The Indian subsidiary Company is the company whose interests are owned and controlled or owned by another company which can be represented as a parent company or holding company. A subsidiary company can be partially or wholly controlled by the parent company. The parent company must hold at least 50% of shares for setting up a Subsidiary company and when it held 100% of shares it is said to be a wholly â€“ owned subsidiary of a parent company.
Formation of Subsidiary companies or wholly-owned subsidiaries is preferable for extending the business to foreign countries. Hence, many of the multi-national companies preferably set-up their subsidiary companies to extend their company to foreign countries. A legal entity which is established in a Foreign country can invest and own a company registered in India by acquiring its shares, with a condition, at least minimum of one director should be an Indian and Indian resident. A subsidiary company should follow the Rules and Regulations of the country where it’s situated and A company can be registered as a Private limited company or Public limited company.