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Incorporation of a Wholly Owned Subsidiary (WOS) under Companies Act, 2013

Written By

Sanmita Poojari

Published on

September 5,
2024

Last updated on

January 19, 2026
15:54

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AI Summary

A wholly owned subsidiary (WOS) is a company whose entire share capital is held by a single holding or parent company.
Incorporation of a WOS in India is governed by the Companies Act, 2013.
The incorporation application is processed by the Central Registration Centre (CRC), Ministry of Corporate Affairs.
The holding company must pass a board resolution authorising the setup of the WOS and specifying the proposed name options, paid up capital, and authorised signatories or nominees.
The holding company must check whether RBI or Government approval is required for receiving Foreign Direct Investment under the applicable FEMA route before proceeding.
The WOS must have a minimum of 2 directors, and at least 1 director must be a resident director as required under the Companies Act, 2013.
An authorised representative must be identified on behalf of the holding company to sign the documents submitted for incorporation.
A nominee shareholder of the holding company must be identified to hold the minimum required shares in the WOS on the holding company's behalf.
The authorised representative and the nominee shareholder must be two distinct individuals and cannot be the same person.

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A Wholly Owned Subsidiary (WOS) is a company whose entire share capital is held by another company, known as the holding or parent company. The process of incorporating a wholly-owned subsidiary in India is governed by the Companies Act, 2013. The application is processed by the Central Registration Centre (CRC), Ministry of Corporate Affairs.

Prerequisites for setting up a WOS (Private Company) in India

Holding Company to pass a resolution authorising the setup of a WOS in India and identifying the proposed name(s); paid up capital and authorised signatories / nominees of the WOS
Check if RBI/Government approval is required for receiving Foreign Direct Investment (FDI) Identify minimum 2 directors, 1 of whom shall be a Resident Director
Identify an Authorised Representative on behalf of Holding Company to sign documents to be submitted for incorporation
Identify a Nominee Shareholder of the Holding Company who will hold minimum shares in the WOS on behalf of the Holding Company

Note: The Authorised Representative and Nominee Shareholder cannot be the same person

About the Author

Sanmita Poojari

Senior Associate | Compliance | sanmita.p@treelife.in

A compliance expert with a strong foundation in corporate legal and secretarial practices. Excels in corporate governance, regulatory filings, and advisory services on legal and financial matters, ensuring seamless corporate law compliance for clients.