Wholly Owned Subsidiary or Joint Venture Company

As Domestic Entity

Why India

Why India

As Foreign Entity

Comparison Table

Summarised Comparison Table of all entry Options

Domestic EntityWholly Owned Subsidiary (WOS)
or Join Venture Company (JVC)

WOS or JVC in India can be incorporated as a Private Limited Company or a Public Limited Company.

Governing Authority- Governing Authority for the incorporation of Private Limited or Public Limited Company in India is the Registrar of Companies.

Governing Law- The Companies Act, 2013 and the rules and regulations made there under.

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Best of Everthing

Apart from the difference from the compliance point of view, the basic difference between a Private Limited Company and a Public Limited Company are as follows:

Particulars	Public Company	Private Company
Minimum Directors	3	2
Minimum Subscribers	7	2
Minimum Authorized Capital	Nil	Nil

Eligibility Criteria-

Foreign Direct Investment in India in WOS or JVC is permitted under the following two routes:

Automatic Route:

Indian companies can issue shares under the automatic route up to 100% of their paid-up capital in those sectors wherein Foreign Direct Investment is permitted up to 100%.

In certain other sectors, foreign investment is limited to a prescribed percentage ceiling.

Government Approval

All other cases where the automatic route is not applicable require prior specific approval from the Foreign Investment Promotion Board (commonly referred to as FIPB).

Time Period- There is no particular time limit as to the duration of a Private/Public Limited Company. These entities shall carry on their business in India till the time they wound under the provisions of The Companies Act, 2013.

Permitted Activities-WOS/JVC can carry on the business activities as permitted by the Foreign Direct Investment policy of India.

Procedure:

Establishment of WOS/JVC in India

STEP-1

The following issues are to be decided up front by the parent Company: –

Individuals proposed to be appointed as Director;

(Minimum 2 for Private Limited Company and 3 for Public Limited Company)

*One of the Proposed Directors should stay in India for at least 182 days during the financial year)

Number of Shareholders and their shareholding ratio;

(Minimum 2 for Private Limited Company and 7 for Public Company)

Authorized and Paid-up Share Capital;
Business Objects;

(In-Principle Approval of appropriate authority/institute shall be required in case of certain objects)

Proposed Name;
Address for Correspondence till Registered Office is established;
Registered Office location;

(Name of the Indian City/State, where the Company proposes to establish its Registered Office once the company has been incorporated.)

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Follow the steps

STEP-2

Preparation of Documents: Basic documents required are

Digital Signature Certificate (DSC) of every Director;
Attested Identity (ID) and Address proof of the individuals proposed to be appointed as Directors
Attested Board Resolution for Name Approval and Incorporation from parent company;
Attested Authority Letter/Power of attorney in favor of ‘KNM’

Memorandum and Articles of Association of the proposed WOS;
Attested Subscriber sheet required to be attached with Memorandum and Articles of Association;
Attested Articles of Association and Certificate of Incorporation of the Parent Company;
Attested Verification of Proposed Director for application for DIN (Director Identification Number)
Attested Declaration from Individuals proposed to be appointed as Directors declaring that one is not convicted of any offense in connection with the promotion, formation or management of any company:
- - Each subscriber individually;
  - Every person named as first Director
Proof of nationality of the subscriber to the Memorandum and Articles of Association.
Proof of Identity and Address of subscriber to the Memorandum and Articles of Association
Attested Affidavit from proposed directors for non-acceptance of public deposits;
Disclosure of interest and directorship from the proposed directors;
Consent from proposed directors to act as first directors;
Declaration by the registered owner not holding beneficial interest in shares, if any.

STEP-3 Filing of documents with the relevant Government authority and subsequent follow up.