Wholly-Owned Subsidiary in India | Requirements | Key Features

Registration of Wholly-owned subsidiary company in India

A Wholly-owned Subsidiary Registration in India means a type of company registration in which 100 percent of the shares of the company are held by another company. The company holding the shares is the parent company of the wholly-owned subsidiary registration. In usual cases in India such companies are held by foreign companies that have been incorporated outside the country. These companies investing in the incorporation of wholly-owned subsidiary registration are a good source of Foreign Direct Investments in India.

The Government of India has provided many exemptions to private limited companies in the country for promoting the business culture and environment. Therefore, more and more wholly-owned subsidiary registration, are preferring, to be incorporated as Private Limited Company for utilizing the given exemptions under the Companies Act, 2013.

Minimum requirements for Incorporation of Wholly-Owned Subsidiary Registration:

The minimum requirements that a company needs for incorporating itself as Wholly-Owned Subsidiary Registration are as follows-

  • Minimum of two stakeholders and shareholders in the company are required
  • Minimum of two directors in the company are required
  • Minimum paid-up capital must be at least Rs.1 Lakh

Key features of Wholly-owned Subsidiary Registration:

The key features wholly-owned subsidiary registration in India, are as follows-

  • The wholly-owned subsidiary registration is regulated by the Companies Act, 1956 and Companies Act, 2013 in India.
  • Under the Indian Taxation norms such companies are treated as domestic companies and are eligible to take benefits of all the exemptions and deductions applicable under the Companies Act.
  • These companies are permitted to carry on activities such as marketing, manufacturing, and services.

Process of Wholly-owned Subsidiary Registration:

The step-by-step process of registration of the wholly-owned subsidiary company in India is as follow-

  • Application for Director Identification Number (DIN)- The following documents are needed for applying for the DIN
  • Passport of the applicant
  • Two passport-sized photographs
  • Address proof: Driving License or bank account statements or electricity bill, etc.
  • Affidavit in the prescribed format
  • Educational qualification details
  • Details of the present occupation
  • Form DIN-1, duly filled and attested by a Company Secretary or a Chartered Accountant
  • In case the proposed director is outside the Indian Territory then all the documents should be posted from the home country to India
  • Applying for Digital Signature Certificate (DSC)- The following is required to obtain DSC for the wholly-owned subsidiary registration
  • Digital Signature Certificate for anyone of the directors in the company is needed
  • A Chartered Accountant or Company Secretary must attest the Digital Signature form
  • Approval and form-filling-
  • The applicant of the wholly-owned subsidiary registration is required to file an application in Form 1A for incorporation with the Registrar of Companies
  • The new approval must be attested by a Chartered Accountant or Company Secretary with a chargeable amount of Rs.1000 for the same
  • After the approval of the name, the last step of wholly-owned subsidiary registration takes place.
  • Registration of the Wholly-Owned Subsidiary-
  • All documents must be submitted along with the Memorandum of Association (MOA) and Articles of Association (AOA) of the proposed company
  • The memorandum of the company is stamped with a fee equal to 15% of the company’s authorized capital
  • Once the company pays the stamp duty and the ROC Filing fees, the documents are verified by the registrar. Through a straightforward process, the Form INC-22 and Form DIR-12 are approved by verifying them from Form INC-7. Any recommendations made by ROC is to be complied by the wholly-owned subsidiary registration
  • A Certificate of incorporation or Wholly-Owned Subsidiary Registration Certificate is issued to the applicant through e-mail.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.