Allotment of shares to Foreign Investor

Posted on 03-07-2016        By ADMIN

Allotment of shares to Foreign Investor 

The capital instrumentsshould be issued within 180days from the date ofreceipt of the inwardremittance receivedthrough normal bankingchannels including escrow account openedand maintained for the purpose or by debit tothe NRE/FCNR (B) account of the nonresidentinvestor.

Allotment of Shares:i. Listed Shares: - The price worked out in accordance with the SEBI guidelines, as applicable.ii. Non-Listed Shares:- On Allotment of Shares: The fair valuation of shares done by a- SEBI registered Merchant Banker or- A Chartered Accountant as per any internationally accepted pricing methodology onarm’s length basis. 

Certificate from Company Secretary: 2A certificate from the Company Secretary of thecompany certifying that:- All the requirements of the Companies Act, as applicable, have been complied with- Terms and conditions of the Government of India approval, if any, have been compliedwith- The company is eligible to issue shares under these Regulations; and 

Annual return on Foreign Liabilities and Assets: Annual return on Foreign Liabilities and Assets should be filed on an annual basis by theIndian company, directly with the Reserve Bank. This is an annual return to be submitted by 15th of July every year, pertaining to allinvestments by way of direct/portfolio investments/reinvested earnings/other capital in theIndian company made during the previous years (i.e. the information submitted by 15thJuly will pertain to all the investments made in the previous years up to March 31). The details of the investments to be reported would include all foreign investments madeinto the company which is outstanding as on the balance sheet date. The details of overseas investments in the company both under direct/portfIndiao investment may beseparately indicated  

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Author - CS Divesh Goyal

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