Initial Subscription - Is Filing of FCGPR Required??

[JYOTHI SHIVAYOGI]

Dear Members

 

Please clarify!

 

Our Company has paid up capital of Rs.1,00,000/- shared between 2 members. One of them is NRI. He had subscribed for Memorandum for Rs.50000/-

 

Later during Aug 2010, we received funds from foreign towards his initial subscription.

 

Bankers are asking me for allotment of shares and to file form FCGPR.

 

Please suggest.

 

Regards

 

Jyothi

[kiran mukadam]

Hi,

Within 6 months from the date of receiving foreign remittances, it is essential to allot the share. it is required to file FCGPR within 30 days from the date of allotment

Please see RBI websirte- frequently asked question-

Q.4.   What is the procedure to be followed after investment is made under the Automatic Route or with Government approval?

Ans.   A two-stage reporting procedure has to be followed :.

• On receipt of share application money :

Within 30 days of receipt of share application money/amount of consideration from the non-resident investor, the Indian company is required to report to the Regional Office concerned of the Reserve Bank of India, under whose jurisdiction its Registered Office is located, the Advance Reporting Form, containing the following details :

• Name and address of the foreign investor/s;  
• Date of receipt of funds and the Rupee equivalent;
• Name and address of the authorised dealer through whom the funds have been received;
• Details of the Government approval, if any; and
• KYC report on the non-resident investor from the overseas bank remitting the amount of consideration.

• Upon issue of shares to non-resident investors :

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 Regional Office concerned of the Reserve Bank of India. 

• Certificate from the Company Secretary of the company accepting   investment from persons resident outside India certifying that:  

  The 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.

  The investment is within the sectoral cap / statutory ceiling permissible under the Automatic Route of the Reserve Bank and it fulfills all the conditions laid down for investments under the Automatic Route, namely-

a) Non-resident entity/ies - (other than individuals), to whom it has issued shares have existing joint venture or technology transfer or trade mark agreement in India in the same field and Conditions stipulated at Paragraph 4.2 of the Consolidated FDI policy Circular of Government of India have been complied with.

OR

Non-resident entity/ ies - (other than individuals), to whom it has issued shares do not have any existing joint venture or technology transfer or trade mark agreement in India in the same field.

Note – For the purpose of the 'same' field, 4 digit NIC 1987 code would be relevant.

b) The company is not an Industrial Undertaking manufacturing items reserved for small sector.

OR

The company is an Industrial Undertaking manufacturing items reserved for the small sector and the investment limit of 24 per cent of paid-up capital has been observed/ requisite approvals have been obtained.

c) Shares issued on rights basis to non-residents are in conformity with Regulation 6 of the RBI Notification No FEMA 20/2000-RB dated 3rd May 2000, as amended from time to time.

OR

Shares issued are bonus shares.

OR

Shares have been issued under a scheme of merger and amalgamation of two or more Indian companies or reconstruction by way of de-merger or otherwise of an Indian company, duly approved by a court in India.

OR

Shares are issued under ESOP and the conditions regarding this issue have been satisfied.

• Shares have been issued in terms of SIA/FIPB approval No. --------------------- dated -------------------- 

• Certificate from Statutory Auditors/ SEBI registered Category - I Merchant Banker / Chartered Accountant indicating the manner of arriving at the price of the shares issued to the persons resident outside India.

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CS Kiran Mukadam

Mob:-9420153962

आपण जर दुसऱ्याला मदत करू शकत नसू , तर किमान त्रास तरी देऊ नये.

[urvashi pradhan]

Once money was received from the NRI investor, you would have collected the relevant FIRC/s from the authorised dealer bank. Thereafter, shares certificates would have to be issued/would have been issued to the NRI investor and Form FCGPR filed with RBI in respect of the allotment of shares to the NRI investor. This requirement does not change depending on whether money was received from abroad for the initial subscription or otherwise, which i am assuming is what your question is.

 

 

Thanks & Regards

Urvashi Pradhan. 

 

 

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[vikram jhawar]

Hello Kiran Madam,

One of our Group Company has allot the the share to foreign directors in Jan 2009 but didn't file FCGPR Form.....Can the Company file now.

If penalty will be imposed then what is the expected penalty.

Kindly reply....

Thanks and Regards

Vikram Jhawar


"Effort may fail but don't fail to make effort"

[darshan ramanan]

If the Investment is on non-repatriation basis..then filing of FC-GPR is not necessary.

Regards

Darshan

[Rinky Agrawal]

dear darshan,

can u please tell the notification or circular for not filling the same in case of non -repatriation basis.

 

rinki