Key Regulatory Approvals Needed After Incorporation in India
Establishing a wholly-owned subsidiary in India provides several benefits to foreign companies. But, expanding into India is much more than incorporation; it is about strategic precision.
A business consulting firm ensures your WOS not only survives but thrives by mastering the post-incorporation compliances from the first day.
Post-Incorporation Compliances
- Financial Foundation: Bank Account
You need to open a current account with an Indian bank, and all business transactions will be handled through this account. This will require approval from the board during its first meeting. It is important to strategically choose a bank close to the office for ease of daily operations.
- Business Launch: INC – 20A
Once the account is successfully opened, the subscription amount is to be deposited, following which you need to submit the INC–20A to the ROC within 180 days from the date of incorporation. This form is a declaration stating that the subscription amount is deposited in the current account, and companies cannot start any business activity before its submission.
- Corporate Governance: Board Protocols
Conduct the first board meeting within 30 days of incorporation and thereafter hold at least four meetings per year (one in each quarter). The company must ensure board minutes are maintained as per the legal requirements.
- Finance Protocol: Appointment of Auditor
The WOS must, within 30 days from the date of incorporation, appoint the first statutory auditor, and the information must be submitted to the ROC using Form ADT–1. The auditor’s responsibility is to audit the financial accounts and ensure their accuracy and regulatory compliance.
- Ownership Protocols: Issue of Share Certificates
The company must issue share certificates to the shareholders within 60 days of incorporation. This is mandatory to formalize the entity’s shareholding structure.
- Annual Protocols: Filings
- Form MGT – 7: It is the annual return form and must be submitted within 60 days. The form includes information, such as registered office address, major business activities, shareholding, and changes in directorship, if any
- Form AOC – 4: Financial statements must be filed within 30 days post the annual general meeting. The annual statements include the P&L account, balance sheet, and director’s report.
- Documentation: Statutory Registers
The subsidiary must maintain statutory registers, such as contracts, charges, directors, members, and shareholder transfers. The registers must be updated regularly and made available for the statutory review as required.
- Taxation: Various Registrations
- For turnover exceeding threshold limits, GST registration is mandatory along with monthly/quarterly and annual GSTR1 and GSTR3 filings
- Procure PAN and TAN for tax filing and TDS requirements
- File Income Tax Returns, and when applicable, undertake a full tax audit
- All intercompany transactions must comply with transfer pricing regulations, and maintaining all supporting documentation is mandatory
- FEMA Protocols: Foreign Investments
- For FDI receipts, the entity must submit Form FC-GPR on the RBI’s FIRMS portal within 30 days from the date of share allotment
- Filing FLA Return disclosing all foreign assets and liabilities via RBI’s FLAIR system
Ignorance of the law is not an excuse. The Indian regulatory environment is complex and dynamic. Non-compliance not only invites penalties but can cause disruptions. Ensuring compliance is at the core of your India strategy, Greenvissage transforms regulatory obligations into strategic enablers. So, you can focus on growing your business and not worry about governance gaps.
Ready to ensure regulatory compliance? Connect with our experts; call on +91 8237857853 or drop us a mail at info@greenvissage.com.
