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Partnership with a non resident

Mayank Kapoor (.) (159 Points)

23 January 2012

I have a query.

Is it possible to form a partnership between an Indian resident and two Chinese residents?

If not, what are the alternatives to between a resident and non resident.

Regards

Mayank kapoor

9871009350

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10 Replies

Mihir Manohar (CA Final - Article Assistant) (474 Points)
Replied 25 June 2012

Fantastic Query but i thinh that this will be guided by Law between both the countries. I m not perfectly sure......but i m eager to know the solution.

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 16 December 2012

The same is not permitted as per FEMA.

Anuj

femaquery @ gmail.com

Mayank Kapoor (.) (159 Points)
Replied 17 December 2012

hmm. Thank you,

Anuj can you help me in the case of a company.

I want to form private limited company and it will have two Foreign Directors and the head office wants to hold 100% share in that company. I have two queries related to it ;-

1.) Is it possible to give 100% shares to the Head office (Represented by the foreign partner) or it is

mandatory to give some part of the equity to any subsidiary company ?

2.) Notarization of the MOA from the foreign country is required in case Foreign Directors sign the MOA.

In case the directors are in India for 30 days and they sign the MOA , is notarization from the foreign

country still required??

I am also posting this query separately so you can reply in any of them.

Thanks.

Mayank Kapoor (.) (159 Points)
Replied 17 December 2012

Mihir even I was eager for a reply :)

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 17 December 2012

1. The answer shall depend on the work proposed to be done by the Indian Company.

2. MAy not be required subject to certain conditions.

Anuj

femaquery @ gmail.com

Nikhil Kaushik (Fellow CA) (85367 Points)
Replied 17 December 2012

Dear Mayank,

Answer to part 1 depends on the objectives of the proposed entity (please be guided by FDI investment guidelines)

Part 2, the MOA, AOA shall not require notarization. But the directors shall be required to take DIN number which shall require their ID and address proof documentation to be notarized/ consularised depending on the country they belong too.

Mayank Kapoor (.) (159 Points)
Replied 17 December 2012

Dear Anuj

1.) The company will deal in trading of medical equipments. The FDI allowed is 100% through

automatic route.

2.) Can you please specify the conditions of possible ??

Regards

Mayank

Mayank Kapoor (.) (159 Points)
Replied 17 December 2012

Dear Nikhil

1.) The FDI approval is not an issue as the company is aloowed 100% FDI through automatic route. My

point is regarding the company Law. Is it legally allowed to allot 100 % share to one foreign company

or it should be divided between two foreign company ( Like headquarter and its german subsidiary as 99% and 1% )

2.) I have received the DIN of the directors. The issue is regarding MOA. ROC will reject the papers if the signatures are not notarized for the foreign country.

Thanks and regards

Mayank

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7014 Points)
Replied 18 December 2012

As per Company Law there has to be 2 shareholders ina Pvt. Ltd. Company, hence it is necessary to divide the holding(in whatever ratio) amongst the two foreign Companies.

Anuj

femaquery @ gmail.com