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Subscription of MOA by an NRI

Binish C (Student) (54 Points)

05 July 2009

Hello All,

At the time of incorporation of a new company, If one of the promoter director is an NRI having permenent living address outside india and wants to be one of the Memorandum of Assosiation (MOA) subscriber-

1). What will be the procedure?

2). Does he/she requires to Notary himself/herself at outside indian or within india or need some documents from the Embassy?

3). What other points have to take into consideration?

Wainting for the reply with anticipation.

Regards,

Binish.

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9 Replies

Ajay Mishra (Company Secretary) (74337 Points)
Replied 06 July 2009

Dear Binish

There are some instruction for being a subscriber of MOA/AOA of Indian Company:

NON-RESIDENT INDIAN AS SUBSCRIBER TO THE MOA/AOA

The Reserve Bank of India had given general permission under section 29(1)(b) of the former FERA, 1973 to NRI to subscribe to the MOA of an Indian company and to take shares as a subscriber .(Notification No. FERA 143/93-RB, dated 26-4-1993 issued by RBI, Mumbai in this regard is reproduced hereunder:

“The RBI has given general permission to NRI to subscribe to the MOA/AOA of Indian Company for the purpose of Incorporation of the company subject to the condition that:-

(a) the total face value of the shares to be taken by NRI does not exceed Rs. 10,000

(b) the company is being manly formed for undertaking industrial activities

(c) the MOA of such company does not permit the company to take up any agriculture/plantation activities and to deal in real estate business other than developing real estate, and

(d) such company shall file a declaration in the prescribed form with the RBI regarding particular of such shares issued within 900days from the date of incorporation of the company.

DCA Circular dated 16-2-1995 clarifies that there can not be any restriction for incorporation of a company whether all the subscriber to the MOA/AOA/ proposed directors are residing abroad, being either foreign nationals, or NRI subject to the approval of RBI, where necessary.

The RBI may issue such a general permission also under FEMA, 1999 also. The FEMA(Permissible Capital Account Transactions) Regulations, 2000 allow persons resident outside India to invest in an issue of security by body corporate or an entity in India.

Views of other experts solicited,

Best Regard

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Binish C (Student) (54 Points)
Replied 07 July 2009

Thank you Ajay Sir for your kind instructions.

Now apart form the RBI's general permission -

- Does he/she requires to Notary himself/herself at outside indian or within india or need some documents from the Embassy for act as one of the subscriber and first director of the company.

Regards,

Binish.

Ajay Mishra (Company Secretary) (74337 Points)
Replied 08 July 2009

Dear Binish

In case u appoint a NRI as Director u first take Director Identification Number (DIN) of such director. In case u obtaining DIN of NRI u must follow the process given in point no.7 of general instruction for DIN Application regarding notary outside India.

Best Regard

1 Like

Binish C (Student) (54 Points)
Replied 11 July 2009

Hello All,

Thanks Ajay sir for your response.

I got few instructions which I would like to share with all.

The photograph, identity proof and address proof should be attested at the embassy / notary of the country in which he resides. Also a certified copy of the valid passport should be enclosed.

Regards,

Binish

1 Like

niharika (cs) (21 Points)
Replied 22 April 2010

dear sir,

wht abt moa and aoa , how that should goin to be witnness

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(Guest)

The MOA /AOA should be witness by the Indian Embassy.

and send that documents to the Indian Promoter, then after Indian Promoter will subscribe the same and file Incorporation forms with ROC.

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Contact: + 91-9427633901

E-mail: ankur @ csankur.com, ankurjewel @ gmail.com

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1 Like

Unmesh (Consultant) (83 Points)
Replied 12 May 2011

Suppose a NRI is forming a new co for authorised capital of rs 5000000, in which he will be 50% shareholder share breakup if 500000 shares of rs 10 each, co will do business of trading of fertilser etc. do he need to take any approval of FIPB and also he will give his portion of equity through nri account operated in india, do he need to to intimate to rbi.

namrata (company secretary ) (422 Points)
Replied 12 May 2011

Hi,

My query is wen there is name change after the New name we write Formerly Known as . Can anyone tel me for how long is the term used,is there any specific time period for the same.

Regards

Namrata Pai

CA. Anuj Gupta (Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA) (7019 Points)
Replied 09 October 2011

Originally posted by : Unmesh
	Suppose a NRI is forming a new co for authorised capital of 5000000, in which he will be 50% shareholder share breakup if 500000 shares of10 each, co will do business of trading of fertilser etc. do he need to take any approval of FIPB and also he will give his portion of equity through nri account operated in india, do he need to to intimate to rbi.

No approval from RBI is required in the present case, however certain compliances need to be undertaken based on whether the money is received in India on repatriable or non repatriable basis.

Anuj

+91-9810106211

femaquery @ gmail.com