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CA Final Nov’23 Students Amendments

Registered Valuer
1. Partnership entity or company shall NOT be eligible if:
a. Set up for objects other than rendering professional service, financial or valuation
services or if such co./firm is a subsy, JV or associate of another co/BC
b. Is undergoing insolvency resolution process or undischarged bankrupt
c. All Partners/Directors are not eligible above [except (a) and (b)]
d. Lower of (3 or all partners/directors) are not RV
e. None of its Partners/Directors is RV for Asset Class for which it seeks to be RV.
f. It is not a member of RVO.
Provided that – It shall not be member of more than 1 RVO at a given point of time
Transition provision to comply with this point – 6 months

Rule 7A: Intimation of changes in personal details by RV to Authority: [Amendment]

RV shall intimate the authority for change in:
 personal details, or
 any modification in composition of partners or directors, or
 any modification in any clause of partnership agreement or MoA,
which may affect registration of RV, after paying fee as per the Table -I in Annexure

Prevention of Money Laundering Act:

Person carrying a. Person carrying on activity for playing Games of chance for cash/kind
designated b. Inspector General of Registration appt. u/s 3 of Registration Act, 1908
business c. Real estate Agent engaged in providing services in relation to the sale
[Amendment] or purchase of real estate (as defined u/s 2(zm) of RERA Act) and
[RAP SONG] having annual turnover of > = Rs. 20 lakhs.
d. Dealer in Precious metals, precious stones, or other High value goods if
they engage in any cash transactions with customer > = Rs. 10 lakhs,
carried out in a single operation or in several operations that appear to
be linked.
e. Person engaged in Safekeeping & administration of cash & liquid
securities as notified by CG
f. Such other activities as CG may notify.

CG hereby notifies the following activity when carried out for or on behalf
of another natural or legal person in OCOB:
(i) exchange between virtual digital assets and fiat currencies;
(ii) exchange between one or more forms of virtual digital assets;
(iii) transfer of virtual digital assets;
(iv) safekeeping or administration of virtual digital assets or instruments
enabling control over virtual digital assets; and
(v) participation in and provision of financial services related to an
issuer's offer and sale of a virtual digital asset.
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Index for CA Final May’23 Students Amendments

Keep it simple –
Paper 4 No matter which edition you have, every student who has purchased my Ultimate Solution book on
students or before 4th March 2023 should get this amendment sheet printed.
Paper 6D You can go ahead and print just 3 serial number.
students

S.No. Amendments Covered Relevant for Page No.

1 FEM (Overseas Investment) Rules 2022 Paper 4 & 6D 1
2 FEM (Overseas Investment) Regulation 2022 Paper 4 & 6D 10
3 Insolvency and Bankruptcy Code – IBC Paper 4 & 6D 15
4 Foreign Contribution Regulation Act (FCRA) Paper 4 16
5 Companies Act Paper 4 17
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Foreign Exchange Management (Overseas Investment) Rules, 2022

About the Rules:

 Issue by Ministry of Finance w.e.f. 22nd August 2022
 Led to suppression of the following two regulations:
o FEM (Transfer or Issue of Any Foreign Security) Regulations, 2004
o FEM (Acquisition & Transfer of Immovable Property O/S India) Reg, 2015

Important Definitions:

Foreign Entity:
Entity incorporated outside India (including IFSC) with limited liability.
Provided that – Restriction of limited liability shall not apply to entity with core activity in a
strategic sector (E.g., green energy or natural resources).

Overseas Investment (OI) – Financial Commitment and Overseas Portfolio Investment (OPI) by PRI

Financial Commitment: Aggregate amount of investment by PRI by way of:

ODIs Debts other than Overseas Portfolio Investments Non-fund based facilities

Overseas Direct Investment (ODIs)

Investment by way of:
 Acquisition of unlisted equity capital of a foreign entity or
 Subscription as a part of MoA of foreign entity, or
 Investment in >= 10% of PUESC or
 Investment with control where investment is <10% of listed foreign entity.

OPI –
 Investment, other than ODI, in foreign securities
 but not in unlisted debt instrument or
 any securities issued by a PRI who is not in an IFSC

Financial service Regulator – RBI, SEBI, IRDA and PFRDA

Indian entity means:

(i) Company under Companies Act
(ii) Body corporate incorporated by any law
(iii) LLPs under LLP Act
(iv) Partnership firm under IPA, 1932

Strategic Sector includes energy and natural resources sectors such as oil, gas, coal, mineral ores,
submarine cable system and start-ups and any other sector as deemed necessary by CG.
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“Subsidiary” or “step down subsidiary” of a foreign entity means an entity in which the foreign entity
has control (not necessarily >50% holding)

“Control” means:
 the right to appoint majority of dirs. or
 to control management or policy decisions exercisable by a person acting individually or in
concert including by virtue of their shareholding or mgt. rights or shareholders’ agreements
or voting agreements that entitle them to >= 10% of voting rights or in any other manner.

“Net worth” – Same meaning as Sec 2(57) of Companies Act. (i.e., SPA included now)
3. Administration of these Rules:
 Administered by RBI
 RBI may issue direction and instructions as it may deem necessary for effective implementation

4. Non applicability:
These rules and relevant regulations shall not apply to:
(a) Investment made outside India by a financial institution in an IFSC (e.g. JP Morgan in GIFT City)
(b) Acquisition or transfer of any investment o/s India made:
a. Out of Resident Foreign Currency (RFC) Account or
b. Out of FC resources held o/s India by a person employed in India for specific duration
irrespective of length thereof or for a specific job duration of which is < 3 years.
c. In accordance with section 6(4) of this Act

Section 6(4) – PRI may hold foreign currency, foreign security or IP situated o/s India provided that
it was held by such person when he was PROI or inherited from a PROI

5. Debt instrument and non-debt instrument:

Following shall be debt and non-debt instruments as determined by CG u/s 6(7):
(A) Debt instruments (RBI has power to regulate)
Govt Bonds Corporate Bonds All non-equity tranches of securitization

Borrowing through Loans Depository receipts with underlying debt securities

(B) Non-debt instruments:

Investment in equity of incorporated entities Capital participations in LLPs Immovable prop

Instruments recognised in FDI policy Equity tranche of Securitisation Contribution to trust

Depository receipts against equity Investment in MF and ETF which invest >50% in equity

Investment in units of AIFs, ReITs and Infra investments trusts

6. Continuity of existing investment:

Any investment or financial commitment made o/s India as per FEMA Rules and Reg. and held as on
date of publication of this Rule in Official Gazette – Deemed to be in compliance of this Rule.
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7. Rights issue and Bonus Shares

1. Any PRI who has acquired & continues to hold equity of foreign entity (as per Rules & Reg) may:
 Invest in equity capital issue by such entity as rights issue, or
 May be granted bonus subject to T&C of these rules.

2. PRI referred above may renounce such rights in favour of PRI or PROI.

8. Prohibition on investment o/s India:

Save as otherwise provided in Act, Rules or Regulation, no PRI shall make or transfer investment or
financial commitments outside India.

9. Overseas Investment (OI):

1. Investment outside India:
 Any investment made outside India by a PRI
 shall be made in a foreign entity engaged in bona fide business activity,
 directly or through step down subsidiary or SPV
 subject to limits and conditions of these rules and regulations

Provided that – OI or transfer thereof (including swap) of securities in foreign entities

incorporated in Pakistan or other CG notified jurisdiction – Requires prior approval of CG

2. Notwithstanding these Rules and Regulations:

i. CG may, on application made to it through RBI, permit financial commitments in strategic
sectors or geographics, above the limits subject to T&Cs.
ii. RBI may, on application made to it through designated AD Bank, permit a PRI to make or
transfer investment or financial commitment outside India subject to T&C.
Provided that – OI by PRI shall not be made in foreign entity located in country as may be
decided by CG.

3. RBI may, in consultation with CG,:

 Stipulate ceiling for aggregate outflows in a FY on account of OI (i.e., FinCom or OPI)
 Stipulate ceiling beyond which amount of Financial commitment (not OI) by a PRI in a FY shall
require prior approval of RBI.

10. No objection certificate:

1. A PRI who:
has an NPA classified as wilful under investigation by financial service regulator or
account defaulter by any bank Indian investigative agencies - CBI or ED or SFIO

shall, before making any Fincom or undertaking regulations, obtain a NOC from the concerned
lender bank or regulatory body or investigative agency by making an application in writing.

Where the concerned bank or agency fails to furnish NOC within 60 days of application –
Presume no objection to the proposed transaction.
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2. NOC issued by bank, agency, etc. shall be addressed to the designated AD bank with an
endorsement to applicant.

Rule 11 onwards:
Rule Heading In the manner and subject to T&C Prescribed in :
11 Manner of ODI by Indian Entity Schedule I
12 Manner of OPI by Indian Entity Schedule II
13 Manner of ODI by Resident Individual Schedule III
14 OI by PRI other than Indian Entity and Schedule IV
Resident Individual
15 OI in IFSC by PRI Schedule V

16. Pricing Guidelines:

1. Unless otherwise provided herein, the issue or transfer of equity capital:
 From PROI or PRI to a PRI who is eligible to make such investment, or
 From a PRI to a PROI
shall be subject to a price arrived on Arm’s Length basis (ALP)

2. In such transaction, AD bank shall ensure compliance with ALP taking into consideration the
valuation as per internationally accepted method.

17. Transfer or Liquidation:

1. Unless provided in these rules, PRI holding equity capital as per these rules, may transfer such
investments as per the Regulations.
2. PRI may transfer equity capital by way of sale to a “Eligible PRI” or PROI
3. In case such transfer is on account of merger, amalgamation or demerger or buyback, such trf or
liquidation shall have approval of competent authority as per laws of India or host country.
4. Where the disinvestment by PRI pertains to ODI:
i. Transferor, in case of full disinvestment other than by way of liquidation, shall not have any
dues outstanding for receipt from foreign entity (as an investor in equity or debt)
ii. Transferor must have stayed invested for at least 1 year from date of making ODI

Provided that, above condition shall N.A. in case of:

a. merger, demerger or amalgamation between 2 or more FE that are wholly owned by IE or
b. where there is no change or dilution in aggregate holding of Indian entity in the new entity.

5. The holding of any investment or transfer thereof shall not be permitted if initial investment was
not permitted under the Act

18. Restructuring:
PRI who made ODI in a foreign entity may permit restructuring of balance sheet by such entity:
 which has been incurring losses for previous 2 years as evidenced by last audited BS.
 subject to compliance with reporting, documentation requirements, and
 subject to diminution in the total value of o/s dues towards such PRI on accounts of investment in
equity or debt after such restructuring not > proportionate amount of accumulated losses.
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Certification of diminution in value:

In case where the original investment is > $10 mn or where amount of diminution > 20% of total o/s,
the diminution in value shall be duly certified on an ALP by:
 Registered valuer under Companies Act,
 Corresponding valuer registered with regulatory authority in host jurisdiction,
 Certified Public Accountant in host jurisdiction.

The certificate dated not > 6 months before date of transaction – Submit to designated AD bank

19. Restrictions and prohibition

(1) Unless otherwise provided, no PRI shall make ODI in foreign entity engaged in:
(a) Real estate activity
(b) Gambling in any form
(c) Dealing with financial products linked to INR w/o specific approval of RBI.

Note – Real estate activity means:

 Buying or selling of real estate
 Trading in Transferable Development Rights (TDRs)
 but does not include development of townships, construction of residential or commercial
premises, roads or bridges for selling or leasing.

(2) Any ODI in start-ups recognised under laws of host country shall be made by an:
 Indian entity - Only from internal accruals whether from Indian entity or group or associate
cos. in India
 Resident individuals – From own funds of such individuals

(3) No PRI shall make financial commitment in foreign entity that has invested or invests into India,
at the time of making it or any time, thereafter, resulting in a structure with > 2 layers of
subsidiaries. [Round tripping]

Such restriction shall not apply in case of:

Systematically important NBFC as Govt co. u/s 2(45) of
Banking co. Insurance co.
per Sec 45-I of RBI Companies Act

20. Requirements to be specified by RBI:

Mode of payment, deferred payment of consideration, reporting, realisation and other requirement
for OI by PRI shall be as per regulations made by RBI.

21. Restriction on acquisition or transfer of immovable property outside India (IPOI)

(1) Save as other provided in the Act, no PRI shall acquire or transfer IPOI without general or
special permission of RBI.

Provided that above provision shall not apply to property:

(i) Held by PRI who is a national of a foreign state.
(ii) Acquired by a PRI on or before 8th July 1947 & continued to be held with permission of RBI
(iii) Acquired by PRI on lease not > 5 years.
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(2) Notwithstanding above:

(i) PRI may acquire IPOI by way of:
Purchase from PRI who acquired such IPOI
Inheritance Gift
as per forex provision in force at that time
(ii) PRI may acquire IPOI from a PROI by way of:
Purchase out of purchase out of remittance sent
Inheritance
forex in RFC A/C under LRS scheme of RBI*
jointly with a relative who out of income or sales proceeds of
is PROI overseas assets other than ODI
*Provided that such remittance under LRS may be consolidated in respect of relatives if
such relative being PRI comply with T&C of the scheme.
(iii) An Indian entity having overseas office may acquire IPOI for the business and residential
purpose of staff as per RBI directions.
(iv) PRI who has acquired IPOI as per forex provision in force at such time may:
(a) Transfer it by way of gift to eligible PRI or by way of sale
(b) Create charge on such property as per Act, Rules, Regulations or RBI directions.

(3) Holding of investment in IPOI or transfer thereof shall not be permitted if initial investment was
not permitted.

Author’s Note –
Impact of these rules: Global economic meltdown due to inflation and war, may present good
opportunities for Indian parties to acquire strategic assets at an attractive valuation.

Schedule I – Manner of ODI by Indian Entity

1. Manner of making ODI:
(1) Purpose – Undertaking bonafide business activity.
(2) ODI may be made or held by way of:
Subscription or Acq. through bidding Acq. by way of right
swap of securities
purchase of equity or tender issue or bonus issue
capitalisation of any amt. due to be received, remittance of which is merger, demerger
permitted under Act or does not require prior permission of CG/RBI or amlagamtion

2. ODI in financial services activity:

(1) An Indian entity engaged in financial services activity in India may make ODI in a foreign
entity engaged in such activity provided that the Indian entity:
(i) has posted net profits during the last 3 FYs
(ii) is registered with financial service regulator in India
(iii) has obtained approval from financial service regulators both in India and host country.

(2) An Indian entity not engaged in financial services activity in India may make ODI in a foreign
entity engaged in such activity, except banking or insurance, provided that the Indian entity
has posted net profits during the last 3 FYs.
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Provided that an Indian entity not engaged in insurance sector may make ODI in general and
health insurance where such insurance business is supporting the core activity undertaken
overseas by such an Indian entity.

(3) If net profit condition above is not met from 202-2021 to 2021-22 due to COVID, then
exclude these periods.

3. Limit of financial commitment (FinCom):

(1) Total FinCom by an Indian entity in all foreign entities taken together shall be
<= 400% of Net worth as on date of last audited FS or as directed by RBI + CG
(2) Total FinCom shall not include capitalisation of retained earning (e.g., bonus) but include:
i. Utilisation of the amount raised by issue of ADRs or GDRs or stock swap.
ii. Utilisation of proceeds from ECBs to the extent the corresponding pledge or creation
of charge on asset to raise such borrowings has not already been included in limit.

Provided that FinCom made by Maharatna or Navratna or Miniratna or subsy. of such PSUs
in foreign entity o/s India engaged in strategic sectors shall not be subject to above limits

Schedule II – Manner of OPI by Indian Entity:

1. An Indian entity may make OPI <= 50% of net worth as on date of last audited FS
2. Listed Indian co. may make OPI including by way of reinvestment.
3. Unlisted Indian entity may make OPI only under selective clauses of Schedule I (i.e., unlisted
foreign entity can do OPI within limits of Schedule I i.e., 400%)

Author’s Note (Let it go if you didn’t understand)

A Listed Indian entity can make total investment of 450% of NW (i.e., 400% in ODI & 50% in OPI.

But for an unlisted Indian entity, the 50% in OPI is subsumed within the limit of 400%, hence max
investment of 400% can be done.

Schedule III – Manner of making OI by Resident Individual:

1. Manner of making OI:
(1) Any resident individual may make ODI or OPI subject to overall ceiling under LRS of RBI.
(2) Resident individual may make or hold OI by way of:
(i) ODI in an operating foreign entity:
 not engaged in financial service activity AND
 where the resident indv. has control, such foreign entity does not have subsy or step
down subsy.
(ii) OPI, including by way of reinvestment.
(iii) ODI or OPI, by way of:
Acq. by way of right swap of securities (e) (f) Acquisition of
Gift
issue or bonus issue due to merger, etc. Inheritance sqeat eq. shares
capitalisation of any amt. due to be received, remittance of which is (h) Acq. of shares
permitted under Act or does not require prior permission of CG/RBI under ESOP scheme

(g) acq. of minimum qualification share for holding mgt. position

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Provided that – ODI w.r.t. clause (e), (f), (g), (h) shall be made irrespective of whether or
not such foreign entity is engaged in financial service activity or has subsy or step down
subsy where resident individual has control.

Provided further that – Acquisition of < 10% of equity without control under clause (f), (g)
and (h) shall be treated as OPI.

2. Acquisition of foreign securities by way of Gift or inheritance:

(1) A resident individual may, without any limit, acquire foreign securities by way of inheritance
from PRI is holding such securities as per this Act or from a PROI.
(2) A resident individual, without any limit, may acquire foreign securities by way of gift from a
PRI who is a relative and holding such securities as per this Act.
(3) A resident individual may acquire foreign securities by way of gift from a PROI as per FCRA
Act and Regulations made thereunder.

3. Acquisition of shares or interest under ESOP or Sweat Equity shares:

(1) A resident individual, who is an employee or director of an:
 office in India or branch of an overseas entity or
 subsidiary in India of an overseas entity or
 Indian entity in which the overseas entity has direct or indirect eq. holding
may acquire, without limit, shares under ESOPs or sweat equity shares offered by such
overseas entity provided that such ESOPs are being issued globally on uniform basis.

(2) Notwithstanding above, a resident individual may acquire ESOPs under any scheme of CG.

Schedule IV – OI by PRI other than Indian entity and resident individual

1. ODI by Registered trust or society
A person being a registered trust, or a registered society engaged in the educational sectors, or
which has set up hospitals in India may make ODI with prior approval of RBI subject to following
conditions [E-SLAP]:
(i) Foreign entity is engaged in same Sector as that of the Indian trust or society,
(ii) Trust or society should be in Existence for at least 3 FYs before the year of investment
(iii) Trust deed or MoA or Rules or bye-laws shall Permit proposed ODI
(iv) Such investment has Approval of trustees (trust) and governing body (society)
(v) In case the trust or society requires special Licence either from MHA, CG or local
authority, such license has been obtained and submitted to designated AD.

2. ODI by Mutual Funds (MFs), Venture Capital Fund (VCFs) or Alternative Investment Fund (AIFs)
(1) A MF or VCF or AIF may acquire or trf. foreign sec. as per SEBI and subject to T&C of RBI.
Provided that – Aggregate limit of such investment – RBI + CG to decide.
Provided further that – Individual limits of such investment shall be as per SEBI.
(2) Every transaction of purchase or sale here shall be routed through designated AD bank
(3) Investments by MF, VCFs and AIF to be treated as OPI.
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3. Opening of Demat Accounts by SEBI approved clearing corporations (CCs) of stock exchanges
and clearing members (CMs):
May acquire, hold, and transfer foreign securities, offered as collateral by foreign portfolio
investors and subject to SEBI, shall:
(i) Open and maintain demat account with foreign depositories.
(ii) Remit the proceeds arising due to such action, if any, and
(iii) Liquidate such foreign securities and repatriate the proceeds thereof to India.

4. Acquisition and transfer of foreign securities by domestic depositories:

May acquire, hold and transfer foreign securities of a foreign entity, being the underlying
security to issue Indian Depository Receipts (IDRs) as may be authorised by such foreign entity
or its overseas custodian bank and the person investing in IDRs may either sell or continue to
hold foreign securities as per these regulations upon conversion of such depository receipts.

5. Acquisition and transfer of foreign securities by AD Bank:

An AD bank including its overseas branch may acquire or transfer foreign securities in
accordance with the terms of the host country in the normal course of its banking business.

Schedule V – Overseas Investment in IFSC by PRI

1. Subject to these rules and regulations, PRI may make OI in IFSC in India within limit.
2. A PRI may make OI in an IFSC in manner laid down in Sch I to IV provided that:
(i) In case of an ODI made in IFSC, approval by concerned financial service regulator shall be
decided within 45 days from date of application, failing which – deemed approved.
(ii) An Indian entity not engaged in financial service activity in India, making ODI in foreign
entity, except banking and insurance, who does not meet net profit condition, may make ODI
in an IFSC.
(iii) PRI may make contribution to an investment fund or vehicle set up in an IFSC as an OPI
(iv) Resident individual may make ODI in foreign entity including an entity engaged in financial
services activity, (except in banking and insurance), in IFSC if such entity does not have
subsidiary or step-down subsidiary outside IFSC where the resident individual has control in
the foreign entity.

3. Recognised stock exchange in IFSC shall be treated as RSE outside India for these rules.
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Foreign Exchange Management (Overseas Investment) Regulations, 2022

About the Regulation:

Issue by Reserve Bank of India w.e.f. 22nd August, 2022

2. Important Definitions - None

3. FinCom by Indian Entity by modes other than equity capital:

The Indian entity (IE) may lend or invest in:
 any debt instrument issued by a foreign entity or
 extend non-fund-based commitment to or on behalf of foreign entity including overseas step-
down subsidiaries of such Indian entity.

subject to following conditions:

 IE is eligible to make ODI;
 IE has made ODI in the foreign entity;
 IE has acquired control in such foreign entity at time of making FinCom.

4. FinCom by Indian entity by way of Debt

IE may lend or invest in any debt instruments issued by foreign entity subject to condition that:
 Such loans are duly backed by loan agreement and.
 Rate of intt. shall be charged on an arm’s length basis (unrelated + no conflict of interest).

5. FinCom by Indian entity by way of Guarantee (Non-fund based)

1. Following guarantees may be issued to or on behalf of a foreign entity or step-down subsy in
which IE has control through FE:
(i) Corporate guarantee or performance guarantee by such IE
(ii) Corporate guarantee or performance guarantee BY group company of such IE in India being
holding co. (>= 51% stake in Indian entity) or subsy co. (in which IE holds >=51%) or promotor
group co. which is a BC
(iii) Personal guarantee BY the resident individual promoter of the IE
(iv) Bank guarantee, backed by counter-guarantee or collateral by IE or its group co. and issued
by bank in India.

2. Where guarantee is extended by group co., it shall be counted towards utlisation of its FinCom
limits independently, and
In case of Resident individual promoter, same shall be counted in FinCom limit of the IE.

Provided that, where commitment under sub-regulation (1) is extended by group co., any fund-
based exposure to or from the IE shall be deducted from net worth of such group co. for
computing its FinCom limt.

Provided further that where the guarantee under sub-regulation (1) is extended by a promoter,
which is a body corporate or an individual, the IE shall be a part of promoter group.
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3. No guarantee shall be open-ended.

4. The guarantee, to the extent of the amount invoked, shall cease to be a part of the non-fund
based commitment but be considered as lending.

5. Where a guarantee has been extended jointly and severally by two or more IEs , 100% of the
amount of such guarantee shall be reckoned towards the individual limits of each of such IEs.

6. In case of perf. guarantee, 50% of amount of guarantee shall be reckoned towards FinCom limit.

7. Roll-over of guarantee shall not be treated as fresh FinCom where the amt. on account of such
roll-over does not exceed the amount of original guarantee.

6. FinCom by way of pledge or charge

An IE, which has made ODI by way of investment in equity capital in a foreign entity, may:
(a) Pledge such equity in favour of AD bank or PFI in India or an overseas lender, for availing fund-
based or non-fund-based facilities for itself or for any foreign entity in which it has ODI or step
down subsidiary thereof or in favour of debenture trustee registered with SEBI for availing
fund-based facilities for itself.

(b) Create charge by way of mortgage, pledge, hypothecation, etc. on:

i. its asset in India (incl. assets of group co., associate co., promoter or director) in favour of
AD bank or PFI in India or an overseas lender as security for availing fund-based or non-
fund-based facilities for itself or for any foreign entity in which it has ODI or step down
subsidiary thereof or in favor of debenture trustee registered with SEBI for availing
fund-based facilities for itself.
ii. the assets outside India of the foreign entity in which it has made ODI or its step down
subsy outside India, in favour of AD bank in India or PFI in India or an overseas lender as
security for availing fund-based or non-fund based facilities for itself or for any foreign
entity in which it has ODI or step down subsidiary thereof or in favor of debenture
trustee registered with SEBI for availing fund-based facilities for itself.

Provided that:
i. Value of pledge or charge or amount of facility – Whichever is LESS, shall be considered as
FinCom limits provided such facility has already not been included in FinCom limit and
excluding cases where the facility has been availed by the Indian entity for itself;
ii. Overseas lender in whose favour there is such a pledge or charge shall not be from any
country or jurisdiction in which FinCom is not permissible under FEMA Rules.

Note – The “negative pledge” or “negative charge” created by an IE, or a bid bond guarantee
obtained as per these regulations for participation in a bidding or tender procedure for acquisition
of foreign entity shall not be reckoned towards FinCom limit referred to in Reg. 3(1).
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7. Acquisition or transfer of equity capital by way of deferred payment:

1.
Where a PRI acquires equity cap. by Where PROI acquires equity capital
subscription or purchase from PROI by way of purchase from PRI

and where such equity cap. is reckoned as ODI,

the payment of amount of consideration may be deferred for such definite period from date of
agreement as provided in such agreement subject to following:
(i) Foreign securities equivalent to amount of total consideration shall be transferred or
issued upfront by the seller to the buyer.
(ii) Full consideration finally paid shall be compliant with pricing guidelines.

Provided that – Deferred part of consideration in case of acquisition of equity capital of a

foreign entity by PRI shall be treated as non-fund based commitment.

2. Buyer may be indemnified by the seller up to such amount and subject to such T&C as may be
mutually agreed upon and laid down in the agreement.

Provided that, such agreement is in compliance with provision of the Act, etc.

8. Mode of payment: (for both debt and non-debt instrument)

A PRI making OI may make payment:
i. By remittance made through banking channels.
ii. From funds held in accounts as per this act.
iii. By swap of securities.
iv. By using proceeds of ADRs, GDRs, or stock swap of such receipts or ECBs.

9. Obligation of a PRI:
1. A PRI acquiring equity capital in foreign entity which is reckoned as ODI shall submit to AD Bank
share certificates or other relevant docs as per law of host country, as evidence of such
investment, within 6m from:
 date of effecting remittance or
 date on which the dues to such person are capitalized or
 date on which amount was allowed to be capitalised, as the case may be.

2. PRI, through its designated AD bank, shall obtain a Unique Identification Number (UIN) from
RBI for the foreign entity in which ODI is intended to be made before sending outward
remittance or acquisition of equity capital, whichever is earlier.
(Note: In case of deferred payment, acquisition is earlier)

3. A PRI making ODI shall designate an AD bank and route ALL transactions related to a particular
UIN through such AD.
Provided that – Where >1 PRI makes FinCom in same foreign entity, ALL such person shall route
ALL transactions relating to that UIN through AD bank designated for that UIN.
 13

4. PRI having ODI shall realise and repatriate to India:

 all dues receivable from foreign entity w.r.t. investment in such entity, (e.g., Dividend)
 the amount of consideration received on transfer or disinvestment of such ODI and
 the net realisable value of assets due to liquidation as per laws of host country
within 90 days from date when such receivables fall due or date of such trf. or disinvestment or
date of actual distribution of assets made by official liquidator.

5. PRI who is eligible to make ODI may make remittance towards earnest money deposit or obtain a
bid bond guarantee from an AD bank for participation in bidding or tender procedure for
acquisition of foreign entity.

Provided that – In case of open-ended bid bond guarantee, it shall be converted to close ended
within 3 months from date of award of contract.

10. Reporting requirements for Overseas Investment:

(1) All reporting by a PRI, as specified, shall be made through designated AD bank in manner provided
in this regulation and in format provided by RBI.

(2) A PRI who has made ODI or making FinCom or undertaking disinvestment in a FE shall report:
a. FinCom at the time of sending outward remittance or making a FinCom, whichever is earlier;
b. disinvestment within 30 days of receipt of disinvestment proceeds;
c. restructuring within 30 days from the date of such restructuring.

(3) A PRI other than a resident individual making any OPI or transferring such OPI by way of sale
shall report such investment or transfer of investment within 60 days from end of the half-year
in which such investment or transfer is made as of Sep or March-end:

Provided that in case of OPI by way of acquisition of shares or interest under ESOP, the reporting
shall be done by the:
 Office in India or
 Branch of an overseas entity or
 Subsidiary in India of an overseas entity or the Indian entity in which the overseas entity
has direct or indirect equity holding where resident individual is an employee or director.

(4) A PRI acquiring equity capital in a FE which is reckoned as ODI, shall submit an Annual Performance
Report (APR) with respect to each foreign entity every year by 31st December and where the
accounting year of such foreign entity ends on 31st December, the APR shall be submitted by 31st
December of the next year:

Provided that no such reporting shall be required where:

i. a PRI is holding <10% of the equity capital without control in the FE and there is no other
FinCom other than by way of equity capital; or
ii. a foreign entity is under liquidation.
 14

Explanation: For the purposes of this sub-regulation:

(a) the APR shall be based on the audited FS of the foreign entity.

Provided that where the PRI does not have control in the FE and the laws of the host country or
host jurisdiction, as the case may be, do not provide for mandatory auditing of the books of
accounts, the APR may be submitted based on unaudited FS certified as such by statutory auditor
of the IE or by a CA where the statutory audit is not applicable;

(b) in case more than one PRI have made ODI in the same FE, the person holding the highest stake in
the FE shall be required to submit APR and in case of holdings being equal, APR may be filed jointly;

(c) The PRI shall report the details regarding acquisition or setting up or winding up or transfer of a
step-down subsidiary or alteration in shareholding pattern in FE during reporting year in APR.

(5) An IE which has made ODI shall submit an Annual Return on Foreign Liabilities and Assets within
such time as may be decided by RBI, to Department of Statistics & Info Mgt., RBI

11. Delay in reporting:

(1) A PRI who does not submit the evidence of investment within time specified in Regulation 9(1) or
does not make any filing within the time specified under Regulation 10, may make such submission
or filing, as the case may be, along with Late Submission Fee within such period as may be advised,
and at the rates and in the manner as directed by RBI.

Provided that such facility can be availed within maximum 3 years from due date of such
submission or filing, as the case may be.

(2) A PRI responsible for submitting the evidence or any filing relating to OI before date of
publication of these regulations in the Official Gazette and who has not made such submission or
filing within the time specified thereunder, may make such submission or filing along with Late
Submission Fee and at the rates and in the manner as may be directed by RBI, from time to time.

Provided that such facility can be availed within maximum 3 years from date of publication
of these regulations in OG.

12. Restriction on further financial commitment or transfer:

A PRI who has made a FinCom in a foreign entity as per Act or rules or regulations made thereunder,
shall not make any further FinCom, whether fund-based or non-fund-based, directly or indirectly,
towards such foreign entity or transfer such investment till any delay in reporting is regularised.
 15

Insolvency and Bankruptcy Code, 2016

Section 24 – Meeting of CoC

 Mode of meeting– In person or such e-means as may be specified.
 Meetings to be conducted by RP.
 Meeting of CoC: [Amendment]
o RP to convene meeting of CoC as and when it considers necessary.
o RP to convene meeting on request by members of CoC having at least 33% of voting rights.
o RP may place proposal received from member of CoC – If he considers necessary + Such proposal is
made by members representing at least 33% of voting right.
 RP to give notice of each CoC meeting to:
o Members of CoC including ARs
o Members of suspended BOD or partners of CD
o OC if the amount of aggregate dues (towards OD) is >= 10% of total debt
 BOD, partners and 1 rep of OCs may attend the meeting but no right to vote and their absence not to
invalidate proceedings of meeting.
 Period of Notice of meeting
o Not less than 5 days’ notice to all participants
o CoC may reduce period of notice to not less than 24 hours (48 hrs in case if there is any AR)
 FC who is a member of CoC may at his own cost appoint an IP (other than RP) to represent himself.
 Voting shares to be based on financial debt owed to such creditor and shall be determined by RP
 Meeting to be conducted in such manner as specified.

Note - Meetings may be convened till the RP is approved u/s 31 or order for liquidation is passed u/s 33 &
decide on matters which do not affect the RP submitted before AA.

Section 7: Initiation of CIRP by a FC

Financial Creditor
Application (prescribed Form)
(Itself or jointly with other Adjudication Authority (NCLT)
Against CD for initiating CIRP
FCs/Person notified by CG)
Following person are notified by CG and may file an application on behalf of FC:
executor or administrator of trustee including person duly authorized by
Guardian
an estate of FC debenture trustee BOD of a company
• Applicant shall serve copy of such application to registered office of CD and to Board by register post,
speed post, or hand delivery or e-mode BEFORE filing with AA. [Amendment]

Section 39 - Verification of Claims

 The liquidator shall verify the claims within such time as may be specified by the Board (30 days from the
last date of the receipt of the claim)
 Liquidator may require any creditors/CD/ others to produce any other evidence to verify claims.
 Liq. shall also verify claims collated during CIPR but not submitted during liquidation , within 30 days from
last date for receipt of claims during liquidation & may either admit/reject claim.
Section 59: Voluntary Liquidation of Corporate Persons (CP)
Replacement of Liquidator – CP may replace liquidator by passing a SR. Such IP shall, within 3 days 7 days of
his appointment, intimate IBBI about such appointment.
 16

Foreign Contribution Regulation Act

Section 4: Person to whom Sec 3 not applicable:

Person referred to u/s 3 can accept FC where such FC is by way of [ Salary/Stipend R2 BAD ]:
- Salary, wages or other Payment in course of Gift/presentation - As
rem. due to him OR as an Agent of FS
international trade a member of Indian
w.r.t, transaction by
- Payment in OCOB in India or OCOB outside Delegation (subject to
such FS with CG/SG
by FS India CG Rules)

Remittance in OCOB through Post office / AP scholarship / stipend or

from his relative*
as per FEMA payment of like nature

*Note – Any person receiving FC from relative > Rs. 10 lakhs in FY - Inform CG in FC - 1 within 3m.

FAQs regarding Online submission of revision application u/s 32

Who is eligible? Person registered under FCRA + Aggrieved by order of CG
How to make such application? Application to Secretary, MHA, Government of India in e-form
only.
Can application be sent through W.e.f. 15th Aug 2022, NO.
physical mode?
Procedure Upload a scanned copy of its application on the FCRA web portal.
Go to - "Services under FCRA" >> "Revision Application against
Section 32, FCRA 2010”
Is there a need to send physical Bola na nahin? Samajh nahin aaaraha? :D Nahin chahiye physical
copy of revision appln. filed online? copy.
Any specific format for such No. Scanned copy of duly signed application on plain paper is
application? acceptable
Is applicant required to submit Yes. It must be submitted along with supporting document, if any
justification for revision of order?
Fee Rs. 3,000 – Paid through payment gateway as specified by CG
Time limit Within 1 year from date on which the order in question was
communicated or date on which it otherwise came to know of it,
whichever is earlier
 17

Companies Act, 2013

Section 150: Manner of Selection of ID and Maintenance of Databank of ID

Restoration of Name:
Any indv. whose name has been removed for not being able to clear OPSAT within 2 years, he may apply
for restoration of his name on payment Rs. 1,000 & IICA shall allow such restoration subj to:
(i) his name shall be shown in a separate restored category for 1 year from such restoration within
which, he shall be required to pass OPSAT & thereafter his name shall be included, only, if he
passes OPSAT and in such case, the fees paid by him at the time of initial registration shall
continue to be valid for the period for which the same was initially paid; and

in case he fails to pass OPSAT within 1 year from date of restoration, his name shall be removed from
data bank, and he shall be required to apply afresh for inclusion of his name

Section 152: Appointment of Directors

1. First director -
 Appointed as per provisions of AoA. Otherwise, subscribers to MoA (individuals) – Deemed
 Tenure – Till directors duly appointed as per provision of this Act
 OPC – Individual member deemed.
2. Every director shall be appointed by the company in the GM (unless otherwise specified)
3. No person to be appointed as dir. unless allotted DIN. (Minor cannot obtain DIN)
4. Every Dir. (incl Sec 161) to furnish DIN and Declaration that he is not disqualified before appt.
5. Furnish consent to act as a director – On or before his appt. - DIR-2 (Director to co.)
Co. to file such consent with RoC within 30 days of such appt. in Form DIR 12 + Fees.
In case of a person who is a national of a country that shares land border with India, necessary
security clearance from Ministry of Home Affairs to be attached along with such consent.
Proviso (N.A to S-8 Co.) – For appt. of ID, ES to include a statement of BOD that he fulfils
condition specified in the act

Sec 154: Allotment of DIN

 CG shall allot DIN within 1 month of receipt of application
Communicate decision + DIN (in
Submit DIR-3 Appln. CG shall decide on the
case of approval) by way of
online and make number is approval or rejection
letter (post/e-mode) within 1
requisite payment generated of application
month of receipt of appln

Note – No Application no. shall be generated in case of a person who is a national of a country that
shares land border with India unless necessary security clearance from Ministry of Home Affairs
has been attached along with DIR 3.

Other Amendments:
Nidhi company and other minor amendments – This were done in Nov’22 amendments video. It is very
likely that all other amendments – You have already covered it. Just in case if you haven’t done it
already, watch Nov’22 amendment video on YouTube.