Corpdaily by CS Kartik Arora

 Funding is the lifeblood of any organization and FDI is one of the major sources of funding for most startups.  FDI in India is allowed under two routes a) Automatic Route b) Government Approval Route.  The first and the foremost step before signing any share subscription agreement with the proposed investor is to check the FDI Policy for the business activity which your Company undertakes. If your business falls under the Automatic Route, there is no need to obtain any prior consent from any authority and you may proceed further with signing the share subscription agreement. However, if your business activity falls under Government Approval Route, the necessary application needs to be made to the respective ministry/department of the Government of India.  Moving forward, once the Company has received the funding, the following procedure needs to be completed: 1) Allotment of Shares: As per the provisions of the Companies Act, 2013, the Company needs to allot the shares to the investo

Changes in the composition of Boards are strategic in nature and generally involve a lot of planning. However, sometimes it may be necessary to appoint a Director in the Company on an urgent basis due to statutory requirements or for any other reason. In such cases, it is generally suggested to appoint an Additional Director on the Board of the Company which can be done by following a few simple steps as given below: 1) Take prior consent from the proposed Director in Form DIR-2 for his appointment as an Additional Director of the Company;   2) Send a notice to the Board of Directors of the Company at least 7 days before the date of the Board Meeting;  Note a) A  meeting of the Board may be called at shorter notice to transact urgent  business subject to the condition that at least one independent director, if any, shall be  present at the meeting. I n case of absence of independent directors from such a meeting  of the Board, decisions taken at such a meeting shall be circulated to al

Every Company is required to update their NIC Code as declared in the Entity Master Form ("EMF") upon a change in the main objects of the Memorandum of Association ("MOA") of the Company. The procedure to update the NIC Code on the EMF Portal is easy and involves two simple steps:  1) Choose the most relevant NIC Code based on the updated objects of the Company; 2) Initiate an Email to RBI from your registered Email Id requesting them to update the NIC Code on the EMF Portal in FIRMS. The relevant email ids of RBI for this purpose are: a) helpfirms@rbi.org.in  b) fedsupport@rbi.org.in Note: You may also keep your Authorized Dealer Bank in the CC for their reference. Attachments to the Email:  a) Certified True Copy of the Special Resolution approving the updated objects; b) Certified copy of the MOA post alteration of the objects clause. About the Author: Kartik Arora is a Member of The Institute of Companies Secretaries of India and can be reached at cskartikarora@