prabhaaas (Company Secretary and Cost Accountant) (116 Points)
03 September 2014A private limited company in india which is a 100 % subsidiary of a Korean company wants to take a loan of rs.2.00 crores from the parent company in usd.
Can anyone help me with checklist
Gargi Ranade
(CS)
(410 Points)
Replied 04 September 2014
It seems that you are willing to avail External Commercial Borrowing??
Are you willing to bring the ECB for financing your capital expenditure plan??
Please read Master Circular on ECB on RBI site - Foreign Exchange Management Act
If yes then broadly you need to do following things
Compliance under Companies Act
1. Related Party Transaction Approval from the Shareholders of the parent Co.
2. check the borrowing power of the Board
3. Board Approval
Complaince Under FEMA
1. Prepare statement justifying the entire utilisation of Fund
2. Prepare ECB Agreement with all terms and conditions after taking into consideration ECB Master Circular of RBI, prepare Drawdown & Repayment Schedule
3. File Form 83 to AD.
4. Get the LRN From RBI
5. Bring the Money , Utilise same strictly for the purpose specified in Form 83 & agreement .
6. Keep the record of each utilisation, file ECB 2 every month.
Regards,
CAclubindia
