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How to make an Indian company a subsidiary of UK?

There are 2 IT companies, 1 in the UK and 1 in India. They were established around the same time.

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Hello Sir,
Let me give you a description of the information we are looking for.

These 2 companies have different directors. Both are Pvt Ltd Companies. Due to their good relations over a period of more than 5years. They wish to join up so the other becomes a sister or subsidiary(whichever holds better gains), Is there any way I could gain some information as to how to join them? They are existing companies and both the companies pay their individual taxes in their own country. I hope I'm not missing anything but if I do, kindly do tell.
Thank you.

Replies (6)

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By Tax Dragon
11th Feb 2020 06:34

What is the end goal? Apart from good relations, is there any current connection?

Whoever owns the Indian would potentially be making a direct disposal. They need to take professional advice in India. We can't help them even if we wanted to.

The UK person clearly needs UK advice. ICAEW website, among others, might provide useful links. Will the Indian operations continue? It would be sensible for UK person to find out what that means for them... the way to do that is to take advice in India.

I don't happen to know any Indian accountancy body website from memory. As you're in IT I wouldn't dare to presume that I could use a search engine better than you.

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Replying to Tax Dragon:
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By bigtwig
11th Feb 2020 06:53

Thank you for responding.
Regarding our end goal: The trustworthy UK company owner, our friend has informed that joining the two as a subsidiary or sister company can enhance the business model. Then we can source clients for our work even better and exchange employees as per the demands of the individual projects with much less worries.
I think I understand what you mean by a direct disposal.
Both the country will have its operations continued. Nothing changes on those ends. Our aim is to streamline our business model in such a way that future business transactions can be easier. No matter it is about sourcing clients or handling accounts as a family.

Being a small company we thought it would seem fit to atleast get an overview first of what barriers or hurdles we might have to overcome and if they are worth the cost.
Thank you for your advice. If there is anything more you could add, that would be great. I will get in touch with an Indian accountancy firm as you advice.

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Replying to bigtwig:
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By Tax Dragon
11th Feb 2020 07:15

I think your friend may be misinformed, but perhaps I miss the point. Anyway, definitely take advice before you sign up to such plans.

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Replying to Tax Dragon:
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By bigtwig
11th Feb 2020 07:37

Ok thank you very much.

I will check on these points.

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By johngroganjga
11th Feb 2020 08:04

Your question is about how to join them, not whether to do so. The excellent responses above are about taking advice on the consequences of doing so before deciding whether to go ahead. I entirely agree that you should do so.

The simple answer to your question about how to make the Indian company a subsidiary of the UK company is that the shareholder of the Indian company must sell their shares to the UK company. The sale can be made for cash or for new shares in the UK company, as those involved see fit.

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Replying to johngroganjga:
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By bigtwig
11th Feb 2020 08:29

Thank you Sir. yes you are right about how to join them and not whether to do so.
I respect and I am glad to hear what the previous gentleman said.

You answer is what I was looking for. Thank you very much.
I am glad to have asked for help here in this forum.

You have a good day Sir!

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