Electronic Articles of Association (AOA), which can be submitted as a linked form to SPICe+ to get incorporations.

URC-1 INC-9 Generations of PDF

  • In the case of Part-I corporations, the “URC-1 form,” containing all the information about the current entity, must be filed.
  • The information about the subscribers and directors supplied in Part B shall be used to automatically populate the INC-9 declaration form. The user will be able to download and attach DSCs using the dashboard.

SPICE + Upload

  • The user must select the option to upload forms. Once all other connected forms and DSCs have been attached to Spice+ Part B pdf.
  • Upon successful form upload, an individual Service Request Number (SRN) will be produced and displayed to the applicant.
  • You should be aware that the SPICe+ form needs to be submitted again in the same way if it is flagged as having a problem during processing.

Attachments Required For SPICe+ Overall

  • Articles of Association (MOA).
  • Association Bylaws (AOA).
  • First subscribers and directors’ declaration (Affidavit not required)
  • Evidence of a business address.
  • Utility bill copies (May vary).
  • A copy of the foreign body corporate’s COI (certificate of Incorporation) (if any).
  • Resolution adopted by the promoter company.
  • first directors’ percentage in other entities
  • Nominee’s declaration on Form INC-3.
  • Address at home and identification documentation for subscribers
  • Address at home and identification documentation for the nominee
  • Residential address and application I, II, and III’s identity documentation.
  • Resolution of unregistered firms must be submitted for Chapter XXI (Part 1) Companies.
  • Statement in Form (INC-14).
  • Statement on Form No (INC-15).
  • optional add-ons, if applicable

Attachments required for AGILE-PRO

  • Documents about the main site of business
  • Documents about the appointment of an authorized signatory for a GSTIN (either a letter of authorization, an acceptance letter from the Managing Committee, or a copy of a board resolution).
  • Documents proving the identity of the person who will be opening the bank account.
  • Documents about the authorized signatory’s address while creating a bank account.
  • Documents about the Authorized Signatory for EPFO’s Specimen Signature

Phoenixtax- Tax consultant in Chennai will fill out the form, submit the documents for you and track the progress of the registration and deliver it to you.