What is the time limit for filing form INC-6?
Form INC-6 shall be filed within 30 days in case of voluntary conversion (if any One Person Company wants to convert itself into private/public company then also it can voluntarily apply through Form INC-6 after two years of its incorporation) and within six months of mandatory conversion (In case paid up share capital of an One Person Company exceeds fifty lakh rupees or its average annual turnover).
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Can more than one Liaison Office be set up?
Yes. Requests for establishing additional Liaison Offices may be submitted through fresh FNC form duly signed by the authorized signatory of the foreign entity in the home country to the Reserve Bank of India.
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How long will the directors be liable for the offences occurred during his tenure?
A director shall be liable for the offences / non-compliances occurred during his tenure even after his resignation and disassociation with the company.
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What are the exceptional scenarios in which pdf attachments (MOA, AOA) should be used instead of eMoA, eAoA with SPICe (INC-32)?
When the applicant is :
1. Non-Individual first subscriber based outside India
2. Non-Individual first subscriber based in India
3. Indian National being Subscriber other than director
4. Indian National being Subscriber-cum-Director
5. Foreign National being Subscriber other than director having valid DIN
6. Foreign National being Subscriber-cum-Director having valid DIN
7. Foreign National being Subscriber-cum-Director not having valid DIN
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Whether a LO, BO and PO (Liaison, Branch or Project) can acquire property for its operations?
- The BO / PO of a foreign entity, excluding an LO, shall be permitted to acquire property for their own use and to carry out permitted/incidental activities except for leasing or renting out the property. Please note that entities from China, Hong Kong and Macau shall require prior approval of the RBI to acquire immovable property in India for a BO/PO
- BOs/LOs/POs shall have general permission to carry out permitted/ incidental activities from leased property subject to lease period not exceeding five years
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Which authority allots the Director Identification Number (DIN)?
Any person intending to become a director in an existing company shall file Form DIR-3 and the same gets processed by the Central Government (Office of Regional Director (Northern Region), Ministry of Corporate Affairs). Further, the person who is appointed as a director upon filing Form SPICe INC-32 (which is a Simplified Proforma for Incorporating Company Electronically) will be issued a unquie 8-digit DIN by the approving authority (Central Registration Centre).
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What are the activities that are permitted to be undertaken by Project Office?
The list for PO as follows:
- Non-resident companies are generally permitted to establish POs in India, provided they have secured a contract from an Indian company to execute a project in India
- Further, the project must have secured the necessary regulatory clearances and is funded directly by inward remittance from abroad or the project is funded by a bilateral or multilateral international financing agency, or a company or entity in India awarding the contract has been granted term loan by a public financial institution or a bank in India for the project
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Whether all the directors, manager and secretary of the Company are required to register their DSC on the MCA portal?
No, only those persons who will be signing the e-Forms on behalf of the Company are required to register their DSC on the MCA portal.
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Is it mandatory for the name of the company to be indicative of the nature of its business?
No, it is not mandatory for the name to be indicative of the nature of its business.
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What should be the quorum for board meetings?
Quorum for the board meeting for an Indian subsidiary is two directors. In case of physical board meeting, two directors should be present in person.
Board meeting may also be held through an audio-visual means (for example, video conference) subject to compliance with conditions such as recording of the meeting, roll call, minutes of the meeting capturing the VC details, etc. There are restrictions with respect to matters which can be approved in a meeting held through this mode.
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Whether the draft prospectus for IDRs to be filled with SEBI?
Yes. Foreign issuer is required to file the draft prospectus with SEBI while complying with the requirements of SEBI (ICDR) Regulations, 2009. Any changes specified by SEBI shall be incorporated in the final prospectus to be filed with Registrar of Companies
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What are Indian depository receipts (IDR)?
An IDR is an instrument denominated in Indian Rupees in the form of a depository receipt created by a Domestic Depository (custodian of securities registered with the Securities and Exchange Board of India) against the underlying equity shares of issuing company to enable foreign companies to raise funds from the Indian securities Markets.
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Is transfer of capital instruments from resident to non-residents permitted?
Yes, transfer of capital instruments from resident to non-resident is permitted, s.t. prior permissions from the Reserve Bank of India, except in following cases (as mentioned in detail in Sub section 5.2 of the Consolidated FDI Policy 2017):
- where the pricing guidelines under FEMA, 1999 are not met, s.t. other conditions
- where the transfer requires prior approval of the Government per the extant FDI Policy
- where the transfer of shares attracts SEBI (Substantial Acquisition of Shares and Takeovers) Regulations
- where the investee company is in the financial sector.
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What are the pricing guidelines to be complied with given the scenario of transfer of shares from resident to non-resident?
Listed Securities: Price to be not less than the price worked out as per SEBI guidelines
Unlisted Securities: Price to be not less than fair value worked out as per any internationally accepted pricing methodology on arm’s length basis
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What is apostille and how to get the documents apostilled and notarized from the foreign country?
An "apostille" is a form of authentication/certification issued to documents for use in countries that participate in the Hague Convention of 1961. Apostille is to confirm the legal authenticity of any document. A list of countries that accept apostilles is provided by the US State Department.
Apostilles are affixed by Competent Authorities designated by the government of a state which is party to the convention.
A list of these authorities is maintained by the Hague Conference on Private International Law. Examples of designated authorities are embassies, ministries, courts or (local) governments.
An Apostille Certificate is official government Certificate printed or stamped onto the reverse side of a single page document or attached to multiple paged documents with green notary ribbon making it become one inseparable document. It authenticates the seal and or signature of the public official or authority such as a notary or registrar issuing the document.
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Whether any listing permission required for issuance of IDRs?
Yes, the issuer company is required to obtain in-principle listing permission from all the recognized stock exchanges in which the issuer proposes to get its IDRs listed.
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What is the FDI Policy for Asset Reconstruction Companies?
Up to 100% FDI is permitted for Asset Reconstruction Companies registered with Reserve Bank of India without government route.
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What is the procedure for making portfolio investments in India for a Non-Resident Indian?
An NRI needs to apply to a designated branch of a bank, which deals in Portfolio Investment. An NRI can purchase shares up to 5% of the paid-up capital of an Indian Company on a fully diluted basis. All NRIs taken together cannot purchase more than 10% of the paid-up value of the Company. The aggregate limit of up to 24%, with the approval of its Board of Directors and its General Body through a resolution and a special resolution, respectively.
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What are the pricing guidelines to be complied with given the scenario of transfer to shares from non-resident to resident?
Listed Securities: Price to be not more than price worked out as per SEBI guidelines
Unlisted Securities: Price to be not more than fair value worked out as per any internationally accepted pricing methodology for valuation of shares on arm’s length basis
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Can one increase the Company's authorized capital to get more external funding?
The authorized capital of a Company can be increased at any time as per the Companies Act, 2013 and in case the Article of Association does not allow this, the AoA can be amended by passing a “special resolution”. One may also consider getting External Commercial Borrowings.
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