SUBSIDIARY INCORPORATION

  • INDIA
  • SUBSIDIARY INCORPORATION

SUBSIDIARY INCORPORATION

Indian Company Registration

India continues to be a well-liked investment location for foreign businesses and foreign nationals attracting huge amount of Foreign Direct Investment (FDI) and Private Equity capital due to its abundance of highly skilled IT professionals. direct investment of up to 100% into a private limited company or limited company is permitted.

Overview of India Entry Strategies

for Foreign Companies

01

Creation of a private limited company or limited liability company

For foreign nationals and businesses, incorporation of a private limited company is the simplest and fastest type of entry strategy into India. Under the automatic route, which doesn't require permission from the Central Government, foreign

02

Incorporation of a Limited Liability Partnership

Due to the fact that 100% FDI in LLP is now permitted, incorporation of a Limited Liability Partnership (LLP) is another method for foreign nationals or foreign citizens to enter India.



03

Through Proprietorship Firms or Partnership Firms

The most fundamental types of business entities are proprietorship and partnership firms, which are typically used by small businesses or unorganised players.


04

Registration of Branch Office, Liaison Office or Project Office

Registration of a branch office, liaison office, or project office requires RBI approval. As a result, it will be more expensive and take longer than forming a private limited company. Foreign nationals are also prohibited from establishing project offices, liaison offices, or branch offices.

FDI in Private Limited Company

Up to 100% of foreign direct investment (FDI) may be made into an Indian private limited company or limited company. Only a small number of industries demand prior Central Government approval for investments by foreign firms or foreign individuals. The government must approve investments made by foreign companies or foreign nationals in the following sectors:

  • ✓ Petroleum industry, pipelines for natural gas and LNG
  • ✓ Buying shares of infrastructure-related companies
  • ✓ Strategic and defence industries
  • ✓ Nuclear minerals
  • ✓ Broadcasting
  • ✓ Delivery Services

Incorporation of Private Limited Company for Foreign Companies and Foreign Nationals

Management and Shareholding Structure

A private limited company must have a minimum of two Shareholders and two Directors. A shareholder can be a person or a corporate entity. The Board of Directors of the Indian Private Limited Company must have one Director who is both an Indian Citizen and Indian Resident.

Obtaining Digital Signature for Foreign National Directors

The incorporation documents and ongoing compliance documents for a company must be filed with a digital signature. Consequently, one or more of the company's directors must have digital signatures.

Name Approval

The proposed company's name can be approved concurrently with the application process for digital signatures. The Indian company must have a distinct name that ends in "Private Limited”.

Filing to Formally Establish a Private Limited Company

Once the name has been approved, the incorporation paperwork for the company can be submitted to the Ministry of Corporate Affairs.

Affidavits and declarations from the directors, MOA and AOA and documentation of the registered office address are among the incorporation documents that must be filed.

Signing to the Memorandum of Association (MOA) & Articles of Association (AOA).

In order to become shareholders in an Indian company, a foreign company that has signed MOA to do so must provide the following documentation: a copy of its certificate of incorporation, a board resolution approving the purchase of Indian company shares, and evidence of the foreign company's address.

Following receipt of the incorporation application and all necessary paperwork, the Registrar will issue the company a Certificate of Incorporation.

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship LLP Company
Definition

Unregistered business entity controlled by a single individual

A Limited Liability Partnership is a hybrid entity with the characteristics of a partnership firm and the liabilities of a corporation.

A registered entity has limited responsibility for its owners and shareholders.
Ownership

Sole Ownership

Designated Partners
  • ✓ Min 2 Directors
  • ✓ Min 2 Shareholders
  • ✓ Max 15 Directors
  • ✓ Max 15 Directors

For One Person Company

  • ✓ 1 Director
  • ✓ 1 Nominee Director
Transferability

Non Transferable

Transferable

Transferable

Documents Required for Indian Subsidiary

  • ✓ Passport
  • ✓ Address Proof
  • ✓ Identity Proof
  • ✓ Directors Identification Number (DIN)
  • ✓ Digital Signature Certificate (DSC), MOA and AOA
  • ✓ No Objection Certificate from the person who owns the property of business place
  • ✓ Certificate of Incorporation granted by the foreign government
  • ✓ Residential Proof

Frequently Asked Questions

FAQs

  • What are the prerequisites for becoming a Director?

    The Director must be over the age of 18 and a natural person. There are no restrictions on citizenship or residence. As a result, foreign citizens can serve as Directors in an Indian Private Limited Corporation.

  • Is a physical address essential to establish a Private Limited Company?

    It is necessary to provide an address in India where the Company's registered office will be located. The premises where communication from the MCA will be received might be commercial/industrial/residential.

  • Is it necessary for me to be there in person while forming a Private Limited Company?

    No, you will not be required to come to our office or any other office to form a Private Limited Company. Any papers can be scanned and forwarded to our office through email. Certain documents will also need to be delivered to our office through courier.

  • How many individuals do you need to form a Private Limited Company?

    A private limited company must be formed by at least two people. A private limited company may have up to fifteen directors, with a minimum of two. There might be as few as two owners and as many as 200 investors in a private limited company.

  • How long will the company's incorporation be valid?

    Once formed, a company will be operational and in existence as long as the yearly compliances are satisfied on a regular basis. If yearly compliances are not met, the company will become dormant and may be struck off the register after a certain length of time. A dissolved company might be resurrected for up to 20 years.

  • What documents are necessary for incorporation?

    Identification and address verification are required for all prospective Directors of the Company. For Indian nationals, a PAN card is required. Moreover, the landlord of the registered office premises must present a No Objection Certificate for having the registered office in his/her premises, as well as identification and address verification.