Register Subsidiary Company: Owing to multiple benefits of tapping into the Indian market such as access to a large market opportunity, growing middle class, improving regulatory environment, access to the talent pool, government incentives and more, expanding an existing business in the country through subsidiaries is most likely to pay off.
While there are numerous benefits, setting up a subsidiary in India also involves complying with local regulations, understanding cultural nuances, and adapting to the local business environment. Therefore, a company may seek help from legal and business experts to navigate the complexities.
Moreover, it’s important to note that the process and specific requirements to register a subsidiary in India may vary depending on factors such as the type of company, industry, and location.
Also read: Step-by-step guide: How to register your MSME on Udyam portal for free
Here’s how to register a company’s subsidiary in India
Determine the Type of Company: Decide on the type of subsidiary company you want to establish. The most common options for foreign companies are a private limited company in which the parent enterprise owns more than 50 per cent of the subsidiary or a wholly-owned subsidiary wherein the parent entity owns all shares in the subsidiary belonging to sectors that allow 100 per cent foreign direct investment (FDI).
Obtain Digital Signature Certificate (DSC): As the registration process is done online, you need to obtain a Digital Signature Certificate (DSC) for the proposed directors of the company. DSC is used to electronically sign the documents during the registration process.
Apply for Director Identification Number (DIN): Directors of the subsidiary company must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA). DIN can be obtained by submitting the DIN application online.
Name Approval: Choose a unique name for your subsidiary company and apply for its approval through the MCA’s online portal. The name should adhere to the naming guidelines provided by the MCA.
Drafting Memorandum of Association (MoA) and Articles of Association (AoA): MoA and AoA are legal documents that define the objectives, rules, and regulations of the company. Prepare these documents in accordance with the Companies Act, 2013.
Filing Incorporation Documents: Once the name is approved, you need to file the incorporation documents, including the MoA, AoA, and other required forms, with the Registrar of Companies (ROC) through the MCA’s online portal. The incorporation is done through the SPICe+ form on the Ministry of corporate affairs portal.
Also read: MSME Guide: How to start and run your business in India
Payment of Registration Fees: Pay the required registration fees to the ROC based on the authorized capital of the subsidiary company.
Obtain Certificate of Incorporation (CoI): If all the documents and information provided are in order, the ROC will issue a Certificate of Incorporation. This certifies the registration of the subsidiary company.
Apply for Permanent Account Number (PAN) and Tax Registration: After obtaining the CoI, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the subsidiary company from the Income Tax Department.
Open Bank Account: Lastly, open a bank account in the subsidiary’s name in India.
Compliance with Other Regulations: Apart from the company registration process, ensure compliance with other applicable regulations such as Goods and Services Tax (GST) registration, labor laws, and any industry-specific regulations.