Corporate Updates 17 July 2014

MCA: 

MCA has directed all the Registrar of Companies across India that Registration of Name of the Companies shall be in consonance with the provisions of the Emblems and Name (Prevention of Improper Use) Act, 1950. Registrar of Companies are directed that while allotting names to Companies/Limited Liability Partnerships, due care should be exercise to ensure that the names are not in contravention of the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1956. To this end it is necessary that Registrars are fully familiar with the provisions of the said Act.

RBI: 

In the Union Budget 2014-15, presented on July 10, 2014, the Hon’ble Finance Minister announced that long term financing for infrastructure has been a major constraint in encouraging larger private sector participation in this sector: While flexible structuring for long term loans to infrastructure sector, separate circulars have been issued on the asset side of the banks’ balance sheets on the liability side of the banks’ balance sheets by the RBI. To view the circular, please Click Here.

Corporate Updates 16 July 2014

RBI: 

1. RBI has issued Revised Pricing Guidelines for Issue/ Transfer of Shares or Convertible Debentures under Foreign Direct Investment (FDI) in India. The new pricing guidelines (i) In case of listed companies : The issue and transfer of shares including compulsorily convertible preference shares and compulsorily convertible debentures shall be as per the SEBI guidelines and the non-resident investor shall be eligible to exit at the market price prevailing on the recognised stock exchanges subject to lock-in period as stipulated, without any assured return. (ii) In case of unlisted companies : shall be at a price worked out as per any internationally accepted pricing methodology on arm’s length basis. These directions shall come into effect from the date of the publication of the relative Notification in the Official Gazette.

2. RBI has decided that the Issue of Partly Paid Shares and Warrants by Indian Company to Foreign Investors in accordance with the provision of the Companies Act, 2013 and the SEBI guidelines, as applicable, shall be eligible instruments for the purpose of FDI and foreign portfolio investment (FPI) by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolio Investors (RFPIs) subject to compliance with FDI and FPI schemes. The pricing of the partly paid equity shares shall be determined upfront and 25% of the total consideration amount (including share premium, if any), shall also be received upfront; The balance consideration towards fully paid equity shares shall be received within a period of 12 months.

Corporate Updates 15 July 2014

CBEC: 

CBEC has made amendments in Rule 7(d) of the Cenvat Credit Rules, 2004 with regard to the manner and extent of distribution of common input Service Credit. Rule 7 provides for the mechanism of distribution of common input service credit by the Input Service Distributor to its manufacturing units or to units providing output services. Rule 7 was amended to simplify the method of distribution. The amended rule 7(d) seeks to allow distribution of input service credit to all units in the ratio of their turnover of the previous year.

RBI: 

RBI has removed levy of foreclosure charges / pre – payment penalty on Floating Rate Loans on individual borrowers. As a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, it is advised that NBFCs shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

Corporate Updates 10 July 2014

Railway Budge 2014: 

The Government’s railway budget broke new ground by proposing the opening up of the system to overseas investors and offering a grand vision of what India’s train system could look like in the future. Some of the Highlights of Railway Budget are : No new increase in passenger fares and freight charges; Bullet train on Mumbai-Ahmedabad Sector after Delhi – Agra; Diamond quadrilateral for high speed trains; Plan to hike speed of trains to 160-200 km/hr in 9 sectors; Online booking to support 7,200 tickets/minute; to allow 1.2 lakh users log in simultaneously; Reservation system to be revamped, ticket-booking through mobile phones, post offices to be popularized; Online platform, unreserved tickets; Combo parking-platform tickets at stations.

RBI: 

RBI has clarified that the Central Board of Direct Taxes (CBDT) is the competent authority to issue instructions under Foreign Exchange Management Act, 1999 (FEMA), for the purpose of clarifying tax issues. It has now been decided that Reserve Bank of India will not issue any instructions under the FEMA, in this regard. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of the tax laws, as applicable. The CBDT has revised the existing instructions to be followed while allowing remittances to the non residents, with effect from October 1, 2013. It has issued Income Tax (14th Amendment) Rules, 2013 on furnishing of information under Section 195(6) of the Income Tax Act, 1961 and prescribed the rules and forms to this effect. To view and download the Circular, please Click Here.

Corporate Updates 7 July 2014

RBI: 

RBI restores limit of Overseas Direct Investments to 400% of net worth for Financial Commitment (FC) to be undertaken by Indian party under Overseas Direct Investments (ODI) under the automatic route to the limit prevailing, as per the extant FEMA provisions, prior to August 14, 2013. Further for any financial commitment exceeding USD 1 (one) billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank even when the total FC of the Indian Party is within the eligible limit under the automatic route (i.e., within 400% of the net worth as per the last audited balance sheet).

CBDT: 

CBDT, Ministry of Finance has come out with a Standard Operating Procedure on filing of Appeals/ Special Leave Petitions (SLPs) by the Income tax Department in the Supreme Court under various provisions of the Income Tax Act & rules framed thereunder and for other related matters. Instructions  & revised Proforma B for submission of proposal to file SLP has also been issued by CBDT.

Corporate Updates 4 July 2014

RBI:

RBI has released separate Master Circulars for each & every topic under the various provisions of FEMA and Banking Laws. These Master circulars are compilations of all the circulars issued by the Regulator and applicable on as on date on the stakeholders. With an intention to have all current instructions on the subject at one place, the Reserve Bank of India issues Master Circulars on various topics updated as on June 30, 2014.

MCA

MCA has initiated the process of weeding out of files and papers in accordance with the the riles of records keeping including digitization, wherever necessary. All sections / divisions have been instructed to identify files / documents which need to be preserved in the record room or to be transferred from the record room to National Achieves. They have also been advised to ensure that redundant records are weeded out through a special drive to be completed in a month’s time.

Corporate Updates 1 July 2014

MCA: 

MCA has clarified that Companies desired to have the word “Commodity Exchange” in its name are required to obtain a “No Objection Certificate” from the Forward Markets Commission (FMC). All other provisions of the Companies (Incorporation) Rules, 2014 will continue to be applicable. This NOC from FMC is furnished by the applicant at the time of incorporation and will also be required to be furnished by all such companies incorporated with the words “Commodity Exchange” before the issue of this circular.

RBI: 

RBI on 24/06/2014 released the ‘Timelines for Regulatory Approvals’ and ‘Citizens Charter’ for delivery of services as part of implementation of the non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC). These timelines are indicative. As per one recommendation of the FSLRC, all regulators are required to move to a time-defined approval process, subject to applicable laws, for all permissions including licence to do business, as well as launch of products and services. Accordingly, the Reserve Bank has prepared timelines for regulatory approvals by its various departments and a Citizens’ Charter for delivery of services by its departments which have public interface.

Corporate Updates 24 June 2014

RBI: 

RBI has delegate the powers to Authorised Dealer Category – I relating to transfer of Assets of Liaison Office (LO) / Branch Office (BO) / Project Office (PO) in addition to the delegated powers relating to allow closure of the accounts of LO/BO and repatriates the surplus balances subject to submission of prescribed closure documents. The AD Category-I banks subject to compliance with the conditions as prescribed by the RBI may allow the LO/BO/PO to transfer their assets only when the foreign entity intends to close their LO/BO/PO operations in India. Further all payments & credits to the bank accounts of LO/BO/PO on account of such transfer of assets will be treated as permissible credits.

SEBI:  

The Board of SEBI in its Meeting held on 19-06-2014 at New Delhi and took various decisions relating to the Reforms in the Primary Market, Review of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, Manner of Dealing with the Qualified Audit Reports filed by Listed Companies, Minimum public shareholding for Public Sector Undertakings (“PSUs”) under Securities Contracts (Regulation) Rules, 1957, Amendments to regulations governing the preferential issue norms. To view and download the entire proceeding of the Board, please click here.

Corporate Updates 20 June 2014

MCA: 

MCA in exercise of the powers conferred by Section 448 of the Companies Act, 1956 & 396 of the Companies Act, 2013, w.e.f 13-06-2014 established the office of the Official Liquidator at Hyderabad having territorial jurisdiction for the purpose discharging of function of Official Liquidator in the State of Telengana and the office of the Registrar of Companies at Hyderabad having territorial jurisdiction for the purpose discharging of function of Registrar of Companies in the State of Telengana respectively.

RBI: 

All Indian companies which have received FDI and/or made FDI abroad in the previous year(s) including the current year, should file the Annual Return on Foreign Liabilities and Assets (FLA) in the soft form to the Reserve Bank by July 15 every year. In order to collect information on Indian companies’ Outward Foreign Affiliated Trade Statistics (FATS) as per the multi-agency global ‘Manual on Statistics of International Trade in Services’, the FLA return has been modified marginally and is now available on the RBI website. All stakeholders are requested to use the latest version of the said FLA Annual Return.

Corporate Updates 12 June 2014

MCA: 

MCA has clarified that the provisions of General Circular No. 12/2014 dated 22.05.2014 regarding Applicability of PAN requirement for Foreign Nationals, that if Foreign Nationals does not possess Permanent Account Number (PAN), he/she shall furnish a declaration in the prescribed proforma, as an attachment to the Incorporation Form (INC-7). Further, it is clarified that, in case of a Resident Director of the proposed company he/she shall be required to submit PAN details at the time of incorporation. To view & download the circular, please Click Here.

RBI:

Reserve Bank on the basis of representations / references from various stakeholders especially migrant workers, transferred employees, etc. regarding problems faced in submitting a proof of current / permanent address while opening a bank account has now decided to simplify the requirement of submission of ‘proof of address’ and henceforth, customers may submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. In case the address mentioned as per ‘proof of address’ undergoes a change, fresh proof of address may be submitted to the branch within a period of six months. To view & download the circular, please Click Here.