Un-paid shares, in name of non-resident as per moa,tranfer

Since Non-resident has not paid any amount to Company for shares subscribed, the Company can not issue Share Certificates to Non-resident. Further, if Company has not issued Shares to Non-resident, the question of transfer of shares does not arise.

Dear Pratik,

Subscribers of MOA are deemed shareholders of the company. They don't need to take shares. As soon as they subscribe the MOA & file it with ROC along with other incorporation documents they become the members as well as shareholders of the company. 

As per above Non-Resident is deemed shareholder of the company. 

Would like to have you view on above and course of action to be taken. 

I don't think so. Even if you treat them as deemed shareholders, how will you be able to allot shares to foreign resident if the Company has not yet received money for it. As you also know that alloting shares to Non-resident requires reporting to RBI.

In normal situation (resident shareholder), your view of deemed shareholder may be correct. But in case of non-resident, without receiving money, it would be very difficult to allot shares to them becasue you need to comply with FDI reporting and rules.

As per my opinion, you can not transfer such shares unless you comply with all the procedures properly. However, kindly wait for others' views if they have different opinion. Thanks

Agree with Prateek.. though partially.. Even in case of resident subscribers, the shares will have to be first madr fully paid up, before being able to transfer them.

Further, subscriber to MOA is a deemed Member only for the purpose of complying with the provisions that the company cannot be incorporated without a member. However, unless the subscriber pays for his shares, he cannot become a shareholder.

Thanks for your valuable opinion. Does taht mean first we have to allot shares to the Non-Resident after receipt of funds and compliance with RBI & FEMA notifications & provisions respectively. Afterwhich shares would be transferred.

 

Yes. your understanding is correct. first complete the allotment to Non Resident and issue him the Share Certificates. Then only the stamped and executed transfer deed ALONG WITH ORIGINAL SHARE CERTIFICATE will have to be submitted to the Company for registration of transfer of shares