FORMATION OF A WHOLLY OWNED SUBSIDIARY COMPANY IN INDIA/ CHECKLIST FOR INCORPORATING WHOLLY OWNED SUBSIDIARY COMPANY
Company
Registration in India
This
Article is provides information about the stages and documents required for
incorporation of a private limited company in India which is subsidiary of a
foreign company in India. The procedure for registering a subsidiary
company in India is very simple and will take around a maximum of 15 days to
complete. The followings are the detailed requirements, procedure and system
for subsidiary formation in India:
A
private company is defined under Section 3(1)(iii) of the CA Act as a
company which -
- Has a minimum
paid up share capital of INR 100,000 or a higher paid-up capital as may be
prescribed by its articles of association
- Restricts the
right to transfer shares by its articles of association.
- Prohibits any
invitation to the public to subscribe for any shares in, or debentures of,
the company.
- Prohibits any
acceptance of deposits from persons other than members, directors or their
relatives.
- Can be formed
with a minimum of two members and two directors.
- Limits the
number of its members (shareholders) to fifty not including (i) persons
who are in the employment of the Company and (ii) persons who, having been
formerly in the employment of the Company, were members of the Company
while in that employment and have continued to be members after the
employment ceased.
Therefore,
minimum capital required for incorporation of a private company is Indian
Rupees 1(one) lakh and there should be at least one two members (shareholders)
and two directors).
Incorporation
of a private limited company in India broadly involves the following stages:
STAGE - I
OBTAINING
DIRECTORS IDENTIFICATION NUMBER (DIN) & DIGITAL SIGNATURES
Directors Identification Number (DIN)
Prior
to incorporation of a company, the proposed directors of the company are
required to obtain Directors Identification Number (“DIN”) from the
Ministry of Company Affairs by making an online DIN application in Form DIN 1.
Form DIN 1 is approved by the DIN Cell of the Ministry of Corporate affairs.
The
said Form DIN 1 is to be filed with the scan copies of the applicant’s
photograph, identity proof, a valid residential proof and a verification/
declaration in the prescribed format to be given by the applicant (who is
applying for the DIN). Upon online submission of the Form DIN 1 and online
payment of the fee, a permanent DIN to the director will be allotted
immediately.
The
following documents are required to make a DIN application for each of the
proposed director(s):
(i)
Identity proof
For
identity proof, a copy of passport or copy of permanent account number card
(PAN card) is required to be provided. Please note that in case of a foreign
national only passport is acceptable as identity proof and in case of an Indian
national copy of PAN card is must.
(ii)
Residence proof
For
residence proof, a copy of voter’s identity card or valid driving licence or
latest bank statement duly certified by the respective bank or utility bill
(not older than two months) is required to be provided.
(iii) One
passport size color photograph in jpeg format. In addition one more photograph
is required which should be separately pasted on a plane paper.
(iv) Verification/
Declaration in the prescribed format on a 10 Rupees stamp paper, duly notrized
by a notary public.
All the
aforementioned documents should be attested by a notary public in the country
of residence of the applicant.
Digital Signature Certificate (“DSC”)
Any one
of the proposed directors is required to obtain digital signature certificate
(“DSC”) in India for online filing of e-Forms with the concerned
Registrar of Companies (“ROC”). For obtaining DSC an application is made
under the signatures of the director who intends to obtain DSC along with the
copy of his identity proof and a copy of his residence proof. The
following documents are required to make a DSC application for each of the
proposed director(s):
(i)
Identity proof
For
identity proof, a copy of passport or copy of permanent account number card
(PAN card) is required to be provided. Please note that in case of a foreign
national only passport is acceptable as identity proof and in case of an Indian
national copy of PAN card is must.
(ii)
Residence proof
For
residence proof, a copy of voter’s identity card or valid driving license or
latest bank statement duly certified by the respective bank or utility bill
(not older than two months) is required to be provided.
(iii)
One passport size color photograph. Please note that the photograph should be
pasted on the application form and cross signed by the director (applicant).
(iv)
DSC application form duly signed by the director (applicant)
The
identity and residence proof of the applicant as aforesaid should be attested
by a notary public in the country of residence of the applicant.
STAGE - III
APPLICATION
FOR NAME APPROVAL OF THE PROPOSED COMPANY WITH THE ROC
After
obtaining the DIN and DSC as aforesaid, an online application for availability
of the proposed name (in the prescribed Form 1A), along with six proposed names
in order of preference (may be less than six), each one indicating, as far as
possible, the main objects (principal activities) of the company, shall be
submitted to the ROC. The name of a private company should end with the words
“Private Limited”.
If the
proposed company is a subsidiary of body corporate incorporated outside India,
Form 1A is required to be e-filed along with the following attachment at the
website of Ministry of Company Affairs, India:
(a) Board
Resolutions by the parent
company (separately from each subscriber to the proposed entity) indicating its
intention to incorporate a subsidiary in India and authorizing a director to
issue specific power of attorney.
(b) Power of
Attorney(s) (separately from
each subscriber to the proposed entity) authorizing someone to represent the
subscribers before the concerned ROC to liaise with all concerned
authorities and officials in the matter of incorporation.
(c) No
Objection Letter from the parent
company (separately from each of such entity whose name or part thereof
will be used in the name of the proposed entity) for use of the name of the
parent company or part thereof in the name of the proposed company.
(d) Charter
Documents of the parent company
i.e. Certificate of Incorporation of the parent company.
Please
note that all of the aforementioned documents should be notarized
by a Notary Public in the
country where the registered office of the entity (which has issued the said
document), is situated and
further Apostilled/
endorsed at the Indian Consulate in
the country where the registered office of the entity (which has issued the
said document) is situated.
(e) A brief
writ-up on the main objects proposed to be carried out by the Company.
(f) Proof of ownership of the registered office of
the company. In case the property is not taken on lease by the Company himself,
a no objcetion certificate would be required
STAGE IV
DRAFTING
AND STAMPING OF MEMORANDUM & ARTICLES OF ASSOCIATION (“MOA AND AOA”)
MOA and
AOA are to be drafted in compliance with the provisions of the Act. Adequate
stamp duty would be required to be paid thereupon based on the authorised
capital of the company. The stamp duty on MOA and AOA shall be paid along with
the filing fee payable at the time of filing of incorporation related
documents.
STAGE V
INCORPORATION
DOCUMENTS TO BE FILED WITH THE ROC
After
the name approval, the following forms have to be e-filed with the ROC after
having been digitally signed by any of the proposed directors. The lists of
documents are as follows:
(i) Form 1 - Declaration of compliance of all the
requirements of the Act along with the memorandum of association of the
company;
(ii) Form 18 - Situation of the registered office of the Company;
and
(iii) Form 32 - Particulars of Directors of the Company along with
the consent of directors.
All the
aforesaid incorporation documents (scanned copies of the executed version) have
to be submitted with the ROC as attachments to the E form 1 alongwith:
(i) The
original copies of MOA and AOA with the subscriber pages duly executed by or on
behalf of the subscribers and witnessed.
(ii) Power of
Attorneys from the subscribers to the MOA and AOA appointing representatives to
incorporate the company and to make corrections in the MOA and AOA. The said
powers of attorneys are required to be notarized and attested by Indian embassy
abroad.
The ROC
then scrutinizes the above-mentioned documents and if necessary, directs the
authorized person to make necessary corrections therein. The ROC after being
satisfied that all the documents are complete, issues the certificate of
incorporation of the Company, which is the conclusive proof of registration of
the company in India.
Thank you
Devesh
Pandey
+91 9811237186
csdeveshpandey@gmail.com
9 comments:
Good research and simplified language used in the procedure makes the understansing all the more simple. Good luck Tk cr.
Thannk you neha for suchappreciatiron
feel free to ask any query through email my
Hello Devesh Sir,
You have mentioned minimum authorised capital requirement of Rs.500000/- for incorporating a WOS of a foreign co. in India.
Can you pl. provide me the source for the same?
Thanks,
Prathamesh.
Hello Devesh Sir,
Read your article. It was very helpful. I have one query. In the article, you have mentioned minimum capital requirement of Rs.5 Lacs for incorporating a WOS of a foreign company in India.
Can you please provide me the source for the same?
Thanks,
Prathamesh.
Hello Devesh Sir,
Read your article. It was very helpful. I have one query. In the article, you have mentioned minimum capital requirement of Rs.5 Lacs for incorporating a WOS of a foreign company in India.
Can you please provide me the source for the same?
Thanks,
Prathamesh.
Dear Sir,
Thanks
Manish kumar kalantri
Dear Sir,
Thanks
Manish kumar kalantri
Dear Sir,
I read your blog its very helpful.
Sir i want to know the procedure to become a public company WSO.
Can a public ompany become WSO?? if yes than its minimum no. of memeber will fall below 7. how to do that?
Please reply sir its urgent
Dear Sir,
I read your blog its very helpful.
Sir i want to know the procedure to become a public company WSO.
Can a public ompany become WSO?? if yes than its minimum no. of memeber will fall below 7. how to do that?
Please reply sir its urgent
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