FEMA: Valuation of Shares of New Pvt Ltd Co receiving FDI
This query is : Open
24 April 2009
HI
A PVT Ltd Co was formed June 2008. The company has received FDI in August 2008, Rs 16 Lacs for which no Legal compliances have been made. The Company is in activity of Consulting Engineering and other Engineering related activites. My Question is that if Rs 16 Lacs received I show as FDI in Equity Capital, wherein Rs 10 shares are issued at a Premium of Rs 48, will it raise any problem. I have gone through the CCI Guidelines for Valuation of Shares:
Net Asset Value: Not applicable as this company has no latest audited Balance Sheet, and this is First Year.
Profit Earning Capacity Value: Not applicable as the method applies to Trading and Manufacturing Compnay, and this is a Consulting Engineering company
Market Value: N/a since Pvt Ltd Co
Fair Value: This method starts taking avg of First 2 methods, which are N/a
Kindly let me knw, if I go by the random issue price of Rs 58( FV 10 & Premium 48) will there be any non compliance
Thank You
A PVT Ltd Co was formed June 2008. The company has received FDI in August 2008, Rs 16 Lacs for which no Legal compliances have been made. The Company is in activity of Consulting Engineering and other Engineering related activites. My Question is that if Rs 16 Lacs received I show as FDI in Equity Capital, wherein Rs 10 shares are issued at a Premium of Rs 48, will it raise any problem. I have gone through the CCI Guidelines for Valuation of Shares:
Net Asset Value: Not applicable as this company has no latest audited Balance Sheet, and this is First Year.
Profit Earning Capacity Value: Not applicable as the method applies to Trading and Manufacturing Compnay, and this is a Consulting Engineering company
Market Value: N/a since Pvt Ltd Co
Fair Value: This method starts taking avg of First 2 methods, which are N/a
Kindly let me knw, if I go by the random issue price of Rs 58( FV 10 & Premium 48) will there be any non compliance
Thank You
25 April 2009
Dear Pradeep
What FEMA says is the issue price should not be less than Fair Value as per CA certificate.
Therefore if the issue price is more than the FAIR VALUE it will be well within the provisions of FEMA 1999
Rgds
Vivek Hegde
What FEMA says is the issue price should not be less than Fair Value as per CA certificate.
Therefore if the issue price is more than the FAIR VALUE it will be well within the provisions of FEMA 1999
Rgds
Vivek Hegde
25 April 2009
Vivek, thanks for responding
That is exactly what I am asking
How do I determine the Fair Value, as the Fair Value method starts with the average of Value determined by NAV & PECV. Or is there any other method of determinig Fair Value?? If so please let me know.
That is exactly what I am asking
How do I determine the Fair Value, as the Fair Value method starts with the average of Value determined by NAV & PECV. Or is there any other method of determinig Fair Value?? If so please let me know.
27 April 2009
Dear Pradeep
In case of start up companies u can take the face value as fair value.
If u want i can send u a draft CA Certificate for ur reference. Give ur E -mail ID.
Vivek
In case of start up companies u can take the face value as fair value.
If u want i can send u a draft CA Certificate for ur reference. Give ur E -mail ID.
Vivek
27 April 2009
It would be great of you, if u could send me the Certificate. You can send me the CA Certificate at rkjk.thane@gmail.com.
That means if we go ahead with the plan of issuing Rs 10 share @ Rs 48 premium, it will be fine
That means if we go ahead with the plan of issuing Rs 10 share @ Rs 48 premium, it will be fine
27 April 2009
Yes u r right..
Cheers
Vivek Hegde
Cheers
Vivek Hegde
05 December 2009
Dear pradeep
will u send me the draft of CA certificate in case newly incorporated company where no business has commenced,
Email id : naresh_suntan@rediffmail.com
will u send me the draft of CA certificate in case newly incorporated company where no business has commenced,
Email id : naresh_suntan@rediffmail.com
Message likes :
2 times
08 June 2013
Dear @CS Vivek Hegde
can you please send me draft ca certificate for valuation of a company as per RBI compliance for transfer of shares to non-resident company(FDI) to my email id: atul_singhal21@yahoo.com
kindly also tell me where to submit FC-TRS form.
can you please send me draft ca certificate for valuation of a company as per RBI compliance for transfer of shares to non-resident company(FDI) to my email id: atul_singhal21@yahoo.com
kindly also tell me where to submit FC-TRS form.
05 August 2014
Dear CS Vivek Hegde,
Can you please send me draft of CA Certificate for valuation of Shares in case of Newly incorporated company.
email: cmadhavchowdary@gmail.com
Can you please send me draft of CA Certificate for valuation of Shares in case of Newly incorporated company.
email: cmadhavchowdary@gmail.com
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