As per Companies Act 2013, an Indian subsidiary company is defined as a company in which a foreign corporate body or parent body has a minimum of 50% of the entire share capital. The parent body of the company can have a grip or an eye over a subsidiary company and it is mandatory to undergo Indian subsidiary company Registration Online to follow the rules of the laws of the Indian Government
Limited Liability
Directors and members of the Indian subsidiary have indebtedness . this suggests , the administrators and members are strictly limited to their company’s share. indebtedness attribute protects the member and directors of the corporate within the time of any financial distress or loss within the company. Personal assets and properties of directors and members of the corporate won't be in danger albeit the corporate suffers thanks to financial problems.
Encourages Foreign Direct Investment
The Indian government has sanctioned 100% involvement of FDI or Foreign Direct Investment because it helps for fast-growing business industries. to form it more clear, FDI is allowed 100% with none preceding approval. albeit you're a LLP or a Partnership firm or Proprietorship then you'll require an approval beforehand from the govt for FDI.
Perpetual Succession
This means that regardless of whatever happens to the administrators and members of the corporate , the corporate will still run with none problem. Insolvency, death, change in members, transfer then on won't affect the existence of the corporate .
Scope Of Expansion
An Indian subsidiary gets all the advantages of a personal Ltd. . the expansion and development and expansion of business are easy and straightforward because it raises capital from speculator , financial institutions, and therefore the investor.
Obtain Property In India
Foreign subsidiary runs as an independent structure which provides them the proper to shop for properties in India.
Borrow Funds
A formally registered subsidiary in India is allowed to borrow funds from any authorized financial organization within the sort of loans.
Sue And Sued
Indian subsidiary companies work sort of a legal person; it are often sued and may sue.