One-time post-incorporation compliance

Key one-time compliances after incorporation

1. Receipt of subscription money

The shareholders remit the subscription money into the company’s bank account. This is essential for commencing business and forms the basis for the filings that follow.

2. Form INC-20A — declaration of commencement of business

Under Section 10A of the Companies Act, 2013, every company with share capital must file Form INC-20A within 180 days of incorporation. The form confirms that the company has received the subscription amount.

3. Issue of share certificates

Under Section 56 of the Companies Act, 2013, share certificates must be issued to the subscribers within two months of incorporation.

4. Form FC-GPR with the RBI

Under FEMA¹ read with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, the company must report the receipt of foreign investment to the Reserve Bank of India by filing Form FC-GPR within 30 days of share allotment.

5. Appointment of the first auditor (Form ADT-1)

The Board must appoint the first statutory auditor within 30 days of incorporation. If the Board does not do so, the members must appoint the auditor within 90 days at a general meeting. The company is required to inform the Registrar of Companies of such appointment by filing online Form ADT-1.

6. Declaration of beneficial ownership — Forms MGT-4, MGT-5, and MGT-6

In a WOS, the nominee shareholder holds certain shares on behalf of the foreign parent. This creates a distinction between the registered owner and the beneficial owner, which requires compliance under Section 89 of the Companies Act, 2013.

• Form MGT-4. Filed by the nominee shareholder, declaring that they are not the beneficial owner, within 30 days of the nominee’s name being entered in the register of members.
• Form MGT-5. Filed by the foreign parent, declaring itself the beneficial owner, within 30 days of acquiring the beneficial interest.
• Form MGT-6. Filed by the WOS with the ROC within 30 days of receiving MGT-4 and MGT-5, disclosing the declarations.

7. Significant beneficial ownership — Forms BEN-1 and BEN-2

Under Section 90 of the Companies Act, 2013, read with the Companies (Significant Beneficial Owners) Rules, 2018, every Indian company must identify and report its Significant Beneficial Owners (SBOs): the individuals who ultimately own or control it, even indirectly. A WOS must trace the ownership of the foreign parent up to the natural person who qualifies as the SBO.

• Form BEN-1. Furnished by the individual SBO to the Indian subsidiary within 30 days of acquiring SBO status.
• Form BEN-2. Filed by the Indian subsidiary with the ROC within 30 days of receiving BEN-1.

Optional registrations, by business model and threshold

Depending on the nature, scale, and location of the business, some further registrations may apply:

• GST registration, where turnover is expected to exceed the prescribed limit or the company plans inter-state trade.
• Shops and Establishment registration, mandatory under state law for any commercial establishment.
• Professional Tax registration, applicable in certain states.
• Import Export Code (IEC), required for businesses involved in import or export.

Post-incorporation compliance checklist

Conclusion

Incorporating a WOS is only the first step in setting up operations in India. Completing the post-incorporation compliances accurately and on time is essential to building a compliant and credible foundation. These early filings and declarations signal the company’s commitment to Indian regulatory standards and make for a smooth transition into active business. Foreign parents are well advised to approach this phase with careful planning and experienced support, to avoid regulatory complications later.

At CorpNinja Advisors, we help foreign companies establish and maintain compliant operations in India, from incorporation through to ongoing support.