Permissibility and Operational Flexibility Yes, a subsidiary in India can use the parent company’s accounting software, provided it meets Indian statutory and compliance requirements. There is no restriction under the Companies Act, 2013 or Income Tax Act on the...
Legal Requirements for Registered Office Every subsidiary in India is mandatorily required to have a registered office at the time of incorporation or within 30 days thereafter under the Companies Act, 2013. The registered office serves as the official communication...
Purpose and Relevance Credit ratings assess the subsidiary’s creditworthiness and financial stability for lenders, investors, and regulatory bodies. A credit rating is often mandatory for raising debentures, bonds, or external commercial borrowings (ECBs). It enhances...
Legal Eligibility Yes, a subsidiary incorporated in India is a separate legal entity and is fully eligible to file for patents and trademarks under Indian law. The right to file applications is available under the Indian Patents Act, 1970 and the Trade Marks Act,...
Eligibility Based on Incorporation A subsidiary can register under Startup India if it is incorporated as a Private Limited Company, Limited Liability Partnership (LLP), or Partnership Firm. It must be registered in India and should not have completed 10 years from...
Incorporation and Initial Subscription At the time of incorporation, the foreign parent’s details are recorded in the SPICe+ incorporation form. The parent’s shareholding is mentioned in the Memorandum of Association (MOA) and Articles of Association (AOA). Share...
Separate Registration Requirement Each subsidiary must obtain a separate GST registration in every state where it operates. Even if wholly owned by the parent, it is treated as a distinct entity under GST law. Subsidiaries cannot use the GST registration of the parent...
Indian Accounting Standards (Ind AS) Subsidiaries that are part of a group where the parent prepares consolidated financial statements under Ind AS must also adopt Ind AS. Ind AS is mandatory for companies with net worth above ₹250 crores or if they are part of a...
Board and Shareholder Approval The Board of Directors of both the subsidiary and the merging or parent company must approve the merger proposal through board resolutions. A draft Scheme of Amalgamation or Merger is prepared detailing the terms, share exchange ratio,...
Obligation to Deduct Tax Subsidiaries operating in India are treated as deductors under the Income Tax Act, 1961. They must deduct Tax Deducted at Source (TDS) on specified payments such as salaries, rent, interest, professional fees, contract payments, commission,...