Cherry Bansal (Practicing Chartered Accountant) (80 Points)
30 August 2011Dear All,
I need to transfer the shares of a private limited foreign owned company from One non resident to other non resident.
What is the procedure as per companies act and as per FEMA. Please advice! These both non resident companies are
associate companies, so what all needs to be done by whom is required. Please advice!
I oblige your reply.
Thanks & Regards,
Cherry Bansal
valji
(Accounts manager-MBA)
(2150 Points)
Replied 30 August 2011
you have to intimate to RBI simple letter with following documents
1) agreement of transfer 2) transfer deed with stampt duty (0.25%)
3) valuation from Chartered accountant for transfer as per CCI guidelines
valji
(Accounts manager-MBA)
(2150 Points)
Replied 30 August 2011
Notification No. F.E.R.A.206 /99-RB dated 31st July 1999
General Permission to Non Residents for Acquisition/
Purchase of shares from other Non-Residents
In exercise of powers conferred by clause (b) of sub-section (1) of Section 29 and sub-section 4 of Section 19 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Reserve Bank of India hereby permits
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(a) |
(i) |
Non-Residents to acquire shares of companies incorporated in India from other Non-Residents (other than Overseas Corporate Bodies predominantly owned by Non-Resident Indians/Persons of Indian Origin, Non-Resident Indians and Persons of Indian Origin) by way of sale/transfer provided the transferor/seller had acquired the shares under general/special permission of Reserve Bank
|
|
(ii) |
Non-Resident Indians and Persons of Indian Origin and Overseas Corporate Bodies predominantly owned by Non-Resident Indians/Persons of Indian Origin to acquire shares of companies incorporated in India from other Non-Resident Indians, Persons of Indian Origin or Overseas Corporate Bodies predominantly owned by Non-Resident Indians/ Persons of Indian Origin by way of sale/transfer provided the transferor had acquired the shares under general or special permission of Reserve Bank |
provided that the rights of the transferee/purchaser in respect of shares so acquired, shall be subject to same restrictions and conditions as were applicable to the transferor/seller of the shares.
(b) Companies incorporated in India and/or a depository defined in clause (2) of sub-section 1 of Section 2 of Depository Act, 1996 to enter in their register or books in which securities are registered or inscribed an address outside India of a holder of any securities consequent upon acquisition of such securities by non-resident under this notification
valji
(Accounts manager-MBA)
(2150 Points)
Replied 30 August 2011
please check atatch file
Cherry Bansal
(Practicing Chartered Accountant)
(80 Points)
Replied 30 August 2011
Thanks Mr. Valji, It was really helpful.
Hitesh Khemchandani
(Practicing Consultant)
(43 Points)
Replied 01 September 2011
Dear Valji
CCI guidelined for valuation of shares is no longer applicable. It has to be DCF method for valuation of shares.
Hitesh
valji
(Accounts manager-MBA)
(2150 Points)
Replied 02 September 2011
hi
i am not aware for this ,thanks for information
whether any circular for this
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3468 Points)
Replied 02 September 2011
I feel there is no compulsion to intimate RBI about transfer of shares in a Indian company from NR to another NR.
The simple logic is there is no money coming into India from overseas through banking channels. Otherwise, which AD bank will certify the FC TRS ?
CA. Anuj Gupta
(Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA)
(7024 Points)
Replied 04 September 2011
Dipjyoti is correct, no action is required from Indian Company as regards the FEMA , apart from valuation of shares as per DCF.
However there shall be liabillity of Company purchasing shares to deduct TDS on the amount of Capital Gains. As both the Non Resident Companies are related , geat care needs to be taken before fixing the value of shares being transferred.
Anuj
+91-9810106211
femaquery @ gmail.com
Vishal
(business)
(78 Points)
Replied 10 November 2011
Dear Hitesh
Please state if a pvt ltd co has issued shares to its holding foreign co based on Profit Earning Capacity Value ( PECV) Method
Is this ok if the shares are issued at higher price than the valued price as per DCF method even if the shares are issued based on Profit Earning Capacity Value ( PECV) Method .
regards
VK
piyush goplani
(CA)
(80 Points)
Replied 15 October 2012
Hi everyone,
Please suggest if there is any change in the provisions
please brief what i have to do in the following case:
- shares of indian pvt ltd companies held by a NRI Corporate
- that NRI COrporate is transferring its shares to another NRI corporate
please tell me the FEMA/RBI and proceedure for the Valuation of shares
Thanks in advance
Regards:
Piyush.
ca.goplanipiyush @ gmail.com
Tejal
(CS)
(123 Points)
Replied 22 June 2013
Our Company is Pvt. Ltd. Company, one of the NRI is holding equity shares in our company. Now this NRI is transferring his shares to his brother who is also an NRI.
What is the procedure to be follow? Please help me.
CA. Anuj Gupta
(Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA)
(7024 Points)
Replied 24 June 2013
Folow the regular Company law procedure for transfer of shares.
Nothing needs to be done on RBI front if there is no change in stand of REPATRIATION of SHARE PROCEEDS by NRI.
Anuj
femaquery @ gmail.com
Nikhil Gusain
(Article)
(22 Points)
Replied 01 July 2013
A foreign corporate body which holds 99% shares of our company is proposing to sell all the shares to another foreign body corporate
kindly give directions towards income tax on such transfer & procedures as per law ?
Tejal
(CS)
(123 Points)
Replied 03 July 2013
Dear Anuj Sir,
I have one query related to downstream investment.
Who will report to FIPB about downstream investment i.e. investing company or investee company?
Please sir help me.
CAclubindia
