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Transfer of Shares by a NRI to a Non Resident ENtity

Sreenidhi (Company Secretary) (72 Points)

25 June 2009

hey friends...

Can a NRI who has major shareholding (99.9%) in a pvt ltd software company dealing with prepress activities, transfer his ENTIRE SHAREHOLDING to a non resident entity ??? if yes, what is the procedure ?? does the process involve approval from RBI at any stage ?

PLease advice asap...

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5 Replies

Kavin (Emplyment) (149 Points)
Replied 16 February 2010

Following are the formalities to be complied with for transfer of shares to NRI:

The payment for the shares to be purchased by NRI may be made through his NRE/FCNR Account. In case of shares to be purchased on non-repartiation basis, then the amt shall be remitted by way of normal banking channel or through NRE/FCNR account held by the NRI
the following documents to be submitted to the AD through whom the transfer being transacted:

--- consent letter from buyer and seller or from their authorised agent

--- share holding pattern of the investee company after the acquisition of shares

--- chartered accountant certifiacte for valuation shares ( fair value of shares)

--- undertaking from the buyer that he is eligible to acquire the shares under FDI cap,

if appicable.

3. Form FC - TRS to be filed with AD category - I bank within 60 days from the date of

receipt of consideration. ( in quadruplicate)