Union Budget 2023-24
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  • Which form has to be filed in case of voluntary conversion of One Person Company?

    Form INC-6 has to be filed within 30 days of voluntary conversion of One-Person Company 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 INR50 lakhs or its average annual turnover).

    For more information, click here.

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  • Whether the name of a Limited Liability Partnership can end with words like ‘Limited' or ‘Pvt. Limited'?

    No, the name of an LLP cannot end with words such as ‘Limited’ or ‘Pvt. Limited’. Name of an LLP shall end with either ‘Limited Liability Partnership’ or ‘LLP’. The word ‘limited’ shall be allowed in name only within ‘Limited Liability Partnership’.

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  • Is it mandatory to appoint a Resident Director in a Company?

    Yes, there is a mandatory requirement to appoint at least One (01) Resident Director in a Company. Section 149(3) of the Companies Act. 2013 (“The Act”) states that every Company should have at least one Director who has stayed in India for a total period of not less than 182 days in the Financial Year.

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  • What should be the quorum of an AGM (Annual General Meeting) of Indian subsidiary?

    Quorum for the AGM of an Indian subsidiary is two members personally present. In case of corporate shareholders, the respective shareholders would be required to authorize two different individuals to represent them in the AGM. Representation letters supported by the board resolutions would be required to be maintained in this regard

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  • What are the key prerequisites for setting up of an unlisted public limited company in India?

    The key prerequisites for setting up an unlisted public limited company are the following: 

    • Minimum three directors – mandatory one resident director but not required to be a citizen of India
    • Minimum seven shareholders – shareholders may be either corporates or individuals  
    • No minimum capital threshold, should have at least seven shares, if the proposed company will be limited by shares
    • Physical space to be identified as a registered office

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  • How can the name be reserved prior to registration of company ?

    For reservation of a name prior to filing SPICe (INC-32),you can use RUN facility provided by MCA for reservation of name.
    For further details please access following link.

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  • Which act governs Company formation and operations?

    Ministry of Corporate Affairs via Companies Act 2013 regulates incorporation of the company, responsibilities of a company, directors, dissolution of a company.

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  • What are the implications of establishment of PE (Permanent Establishment) in India, on the expats?

    The assignees would be denied the benefit of short stay exemption under tax treaty as their salary expenditure would be deemed as deduction claimed by the foreign entity. Thus, the salary income earned by expats would become taxable in India.

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  • Can an existing partnership firm be converted to LLP?

    Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of the LLP Act. Form 17 (MCA Form) needs to be filed along with Form 2 (MCA Form) for such conversion and incorporation of LLP.

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  • Can we enter the conditions of private company as required under Section 5 of the Companies, Act, 2013 in SPICe AoA(INC-34)?

    Yes, SPICe AoA (INC-34) has facility for adding, modifying, and deleting Articles.
    For further details please access following link.

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  • What are the possible sectors where FVCI can invest?

    An FVCI can invest in an Indian company engaged in Biotechnology, IT related to hardware and software development, Nanotechnology, Seed research and development, Research and development of new chemical entities in pharmaceutical sector, Dairy industry, Poultry industry, Production of bio-fuels, Hotel-cum-convention centres with seating capacity of more than three thousand and Infrastructure sector.

    For more information, click here.

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  • What is Foreign Portfolio Investment?

    Foreign Portfolio Investment (FPI) is an investment by a foreign investor in a group of assets such as stocks, bonds, cash equivalents.

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  • What is the institutional framework governing FDI in India?

    FDI in India is regulated under Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Original notification is available at link; subsequent amendment notifications are available at link2.

    Besides FEMA, 1999, FDI is also subject to other regulations as per Reserve Bank of India (RBI) and DPIIT. DPIIT is the nodal agency entrusted to formulate FDI Policy. It issues press notes to make amendments in the existing policy and also issues consolidated FDI Policy on an annual basis.

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  • What are the limits of FII/FPIs Investment in securities in India?

    Foreign Institutional Investor (FII) and Foreign Portfolio Investors (FPI) may in terms of Schedule 2 and 2A of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations, as the case may be, respectively, invest in the capital of an Indian company under the Portfolio Investment Scheme which limits the individual holding of an FII/FPI below 10% of the capital of the company and the aggregate limit for FII/FPI investment to 24% of the capital of the company. This aggregate limit of 24% can be increased to the sectoral cap/statutory ceiling, as applicable, by the Indian company concerned through a resolution by its Board of Directors followed by a special resolution to that effect by its General Body and subject to prior intimation to RBI. The aggregate FII/FPI investment, individually or in conjunction with other kinds of foreign investment, will not exceed sectoral/statutory cap.

     

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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

    For more information, click here

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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):

    1. where the pricing guidelines under FEMA, 1999 are not met, s.t. other conditions
    2. where the transfer requires prior approval of the Government per the extant FDI Policy
    3. where the transfer of shares attracts SEBI (Substantial Acquisition of Shares and Takeovers) Regulations
    4. where the investee company is in the financial sector.

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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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  • 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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  • 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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  • 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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