Foreign shareholder

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amit sharma (Querist)
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17 May 2012 while incorporating a company if there is a foreign shareholder who is also amongst first subscribers to MOA but is not acting as a director .In this case is there any special documents or information is required for filing Form 1A, Form 1,Form 32 and Form 18.This is urgent.Also whether any special para is required in MOA & AOA in this regard????

Ajay Mishra

Ajay Mishra (Expert)
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17 May 2012 Hi

Yes, subscription page MOA and AOA is required to be signed by subscriber own hand written and such page will be certified by ambecy of that country where such subscriber resides.

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Ajay Mishra

Ajay Mishra (Expert)
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17 May 2012 Hi

There are some instruction for being a subscriber of MOA/AOA of Indian Company:

NON-RESIDENT INDIAN AS SUBSCRIBER TO THE MOA/AOA

The Reserve Bank of India had given general permission under section 29(1)(b) of the former FERA, 1973 to NRI to subscribe to the MOA of an Indian company and to take shares as a subscriber .(Notification No. FERA 143/93-RB, dated 26-4-1993 issued by RBI, Mumbai in this regard is reproduced hereunder:

“The RBI has given general permission to NRI to subscribe to the MOA/AOA of Indian Company for the purpose of Incorporation of the company subject to the condition that:-

(a) the total face value of the shares to be taken by NRI does not exceed Rs. 10,000
(b) the company is being manly formed for undertaking industrial activities
(c) the MOA of such company does not permit the company to take up any agriculture/plantation activities and to deal in real estate business other than developing real estate, and
(d) such company shall file a declaration in the prescribed form with the RBI regarding particular of such shares issued within 900days from the date of incorporation of the company.

DCA Circular dated 16-2-1995 clarifies that there can not be any restriction for incorporation of a company whether all the subscriber to the MOA/AOA/ proposed directors are residing abroad, being either foreign nationals, or NRI subject to the approval of RBI, where necessary.

The RBI may issue such a general permission also under FEMA, 1999 also. The FEMA(Permissible Capital Account Transactions) Regulations, 2000 allow persons resident outside India to invest in an issue of security by body corporate or an entity in India.

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