Whenever anyone incorporates a Company in India as a ‘Subsidiary” or “Wholly-owned Subsidiary (WOS)” of a Company incorporated outside India. Many questions came into notice like:
- What are the information/ Documents required from Foreign companies?
- Whether the presence of an authorized representative of a foreign Company mandatory in India at the time of signing of documents.
- What are the provisions in respect of Notary / Apostil etc?
- Which ID Proofs / Identity proof of foreign subscribers required by the Company etc. etc.
Many more questions came into thoughts while the incorporation of a subsidiary of a foreign subsidiary. In this editorial author shall try to clarify all such doubts/queries in a practical approach.
Process of Incorporation
STEP – I: Apply for Name Approval:
Before an application for name approval, the foreign Company has to choose the name on basis of the followings:
- In the case of Subsidiary or WOS, foreign Companies can use the coined word of its name as coin word for the Incorporation of Company in India to take the Benefit of Its goodwill in foreign County.
- Foreign companies can apply the same name (name in a foreign country) in India by using the word “India” in its name.
- If a foreign Company having any registered Trade Mark then it can use such a trademark for the Incorporation of Company in India.
- Any other name as decided by the Foreign Company.
- While selecting the name thought came into mind what are the documents/ information required for application of Name by a foreign Company?
In the case of Foreign Company using Its “Coin” word or “Trademark” the following Documents/information required:
- NOC from the Foreign Company to use the ‘Coin’ word or ‘Trademark” in the form of Resolution.
- Apostilled copy of the Charter of Foreign Company (translated in the English language).
- Such resolution shall be apostilled in a foreign country.
- In case of use of Trademark – a copy of trademark registration documents.
“ If a foreign company is incorporating its subsidiary company in India, then the original name of the holding company as it is maybe allowed with the addition of word India or name of any Indian state or city.”
Process of Name Approval
SPICe+ would have two parts viz.
SPICe+ would have two parts viz.:
- Part A – Name Approval
- Part-B- Incorporation of Company
A: PART A-for Name reservation for new companies
Login on MCA Website
Applicants have to log in to their account on MCA Website. (Pre-existing users can use the earlier accounts or new users have to create a new account.)
After Login the following screen will appear:
B: Click on New Application and the following window will open:
(This form can’t be downloaded; it has to be filled on a real-time basis)
Details required to be mentioned in the online form:
- Type of Company (i.e. Producer, Part I, OPC, Section 8, etc.)
- Class of Company (whether Private, Public)
- Category of Company (whether Company limited by shares, limited by Guarantee or unlimited)
- Sub-category Union Government, State Government, Non-Government Company, Subsidiary of Company incorporated outside India)
- Main Division of Industrial Activity (enter number belonging to Industrial Activity)
- Description of the main division
- Particulars of Proposed or Approved Name. (User has to enter the name he wants to reserve, for the incorporation of a new company. Users are requested to ensure that the proposed name selected does not contain any word which is prohibited under Section 4(2) & (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Incorporation) Rules, 2014. Users are also requested to read and understand Rule 8 of the Companies (Incorporation) Rules, 2014 in respect of any proposed name before applying for the same. For Name Search: http://www.mca.gov.in/mcafoportal/showCheckCompanyName.do)
Stakeholders are requested to also check the Trademark search to ensure that the proposed name is not in violation of provisions of Section 4(2) of the Companies Act, 2013, failing which it is liable to be rejected. For Trade Mark Search: http://www.ipindia.nic.in/index.htm
Note: Two fields are available ie the two proposed names can be entered
- Choose File (Any attachment)
This option is available to upload the PDF documents. It is not mandatory to attach any document except in case where a name which requires the approval of a Sectoral Regulator or NOC etc. if applicable, as per Companies (Incorporation) Rules, 2014. Only one file is allowed, if have multiple then scan into one document. The attachment size cannot exceed 6 MB for both Part A and Part B has taken together.
C: Fill the given Information and save the application as follows:
- Fill the Information
- Save the Application
- Submit the Application
After Submit below given window will open:
Here stakeholder has two options:
Option 1: Submit Name application and make payment of the same for name approval. Payment of Rs. 1,000/-
Option 2: Click on “Proceed for Incorporation”
After click on “Proceed for Incorporation” below given window will open:
NOTE: * Approval of Name through “PART-A” is an optional way. Companies can also directly apply for the Information after continuation with PART B form.
It is advisable to go through the PART-A route
Part B- Incorporation of Company
STEP-II: Information/ Documents required from Foreign Company
- Apostille / Notarized copy of the resolution of foreign Company ‘mentioning the name of an authorized representative, no. of subscription of shares.
- Apostille/ Notarized copy of ID Proof of authorized representative, if such person is non – resident of India.
- Apostille/ Notarized copy of Charter of Foreign Company.
- Name of one Resident Director.
- 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 the Company applicant have to prepare the following below mentioned Documents;
- Memorandum of Association of Company (Physical copy of MOA shall be prepared; e-MOA (INC-33) can’t be prepared). (Duly apostille or notarized in country of origin).
- Article of Association of Company (Physical copy of AOA shall be prepared; e-AOA (INC-34) can’t be prepared). (Duly apostille or notarized in country of origin).
- INC-9 declaration by a first subscriber(s) and director(s) (Duly apostille or notarized in country of origin). If all the subscribers having PAN/DIN then INC-9 shall be e-INC-9 download from the dashboard.
- DIR-2 declaration from first Directors along with Copy of Proof of Identity and residential address. (Duly apostille or notarized in country of origin).
- Declaration from the foreign subscribers in respect of not having PAN. (Duly apostille or notarized in country of origin).
- NOC from the owner of the property.
- Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);
- Copy of the utility bills (not older than two months)
- 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)
- Digital Signature with only one Subscriber is enough for the Incorporation of the Company.
- DIR-2 from the Resident Director along with a self-attested copy of PAN and resident Proof.
STEP – IV: Fill the Information in Form:
Once all the above-mentioned documents/ information are available. The applicant has to fill the information in the e-form “Spice+”.
Features of SPICe+ form:
- Web-based: This is a web-based form, which means this form can’t be download. It will be filled on the MCA website online only.
- Online Information: This form once online information filed will be saved there only and can be accessed in the dashboard of the login ID.
- Full details of PAN & TAN:
It is mandatory to mention the details of PAN & TAN in the Incorporation Form Spice+. Link to find out of Area Code to file PAN & TAN are given in the Help Kit of SPICE+.
- Attachment of Documents: In web-based form, only promoters have to attach documents pdf files.
- Download PDF form: After the complete the filing of information in a web-based form. Download the PDF file of the form from the dashboard.
- Process after Downloading of PDF: Below given steps have to use for the incorporation of the company.
STEP – V: Fill details of GST, EPFO, ESIC, BANK Account in AGILE PRO:
After the proper filling of the SPICE+ form, the applicant has to move on filling of information in the AGILE PRO form Dashboard Link. All the information which is common in PART-B and AGILE PRO shall be auto fill in AGILE Pro. It is also a web-based form.
- GST: If Company wants to apply for GST it has to select YES in the form and fill the information in the form.
- EPFO/ ESIC: It is mandatory to apply for ESIC and EPFO.
- However, as per their concerned department company not required to file a return till the date applicability of provisions of the same on such company.
- Bank Account: It is mandatory to open a bank account through this form. The bank account branch shall be assigned according to the nearest branch to the Registered office of the Company.
STEP – VI: Fill details of INC-9:
INC-9 shall also be generated web-based and need affixation of Directors/ subscribers on the same. It shall not be generated web-based in one situation when at least one director/ subscriber not having DIN and PAN both.
STEP – VII: Download PDF of all the web-based forms-:
After the filing of all web-based form i.e.
- Agile Pro
Download PDF of such forms from the dashboard given link. After downloading of PDF affix DSC on all the forms accordingly.
STEP – VIII: Filing of forms with MCA:
Once all forms ready with the applicant, upload all four documents as a Linked form on the MCA website and make the payment of the same.
STEP – IX: Certificate of Incorporation:
Incorporation certificate shall be generated with CIN, PAN & TAN details over it.
Features of SPICe+ form:
- The maximum details of directors are TWENTY (20).
- Maximum THREE (3) directors are allowed for filing application of allotment of DIN while incorporating a Company.
- 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.
- Applying for ESIC/EPFO/ Bank Account will be compulsory for all fresh incorporation applications filed in the new version of the SPICe form.
- The company can apply for GST, IEC also through the AGILE 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
- 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
- Registration for Profession Tax shall also be mandatory for all new companies incorporated in the State of Maharashtra w.e.f 15th February 2020
- 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.
Step –I: Receipt of Subscription Money from Foreign Subscriber.
Step –II: Filing of e-form 20A – Declaration of Commencement of Business.
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.
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
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