Applicability of fema or any other law

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manish nagpal (Querist)
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28 February 2017 If an Indian shareholder transfer his share to entity outside india which is already a shareholder then does transfer of consideration from outside entity to indian shareholder attracts FEMA or any other law? Does FEMA prohibit this transfer of are there any limits? Please reply asap.
Thanks in advance :)

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 February 2017 Transfer of funds should be through approved banking channels as per FEMA. Share transfer requires approval of Govt/RBI.
See the link for more details.
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=26#Q8

manish nagpal

manish nagpal (Querist)
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28 February 2017 Are these restrictions same for section 8 company? Section 8 company share transfer requires approval of RBI?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 February 2017 Section 8 company don't have any share capital.

manish nagpal

manish nagpal (Querist)
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01 March 2017 Sir,

A company has to have minimum share capital of 100000. On account of this do have share capital of 900000 (Private placement). 3rd Shareholder(Indian individual) wants to transfer his share to 1st shareholder(outside india entity). Are there any restriction under FEMA to transfer share and received consideration?

Thanks in advance.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 March 2017 No restriction approval may be required see the link for more details.

manish nagpal

manish nagpal (Querist)
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01 March 2017 Thank you so much sir. But there is no link below your reply.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 March 2017 See the link provided already above.

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