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

Published: 05 Sep 2024  |  Last updated: 19 Jan 2026
Author: Treelife
Practice area: Compliance
Tags: wholly owned subsidiary, wholly owned subsidiary in india by foreign company, WOS, WOS in India
Source: https://treelife.in/compliance/incorporation-of-a-wholly-owned-subsidiary-wos-under-companies-act-2013/

## 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](https://treelife.in/legal/setting-up-a-wholly-owned-subsidiary-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***

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