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Discussion > Corporate Law >

Issue of shares to NRI and Compliance

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Business

[ Scorecard : 235]
Posted On 02 February 2010 at 12:18 Report Abuse

Dear All,

A Private Limited Company issued shares of Rs. 10 Lakhs to NRI 2 years back.

but it has not intimated to RBI even the receipt of money and also the allotment of shares.

As per my knowledge the company should intimate the receipt of money to RBI with in 1 month, the shares should be issued with in 6 months form the date of receipt and within 1 month from the date of the allotment the compnay should file a return to the RBI.

But the company has not complied any of these .

can company comply these requirments now. and what may be the penalty or punishment for late filing.

Please give your valuable comment..

 

Thanks.

Uday.


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CA Adarsh Agrawal
CMD of SHAYVIDZ Group

[ Scorecard : 3597]
Posted On 02 February 2010 at 16:16

I think u shd check FEMA, 1999 for the same...





CS Ankur Srivastava
Company Secretary & Compliance Officer

[ Scorecard : 14896]
Posted On 02 February 2010 at 16:22

Dear Uday,

Yes, the company is required to intimate the RBI within 30 days of the foreign remittance( in case of automatic route) in form FCGPR. Further, within 30 days of allotment of shares to NRIs a report of allotment is also required to be submitted to RBI in form FCGPR. 

Hwever, if the company has not filed same reports, same can be filed now. There is no any penalty for late filing, However the RBI may asked the company for the reasons for such a delay in filing.




Megha Shah
Company Secretary & Corporate Legal

[ Scorecard : 45]
Posted On 17 February 2010 at 15:40

Uday,

u need to seek permission from the RBi for issue of shares aftr the expiry of 6 months.

If company could not issue the shares within the six months of the receipt of the foreign money...they have to refund the money and if they could not refund in those six months then company needs to go for compounding before RBi explaining the reasons behind the non issue of shares or non refund of money.

Given below is from the notification which might help u to decide abt ur case

 

3. The matter has been reviewed in consultation with the Government of India and it has been decided that, with effect from November 29, 2007, the equity instruments should be issued within 180 days of the receipt of the inward remittance. In case, the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be. The AD Category – I banks may allow such outward remittances after satisfying themselves with the bonafides of the transactions and that no part of the remittance represents interest on the funds received as advance. Noncompliance with the above provision would be reckoned as a contravention under FEMA and could attract penal provisions.

4. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the Reserve Bank on the merits of the case. Accordingly, AD Category – I banks may apply to the Regional Office concerned of  foreign Exchange Department of the Reserve Bank for refund of such advance.

5. In all cases where, as on November 28, 2007, 180 days have elapsed since receipt of funds and the equity instruments have not been issued, the companies are required to approach the Foreign Exchange Department of the Regional Office concerned of the Reserve Bank through their AD Category - I bank with a definite action plan either for allotment of equity instruments or for refund of the advance, with full details, for specific approval.




CA. Anuj Gupta
Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA

[ Scorecard : 6781]
Posted On 05 July 2011 at 16:49

Kindly check whetehr the amount is invested on repatraition Basis or Non repatriation basis by the said NRI.

 

Anuj

0-9810106211




Hitesh Khemchandani
Practicing Consultant

[ Scorecard : 43]
Posted On 25 August 2011 at 19:12

Dear Anuj

I am reviving this thread Again. If the investment is on non-repratriation basis, are there a seperate set of compliances and can you highlight what these compliances are

Regards

Hitesh




Arjun kumar
Finance officer

[ Scorecard : 31]
Posted On 17 November 2011 at 10:52

Hi,

What amount we should return back as excess amount received as FDI.

Take a example

INR as per FIRC Bank Charges as per FIRC Balance Amount
                               4,327                              337                          3,990
                             99,200                          1,655                        97,546
                         1,03,527                          1,992                    1,01,536
 Share issued                           99,000
 Balance Amount                             2,536

Then what amount should be returned back.Is Rs.2536 or Rs.2536+bank charges(4527)




CA. Anuj Gupta
Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA

[ Scorecard : 6781]
Posted On 17 November 2011 at 10:56

Rs. 2,536/- should be refunded as teh Company got only that amount.

 

Anuj

+91-9810106211

femaquery @ gmail.com




Amrin P. Himani
Article

[ Scorecard : 150]
Posted On 03 March 2012 at 14:55

Sir, after allotment of shares to NRI if any surplus remains can we refund the same surplus to the NRI ??? and if yes the in what period ???



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