Indian Subsidiary Registration

An Indian Subsidiary Company is a business entity registered under Indian law, in which a foreign parent company holds a majority stake (more than 50% of its shares) or controls the composition of its Board of Directors.
It functions as an independent legal entity governed by Indian laws and regulations, while remaining under the control of the foreign parent company.
How a Subsidiary is a Separate Indian Company
In India, a subsidiary company is considered a separate legal entity from its parent company, even if the parent holds a majority stake. This means the subsidiary has its own identity, can sign contracts, own property, and be taken to court independently.

• ​Separate Legal Identity: A subsidiary is a distinct legal entity under Indian law, separate from its parent company. This means it can own property, enter into contracts, and be sued in its name.
• Limited Liability: The parent company is only responsible for the amount it invested in the subsidiary. If the subsidiary has debts or losses, the parent company's assets are usually safe.
• Control and Decision-Making: The parent company can control the subsidiary by owning shares or appointing directors. This allows it to make or influence important business decisions.
• Following Indian Laws: Subsidiaries in India must follow all Indian rules, including those for taxes, employee laws, and company registration.
• Types of Subsidiaries: In India, a subsidiary can be a private limited company (better for smaller businesses) or a public limited company (which follows SEBI  rules).
• Wholly Owned Subsidiary: If the parent company owns 100% of the shares, it’s called a wholly owned subsidiary. In this case, the parent has complete control.
• Reasons for Formation: Many foreign companies create subsidiaries in India to grow their business, hire local talent, and benefit from the country’s growing economy.

• Wholly-owned subsidiary: This type of subsidiary is completely owned and managed by the parent company, which holds 100% of the shares. The parent company can make all the decisions without needing approval from others, ensuring its goals are fully followed.
• Partially-owned subsidiary: In this case, the parent company owns more than 50% but less than 100% of the shares. This gives it strong control, but other smaller shareholders may still have a say in important decisions.
• Operational subsidiary: This type of subsidiary handles specific tasks or parts of the business. It works on day-to-day operations to help the company run more smoothly and use its resources better.
• Strategic subsidiary: These subsidiaries are created to grow into new markets or try out new business ideas. They help the company expand and often play an important role in its overall growth.
• Foreign subsidiary: This subsidiary is set up in another country. It follows the rules and laws of that country, helping the business reach new customers while adjusting to a different business environment.
• Joint venture subsidiary: This is owned by two or more companies together. They share resources, skills, and profits. It’s a partnership to reach shared business goals and reduce risks when entering new markets.​

Wholly-Owned vs. Shared Ownership

Here’s a comparison between a Wholly-Owned Subsidiary and a Shared Ownership Subsidiary (Partially-Owned):

    Aspect                                            Wholly-Owned Subsidiary                                                Shared Ownership Subsidiary (Partially-Owned)

Ownership                                100% owned by the parent company                                  More than 50% but less than 100% owned by the parent company

  Control                                      Full control lies with the parent company                             Significant control, but minority shareholders may influence decisions

Decision-Making            The parent company makes all strategic and operational decisions    Decisions may require consultation with other shareholders

    Flexibility                      High flexibility in aligning with the parent company’s goals                    Limited flexibility due to shared interests

External Influence                                    No external influence                                                      Possible input from minority shareholders
    
Examples of Use               Used when full control is required for strategic alignment                     Used when collaboration or shared risk is beneficial

Risk Management                  The parent bears all risks and responsibilities                                  Risks and responsibilities may be shared

Setup Complexity                         Simpler internal setup as it’s fully owned                               More complex due to the involvement of multiple parties

Documents Required for Indian Subsidiary Registration

To register a subsidiary company in India, you need to collect documents related to the company, its directors, and its registered office.

1. Company-Related Documents

i) Memorandum of Association (MOA) and Articles of Association (AOA): These are key documents that explain the company’s goals, shareholding details, and internal rules and regulations.
ii) Proof of Registered Office: You need to show that your business has a physical office in India. This can be:
A rental agreement is required if the space is leased
Ownership documents are required if the company owns the property
Recent utility bills (electricity, water, phone) as supporting address proof
iii) No Objection Certificate (NOC): If the office is rented, the landlord must provide a letter (NOC) permitting to use of the space as the company’s registered office.
iv) Certificate of Incorporation (if applicable): If the parent company is a foreign entity, you need to submit its Certificate of Incorporation to prove its legal existence.
v) Board Resolution of the Parent Company: The parent company must officially approve the formation of the Indian subsidiary through a board resolution.
vi) Capital Structure: Details of how much share capital the company is authorized to issue and how much has already been paid up.

2. Director and Shareholder Related Documents

i) Digital Signature Certificate (DSC) and Director Identification Number (DIN): These are mandatory for directors to file forms online and for official identification.
ii) Identity and Address Proof:
For Indian directors and shareholders: PAN card, Aadhaar card, passport, or voter ID
For foreign nationals: Passport and proof of address, verified by the Indian embassy or notarized/apostilled
iii) Photographs of Directors and Shareholders: Passport-size photos are needed for identification purposes.
iv) Declaration by Directors and Shareholders: Each director and shareholder must sign a declaration confirming their consent and eligibility to take part in the company.

Indian Subsidiary (Pvt. Ltd.) 

• Legal Status: A distinct, separate legal entity from the parent company, registered under India's Companies Act, 2013.
• Ownership: Foreign parent holds majority (50%+), often 100% (FDI), with no minimum capital requirement.
• Directors: Minimum two directors, with at least one being an Indian resident.
• Shareholders: Minimum two shareholders (can be parent or individuals).
• Operations: Functions as a local Indian company, paying Indian corporate tax. 

• ​Limited Liability: Protects parent company assets from subsidiary debts.
• Market Access & Credibility: Easier access to Indian market and local partners.
• Risk Diversification: Isolates risks within the subsidiary.
• Funding: Can raise funds locally like any Indian entity.
• Tax Advantages: Eligible for lower Indian corporate tax rates.
• Brand Building: Enhances global brand presence and local recognition. 

• ​Foreign Parent: Must be incorporated abroad.
• Directors: Min 2, with 1 Indian resident (DIN needed).
• Shareholders: Min 2; parent must own ≥50% equity.
• Capital: No minimum capital required.
• Compliance: Adherence to FEMA, Companies Act, Income Tax Act.
• Documents: Parent's incorporation docs, director ID/address proofs, MOA/AOA, board resolution, etc.. 

• Name Approval: Unique name for the subsidiary.
• Document Prep: Gather and authenticate documents (apostille for foreign docs).
• Director/Shareholder Setup: Appoint directors, issue shares.
• Registration: File with Registrar of Companies (RoC).
• Post-Registration: Obtain PAN, open bank account, get GST registration. 

What is the AGILE PRO Form and What Does It Cover?
The AGILE PRO form is an important part of the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) process, which is used to register companies in India, including foreign subsidiaries.
The form's name, AGILE PRO, is an acronym for Application for Goods and Services Identification Number, Employees State Insurance Corporation registration, Professional tax registration, Opening of bank account, and Shops & Establishment registration.
It is submitted along with SPICe+ Part B during the company incorporation process on the Ministry of Corporate Affairs (MCA) portal.
What the AGILE PRO Form Covers