Regarding procedure to make a foreigner, director in indian
This query is : Resolved
01 June 2013
SIR,
I WOULD LIKE TO SELL THE SHARES OF MY COMPANY TO A CITIZEN OF BAHAMAS & WANT TO MAKE HIM A DIRECTOR IN MY COMPANY. SO I WANT CLARIFICATION ON FOLLOWING POINTS:
1. HE WILL INVEST IN MY SHARES SO IT WILL BECOME F.D.I.. SO WHAT ARE THE REQUIREMENTS TO BE FULFILLED.?
2. WHAT ARE THE APPROVALS I WANT TO TAKE FROM F.I.P.B. OR R.B.I.?
3. WHAT ARE THE REQUIREMENTS TO BE FULFILLED FOR M.C.A. APPROVAL.?
DETAILED PROCEDURE
I WOULD LIKE TO SELL THE SHARES OF MY COMPANY TO A CITIZEN OF BAHAMAS & WANT TO MAKE HIM A DIRECTOR IN MY COMPANY. SO I WANT CLARIFICATION ON FOLLOWING POINTS:
1. HE WILL INVEST IN MY SHARES SO IT WILL BECOME F.D.I.. SO WHAT ARE THE REQUIREMENTS TO BE FULFILLED.?
2. WHAT ARE THE APPROVALS I WANT TO TAKE FROM F.I.P.B. OR R.B.I.?
3. WHAT ARE THE REQUIREMENTS TO BE FULFILLED FOR M.C.A. APPROVAL.?
DETAILED PROCEDURE
22 June 2013
Hi
REPORTING OF FDI
(i) Reporting of Inflow
(a) An Indian Company receiving invest from outside India for issuing shares/ convertible debentures/preference shares under the FDI scheme, should report the details of the amount of consideration, to the Regional office concerned of the Reserve Bank not later than 30days from the date of receipt in the Advance Reporting Form.
(b) Indian company are required to report the details of the receipt of the amount of consideration for issue of shares/ convertible debentures through an AD Category-I bank, together with the copy of the FIRC evidencing the receipt of the remittance along with the KYC report on the non-resident investor from the overseas bank remitting the amount. The report would be acknowledged by the Regional Office concerned, which will allot a Unique Identification Number (UIN) for the amount reported.
(ii) Time frame within which shares have to be issued
The capital instruments should be issued within 180 days from the date of receipt of inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NER/FCNR (B) account of the non-resident investor. In case the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or the date of debit to the NER/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by onward remittance through normal banking channels or by credit to the NER/FCNR(B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and could attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the Reserve Bank, on the merits of the case.
(iii) Reporting of Issue of Shares
(a) After issue of capital the Indian company has to file Form FC-GPR not later than 30 days from the date of issue of capital.
(b) Form FC-GPR has to be dully filled up and signed by MD/Director/Secretary of the Company and submitted to the Authorised Dealer(AD) of the company, who will forward it to the RBI.
(c) The report of the receipt of consideration as well as Form FC-GPR have to be submitted by the AD bank to the Regional office concerned of the RBI under whose jurisdiction the Registered office of the company is situated.
(d) Annual Return on Foreign Liabilities and Assets should be filed on an annual basis by the Indian Company, directly with the “Advisor, Balance of Payment Statistical Division, Department of Statistics and Information Management, RBI, C9, 8th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai-400051”. This is an annual return to be submitted by 31st July every year, pertaining to all investments by way of direct/portfolio investments/re-invested earning/ other capital in the Indian company made during the previous years.
REPORTING OF FDI
(i) Reporting of Inflow
(a) An Indian Company receiving invest from outside India for issuing shares/ convertible debentures/preference shares under the FDI scheme, should report the details of the amount of consideration, to the Regional office concerned of the Reserve Bank not later than 30days from the date of receipt in the Advance Reporting Form.
(b) Indian company are required to report the details of the receipt of the amount of consideration for issue of shares/ convertible debentures through an AD Category-I bank, together with the copy of the FIRC evidencing the receipt of the remittance along with the KYC report on the non-resident investor from the overseas bank remitting the amount. The report would be acknowledged by the Regional Office concerned, which will allot a Unique Identification Number (UIN) for the amount reported.
(ii) Time frame within which shares have to be issued
The capital instruments should be issued within 180 days from the date of receipt of inward remittance received through normal banking channels including escrow account opened and maintained for the purpose or by debit to the NER/FCNR (B) account of the non-resident investor. In case the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or the date of debit to the NER/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by onward remittance through normal banking channels or by credit to the NER/FCNR(B) account, as the case may be. Non-compliance with the above provision would be reckoned as a contravention under FEMA and could attract penal provisions. In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the Reserve Bank, on the merits of the case.
(iii) Reporting of Issue of Shares
(a) After issue of capital the Indian company has to file Form FC-GPR not later than 30 days from the date of issue of capital.
(b) Form FC-GPR has to be dully filled up and signed by MD/Director/Secretary of the Company and submitted to the Authorised Dealer(AD) of the company, who will forward it to the RBI.
(c) The report of the receipt of consideration as well as Form FC-GPR have to be submitted by the AD bank to the Regional office concerned of the RBI under whose jurisdiction the Registered office of the company is situated.
(d) Annual Return on Foreign Liabilities and Assets should be filed on an annual basis by the Indian Company, directly with the “Advisor, Balance of Payment Statistical Division, Department of Statistics and Information Management, RBI, C9, 8th Floor, Bandra-Kurla Complex, Bandra (E), Mumbai-400051”. This is an annual return to be submitted by 31st July every year, pertaining to all investments by way of direct/portfolio investments/re-invested earning/ other capital in the Indian company made during the previous years.
22 June 2013
For appointing him as director take DIN of that foreigner. After getting DIN of that foreigner, take consent letter to be appointed as director of that company and appoint him at Board Meeting as additional director.
22 June 2013
Procedure for Appointment of Additional Directors.
1. Take consent of director and DIN/disclosure of interest
2. Call a Board Meeting for proposal of appointment of director
3. Hold a Board Meeting and appoint him as additional director.
4. File Form-32, with ROC, with in 30 days from the date of appointment.
5. Attach consent letter with Form-32, in case of public limited company.
6. Take entry in Minutes.
Procedure for Appointment of Additional Directors.
1. Take consent of director and DIN/disclosure of interest
2. Call a Board Meeting for proposal of appointment of director
3. Hold a Board Meeting and appoint him as additional director.
4. File Form-32, with ROC, with in 30 days from the date of appointment.
5. Attach consent letter with Form-32, in case of public limited company.
6. Take entry in Minutes.
30 September 2015
ajay stated law and procedure as per the request.
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