Establishment of subsidiary companies or the wholly-owned subsidiaries, is certainly a very elegant and preferred means for extending one's businesses to foreign countries of choice. Therefore, the majority of multinational corporations opt for setting up their subsidiary companies in the targeted countries, for the ultimate purpose of capturing market in the destination countries. In ours this webpage, we are offering rich, exclusive, and very profitable information about the subsidiary company formation, particularly in India.
Our well-established, amply experienced, and globally prominent law firm of India, is now highly commended for its broad gamut of legal services, especially in the company and corporate laws and the intellectual property laws. A Subsidiary Company is also commonly known simply as a Subsidiary, or a Sister Company; and the company which exercises control over it, is known as the Parent Company, or Holding Company. A visionary subsidiary company is owned and controlled by the parent company partially or completely. For setting up a subsidiary, the parent company must own at least 50% of the total equity capital of the subsidiary. When the holding company makes 100% investment in the subsidiary, then, it is prominently known as the wholly-owned subsidiary of that parent company. Here, it is important to mention that, the subsidiary company of a foreign parent company, has its separate legal entity (apart from that of the parent company); and the subsidiary company is bound to function under the rules and regulations of the country where it is situated.
Subsidiary Company Formation Procedure India
India is now a globally famous destination for subsidiary company formation, for doing business in any desired economic field. An elegant subsidiary company can be private limited company, a public limited company, or a limited liability company, or any other form of a company. But as the New Companies Act, 2013 is very generous to the subsidiary companies in the form of the private limited companies, the most popular and preferred types of subsidiaries in India are the wholly-owned private limited subsidiaries. All procedure and services for subsidiary company formation in India, are exclusively and separately listed in the following paragraphs.
For setting up wholly-owned subsidiaries in the permitted sectors, there is no necessity to get the approval of the FIPB or the RBI. Therefore, all procedures for the inception of a wholly-owned subsidiary by a foreign parent company anywhere in India, are almost the same as that of the incorporation of a private limited company.
- Checking the availability of the proposed names of the subsidiary company, through the Form INC-1
- Making of DINs and DSCs, with help of MCA, Govt. of India
- Drafting and filing the MOA and AOA of the subsidiary company, together with registration fees and stamp duties
- Filing Form INC-22 and Form DIR - 12 with the concerned ROC