The Companies Act 2013 regulates the incorporation and operation of companies in India, including wholly-owned subsidiaries. Here are the general steps to establish a wholly-owned subsidiary in India under the Companies Act 2013:
Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN):
The first step is to obtain DSC for all the proposed directors of the subsidiary. DSC is an electronic signature that is required to file electronic forms.
SPICE+ Form: SPICE+ (Part A) is the second step towards incorporating a Wholly Owned Subsidiary.
Along with this, it is crucial for a wholly owned subsidiary to attach the Board Resolution of the Parent Company and the Trademark Registration Certificate.
INC-32 form-
The most important step in incorporation of any company is the INC – 32 form.
It is paramount to file the accompanying e-forms with the INC – 32 form. The name of the bank with which you will open an account is also to be mentioned in the accompanying e-forms. The accompanying e-forms are related to the MOA, AOA, PAN, TAN and GST as explained herein below:
- Draft and file the Memorandum of Association (MOA) and Articles of Association (AOA): MOA and AOA are the charter documents of the company that define the company’s objectives, rights, and responsibilities of shareholders and directors, and the rules for the company’s operations. These documents need to be drafted, signed, and filed with the ROC.
- Obtain Permanent Account Number (PAN) and Tax Deduction Account Number (TAN): PAN is a unique identification number for tax purposes, and TAN is required for deducting and remitting taxes on employee salaries. The company needs to obtain PAN and TAN from the Income Tax Department.
- Register for Goods and Services Tax (GST): If the company’s annual turnover is above the threshold limit, it needs to register for GST, which is a value-added tax on goods and services.
Obtain Certificate of Incorporation:
Once the MOA and AOA are approved, the company needs to file an application for incorporation with the ROC. The ROC will scrutinize the application and documents and issue a Certificate of Incorporation if all the requirements are met.
It is advisable to seek the assistance of a lawyer to ensure compliance with all the legal and regulatory requirements and to avoid any delays or penalties. To open a wholly owned subsidiary without any hassle and worry of compliances click here.
