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  • When should the first auditors be appointed for a newly incorporated entity?

    The first auditors should be appointed by the board within 30 days of incorporation of the company.  In case of failure by the board to appoint auditors, the auditors shall be appointed by the shareholders in general meeting within 90 days from the expiry of the 30 days period

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  • Within what time should the first board meeting be held?

    The first board meeting should be held within 30 days from the date of incorporation.

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  • What should be the first financial year of the newly incorporated company?

    The first financial year of a company means a period beginning from the date of incorporation and ending on 31 March of the following year.  However, if the company is incorporated on or after 1 January of the year, the financial year will be from the date of incorporation till 31 March of the following financial year.  For example, if a company is incorporate on 1 February 2019, the first financial year will be 1 February 2019 to 31 March 2020.

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  • Is there a time period to issue share certificate to the shareholders?

    The company should issue and deliver the share certificates within a period of two months from the date of incorporation of the proposed company.

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  • Would a One Person Company (OPC) be qualified to profit benefits under the Start-up India activity?

    Yes. One Person Companies are eligible to avail benefits under the Start-up India initiative.

    For more information, click here.

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  • Under which scenarios, the applicant is required to approach the RBI for approval?

    Under the following scenarios, prior approval of RBI shall be required:

    • The principal business of the applicant falls in the four sectors namely defence, telecom, private security and information and broadcasting. However, no prior approval of the RBI shall be required, if government approval or license/permission by the concerned ministry/ regulator has already been granted
    • The applicant is a Non-Government Organization (NGO), Non-Profit Organization, body/ agency/ Department of a foreign government

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  • To which authority the application for establishing Branch office/ Liaison Office/ Project office is required to be submitted?

    Generally, the application for establishing BO / LO/ PO in India may be submitted by the non-resident entity in the prescribed form to Authorised Dealer Bank (AD Bank) identified by the applicant along with the prescribed documents.

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  • Is there any endorsed fee(s) that can be charged from the Start-ups for furnishing them with a suggestion/bolster/underwriting letter?

    Yes. A maximum fee of INR 5,000 can be charged by the incubators for issuing a letter of recommendation to Start-ups. In cases where an incubator is required to form a panel of external experts to assess the innovativeness of the product/service/process, a maximum fee of Rs. 10,000 can be charged by the incubators.

    For more information, click here.

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  • What financial criteria are required to be fulfilled for setting-up a BO/LO (Branch Office or Liaison Office) in India?

    The non-resident entity applying for a BO/LO in India should have a financially sound track record as below:

    • For BO: A profit making track record during the immediately preceding five financial years in the home country and net worth of not less than US$100,000 or its equivalent
    • For LO: A profit making track record during the immediately preceding three financial years in the home country and net worth of not less than US$50,000 or its equivalent

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  • How would I enlist another organization in India?

     Incorporating a company through Simplified Proforma for Incorporating Company electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34), is the default option and most companies are required to be incorporated through SPICe only.

    For more information, click here.

     

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  • What is the FDI Policy for Asset Reconstruction Companies?

    Up to 100% FDI is permitted for Asset Reconstruction Companies registered with Reserve Bank of India without government route. 

    For more information, click here.

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  • What is fungibility window?

    Fungibility window is the time period specified by the issuer company during which IDR holders can apply for conversion/ redemption of IDRs into underlying equity shares.

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  • Can an IDR holder appoint any nominee in case of death?

    Yes, an IDR holder can at any time nominate a person to whom his IDRs shall vest in the event of his death.

    For more information, click here

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  • Who is responsible to distribute the corporate benefits to IDR holders?

    On the receipt of dividend or other corporate action on the IDRs, the Domestic Depository shall distribute the corporate benefits to the IDR holders in proportion to their holdings of IDRs.

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  • What are the exit options available for an investor in IDR?

    The Investor may trade the IDRs in India or can request for redemption of the IDRs to the issuer company.

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  • Whether IDRs can be converted/ redeemed into underlying equity shares?

    IDRs can be converted/ redeemed into the underlying equity shares only after the expiry of one year from the date of the listing of the IDRs, subject to the compliance of the related provisions of Foreign Exchange Management Act and Regulations issued thereunder by RBI & SEBI in this regard.

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  • Whether the IDRs required to be listed in any stock exchanges of India?

    Yes, The IDRs are required to be listed in at least one stock exchange in India having nationwide terminals.

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  • Whether any listing permission required for issuance of IDRs?

    Yes, the issuer company is required to obtain in-principle listing permission from all the recognized stock exchanges in which the issuer proposes to get its IDRs listed.

    For more information, click here

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  • Whether the draft prospectus for IDRs to be filled with SEBI?

    Yes. Foreign issuer is required to file the draft prospectus with SEBI while complying with the requirements of SEBI (ICDR) Regulations, 2009. Any changes specified by SEBI shall be incorporated in the final prospectus to be filed with Registrar of Companies

    For more information, click here

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  • Who are eligible to issue IDRs?

    The eligibility criteria given under IDR rules and guidelines as mentioned under:

    The foreign issuing company shall have the following:

    • pre‐issue paid‐up capital and free reserves of at least $ 50 M and have a minimum average market capitalization (during the last 3 years) in its home country of at least $ 100 M
    • a continuous trading record or history on a stock exchange in its home country for at least three immediately preceding years
    • a track record of distributable profits for at least three out of immediately preceding five years
    • listed in its home country and not been prohibited to issue securities by any Regulatory Body and has a good track record with respect to compliance with securities market regulations in its home country

    Note: The size of an IDR issue shall not be less than INR. 50 Cr

    For more information, click here.

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