Incorporation of Wholly Owned subsidiary Company or Subsidiary Company of Foreign Company in India
1. Foreign Subsidiary
A subsidiary company of foreign Company in relation to foreign holding means a company in which a foreign holding Company-
a. Control the full composition of the Board of directors or;
b. Hold more than 50% of the total share capital.
2. Wholly owned subsidiary of foreign Company
It is a company incorporated under the provisions of the companies Act, 2013 and in which the foreign company holds 100% of the total share capital of such company.
3. Steps to be taken for incorporation
Reservation of the name
The procedure for name approval and name reservation is same as any Indian Company Subject to some additional points
Before making an application for the incorporation of the company, the foreign company shall apply for the reservation of the name.
Points to be considered while making reservation of name-
a. A foreign company can apply for its own name for reservation for its subsidiary or WOS.
b. In case if foreign company applying its own name to reservation for its subsidiary or WOS in India then first of all foreign company shall passed a resolution to use the name by its subsidiary or WOS in India.
c. Subsidiary or WOS shall use such name but with the extension of word “India” in such name for example a Company named ABC Ltd is a foreign company and intend to incorporate a subsidiary or WOS in India and it giving its own name to the subsidiary or WOS, then the same can be use in India by the company but with “ABC India Ltd
d. If a foreign company having any registered trademark outside india the same can be use by it for the trademark of its subsidiary or WOS in India.
Documents required for the reservation of Name
Resolution of the foreign company (duly apostle)
Charter (MOA) of the foreign Company (duly apostle)
NOC from the foreign Company to use its own name(duly apostle)
If foreign company is giving its trademark then copy of the trademark registration certificate (duly apostle)
4. Incorporation of the subsidiary or wholly owned subsidiary through SPICe+
A. Login to MCA
Foreign company i.e applicant have to login into their account on MCA website (if already have, other first of all register to MCA website.
B. Click on SPICe+
Then under Company services click on SPICe+ and enter into new application.
C. Part A of SPICe+.
We can reserved the name of the company in part A of SPICe+
Thereafter the Application number will be generated for name reservation/Incorporation which is yet to be submitted/uploaded by the user and resubmission for the name will be done through Pat-A of SPICE+.
If the applicant intends to apply for name, incorporation and other integrated services together, he can do so together by filling relevant information in Part A and Part B.
D. Relevant fields of Part-A of SPICE+
(i) Type* of company
(ii) Class of company
(iii) Category of company
(iv) Sub-Category of company
(v) Main division/Branch of industrial activity of the company
(vi) Description of the main division.
E. If Part-A is complete, applicant can click on
- Submit Name Reservation (only can apply for 2 names) or
- Proceed to Incorporation (if the applicant chooses this option then he will apply for single name and jump on the Part-B of web form) or
- Cancel
F. Note-1
While applying for the Name, the applicant has to ensure that the proposed name selected does not contain any word which is prohibited under Section 4(2) & (3) of the Act and Rule 8 of the Companies (Incorporation) Rules, 2014. The applicant has to read and understand Rule 8 of the Companies (Incorporation) Rules, 2014 in respect of any proposed name before applying for the same.
G. Note-2
the applicant can only apply for 2 names in Part-A of SPICE+ by paying the fees of Rs. 1000.
H. Note-3
There is not any mandatory attachments, however it would be mandatory to attach relevant documents and No Objection Certificates (NOCs) in Part A of SPICe+ only when a name which requires the approval of a Regulator or NOC etc.
I. Note-4
the only one file is allowed to be uploaded as an attachment & Maximum size shall not exceed 6MB in overall.
J. Part – B of SPICe+
this part has been divided into different parts like
– One section is related to Companies Structure and
– Other part is related to Directors and subscriber Particulars.
– Each section of Part-B shall contained “Save and continue button”
– Check form validation will happen on each of the section
K. Services offered under Part-B of SPICe+
(i) Incorporation
(ii) DIN allotment
(iii) Mandatory issue of PAN
(iv) Mandatory issue of TAN
(v) Mandatory issue of EPFO registration
(vi) Mandatory issue of ESIC registration
(vii) Mandatory issue of Profession Tax registration(Maharashtra)
(viii) Opening of Bank Account and
(ix) Allotment of GSTIN.
L. Relevant Documents and information to be provided by foreign company
1. Duly apostle copy of the resolution by the Foreign Company, for their authorized representative.
2. Duly apostle copy of the resolution by the Foreign Company, for approving the no. and of subscribers.
3. Duly notarized and apostle copy of the ID proofs of the authorized representative, passport is mandatory if such person is non resident;
4. Name of atleast one resident director;
5. Duly apostle copy of the Charter (MOA) of foreign company;
6. Particulars of Nominee of the share of Foreign Company (in case of WOS).
M. Documents required for incorporation
1. MOA of the company shall be duly notarized and apostle.
2. AOA of the company shall be duly notarized and apostle.
3. DIR-2 i.e consent of the first director shall be duly apostle and notarized.
4. ID proof of the directors shall be duly apostle and notarized;
5. INC-9 i.e declaration by the subscriber and directors shall be duly apostle and notarized.
6. NOC from the owner of the property in case if the property is taken on lease for use of registered office of the company;
7. Proof of office address (rent agreement; lease deed etc)
8. Copy of utilities bill (electricity bill, telephone bill etc) not older than 2 months
9. In case if director not having DIN then copies of ID proof and address proof shall be duly notarized and apostle.
N. procedure required for Part-B of SPICe+
– Details related to the capital structure of the proposed Company
– Particulars for issuance of PAN and TAN
– Upload mandatory attachment in web form which is based on the type of the Company the applicant wants to Incorporate (duly apostle).
– The applicant has the declaration button and on which applicant need to click
– Once the pre-scrutiny is successfully done then applicant need to click on the submit button
– Once the web form is submitted successfully, the applicant will get a confirmation message.
– After click on the submit button, the system will automatically generate the PDF file
– The applicant can download whatever the information that applicant has entered in the web form. Thereafter that PDF which is downloaded by the applicant, will enable him/her to view that PDF in the Dashboard. So applicant need to click on the application number thereby he will be able to view the section for download.
– The applicant then can download SPICE+ in the dashboard for affixing the DSC’s and also all the linked form gets enabled and available for the applicant to fill and submit.
– The linked form gets enable for filing only once you entered the relevant information in Part-B of SPICE+.
o. Form Agile pro
The Agile pro is mandatory in all cases however E-MOA, E-AOA, URC-1 and INC-9 all these forms are depending upon certain conditions. Agile pro is enabled only once Part-B of SPICE+ is filled.
P. Filing of E-MOA & E-AOA
1. As far as E-MOA and E-AOA is concerned, the current PDF form for E-MOA and E-AOA that we have, there is no major change in the layout of these forms. However instead of SRN of “RUN” which was mandatory to mentioned in the E-MOA and E-AOA but now it is optional filed in SPICE+ E-MOA and E-AOA if the name is already reserved in Part-A of SPICE+.
2. The name of the Company will get pre-filled in the E-MOA and E-AOA by using the same application number and all other information related to E-MOA and E-AOA will remain same.
3. Once the all the information has been entered and on the click button, again a PDF will get auto generated by the system. The applicant needs to save the PDF and affix the DSC on such forms then only applicant can submit the forms.
Q. SPICE+ Upload
1. After affixing DSC’s in SPICE+ Part-B PDF and other linked forms, applicant needs to click on upload form option
2. Upload SPICE+ Part-B and all the relevant linked form
3. On successful upload of forms, unique service request number gets generated and displayed to the applicant.
5. Post Incorporation Compliance
A. Form-20A to be filed
Once the company incorporated then after incorporation form -20A shall be file with the ROC for declaration of commencement of business.
B. Subscription Money
Receipt of subscription money from the foreign subscriber/ foreign company
C. FCGPR
Company shall file FCGPR within 30days from the allotment of shares, to the RBI, to comply FEMA guidelines.
D. Share Certificates
The Company shall issue the share certificates to the subscribers.
Author Bio
Since the documentation is complicated can we incorporate the company with Indian Shareholders, once company is incorporated 99.99% shares will be transferred by the shareholders to the foreign company. Is there any additional compliance at the time of transfer besides SH 7