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  • What is an Annual General Meeting (AGM)? When should a company convene its first AGM?

    Every company shall in each year hold in addition to any other meetings, a general meeting of its shareholders as its annual general meeting for adoption of audited financial statements, declaration of final dividend, etc

    The first AGM of a company should be held within a period nine-month from the date of close of first financial year.

    In any other case, within a period of six months from the date of closing of the financial year.

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  • Can AGM (Annual General Meeting) be held at a place situated outside the limit of city, town or village in which the registered office is situated?

    AGM of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance. However, AGM cannot be held outside India.

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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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  • Can a company maintain books of account in any place other than registered office?

    A company may maintain books of account and other relevant papers at any place in India as the board of directors may decide and the company should make a filing with the RoC (Registrar of Companies) in the prescribed form giving the full address of that other place. However, there are certain documents which are mandatorily required to be maintained at the registered office such as minutes of the meeting.

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  • Can one person simultaneously provide accounting and auditing services?

    The statutory auditor of a company cannot provide following services to the company or its holding company or subsidiary company:

    • Accounting or book keeping services
    • Internal audit
    • Design and implementation of any financial information system
    • Actuarial services
    • Investment advisory services
    • Investment banking services
    • Outsourced financial services
    • Management services
    • Other services prescribed under the rules

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  • Is there any cooling period for the existing auditors after the expiry of their term?

    An individual auditor who has completed his term of five years shall not be eligible for re-appointment as auditor in the company for five years from the completion term of five years.

    An auditor firm who has completed their two terms of five years shall not be eligible for re-appointment as auditor in the company for next five years from the completion of 10 year.

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  • What is the tenure of an auditor? What is the tenure of the first auditor?

    An individual can serve as an auditor for a term of five consecutive years. A firm can serve two terms of five consecutive years each, i.e., a total of 10 years as an auditor.

    Every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting.

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  • Who appoints the first auditor?

    As per Section 139(6) of Companies Act 2013, first auditor will be appointed by the board of directors of company within 30 days of incorporation of company. If the board fails to appoint the first auditor, an extra ordinary general meeting will be called by the board to appoint the first auditor within 90 days from the receipt of the information from the board of directors.

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  • Is a license necessary for carrying out money changing business?

    Yes. No person shall carry on money changing business without the possession of a valid licence issued by the Reserve Bank. Any person found undertaking money changing business without a valid licence is liable to be penalised under the Act ibid.

    For more information, click here.

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  • How to inform RoC about change in membership of OPC?

    The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the new member of the OPC.

    For more information, click here.

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  • What is Indirect Foreign Investment?

    If the investor company is not owned or controlled by resident Indian citizens, or is owned or controlled by persons resident outside India, then such investment is termed as “Indirect Foreign Investment” for the investee company.

    For more information, click here.

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  • How is India-Bangladesh trade relationship?

    India and Bangladesh signed their first trade agreement in 1972 and have engaged in multiple trade arrangements whenever the two countries recognise any opportunity in terms of comparative advantage. India has 'revealed comparative advantages' in many products that Bangladesh needs. Bangladesh has been provided duty free quota free access by India on all tariff lines except tobacco and alcohol under SAFTA. India’s exports to Bangladesh for the year 2017-18 (April to March) stood at US $ 8.46 billion and imports from Bangladesh during the financial year 2017-18 stood at US $ 0.68 billion.

     

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  • What is the highlight of India-Bangladesh bilateral relationship?

    India was the first country to recognize Bangladesh as a separate and independent state and, shortly after its independence in December 1971, established diplomatic relations with the country. Bangladesh is the one of the main development partners of India today. India has extended three Lines of Credits to the said nation in the last 8 years of worth US$ 8 billion.

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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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  • 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 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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  • What are the pricing guidelines to be complied with given the scenario of Issue of shares by Indian investee company to a person resident outside India?

    Listed Securities: Price to be not less than the price worked out as per SEBI guidelines

    Unlisted Securities: Price not less than the price worked out as per internationally accepted pricing methodology on arm’s length basis

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  • Are there any restrictions on the sectors for FDI in India?

    Yes, investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. as per the latest FDI policy.

    For more information, click here.

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  • What does Person of Indian Origin (PIO) stand for?

    ‘Person of Indian Origin (PIO)’ means a citizen of any country other than Bangladesh or Pakistan, if

    1. They at any time held Indian Passport, or,
    2. They or either of their parents or grandparents was a citizen of India by the Constitution of India or the Citizenship Act, or,
    3. The person is a spouse of an Indian citizen or a person referred to in sub-clauses (1) or (2).

    For more information, click here.

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  • What does the FDI policy entail with regards to issuing equity shares under government route?

    Issue of equity shares under the FDI Policy is allowed under the Government route for the following:

    • Import of capital goods/ machinery/ equipment (excluding second-hand machinery)
    • Pre-operative/pre-incorporation expenses (including payments of rent, etc.)

    However, these are subject to compliance with several conditions, as mentioned in sub-section (iv), section (6) of Annexure-3 of the Consolidated FDI Policy

    For more information, click here

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