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Setting up subsidiary of foreign company in India

 

Mr. Gary an Industrialist, one day called me from US. He wanted to avail our services for setting up a wholly owned subsidiary Company in India. Through the conversation with him I understood that he had made enough research about setting up a wholly owned subsidiary Private Limited Company. I have briefed him about setting up a Company in a simplified way:

 

To set up a company there should be a minimum of 2 people. Out of two people, one should be resident in India. Resident means he should be staying in India for more than 182 days.

 

Maximum Shares 99.99% will be hold by a Parent Company.

 

Minimum of Rs.1 Lakh to be invested as the capital of the company. Each director has to obtain a number called Director Identification Number (DIN). Obtaining DIN is a fairly simple process. You have to submit your credentials such as address proof, ID proof and photograph, duly filled application form to the DIN processing centre along with the requisite fees.

 

All the Directors have to get Digital Signature. The documents have to filled and signed manually, scanned and submitted to dsc authorities.

 

You should keep the name of your company same as the Holding Company. You can add the word India in between the name. The name approval authority lies with Registrar of Companies. Once we file an application ROC will approve it, based on the merit of the application.

 

Once the name is approved, the incorporation documents are to be filed (online) with ROC. The incorporation documents are Memorandum and Articles of Association, (something like a deed mentioning do and don’ts of your proposed company), forms mentioning the directors name, shareholders name, registered office address, requisite fee etc.

 

ROC, after scrutiny of all the documents issues a Certificate of Incorporation. The certificate of incorporation will contain a unique number for your company and it is called Corporate Identity Number (CIN)

 

These are the main steps of incorporation. Post incorporation, certain forms have to be filed with ROC and RBI; they are more procedural in nature. The total duration of the entire process will be around 20 working days.

 

Now he wanted to know the documents required for setting up a Company;

 

Documents required from Parent Company is –

  • Certificate of Incorporation
  • Memorandum and Articles of the Company.

 

Documents required from Proposed Directors are –

  • Passport copy
  • Driving Licence or utility Bill or latest bank statement.
  • Photo.
  • Once we receive above documents we will mail across all the papers for signature at one shot with instructions for signing. All these documents should be notarised and apostalised. In case apostalisation is not possible then Indian embassy signature to be taken.

 

Details required

  • Proposed name of the company (better to get 2 more alternative names)
  • Objectives of the company
  • Address of the proposed company (till they identify the place, they can use residence address of Indian Directors if any)

 

Post incorporation, the company has to get all Business registrations such as PAN, TAN, service Tax, Profession Tax or any other registrations applicable to them. I will mention about Apostalisation in my next article.

 

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About CS Vighneshwar Bhat