Procedure For Variation Of Members’ Rights

Section 48 Procedure For Variation Of Members’ Rights

Step 1

Check the Memorandum and Articles of Association of the company, whether any of them authorizes the company to varythe rights attached to any class of shares and such rights of the company are not prohibited by either of them and also by the terms of issue of that classof shares. If not, then, alter the Articles of Association of the company to that effect.

Step 2

Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, (not less than 7 daysin writing) for convening a meeting of the Board of Directors

Step 3

Informthe Stock Exchange with which shares of the company are listed atleast 2 daysbefore the Board meeting about the subject of this meeting

Step 4

Convene and hold a Board meeting to decidethe way to adopt for variations, either through-

(a)obtaining written consent of the holders of not less than three-fourths of theissued shares of that class; or

(b)convening a separate meeting of the holders of the issued shares of that classfor passing a special resolution thereat.

Step 5

Ifthe Board approves the first method as mentioned in Step 4(a) above, then:

·        approvethe resolution for circulation among the holders of the issued shares of thatclass, and

·        circulatesuch resolution amongst the holders and obtain their approval in writing of atleast three- fourths of the issued shares of that class.

Step 6

Ifthe Board approves the second method as mentioned in Step 4(b) above, or thecompany fails to obtain written approval from the holders of not less thanthree-fourths of the issued shares of that class then —

·        authorize the company secretary to convene a separate meeting of the holders of theissued shares of that class; and

·        approve the notice of such meeting containing special resolution with an explanatory statement relating thereto and a proxy form.

Step 7

Inform the said Stock Exchange within 15minutes of the board Meeting, of the outcome of the meeting by letter or fax.

Step 8

Issue notice of not less than twenty-one (21) clear days for convening General Meeting to every member of the company, Directors and auditor.

Step 9

In case of listedcompany, send three copies of the notice to the STOCK EXCHANGES on which thesecurities of the company are listed.

Step 10

Holdthe separate meeting of the holders of issued shares of that class and pass special resolution so proposed by three-fourths majority of the holderspresent.

Note:In case of listed company, special resolution is passedonly through postal ballot.

Step 11

In case of listed company, send copy of the proceedings of thegeneral meeting to the STOCK EXCHANGE with which the company is listed.

Step 12

E-form Filing

Inboth the cases, file Form MGT-14 within 30 days of passing of Special Resolution with the concerned Registrar ofCompanies along with

·        Notice of EGM

·        Certified true copy of the Special Resolution

Step 13

Informthe stock exchange where the shares of that class are listed about the variationin the members’ rights thereof.

Step 14

Ifvariation affects the rights of the holders of other class of shares,simultaneously obtain consent or approval from them.

Step 15

Onvariation becoming effective, make necessary changes in all the papers, documents,registers etc.

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RAVI GARG (CS)     

91-7838204665, 

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Procedure for Incorporation of Section 8 Company for charitable purposes.

Section 8 Procedure for Incorporation of Section 8 Company for charitable purposes.

Step 1

Obtain Director Identification Number (DIN) and Digital Signature

A company needs to have a minimum of two Directors and to make the application for ascertaining availability of name; Director Identification Numbers of at least 2 Directors are required. If the proposed Directors do not have DIN, then apply their DIN and obtain Digital Signatures.

Step 2

Name Availability for Proposed Company

An application for the reservation of a name has to be filed with Registrar of Companies in Form INC.1 along with the prescribed fee of Rs. 1000/-. After approval of form INC.1, the same shall be reserved for a period of 60 days. See Rule 8 of Companies (Incorporation) Rules, 2014 before making an application to ensure that the name being applied is not undesirable.

Step 3

Drafting of Memorandum of Association (MOA) and Article of Association (AOA)

Draft Memorandum and Articles of Association of the proposed company. The formats of MOA and AOA are given in Schedule I to the Companies Act 2013. The MOA and AOA have to be signed by the subscribers indicating the number of shares to be subscribed by each of them against their names in the MOA. The Articles of Association also mentions the names of the First Directors of the Company.

The Memorandum of Association (MOA) of the Company should be in form INC 13.

Step 4

Application for License under Section 8 of the Companies Act 2013.

An Application for License under Section 8 shall be filed in form INC 12 with following attachments-

Ø  Draft Memorandum of Association (MOA) in form INC 13;

Ø  Draft Articles of Association (AOA) ;

Ø  Declaration in Form INC. 14 by an Advocate/Chartered Accountant/Cost Accountant/Company Secretary in practice, that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 and rules made there under and all the requirements under section 8 have been complied with;

Ø  A declaration in Form INC. 15 by each of the persons making the application;

Ø  Brief profile of all the promoters.

Ø  Grounds of Application.

Ø  An estimate of the future annual income and expenditure of the company for next three years, specifying the sources of the income and the objects of the expenditure.

Step 5

Give notice in newspapers

Publish a notice within a week from the date of making the application to the Registrar of Companies in at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the proposed company is to be situated, and circulating in that district, and at least once in English language in an English newspaper circulating in that district; and on the websites of the Company.

Step 6

Approval of other authorities

The Registrar of Companies may require the applicant to furnish the approval or concurrence of any appropriate authority, regulatory body, department or Ministry of the Central or State Government.

Step 7

To decide on granting of license under section 8

The Registrar will wait for 30 days for objections, if any, of any person pursuant to notice published in newspapers. The Registrar may also consult necessary authorities.
Thereafter, the Registrar of Companies at its discretion may grant the license with such conditions as deemed necessary by the Registrar.

The Registrar may direct the company to insert in its memorandum, or in its articles, or partly in one and partly in the other, such conditions of the license as may be specified by the Registrar in this behalf.

Step 8

Registration of Company

The following forms and documents have to be filed with Registrar of Companies for registration.

1. An application for registration of the Company is to be filed with the Registrar of Companies in form INC 7 (for tutorial of form click here). The following documents will be attached with the forms.

a.    Memorandum of Association (MOA) and Articles of Association (AOA) duly signed by all the subscribers.

b.    Identity and address proof of all subscribers along with particulars of name, father’s name, Nationality, Date of Birth, Place of Birth, Educational Qualification, Occupation, PAN, Address, email, phone no. and Fax.

c.    A declaration in form INC 8 by an advocate, Chartered Accountant, Cost accountant or Company Secretary in practice who is engaged in incorporation and a person named in as Director,Manager or Secretary that all requirements related to incorporation has been complied with.

d.    An affidavit will be filed with Registrar of Companies in Form INC.9 from each subscriber and from each person named as first director in the Articles of Association.

e.    The specimen signature and latest photograph duly verified by the banker or notary shall be in the prescribed Form INC. 10.

f.     Copy of the License obtained under Section 8 of the Companies Act 2013.

2.    Form DIR 12 (for tutorial of form click here) will be filed for intimating the particulars of each person mentioned in the Articles of Association as first Director of the company and his/her interest in other firms or bodies corporate along with his/her consent to act as Director of the company in form DIR 2.

3. Intimation of situation of Registered office of the Company is to be filed in form INC 22 (for tutorial of form click here) with Registrar of Companies. Form INC 22 can be filed within a period of 30 days of its incorporation and if it is not filed at the time of registration then an address for correspondence is to be given to the Registrar of Companies till its registered office is established. Proof of address in the name of the Company is to be filed along with form INC 22 and in case the registered office is not in the name of the Company, an NOC will also be obtained from the owner of the Registered office and will be attached with the form.

Step 9

Certificate of Incorporation

After the above forms are approved, a certificate of incorporation is issued by the Registrar of Companies in form INC 11 in electronic form and is mailed to the company at its registered email id.

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RAVI GARG (CS)     

91-7838204665, 

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Procedure of Transfer of shares form Resident to Non Resident:

Checklist for Transfer of shares form Resident to Non Resident:

Please find the below compliances:-

1. Pass Board Resolution for transfer of share from Resident to Non Resident.

2. after receiving fund please intimate to AD Bank for the same in prescribed format provided by the bank.

3. send request letter to AD bank for FIRC copy.

4. file FCTRS with in 60 days to AD Bank.

Enclosure required  with FCTRS:-

1. CA Certificate /Valuation report

2. buyers and seller consent

3. debit authority letter

4. declaration from buyer

5. other documents required for as per ban

Retention of Amount in Foreign Currency Account :

Indian companies which are eligible to issue shares to persons resident outside India under the FDI Policy may be allowed to retain the share subscription amount in a Foreign Currency Account, with the prior approval of RBI.

A. Procedure of Transfer of shares form Resident to Non Resident:

Subject to FDI sectoral policy (relating to sectoral caps and entry routes), applicable laws and other conditionalities including security conditions, non-resident investors can also invest in Indian Companies.

• By purchasing/acquiring existing shares from Indian shareholders.
• By purchasing/acquiring existing shares from other non-resident Shareholders

Condition:
General permission has been granted to non-residents/NRIs for acquisition of shares by way of transfer subject to the following:-

i. Transfer from Non- Resident to another Non- Resident: A person resident outside India (other than NRI and erstwhile OCB) may transfer by way of sale or gift, the shares or convertible debentures to any person resident outside India (including NRIs).

• Without Government Approval: Government approval is not required in sectors which are under automatic route.
• Without Government Approval: Government approval is required in which are under Government approval route.

Other Situations:

• NRIs may transfer by way of sale or gift the shares or convertible debentures held by them to another NRI.
• A person resident outside India can transfer any security to a person resident in India by way of gift. A person resident outside India can sell the shares and convertible debentures of an Indian company on a recognized Stock Exchange in India through a stock broker registered with stock exchange or a merchant banker registered with SEBI.

ii. Transfer from Resident to Non- Resident:

A person resident in India can transfer by way of sale, shares/ convertible debentures (including transfer of subscriber’s shares), of an Indian company under private arrangement to a person resident outside India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure of FDI Policy (Discussed below in detail).

General Permission:

General permission is also available for transfer of shares/convertible debentures, by way of sale under private arrangement by a person resident outside India to a person resident in India, subject to the guidelines given in para 5.2 and Section 1 of this Annexure.

The above General Permission also covers transfer by a resident to a non-resident of shares/convertible debentures of an Indian company, engaged in an activity earlier covered under the Government Route but now falling under Automatic Route, as well as transfer of shares by a non-resident to an Indian company under buyback and/or capital reduction scheme of the company.

Sale Consideration: The sale consideration in respect of equity instruments purchased by a person resident outside India, remitted into India through normal banking channels, shall be subjected to a Know Your Customer (KYC) check by the remittance receiving AD Category-I bank at the time of receipt of funds. In case, the remittance receiving AD Category-I bank is different from the AD Category-I bank handling the transfer transaction, the KYC check should be carried out by the remittance receiving bank and the KYC report be submitted by the customer to the AD Category-I bank carrying out the transaction along with the Form FC-TRS.

B. Terms and conditions

For Transfer of Shares/Convertible Debentures, by way of Sale, from a Person Resident in India to a Person Resident outside India (i.e. to foreign national, NRI, FII, FPI and incorporated non-resident entity other than erstwhile OCB):

i. Parties Involved:

• Seller (resident)
• Buyer (non-resident)
• Duly authorized agent/s of the seller and/or buyer,
• Authorized Dealer bank (AD) branch
• Indian company, for recording the transfer of ownership in its books

ii. Pricing Guidelines:

Price of shares transferred by way of sale by resident to a non-resident where the shares of an Indian company are:-

• Listed: – Listed on a recognized stock exchange in India shall not be less than the price at which the preferential allotment of shares can be made under the SEBI guidelines. Condition: the same is determined for such duration as specified therein, preceding the relevant date, which shall be the date of purchase or sale of shares

• Non- Listed: – Not Listed on a recognized stock exchange in India shall not be less than the fair value to be determined by a SEBI registered Merchant Banker or a Chartered Accountant as per any internationally accepted pricing methodology on arm’s length basis.

Condition: The price per share arrived at should be certified by a SEBI registered Merchant Banker or a Chartered Accountant

iii. Responsibilities / Obligations of the parties: All the parties involved in the transaction would have the responsibility to ensure that

• the relevant regulations under FEMA are complied with and
• Consequent on transfer of shares, the relevant individual limit/sectoral caps/foreign equity participation ceilings as fixed by Government are not breached.
• Settlement of transactions will be subject to payment of applicable taxes, if any.

iv. Method of payment and remittance/credit of sale proceeds :

• Non Resident: The sale consideration in respect of the shares purchased by a person resident outside India shall be remitted to India through normal banking channels.

• FII & FPI: In case the buyer is a FII,FPI, payment should be made by debit to its Special Non-Resident Rupee Account.

• NRI: In case the buyer is a NRI, the payment may be made by way of debit to his NRE/FCNR (B) accounts.

However, if the shares are acquired on non-repatriation basis by NRI, the consideration shall be remitted to India through normal banking channel or paid out of funds held in NRE/FCNR (B)/NRO accounts.

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RAVI GARG (CS)     

91-7838204665, 

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