02 October 2013
Sale or Purchase of Shares of an Indian Company by NRI or citizen of other countries is governed by a proper procedure prescribed by RBI.
In your case first the fair share value was to calculate. If it is quoted then Market Value becomes the base point and if of Non Listed or Private Company then book value is worked on three/year five projected Profit & Loss and Balance Sheet. The figures of this projected PL and BS are used to get Book Value of Shares on Cash Discounted Flow Method. Share Value thus arrived is to be certified by a qualified CA.
After certification of CA the total amount is received from the BUYER in foreign currency. The receiving Bank issues FIRC.
And then FC TRS procedure is taken up with the RBI but through the Bank issuing FIRC.
Afterwards request for TRANSFER OF SHARES is lodged with Board of Directors.
The Company reports this transfer on Form 20B to ROC after next AGM.
Now in case you have received amount in Foreign Currency (US Dollars or GBP or Euro) and not followed or will not follow the above detailed procedure then transfer of Shares can not be accepted.
02 October 2013
As far as section 56(2)(viib) is concerned it clearly states that consideration should be recieved from a Resident.Non residents are out of the purview of sec 56(2)(vii b)
But Mr Shyam has stated that a foreigner has paid consideration. If my answer in this context is complete and correct. You both being a CA so on upper ladder please.
03 October 2013
@ V K Bajaj! Mr Shyam has already clearly asked that the director is foreigner and a non resident and on the basis i have adviced him after going through the provisions u/s 56(viiib).
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