Increasing Authorised capital of an Indian company-procedures

[Prashanth Bhat]

Hi all..

I have a small request.

Correct me if I am wrong.

 

Following are the procedures to increase the paid up capital of an indian Private company( which is a subsidiary of 2 foreign companies):

 

Procedures under Companioes Act:

 

1)Issue notice to directors for Board meeting

(To discuss- increasing paid up share capital, authorized capital, to conduct an EGM and to approve notice for the same )

Conduct Board meeting-

2)Pass resolution for conducting EGM and issue of EGM notice

3)Notice should contain Explanatory statement as required by Sec. 173(2) of The Companies Act

4)Issue notice of EGM to all members

5)Conduct EGM and:

-Pass ordinary resolution to increase Authorised share capital

-Special resolution for Amending the Memorandum

-         File Form 5 ( For increase in Authorised capital)

-         File Form 23 ( For passing Special Resolution)

6)Conduct another Board Meeting and pass:

-         Pass Resolution to issue and allot further shares

-         File Form 2 ( Form for allotment of shares)

-     Pay fee for the increased share capital

 

Procedures under FEMA:

(Company is covered under automatic route)

 

1)Receipt of money from foreign source to Companies designated account

2)Bank will issue Foreign Inward Remittance Certificate (FIRC)

      3)Within 30 days from receipt of investment a letter has to be written to RBI, reporting

            -FIRC number

            -details about account number and date of receipt of Foreign remittance

            -Amount of Foreign inward remittance

            -Name and address of the foreign investor/s

            -Date of receipt of funds and their rupee equivalent

      - Name and address of the authorised dealer (Bank) through    whom the funds have been received

     4)Within 30 days from the date of issue of shares, a report in Form FC-GPR, PART A together with the following documents should be filed with the concerned Regional Office of the Reserve Bank of India, Foreign Exchange Department. 

         -Copy of Letter as sent above

   -Certificate from the Company Secretary that company has complied with the procedure for issue of shares as laid down under the FDI scheme as indicated in the Notification No. FEMA 20/2000-RB dated 3rd May 2000 as amended from time to time and about some other compliance

 

Please provide your suggestions:

 

With Best Regards,

 

Prashanth Bhat

(9449127813)

 

[Madhusudhan Reddy]

Dear Mr. Prashanth Bhat

I think you need to get one more certificate from Chartered Accountant
for valuation of shares of the Company. this is because the Company
has to ensure that the issue price of the shares is not less than the
price arrived by CA.

This certificate needs to be submitted along with form FC-GPR.

Regards,
Madhusudhan Reddy
Secretarial Trainee

[ARUN khandelwal]

Dear Prashanth,

 

Please clarify me that in what manner you will increase the share capital u/s 81. whether it right issue or what type of issue.

 

arun

 

--
Arun Khandelwal
Chennai.

[Alagar M]

Dear Arun,

 

you can increase your share capital either by rights issue or preferential issue of shares ( ie Privae Placement / QIP Placement) . Agains, its depends upon your fund requirements.

 

 

Rgds

G-1 Swathi Court
22, Vijayaraghava Road
T.Nagar, Chennai - 600 017
Tel: 044-28151034/3445/3658
Moble: 919884731993
e-mail: alagar...@karvy.com
website: karvy.com

[Prashanth Bhat]

Dear Arun,

The issue of further shares is to the existing shareholders only ( i.e right issue)

and the shares will be issued in proportion to the existing shareholding pattern.

I think as there is no issue to non shareholders, compliance of provisions of Sec 81 (1) is not required.

 

Please clarify.

 

Regards,

 

Prashanth Bhat.

 

On 11/13/07, ARUN khandelwal <garunkh...@gmail.com> wrote: