Indian subsidiary is defined as the one, where the shares of the company are in part owned by another company. This is a company where the interests are held, and controlled or held by another company. It is established by those foreign entrepreneurs, who do not want to go through the process of establishing the foreign unit but instead, are looking for a hassle-free investment scheme.
Hence, we see that this type of entity is preferred by mainly foreign investors, who are looking to gain the market by establishing their foot, through a hassle-free mode.
Advantages of Indian Subsidiary:
1. Limited Liability.
The personal assets of the owner’s cannot be used to pay off the firm’s liabilities.
2. Continuity of Existence.
The entity enjoys perpetual existence and death of one of the owners does not affect the firm’s existence.
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3. Brand Value.
The firm enjoys brand value and goodwill in the market.
4. Scope of Expansion.
There is high scope for expansion in the Indian subsidiary.
5. Foreign Direct Investment in India.
It brings the much needed FDI in the Indian subcontinent.
Disadvantages of Indian Subsidiary:
1. Limited freedom in management.
There is very limited freedom in the management because decisions are taken by the parent firm.
2. Time-consuming decision making.
The decision takes time because they have to travel through a hassle hierarchical process.
3. Too much legal paperwork.
There is very high compliance required for starting a subsidiary and time-consuming processes.
Documents required for the registration of the Indian subsidiary:
1. Photo id proof.
2. Parent company seal.
3. Address proof of business premises.
4. Written and signed consent to establish the subsidiary.
5. PAN and Passport.
Don’t you know how to get your subsidiary registered, GSB Infotech is here to help you:
1. DSC and DIN.
2. Company Name Reservation.
3. AOA (Articles of Association) and MOA (Memorandum of Association).
4. CIN (Corporate Identification Number).
5. RBI Approval.
6. PAN registration.