Process Incorporation of Foreign Subsidiary / WOS
Process Incorporation of Foreign Subsidiary / WOS
Article Series- 313
In this Editorial the
author shall deliberate the Provisions of Companies Act, 2013 as on Ist
February, 2018 in respect of Incorporation of “Subsidiary of a Company
Incorporated Outside India or Wholly Owned Subsidiary (WOS) of a Company
incorporated outside India. Author
shall discuss followings (i) Provisions of the Act (ii) Step Wise Process of
Incorporation of Company (iii) FAQ’s on Incorporation of Company. (iv) clarity
on Notary or Apostil of Documents. This Editorial includes the
“RUN” “SPICE”.
incorporation
of company
Whenever we incorporate
a Company in India as ‘Subsidiary” or “Wholly owned Subsidiary (WOS)” of a
Company incorporated outside India. Many questions came into notice like: (i)
what information/ Documents required from foreign Company? (ii) Whether
presence of authorized representative of foreign Company mandatory in India at
the time of signing of documents. (iii) What are the provisions in respect of
Notary / Appostille etc. (iv) What ID Proofs / Identity proof of foreign
subscribers required by the Company etc. etc.
Many more questions came
into thoughts while incorporation of subsidiary of foreign subsidiary. In this
editorial author shall try to clarify all such doubts / queries in practical approach.
process
of incorporation
STEP – I: Apply for Name Approval:
Before application for name approval, foreign
Company have to choose the name on basis of followings:
a)
In case of Subsidiary or
WOS, foreign Company can use coin word of its name as coin word for
Incorporation of Company in India to take the Benefit of Its goodwill in
foreign County.
b)
[1]Foreign Company can apply the same name (name in
foreign country) in India by using word “India” in its name.
c)
If foreign Company
having any registered Trade Mark then it can use such trademark for
Incorporation of Company in India.
d)
Any other name as
decided by the Foreign Company.
i.
While selecting the name thought came into mind what are the documents/
information required for application of Name by foreign Company?
In case of Foreign Company using Its “Coin” word or
“Trademark” following Documents / information required:
·
NOC from the Foreign
Company to use the ‘Coin’ word or ‘Trademark” in the form of Resolution.
·
Apostilled copy of
Charter of Foreign Company (translated in English language).
·
Such resolution shall be
apostille in foreign Country.
·
In case of use of
Trademark – copy of trade mark registration documents.
STEP – Process
of Name Approval
A.
Login on MCA Website
Applicant have to login
into their account on MCA Website. (Pro-existing users can use earlier account
or new users have to create a new account.)
After Login use have to
click on the icon “RUN” in MCA
Service. An online form shall be open. Applicants have to fill the information
online. (This form can’t be download)
Note* since 26th January, 2018 e-form INC-1
has been omitted from the Companies Act, 2013.
B.
Details required to be mentioned in online form:
(i) Entity type (i.e. Normal Company, Section 8 Company
etc.)
(ii) Proposed name
(Auto Check Facility)
(iii) Comment (Mention Objects of the proposed Company
and any other relevant information Like Trade Mark etc.)
C.
Choose File:
This option is available to upload the PDF
documents. Like:
i.
Apostille copy of Resolution
of Foreign Company
ii.
NOC, if Required
iii.
Trade Mark resignation
Documents, if required.
D. Submission of Form on MCA Website:
After completion of
above steps user shall submit the Form with MCA website.
E. Payment of Fees:
There is no option of
pay later challan in RUN. Applicant has to pay fees immediately after
submission of form. After payment challan shall be generated.
I. Validity of Reserved Name:
Reserved name shall be
valid for 20 days from the date of approval of Name.
feature - RUN
a.
DSC & DIN not
required for filing of RUN form for reservation of Name. Only account of MCA
portal is mandatory.
b.
No Resubmission of
application is allowed in case of reservation of Name. The application either
Approve or Reject.
c.
Reserved name shall be
valid for 20 days in case of allotment of name for New Company.
d.
Only one Name can be
mentioned in RUN form. Earlier INC-1 allowed 6 names according to the
preference.
e.
As per Register office
Fees Rules, Fees shall be Rs. 1,000/-
f.
No, there is no need to
mention the name or number of proposed Directors in RUN.
NOTE: *
Approval of Name through “RUN” is an optional way. Companies can also directly
apply for the Name in SPICE form.
STEP – II: Information/ Documents required from foreign Company
a)
Apostille / Notarized
copy of resolution of foreign Company ‘mentioning the name of authorized
representative, no. of subscription of shares’.
b)
Apostille/ Notarized
copy of ID Proof of authorized representative, if such person is non – resident
of India.
c)
Apostille/ Notarized
copy of Charter of Foreign Company.
d)
Name of one Resident
Director.
e)
Name of Nominee (in case
of incorporation of WOS)
STEP – III: Preparation of Documents for Incorporation of Company:
After approval of name or for
Incorporation of Company applicant have to prepare the following below
mentioned Documents;
Ñ
Memorandum
of Association of Company (Physical copy of MOA shall be prepare; e-MOA
(INC-33) can’tbe prepared).
Ñ
Article
of Association of Company (Physical copy of AOA shall be prepare; e-AOA
(INC-34)can’tbe prepared).
Ñ
INC-9
Affidavit / declaration by first subscriber(s) and director(s) (Duly apostille or notarized in country of origin).
Ñ DIR-2 declaration from first Directors along with
Copy of Proof of Identity and residential address. (Duly apostille or notarized in country of origin).
Ñ Declaration from the foreign subscribers in respect
of not having PAN.(Duly
apostille or notarized in country of origin)
Ñ NOC from the owner of the property.
Ñ Proof of Office address (Conveyance/ Lease deed/
Rent Agreement etc. along with rent receipts);
Ñ Copy of the utility bills (not older than two
months)
Ñ In case of subscribers/ Director does not have a
DIN, it is mandatory to attach:
Proof of identity and residential address of the subscribers (Duly apostille or notarized in country of origin)
Ñ Digital Signature with only one
Subscriber is enough for Incorporation of Company.
Ñ DIR-2 from the Resident Director
along with self attested copy of PAN and resident Proof.
i. Why foreign Company can’t use e-MOA & e-AOA for incorporation of
Subsidiary or WOS in India?
Foreign
Company can’t use e-MOA & AOA, because as per Rule 13(5) Company
(Incorporation) Rules, 2014 MOA & AOA signed by person resident outside
India should be appostille or notarized
before the notary public of country of his origin.
ii. Whether ID proofs of foreign subscribers required being apostille &
Notarized by pubic notary from the country of origin?
ID
proof of Authorized representative of foreign Company / nominee of foreign
company required to be apostille in the country of origin, if such person is
not citizen of India.
iii. How many Digital Signatures are required in case of incorporation of
Subsidiary/ WOS of foreign Company?
Only
one Digital Signature is enough. Because DSC shall be affix only on SPICE
“INC-32” form. No need to affix DSC on subscriber sheet of MOA / AOA as
physical MOA / AOA used for Incorporation of Company.
iv. In which situations documents of foreign subscribers not required to be
Apostilled?
As per
Rule 13(5) if foreign subscriber is present in India on “Business Visa” then documents are not required to be
apostille.
v. If foreign subscriber present in India on VISA other than Business Visa
and signed the documents in India, whether such documents are required
apostille or notarized in the country of origin?
As the
foreign subscriber is present in India and signed the documents in India.
However, in absence of Business Visa his documents are mandatorily required to
be apostille and notarized in the country of origin.
STEP – IV: Fill the Information
in Form:
Once
all the above mentioned documents/ information are available. Applicant has to
fill the information in the e-form “Spice” INC-32.
Features of SPICe (inc-32) form:
·
Maximum details
of directors are TWENTY (20).
·
Maximum THREE
(3) directors are allowed for filing application of allotment of DIN while
incorporating a Company.
·
Name of Company
can apply the Name also in this form.
·
Affix physical
apostilled/ notarized copy of MOA in the Form.
·
Affix physical
apostilled/ notarized copy of AOA in the Form.
·
Applying for PAN
/ TAN will be compulsory for all fresh incorporation applications filed in the
new version of the SPICe form.
·
In case of
companies incorporated, with effect from the 26th day of January, 2018, with a
nominal capital of less than or equal to rupees ten lakhs or in respect of
companies not having a share capital whose number of members as stated in the
articles of association does not exceed twenty, fee on INC-32 (SPICe) shall not
be applicable
STEP – VI: Submission of
INC-32,33,34 on MCA-:
Once Spice forms ready
with the applicant, upload form on MCA website and make the payment of the
same.
STEP – VII: Certificate of
Incorporation-:
Incorporation
certificate shall be generating with CIN, PAN & TAN.
POST
incorporation
Step –I: Open Bank Account to receive Subscription Money.
Step –II: Receipt of Subscription Money from Foreign Subscriber.
Step -III: Collect FIRC
Certificate from the Bank as per FDI Guidelines.
Step IV: Issue Share Certificate to the subscribers.
Step V: File FCGPR with RBI
as per FDI Guidelines.
Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION
WITH THE USE OF THE INFORMATION.
[1]
If a foreign company
is incorporating its subsidiary company in India,then the original name of the holding company as it is may be allowed
with theaddition of word India or name of any Indian state or city.
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