Advantages of Indian Subsidiary Company

The Indian subsidiary company is one whose interests are owned, controlled, or controlled by another company. The holding company and subsidiary company relationship can be determined using the preference share capital and paid-up equity share capital of the subsidiary company. It can be wholly or partially owned by another corporation. It’s worth noting that the parent company or holding company that owns the subsidiary is referred to as a parent company or holding company. A holding company, on the other hand, differs slightly from a parent company.

The Advantages of an Indian Subsidiary Company are given below:-

Foreign Direct Investment in India  
 

The FDI is allowed 100% for the increasing growth of several business industries in India without any prior approval. However, in the business of Proprietorship, Partnership and LLP require prior Government approval for FDI.

Limited Liability  
The liability of the members and the directors is strictly limited to their shares in the company. Therefore no member or Director is responsible for any loss or financial distress suffered by the company. The assets personally held by Shareholders/Directors will not be at risk or not seized by any banks, creditors or government.

Perpetual Succession  
Perpetual succession is the continued existence of the company which means any changes in members such as death, bankruptcy, exit, transfer, etc. do not affect the existence of the company.

Scope of Expansion  
The expansion of the business is comparatively higher as it is easy to raise capital from any financial institution, venture capitalist, and investor. It has all the advantages of the Private Ltd Company, which gives more transparency.

Borrow funds  
The wholly-owned subsidiary company in India can borrow funds in the form of loans from financial institutions.

Sue and sued  
The Indian subsidiary company has the capacity to sue and can be sued. It has its own legal capacity being a legal person.

Acquire property in India  
The foreign subsidiary company has an independent structure and hence, it is permitted to buy properties in India.

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