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SETTING UP A SUBSIDIARY COMPANY IN INDIA

India is one of the preferred locations for foreign nationals, foreign companies and NRI’s due to its rising economy and plenty of available resources. Therefore, it would be easy doing business in India for foreign nationals. The 100% shares of a wholly owned subsidiary company are owned by another company (foreign company). A foreign company is a company which is located outside India. For example XYZ inc. UK.

A foreign company can set up its operations in India where 100% FDI is permitted under the automatic route. Under automatic route FDI is allowed without any prior approval of Government and Reserve Bank of India.

A company can be registered as private limited or public limited following all the rules and regulations framed by the Companies Act, 2013.

Why is DIN required?
All promoter directors of a company are required to obtain an identification number called the Director Identification Number (DIN) prior to formation of a company. The DIN is issued by the Ministry of Corporate Affairs (MCA).

PROCESS FOR Obtaining DIN
Firstly, a provisional DIN needs to be obtained through online form DIN-1 which is available on the Ministry of Corporate Affairs website. Take a print out of the Provisional DIN, paste photograph, sign at the prescribed places and send the same to DIN Authorities in DIN Cell by courier along with identity proof and address proof. Upon verification and satisfaction of the correctness of the documents, the DIN Authority converts the Provisional DIN into Permanent DIN.

Documents and Information Required:
One identity proof containing photo and date of birth and one address proof is required to be submitted along with the executed form. Identity proof may be Passport/Voter Card/Driving License/PAN Card etc. In case of foreign citizen/NRI, identity proof should necessarily be a passport copy. Address proof may be Passport/Voter Card/Ration Card/Driving License/Electricity Bill/Telephone Bill/Bank Statement etc. General information such as name, father's name, date of birth, nationality, contact details, etc. is required for filling the form. In case of a foreign national, the photograph, identity proof and address proof should be duly attested by the notary public/Indian embassy/apostille authority in the home country of the applicant.

Attestation Requirement
Photograph, identity proof and address proof needs to be attested by notary public, govt. gazette officer, practicing CA/CS/ICWA etc. In case of a foreign national, the photograph, identity proof and address proof should be duly attested by the notary public/Indian embassy/ apostille authority in the home country of the applicant.

Follow Up
It may take around 3-5 days to obtain a DIN

What is DSC and why is it required?
The documents required for formation of a company are required to be filed on-line and DSC is a verification tool (equivalent to hand written signature) used for filing such documents with the ROC. DSC can be obtained for any one or more directors of the proposed company under whose name the documents are usually filed. DSC is of various classes and a Class II DSC is applicable for incorporation and for the process thereafter.

Process for Obtaining DSC
Government has authorized various certification agencies for issuing DSC. In order to obtain DSC, the prescribed application form of the chosen agency has to be filled in and submitted along with the identity proof and address proof. The certification agency office verifies all the documents and upon satisfaction issues DSC in a USB token (and also through email). It is a password protected file.

Documents and Information Required

  • One identity proof containing photo and date of birth and one address proof is required to be submitted along with the executed form.
  • Identity proof may be Passport/Voter Card/Driving License/PAN Card etc. In case of foreign citizen/NRI, identity proof should necessarily be a passport copy.
  • Address proof may be Passport/Voter Card/Ration Card/Driving License/Electricity Bill/Telephone Bill/Bank Statement etc.
  • General information such as name, father's name, date of birth, nationality, contact details, etc. is also required for filling the form. Additionally, father's and mother's name is required for the mandatory roll check of DSC with ROC.


Attestation Requirement
In case of a foreign national, the photograph, identity proof and address proof should be duly attested by the notary public/Indian embassy/ apostille authority in the home country of the applicant.

Follow Up
It may take around 1-3 days to obtain a digital signature.

Note
An application for DSC can also be made simultaneously with the DIN application to save time.

Requirement
Every company needs to have a name and the person incorporating it shall select a few names in the order of preference. The name shall be in consonance with the subject and objects of the proposed company and shall not be similar to the name of any existing company. Certain guidelines (give a hyperlink for name availability guidelines) have been prescribed by the MCA for selection of the name of a company which needs to be considered before selecting a name.

How to apply for Name Availability
After the permanent DIN and DSC are obtained, an application in the prescribed form (i.e. Form No.1A) needs to be filed (on-line) with the ROC. The application shall contain 6 names in order or preference, significance of names proposed with the proposed company, brief description on the main objects, authorized capital, promoter names (with DIN). ROC officials check the Name Approval Application form as per the prescribed guidelines and upon satisfaction, ROC approves the name and reflects the approval online on the MCA portal.

Documents and Information Required

The following information is required for the purposes of Form 1A:

  • Full names, occupation and complete address of the applicant who should be one of the initial shareholders of the proposed company;
  • Full names, complete address and PAN / DIN / CIN / registration number of the 2 initial shareholders (subscribers to the Memorandum of Association) – a minimum of 2 shareholders /subscribers are required in case of a private company and 7 for a public company;
  • DIN of promoter directors (at least 2 directors required)
  • DSC of any one promoter director for signing the form
  • Amount of authorized capital size
  • Name of the city and state in which the proposed company is to be registered.
  • At least one suitable name and up to a maximum of six names, indicative of the main objects of the company.
  • Brief description on main objects of proposed company.
  • In case of the proposed name is similar to the parent company, copy of Directors/Members meeting resolution is also required giving its no objection to such usage and a NOC certificate.


Follow Up
Approx 2-6 days

Notes
If any of the initial shareholders are bodies corporate, a copy of a board resolution is required granting approval for incorporation of a company in India and nominating individuals resident in India on their behalf to do the necessary acts including signing of MOA and AOA on behalf of the company. If any of the initial shareholders is a foreign body corporate, the board resolution as stated hereinabove and the NOC etc. would require notarization from the notary public and consularisation from the Indian Embassy prior to being sent to India.

Requirement
The name approval received from the ROC is valid for a period of sixty (60) days (the validity of the same can be extended by another thirty (30) days by applying to the ROC), within which time period, the necessary documents for incorporation of a company should be filed with the concerned ROC.

Documents Required
For incorporating a company in India, the applicant needs to file the following documents with the ROC:

  1. Memorandum of Association;
  2. Articles of Association;
  3. Form 1- application and declaration for incorporation of a company;
  4. Form 18- location of registered office;
  5. Form 32-particulars of directors;
  6. Consent letters from the proposed directors of the company;
  7. Coloured photographs of the proposed directors;
  8. Power of Attorney in favour of person/consultant to make corrections to incorporation documents and collect the Certificate of Incorporation;
  9. In cases where the subscribers/ initial shareholders are persons resident outside India, the MOA and AOA will have to be notarized in the country of their residence and then apostilled.


Process
All the above documents are filed on-line and a physical copy of some of the documents is also filed with the ROC. Stamp duty & ROC registration fees needs to be paid (challan shall be generated electronically and can be paid through net banking or credit card or in bank branch by cheque/DD).

Follow Up
Approx 6-9 days Stamp Duty
The stamp duty varies as per the size of the authorised capital of the company. Details of the same are provided at the MCA web portal.

ROC Registration Fees
The registration fees also depends upon the size of the authorised capital of the company as provided at the MCA portal.

On submission of above documents and payment of requisite fees, ROC officials verify all the documents and upon satisfaction ROC allots a Company Identity Number (CIN) to the proposed company. The Certificate of Incorporation is the conclusive evidence of the incorporation of a company.

Note:
A private company can start its operations upon receipt of the certificate of incorporation. However, in case of a public limited company, a certificate for commencement of business is also required to be obtained.

Our Role
The process of company formation may seem very simple and structured but there are inherent complexities involved in the process and an experienced consultant is required to advise on various things such as capital, location of registered office, registration fees, stamp duty, etc, prepare and submit the documents and liaise with the authorities. Therefore, our role comes into play and our experienced team, who has hands on experience on these matters, will help you in doing all of the following:

  • Analysing documents, preparation and filing of DIN Application
  • Analysing documents, preparation and filing of DSC Application and obtaining DSC
  • Advising on selection of name and obtaining approval of the same from ROC
  • Preparation of incorporation documents and submitting the same with ROC
  • Obtaining Certification of Incorporation and Certificate of Commencement of Business in case of a public company.

Company Incorporation in Gurgaon India 2017

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