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 sh...

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 meet...

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 cskartikar...

 As per the provisions of Section 128 of the Companies Act, 2013, " Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on an accrual basis and according to the double-entry system of accounting:" However, sometimes the management of the Company may want to keep the books of accounts of the Company at a place other than the registered office of the Company, in such cases, the law provides that " Provided that all or any of the books of account aforesaid and other relevant papers may be kept at such other place in India as the Board of Directors may decide and where such a decision is taken, the company shall, within sev...

  Code Business/ Profession Business Code 01 Medical Profession and Business Business Code 02 Engineering Business Code 03 Architecture Business Code 04 Chartered Accountant/Accountancy Technical Consultancy Business Code 05 Interior Decoration Business Code 06 Technical Consultancy Business Code 07 Company Secretary Business Code 08 Legal Practitioner and Solicitors Business Code 09 Government Contractors Business Code 10 Insurance Agency Business Code 11 Films, TV and such other entertainment Business Code 12 Information Technology Business Code 13 Builders and Developers Business Code 14 Members of Stock Exchange, Share Brokers and Sub-Brokers Business Code 15 Performing Arts and Yatra Business Code 16 Operation of Ships, Hovercraft, Aircrafts or Helicopters Business Code 17 Plying Taxis, Lorries, Trucks, Buses or other Commercial Vehicles Business Code 18 Ownership of Horses or Jockeys Business Code 19 Cinema Halls and Other Theatres Business Code 20 Others

 Main Division of Industrial Activity to be filled in Spice+ Form.  Category Divisions (Codes) Agriculture and Allied Activities Agriculture, Hunting and related Service Activities (01); Forestry, logging and related Service activities(02); Fishing, Operation of fish hatcheries and fish farms; Service activities incidental to fishing (05) Mining And Quarrying Mining of coal and lignite, extraction of peat (10); Extraction of crude petroleum and natural gas, service activities incidental to oil and gas extraction excluding surveying (11); Mining of uranium and thorium ores (12); Mining of metal ores (13); Other Mining and Quarrying (14) Manufacturing (Food stuffs) Manufacture of food products and beverages (15); Manufacture of tobacco products (16) Manufacturing (Textiles) Manufacture of textiles (17);   Manufacture of wearing apparel, dressing and dyeing of fur (18) Manufacturing (Leather & products thereof) Tanning and dressing of leather, manufacture of luggage hand...

Private Placement means the offer and issuance of shares to a select group of persons by a Company.  The Procedure for issuance of shares on a Private Placement Basis is as follows:  1) Hold a Board Meeting: The first and the foremost step for issuing shares on a Private Placement Basis is to hold a Board Meeting for the following purposes: a) Approving the list of persons to whom the shares shall be issued on a Private Placement basis.  b) To approve the offer letter for issuance of shares (Form PAS-4) c) Calling an Extra-Ordinary General Meeting ("EGM") for obtaining the consent of the shareholders for issuance of shares on a Private Placement Basis.   2) Call an Extra-Ordinary General Meeting ("EGM") to approve the resolution for the issuance of shares on a private placement basis as a special resolution and to approve the offer letter to be circulated for this purpose.  3) File the Form MGT-14 within 30 days of approval of the resolution by the shareholders...