According to section 591 foreign companies are the:

• Companies incorporated outside India which, after the commencement of this act, establish a place of business within India and
• Companies incorporated outside India which have, before the commencement of this act, established a place of business within India and continue to have an established place of business within India at the commencement of this act.

A foreign company planning to set up business operations in India has the two options

• As an Indian company: In this case all the provisions related to the Indian companies will apply on that company
• As a foreign company: As a foreign company functioning thorogh a branch, liaison office or project office it has to comply with some other provisions also. Section 591 to 608 of the companies act, 1956 contains the provisions related to the entities incorporated outside India or foreign companies. These sections put an obligation upon the foreign companies to submit their information to the registrar of companies regarding accounting information, registration of charges on properties held by it in India, etc.

Investment and acquisition of equity shares of a Company can be broadly divided into two categories: investment under automatic route and investment under Government approval route. The automatic route requires no requirement of any prior regulatory approval for investment in equity shares of an Indian business and only post facto filing/intimation with the Reserve Bank of India within 30 days of receipt of investment money in India and filing of prescribed documents and particulars of allotment of shares within 30 days of allotment of shares to foreign investors. Foreign Direct Investment of upto 100% is allowed under the automatic route in most activities/sectors in India. Investment in activities / industries where automatic route is not available can be made with the approval of the Government under the Government Approved FDI method.

HOW WE CAN HELP YOU TO START

• We will help you get your Digital Signature (DSC) and Director identification Number (DIN) for all directors (two/three)
• We will then help you pick a unique name using RUN (Reserve Unique Name) with MCA (Ministry of Company Affairs)
• We will help you draft the company MoA (Memorandum of Association) and AoA (Articles of Association)
• We will complete the SPICe form (Simplified Proforma for Incorporating Company Electronically)
• We will send in a request to the NSDL for company PAN & TAN

DOCUMENTS REQUIRED

Identity Proof of directors

• Self-attested scanned copy of PAN Card of directors
• Notarised passport copy for foreign nationals

Address Proof of directors

• Passport / Driving license /Aadhaar card
• Electricity bill / Bank statement (less than 2 months old)

Registered Office Address Proof:

• Rental Agreement OR sale/registration deed (if owned)
• Copy of recent utility bill (electricity/water) or property tax receipt
• No objection certificate from landlord for use of property as registered office (for rented offices)

Incorporation Documents

• Signed Digital Signature Application (hard copy)
• Other incorporation digitally signed and uploaded as soft copies

WHAT YOU HAVE NOW

• DIN for all the directors
• Digital signature token for all directors
• MoA & AoA (Memorandum of Association & Articles of Association)
• Incorporation Certificate from MCA with CIN
• Company PAN card
• Company TAN number
• All supporting documents for opening bank account

SUPPORTING YOUR ON-GOING BUSINESS

• We can maintain your accounts and give you periodic progress reports at end of every month
• We can file your TDS & GST returns
• We can compile and file your income-tax returns

FEATURES OF INDIAN SUBSIDIARY COMPANY

This is similar to any other company incorporated under the Companies Act in India

Separate Legal Entity

A company is a legal entity and a juristic person established under the Act. Therefore a company form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts.

Easy Transferability

Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with share certificate can easily transfer shares.

Uninterrupted Existence

A company has ‘perpetual succession’, that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.

Owning Property

A company being a juristic person, can acquire, own, enjoy and alienate, property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.

Foreign Direct Investment

100% Foreign Direct Investment (FDI) is allowed in many of the sectors through Company type business entity without any prior Government approval. FDI is not allowed in Proprietorship or Partnership, LLP requires prior Government approval.

REGISTRATION PROCEDURE OF THE FOREIGN COMPANY

A foreign company shall within 30 days of establishing a place of business in India deliver to the ROC the following documents:

• A certified copy of the charter, statutes, or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company
• The full address of the registered or principal office of the company
• A list of the directors and secretary of the company
• The name and address or the names and addresses of one or more persons resident in India, authorized to accept on behalf of the company service of process and any notices or other documents required to be served on the company and
• The full address of the office of the company in India which is to be deemed its principal place of business in India.

The filing shall be done at two places with the principal Registrar of companies at New Delhi, and with the ROC of the state having jurisdiction where the principal place of the business of the company is situated. Certification of documents shall be in accordance with Rule 16 of the Companies (Central Government) Rules and Forms, 1956.

Obligation of Foreign Companies

Return of Alterations:

• A foreign company shall within 30 days of change/ alteration of any of the following file a return of alteration containing the particulars of the changes (Section 593):
• The charter, statutes, or memorandum and articles of a foreign company or other instrument constituting or defining the constitution of the company or
• The registered or principal office of a foreign company or
• The directors or secretary of the company
• The name or address of any of the persons authorized to accept service on behalf of the company or
• The principal place of business of the company in India

Accounting:

Section 594 requires a foreign company to maintain books of accounts of its India and world business and three copies of it has to be mandatory filed with the ROC every year within 9 months from the closure of the financial year. These accounts should be accompanied by a list of place of businesses in India. In respect of the Indian business of the foreign company the Profit and loss account, balance sheet and other accounting record should be prepared.

Stating of the Name:

Section 595 of the companies act, 1956 obligates a foreign company to conspicuously exhibit on the outside of every office or place of business where it carries on business in India, its name and country of incorporation, in letters easily legible in English characters and also in the local language (where it is situated). It must cause both these details also to be stated in all letter heads, business letters, bill heads, and letter papers, and in all notices and other official publications of the company.

Service of Notice:

Any process, notice, or other document shall be deemed to be sufficiently served on the foreign company if the notice or document is addressed to any person whose name has been delivered to the Registrar under the foregoing provisions of this Part and left at, or sent by post to, the address which has been so delivered.

Notice of Ceasing the Place of Business in India:

If any foreign company ceases to have a place of business in India, it shall forthwith give notice of the fact to the Registrar, and as from the date on which notice is so given, the obligation of the company to deliver any document to the Registrar shall cease, provided it has no other place of business in India.

Registration of Charges

A foreign company has to file the documents containing the particulars of a charge within 30 days from the date of the creation of charge with the principal registrar as well as the registrar of the state in which the principal place of the business of the company is situated

Bodies with jurisdiction

The statutory bodies, which mainly exercise jurisdiction over foreign companies, are:

• The Central Excise Department
• The Commercial Taxes Department
• The Income Tax Department
• The Reserve Bank of India
• The Department of Industries and
• The Registrar of Companies.