Incorporation under the Companies Act

• The subsidiary must be incorporated under the Companies Act, 2013
  
• It can be registered as a Private Limited or Public Limited company.
  
• Minimum two directors and two shareholders are required for a Private Limited company.
  
• At least one director must be a resident of India.
  
• Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) are required for proposed directors.
  

Shareholding and Ownership

• The parent company must hold at least 51% of the subsidiary’s total equity shares.
  
• In case of a wholly-owned subsidiary, 100% shareholding is held by the parent.
  
• Share capital structure should comply with the Indian foreign investment guidelines.
  
• Share subscription details must be provided during incorporation.
  
• Proper authorization from the parent company is needed for investment in the subsidiary.
  

FEMA and RBI Compliance

• If the parent company is foreign, the Foreign Exchange Management Act (FEMA) regulations apply.
  
• Approval may be required from the Reserve Bank of India (RBI) based on sector-specific guidelines.
  
• Foreign Direct Investment (FDI) must comply with the automatic or approval route.
  
• Reporting of foreign investment to the RBI through Form FC-GPR is mandatory.
  
• Banking arrangements must support inward remittances for share capital subscription.
  

Statutory Filings and Documentation

• Filing of SPICe+ forms for incorporation through the MCA portal is required.d
  
• Submission of Memorandum of Association (MOA) and Articles of Association (AOA)
  
• Board resolution and certificate of incorporation of the parent company must be notarized and apostilled.
  
• PAN, TAN, and GST registrations must be obtained after incorporation
  
• The company must also obtain ESIC, EPF, and Shops & Establishment registrations if applicable.
  

Post-Incorporation Compliance

• Open a bank account in the name of the subsidiary company.
  
• Appointment of a statutory auditor within 30 days of incorporation
  
• Maintain proper books of accounts and statutory registers under Indian law.
  
• Conduct regular board meetings and annual general meetings.
  

File annual returns and financial statements with the Registrar of Companies (ROC)