The Indian subsidiary company is the corporation whose interests are been held and controlled or held through another corporation. The preference share capital as well as the paid-up equity share capital of the Indian subsidiary could be utilized to determine the holding corporation, subsidiary corporation relationship amid two corporations. It could either be owned or held in part by another corporation. It must be noted that the corporation that possesses the Indian Subsidiary is recognized as a parent company or a holding company. Even though, a holding corporation differs from a parent company.Besides, a corporation owned 100% through another corporation is said to be a Wholly Owned Subsidiary of the corporation who had given 100% investment in it.
Indian Subsidiary Companies features
• There is no requirement of prior approval for the repatriation dividend.
• Debt, Equity, and Internal accruals are the available finance mechanisms.
• Indian Transfer pricing regulation is also applicable to the Indian subsidiary Company.
• It is considered as an Indian company for all additional applicable laws and for income tax.
• It is taxed at a rate of 30% when compared to a foreign corporation whereas a foreign corporation is taxable at the rate of 40%.
• The dividend distribution tax (DDT) is subjected to 16.995%.
Indian Subsidiary Registration Online
The Requirements for Indian Subsidiary Registration Online includes;• At least 2 Shareholders• Minimum Capital of Rs. 1lac• DIN for every Directors• Parent company should hold 50% of total equity capital.Documents required for Indian Subsidiary Company Registration OnlineThe documents needed from All Directors and Shareholders for the Indian Subsidiary Company Registration Online includes;1. Utility bills (any)2. A copy of a rent agreement with NOC from the landlord.The documents needed for Proposed Registered Office (Residential or commercial) for the Indian Subsidiary Company Registration Online includes;1. Passport of foreign directors2. Incorporation certificate that is issued through the foreign government3. For opening a subsidiary company in India, a resolution is needed from LLC/INC4. A copy of Voter’s ID/Driving license/Passport and PAN Card of Indian director.5. Passport-sized Photo of all directors and shareholderIndian Subsidiary registration processAn Indian Subsidiary registration process must include the following steps, which include that• In order to start with incorporation of an Indian subsidiary company, two directors must apply for DSC (Digital Signature Certificate), and every one of the directors should apply for DIN (Director’s Identification No.).• For an Indian Subsidiary registration process, the individual is also needed towards applying for the name of the company in Form INC-1.Once the name approval is obtained from the ROC (Registrar of Companies), an individual is required to file –Form INC-7 which is required for Application for Incorporation of Company (Other than One Person Company)Form DIR-12 which is required for Particulars of appointment of directors and key managerial staff; andForm INC-22 which is required for Notice of the situation along with Memorandum and Articles of Association of the Company.• Once the filing of the incorporation documents is completed, payment of online ROC fees and Stamp duty must be done by the individual for an Indian Subsidiary registration process. (This is dependent on the authorized capital of the corporation).• When the fees are paid, ROC validates the filed documents. Form INC-22, as well as DIR-12, is approved through the Straight-Through-Process (STP) and the ROC validates Form INC-7 in detail. The ROC might propose a few changes in the form of attachment.• When the changes were affected and the ROC is satisfied, a Certificate of Incorporation is sent towards the individual by email.Annual Compliances of Indian Subsidiary CompanyAll the Indian Subsidiary companies are required towards complying with the Companies Act, the Income Tax Act, FEMA guidelines, and transfer pricing guidelines. Also, they are legally responsible for filing an income tax return with the income tax department, annual return with the registrar of companies as well as any additional compulsory filings with the Reserve Bank of India or Securities and Exchange Board of India, etc. Though, the conditions are dependent on the form of industry, turnover, and the number of staff.
