Complete Process to Incorporate an Indian Subsidiary

Here’s a step-by-step guide to registering an Indian subsidiary :

• Determine the Business Structure: Decide on the most suitable business structure for the subsidiary in India. Common options include private limited company, limited liability partnership (LLP), or branch office.
• Name Approval: Choose a unique name for the subsidiary and obtain approval from the Registrar of Companies (RoC) in India. The name should comply with the naming guidelines specified by the RoC.
• Drafting of Documents: Prepare the necessary incorporation documents, including the Memorandum of Association (MOA) and Articles of Association (AOA) for a private limited company, or LLP agreement for an LLP.
• Obtain Digital Signatures: Obtain digital signatures for the proposed directors of the subsidiary. Digital signatures are required for filing incorporation documents electronically with the RoC.
• Filing of Incorporation Documents: File the incorporation documents, along with the application for registration, with the RoC in the state where the subsidiary will be located. The application should include details such as the company’s registered office address, directors’ details, share capital, and ownership structure.
• Payment of Registration Fees: Pay the applicable registration fees to the RoC for processing the incorporation documents. The fees vary depending on the authorized share capital of the company.
• Obtain Certificate of Incorporation: Once the RoC approves the incorporation documents and verifies compliance with all legal requirements, it will issue a Certificate of Incorporation. This document serves as proof of the subsidiary’s legal existence.
• Apply for Permanent Account Number (PAN): Apply for a Permanent Account Number (PAN) from the Income Tax Department. PAN is a unique identification number assigned to the company for tax purposes.
• Apply for Tax Deduction and Collection Account Number (TAN): If the subsidiary will engage in business activities that require deduction or collection of taxes at source, such as TDS (Tax Deducted at Source), apply for a Tax Deduction and Collection Account Number (TAN) from the Income Tax Department.
• Open Bank Account: Open a bank account in the name of the subsidiary with a designated bank in India. The bank account will be required for conducting financial transactions and managing the company’s finances.
• Compliance with Regulatory Requirements: Ensure compliance with all regulatory requirements applicable to the subsidiary, such as GST registration (Goods and Services Tax), compliance with labor laws, and obtaining any necessary licenses or permits for conducting business activities.
• Appointment of Key Personnel: Appoint key personnel, such as directors, statutory auditors, and company secretary, as required by law. Ensure compliance with corporate governance norms and disclosure requirements.
• Maintain Statutory Records: Maintain accurate statutory records and corporate documents, including minutes of meetings, registers of members, directors, and share transactions, as required by the Companies Act and other applicable laws.
• Compliance with Transfer Pricing Regulations: If the subsidiary engages in transactions with the parent company or other related entities, ensure compliance with transfer pricing regulations to avoid tax implications.
• Annual Filings and Compliance: Fulfill annual filing and compliance requirements, including filing annual financial statements, income tax returns, and other statutory reports with the authorities in India.

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 a minimum of two shareholders. Shareholders can be either individuals or any entity or a combination of both.
• The Parent Company must hold 50% of the total equity share capital.
• Director Identification Number (DIN) for all Directors.