Board composition and governance, independent director appointment, related party transaction approval, audit committee, nomination committee and corporate governance compliance for foreign owned Indian subsidiaries.
Short, direct, on the record.
An independent director is mandatory for listed companies and for prescribed classes including public companies with paid up capital of INR 10 crore or more, turnover of INR 100 crore or more, or aggregate outstanding loans of INR 50 crore or more. Private limited companies (most foreign subsidiaries) are generally exempt unless they meet these thresholds.
RPTs must be approved by the board (with interested directors abstaining) and by shareholders through ordinary resolution if the transaction exceeds prescribed thresholds. For listed companies, SEBI LODR requires prior approval of the audit committee and shareholders through ordinary resolution for material RPTs. All RPTs must be disclosed in the board report.
No. At least one director must be a person who has stayed in India for a total period of not less than 182 days during the previous calendar year (resident director under Section 149(3)). The remaining directors can be foreign nationals with valid DINs and annual DIR 3 KYC compliance.
CSR is mandatory if the Indian subsidiary has net worth of INR 500 crore or more, turnover of INR 1,000 crore or more, or net profit of INR 5 crore or more during the immediately preceding financial year. The company must spend 2% of average net profit of the preceding 3 years on eligible CSR activities.
Share the subsidiary type, board composition and the governance concern for a preliminary assessment.