Procedure of Opening / Setup Subsidiary Company in India

In recent past Government of India has opened its doors for international companies to open their subsidiary company in India or branch in India. This move was highly welcomed by international business community and hence many international brand have started their subsidiary companies or branches in India. 

Companies / Business having operations in countries other than India can set up wholly-owned subsidiary in India under those sectors where in 100% foreign direct investment is permitted under the Foreign Direct Investment Policy issued by Government of India. 

A foreign company or business can start their wholly-owned subsidiary in India may be either of the following business / company types like : Private Limited Company, Public Limited Company, Unlimited Company and under Sole Proprietorship. International business groups / companies can also set up their operations in India through the business entities: Liaison Office/Representative Office, Project Office, Branch Office. These companies have to register their subsidiary companies with Registrar of Companies which can undertake any permitted business activities.

It is vital to choose the right kind of business consultant who have expertise in starting a subsidiary company in india which best suits its purposes and takes care of liability issues and tax planning issues. We Signs and Marks having years of professional experience in providing assistace to Foreign Direct Investors can help you to starting or setting up your subsidiary company in India.

Foreign direct investors who are planning in setting up a subsidiary company or office in India are required to seek approvals from Government of India before investing in India. Our expert team can help in getting those approvals and perform those much need liasions and paper work in limited period of time.

Holding company Vs.  Subsidiary company

With regard to Foreign Direct Investment in India we can provide professional assistance in How to form Subsidiary in India, Opening Branch in India, How to Incorporate in India, Forming Company in India, Incorporating in India, Forming Subsidiary in India, Starting Business in India, Types of Companies in India, Business Entities in India, Procedure for Formation of Company India, Forming Corporation in India, Forming Private Limited Company in India.

Legal Advice on Company Registration and Firm Registration

The Companies Act 1956 lays down the guidelines for the formation and registration of a Company in India. This Act applies to the whole of India and to all types of Company’s thus making it an important legislative body governing all registrations and closures.

The start of a company means a lot of work. It’s like giving birth to a child. It’s an exciting phase with a lot of anxiety and hope. Every new business requires company registration by law of the land. One should follow the state law as well when registering a Company.

The offices of the registry of the records have all the information regarding all the companies registered in India and the Registrar of Companies has all the authority and responsibility of registering a company in various states and union territories. It is to be noted that all the companies registered have to comply with all the statutory compliances falling under this Company Act.

Some points should be kept in mind when getting registering for the new business is done.

Legal advice:

The first and foremost important step is to ensure that the legal angle is taken care of. One should get the Director Identification Number for the business. Then is the chance of Company registration and then submitting the necessary documents to the government. Some basic documents are mandatory for company registration like, address proof, PAN card, photographs.

One should remember to select at least four suitable names for the new company. It should not be a copied one and should not violate the copyrights and patents.

Once the name is approved by the Registrar of companies, one can move ahead for company registration.

The Memorandum of Association and Articles of Association are legal documents which should be drafted by legal experts, different opinions sought and finally printed.

The application for registering a company has to be forwarded to the Registrar of Companies and should be accompanied with names, Memorandum of Association and Articles of Association besides other requisite documents.This has to be filed with theRegistrar of companies of the state where the company is being set up.

Under the Companies Act 1956, one can form two types of Companies, Private Company or a public company and get them registered as per the procedures laid down in the statute of the Companies Act.

Once the company is registered, one can patent a product or get a copyright to protect your company.

THE COMPANIES (AMENDMENT) ACT, 2015 – HIGHLIGHTS

THE COMPANIES (AMENDMENT) ACT, 2015

After implementation of New Companies Act 2014, the Government has made changes in provisions of the New Companies Act 2014 and published “Companies Amendment Act 2015” on 25.05.2015.  This Act came into force on 26.05.2015. The amendment has been made in the requirement of paid up capital, common seal, filing e-form INC-21 with the Registrar for commencement of business,  passing of special resolutions in certain cases and many more requirements which shall not apply henceforth.

Following is the list of comparison between the changed provisions.

Sr. No.	Amendment to Sections	The Companies Act, 2013	The Companies Amendment Act 2015
1	Section 2 Clause 68	Definition of Private Limited Private limited company means company “having minimum paid up share capital of one lakh rupees” or such higher paid up share capital	(i) in clause (68), the words “of one lakh rupees or such higher paid-up share  capital” shall be omitted
2.	Section 2Clause 71	Definition of Public company Private limited company means company which  (a) is not a private limited (b) has a minimum paid up share capital of five lakh rupees or such higher paid up share capital	(ii) in clause (71), in sub-clause (b), the words “of five lakh rupees or such higher paid-up capital,” shall be omitted.
3.	Section  9	Effect of registration	the words “and a common seal” shall be omitted.
4.	Section 11	Commencement of business The company shall be required to file e-form 21 before commencement of business or exercising its borrowing powers.	Section 11 of the principal Act, shall be omitted Filing of e-form 21 with Registrar of company before the commencement of business or exercising its borrowing powersis not required.
5.	Section 12	Registered office of company clause 3(b)“have its name engraved in legible characters on its seal”	In section 12 of the principal Act, in sub-section (3), for clause (b), the followingclause shall be substituted, namely:—“(b) have its name engraved in legible characters on its seal, if any;”.
6.	Section 22	Execution of bills of exchange Refer sub-section (2) of Companies Act 2014 which reads as follows : (2) A company may, by writing under its common seal,authorise any person, either generally or in respect of any specified matters, as its attorney to execute other deeds on its behalf in any place either in or outside India;3) A deed signed by such an attorney on behalf of the company and under his seal shall bind the company and have the effect as if it were made under its common seal.	In section 22 of the principal Act,—(i) in sub-section (2),—(a) for the words “under its common seal”, the words “under its common seal, if any,” shall be substituted;(b) the following proviso shall be inserted, namely:—“Provided that in case a company does not have a common seal, the authorisation under this sub-section shall be made by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary.”(ii) in sub-section (3), the words ‘‘and have the effect as if it were made under its common seal” shall be omitted.
7.	Section 46	Certificate of shares Clause (1) of Section 46 read as follows(1) A certificate, issued under the common seal of the company, specifying the shares held by any person, shall be prima facie evidence of the title of the person to suchshares.	In section 46 of the principal Act, in sub-section (1), for the words “issued under the common seal of the company”, the words “issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company  Secretary” shall be substituted.
8.	Section 76	Acceptance of deposits from public by certain companies Earlier Section 76A section was not implemented.	Section 76A after Section 76 is inserted Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the manner or the conditions prescribed under section 73 or section 76 or rules made thereunder or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made thereunder or such further time as may be allowed by the Tribunal under section 73,—(a) the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with fine which shall not be less than one crore rupees but which may extend to ten crore rupees; and(b) every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both:Provided that if it is proved that the officer of the company who is in default, has contravened such provisions knowingly or wilfully with the intention to deceivethe company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.”.
9.	117	Resolutions and agreements to be filedSub section (3) (g) the resolutions passed in pursuance of sec section (3) of Section 179 and	In section 117 of the principal Act, in sub-section (3),—(i) in clause (g), the word ‘‘and’’ occuring at the end shall be omitted;(ii) after clause (g), the following proviso shall be inserted, namely:—“Provided that no person shall be entitled under section 399 to inspect orobtain copies of such resolutions; and”.
10.	123	Declaration of Dividend There were only three proviso.	In section 123 of the principal Act, in sub-section (1), after the third proviso, the following proviso shall be inserted, namely:—“Provided also that no company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year.”