Company Structure

General
1

Already posted it over Tax Q&A by Quicko but no response till now.

So

Do take your time but answer all the queries, please.

All 6 companies are registered in INDIA, private & unlisted.

Suppose I have a company (Main Company).

The Main company has 5 wholly owned subsidiaries companies
S-1 , S-2 , S-3 , S-4 , S-5

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The Main company has no revenue but the subsidiaries have revenue.

Q-1) Is it possible to have such company structure (The Main company [INDIAN] having 5 wholly owned subsidiaries [INDIAN] companies) in first place ?

Q-2) How should I file taxes, only file tax for the Main company considering aggregate P&L of all subsidiaries (or) file tax separately for 6 companies.

Q-3) Can expenses incurred in any subsidiary be shown as Main company expense.

@Quicko

2

While waiting for Quicko’s response, you may want to read this…

The “main” company you refer to above is called a holding company. More details here…

1 Like
3

Hello @dtyxg,

Here is the answer to all your queries:

  1. Yes, there is no such restriction so an Indian company can have multiple wholly owned subsidiaries.
  2. You will be required to file the income tax returns for all the 6 companies including one parent and 5 subsidiaries as they are all considered independent legal entities with different PANs.
  3. The expenses incurred by the subsidiary company can be claimed by subsidiary only. If any expenses is incurred by parent in subsidiary it is considered as investment.

Hope this helps!