Doubt on share issue to a foreign national

Tax adviser



 

I have to register a Private Limited Company for software development in which one of the directors is a  foreigner and the shareholding by him is  75%.The total share application money of75,000/- is sent by him from his bank account to the newly formed company bank account in India.

 

Do we require any  document to be filed with ROC-MCA / RBI for alloting shares to Foreigner ?

 

 

 
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C.A



At present as per company law ,such provision ids not there ,,however as per new company bill,2011.. yes such form indicating pattern of shareholding and top 10 shareholder list is needed to be filed with the registrar


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CA in service & CS. dipmaj@ rediffmail.com


Issue shares within 180 days from receipt of application money from NR and file FC GPR part A within 30 days to RBI. Check that the investment falls within the sectoral caps of FDI guidelines / FEMA 1999 read with Rules framed thereunder.


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Company Secretary



You need to file FIRC copy with RBI through your authorised banker and an FCGPR needs to be filed  with RBI statting the allotment made to foreign subscriber. This FCGPR should be within 30 days of incorporation.

 

 


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Company Secretary 2004



Originally posted by : Dipjyoti Majumdar

Issue shares within 180 days from receipt of application money from NR and file FC GPR part A within 30 days to RBI. Check that the investment falls within the sectoral caps of FDI guidelines / FEMA 1999 read with Rules framed thereunder.


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CS



Hello,

As per my understanding, there is no restriction as such as far as MCA is concerned. You will need to comply with RBI provisions.

  1. Check whether the investment is allowed as per FDI policy and there is no sectoral cap
  2. Once you receive Share capital money from the foreign investor, intimate the same to RBI within 30 days in Advance reporting form (Annexure II)
  3. Please note that you will need to issue share capital within 180 days of receipt of funds otherwise the funds has to be repatriated.
  4. Upon Issue of Shares, you will need to intimate the same to RBI in FC-GPR form within 30 days of such issue
  5. An annual return regarding the FDI in Annual Return on Foreign Liabilities and Assets has to filed every year.

Documentation for reporting of inward remittance received

  • Advance reporting form (Annexure II) duly filled & signed by the client
  • Certified copies of FIRC/s, evidencing receipt of remittance. Purpose of FIRC should be in line with the transaction.
  • KYC report on Non-resident investor from the overseas bank remitting the amount

Documentation for form FC-GPR - Issuance of FDI instruments

  • Form FC-GPR (Annexure I) duly filled & signed by Managing Director/Director/Secretary.
  • Certificate from company secretary as per guidelines
  • Certificate from Category I Merchant Banker or Chartered accountant for valuation of FDI Instrument as per the RBI guidelines
  • Certified copies of FIRC’s
  • Unique Identification numbers allotted for all the remittances received as considerations for issuance of shares/debentures. In absence of the same, RBI acknowledged copy of the advance reporting submitted earlier is required.
  • Board Resolution.

Expert’s views are solicited.

Thanks


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Company Secretary



RBI approval is required by filing report to RBI within 30 days of receipt of foreign remittance and file form FCGPR with RBI within 30 days of allotment of shares.
 
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