Allotment of shares to foreigners

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SWARUP SARKAR (Querist)
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03 July 2015 Dear prof colleagues, What is the time limit for allotment of shares to foreigners? As per FEMA it is 6 months from receipt of application money. As per CA 2013, it is two months. Which will be superceded by which?

Pratik Shah

Pratik Shah (Expert)
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03 July 2015 You will have to comply provisions of both the Act.
Hence, you need to allot shares within 2 months. Automatically, FEMA provisions will be complied, since it will be in any case before 6 months.

Suppose, if you allot shares after 90 days, then the company will be liable for non-compliance of only Companies Act and not FEMA.

Being a Company, it has to follow each applicable law and hence you have no option but to allot shares within 2 months