What is a Wholly Owned Subsidiary in India?
Wholly Owned Subsidiary in India is a kind of a company in which another company holds a 100% share. The company which holds a 100% share is called the parent company. An organization becomes a subsidiary of another when the parent organization holds a 50-99.99% share in it. When that shareholding becomes 100% it is called a wholly-owned subsidiary company or organization.
If a foreign entity having a registered office outside India has invested money by taking 100% shares of an Indian company through the Indian FDI policy, the Indian company becomes a wholly-owned subsidiary of that foreign company. When an Indian company acquires a 100% share in one of the foreign company then that foreign company becomes a wholly-owned subsidiary of the Indian company.
One can set up a wholly-owned subsidiary in India as both either a Private Limited or as a Public Limited Company. Regarding the various exemptions available to a private limited company by shares under the Companies Act, 2013, it is recommended that a Wholly Owned Subsidiary Company be established as a Private Limited Company.
Procedure for Incorporation :-
SPICe+ would offer 10 services by 3 Central Govt Ministries & Departments. (Ministry of
Corporate Affairs, Ministry of Labour & Department of Revenue in the Ministry of Finance)
and One State Govt.(Maharashtra), thereby saving as many procedures, time and cost for
Starting a Business in India and would be applicable for all new company incorporations w.e.f
15th February 2020.
1. SPICe+ would be an integrated Web Form.
2. SPICe+ would have two parts viz.: Part A-for Name reservation for new companies and
Part B offering a bouquet of services viz.
(ii) DIN allotment
(iii) Mandatory issue of PAN
(iv) Mandatory issue of TAN
(v) Mandatory issue of EPFO registration
(vi) Mandatory issue of ESIC registration
(vii) Mandatory issue of Profession Tax registration(Maharashtra)
(viii) Mandatory Opening of Bank Account for the Company and
(ix) Allotment of GSTIN (if so applied for)
Registration for EPFO and ESIC shall be mandatory for all new companies incorporated
w.e.f 15 February 2020 and no EPFO & ESIC registration nos. shall be separately issued
by the respective agencies.
All new companies incorporated through SPICe+ (w.e.f 15th February 2020) would also
be mandatorily required to apply for opening the company’s Bank account through the
AGILE-PRO linked web form.