What is Subsidiary Company in India

Subsidiary company is any company whose interests are held and controlled or held by another company. Paid up equity share capital and preference share capital of the subsidiary company can be used to determine the holding company, subsidiary company relationship between two companies.

What is a Subsidiary Company?

There’s often a lot of confusion regarding the position of the subsidiary company and what it does. A subsidiary company is a company that is either owned or owned in part by another company. The company that owns the subsidiary is known as a parent company or a holding company. It should be noted that a holding company does slightly differ from a parent company, though.

What is WOS (Wholly Owned Subsidiary)

When one company is 100% owned by another company, it is called Wholly Owned Subsidiary of the company who had made 100% investment in it.

How To Set Up a Subsidiary

To setup one of these companies, you only need a sole director. The requirement for a company secretary was waived some years ago. The only restriction is that the sole director cannot then act as the company secretary. When you register as a sole director, you will enter both your residential address and a service address. Only the service address will appear in the public records.

The key here is that in the various documentation you submit regarding shareholders you will have both an individual director and another company as a shareholder. You are prohibited from having an entire company owned by another company.

Once you submit the documents, you will have a decision within 24 hours from Companies House.

Conclusion

Opening up a subsidiary isn’t a decision that you should take lightly. It isn’t always necessary and it may be better to simply open a different company from scratch. You have to make this decision by yourself. And it may be better to employ a professional agent to help with the opening of your subsidiary.

Know more about how to register company in India

Indirect Tax

What is an Indirect Tax?

An indirect tax such as Excise, Customs, Sales Tax, Service Tax, Value Added Tax (VAT), etc is a tax collected by an intermediary (such as service provider) from the person who bears the ultimate economic burden of the tax (such as the consumer/client). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons on which it is imposed. A direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be.

Indirect Taxes in India is administered and collected by the Central Board of Excise and Custom (CBEC) which operates under the Ministry of Finance, Department of Revenue. Company formation services in India

What are the types of Indirect Tax applicable in India?

The various types of indirect taxes applicable in India as on date are:

Service Tax

Service tax refers to tax collected by the government of India from certain service providers for providing certain services. The person who pays service tax can be either a service provider or a service receiver or any other person who is responsible for providing certain services. Company formation Gurgaon

Value Added Tax

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.
    For example, when a television is built by a company in Europe, the manufacturer is charged VAT on all of the supplies it purchases to produce the television. Once the television reaches the shelf, the consumer who purchases it must pay the applicable VAT. wholly owned subsidiary in Delhi

Central Excise Duty

 Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. Foreign company registration in Delhi

Customs Duty

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. Import of goods means bringing into India of goods from a place outside India. Setting up a subsidiary in Delhi 

Under all the laws applicable for indirect taxes, certain registration are required to be obtained and periodical returns are required to be filed by the assesses with respect to the indirect taxes collected from third parties failing which penalties may be levied by the authorities.