First Board Meeting Minutes of a Company

MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS OF _____________________________________________ PRIVATE LIMITED/ LIMITED HELD ON ___________DAY THE _____ DAY OF ___________(Month) _____(Year) AT ____ AM/PM AT THE REGISTERED OFFICE SITUATED AT __________________________________________________________________________________________________________________________________________

 

Present

Mr./Ms. _____________                                                                                 Director

Mr./Ms. _____________                                                                                 Director

Mr./Ms. _____________                                                                                 Director

 

1.                  QUORUM

Quorum being present, the meeting was called to order.

2.                  CHAIRPERSON OF THE MEETING

Mr. ___________ was elected as the Chairman of the meeting.

3.                  CERTIFICATE OF INCORPORATION

The certificate of incorporation bearing number _____________________________________ dated ________________ issued by the Registrar of Companies, __________________ along with the copies of Memorandum of Association & Articles of Association were placed before the Board. The same was taken note of.

4.                  CONFIRMATION OF THE APPOINTMENT OF THE DIRECTORS

The Board was informed that as per provisions of Section 152 and Section 149 of the Companies Act, 2013, Mr. _____________ , Mr. _____________and Mr.____________  being named as first Directors in the Articles of Association and will be the first Directors of the Company. In this connection Board passed the following resolution:

“RESOLVED THAT Mr. __________, Mr. _____________ and Ms. ____________- shall be the First Directors of the Company”

5.                  APPOINTMENT OF FIRST AUDITORS

The Chairman placed before the Board the letter received by the Company from M/s ___________________ & Company, Chartered Accountants, intimating that in case of their appointment as auditors of the Company for the year ending 31st March, 2015 is made, the same would be in accordance with the provisions of the Companies Act, 2013. The Board took note of the same and appointed him as the First Auditor of the Company till the conclusion of the first Annual General Meeting of the Company. Following resolution was passed in this regard:

“RESOLVED THAT consent of Board of Directors be and is hereby accorded to the appointment of M/s _____________ & Company, Chartered Accountants as First Auditors of the Company to hold the office from the date of incorporation of the Company till conclusion of the first Annual General Meeting of the Company at remuneration as agreed upon.

RESOLVED FURTHER THAT Mr. ______________, Director of the Company, be and is hereby directed to give intimation of the appointment to Auditor so appointed within a period of seven days.”

6.                  ADOPTION OF THE COMMON SEAL

The Chairman placed before the Board the common seal of the Company, which was taken note of and at the same time following resolution was passed:

“RESOLVED THAT the Common Seal of the Company which has been submitted to and approved by this meeting of the Board and an impression of which has been affixed in the margin of these minutes be and is hereby adopted as the Common Seal of the Company.

FURTHER RESOLVED THAT the Common Seal of the Company shall be kept in safe custody of the Directors of the Company who shall maintain a Seal register in which details of all documents sealed would be entered”

7.                  SITUATION OF REGISTERED OFFICE

The Chairman placed before the Board the copy of the Form – INC 22 filed before the Registrar of Companies as the notice of situation of the Registered Office of the Company and the following resolution was passed:

“RESOLVED THAT the Registered Office of the Company be situated at _______________________________________________________________________________________”

8.                  FINANCIAL YEAR

The Chairman apprised the Board that the first financial year of the Company will be a period shorter than the 12 Month period, however, the subsequent financial years will be of 12 Month period commencing from 1^st April and ending on 31^st March of the following year. The Board took note of the same and following resolution was passed:

“RESOLVED THAT the First Financial Year of the Company will be commencing from _______________(date of incorporation) and ending on 31^st March 2015.

FURTHER RESOLVED THAT the subsequent financial years of the Company will be commencing from the 1^st April till 31^st March of the following year”

9.                  SHARE CERTIFICATES

The Chairman placed before the Board, the format of the Share Certificates proposed to be printed for the Company. The same was taken note of and was duly approved and the following resolution was passed:

“RESOLVED THAT as per section 46 with rule 5 of The Companies (Share Capital & Debentures) Rules,2014 the draft of the Share Certificate as has been produced before the Board, be and is hereby, approved and the same be adopted as the Share Certificate of the Company.

RESOLVED FURTHER THAT Mr. ______________-, Director, be and is hereby authorized to ensure the safe custody of the share certificates.”

10.              BOOKS AND REGISTERS

The Chairman informed the Board that the various books and registers are required to be maintained as the provisions of the Companies Act, 2013 and other applicable statutes along with stationeries are to be purchased for the Company’s business. It was:

“RESOLVED THAT Mr. _______________, Director be and is hereby authorized to make the purchases of the various books, registers and stationary as are necessary for the business of the company

FURTHER RESOLVED THAT the same will be in safe custody of ________________, Director and shall be maintained as per the applicability of the statutory provisions and other applicable Laws”

11.              PAYMENT OF SITTING FEES

As per Section 197(5) with rule 4 of the companies (Appointment & Remuneration of Managerial Personnel)  it is proposed to disburse the sitting fees to the directors for attending the meeting.

Therefore every director Mr. ______________, Mr. ______________ and Ms. _______________________ unanimously waived off the requirement of paying sitting fees.

12.              SHARES TO SUBSCRIBERS TO MEMORANDUM

The Chairman apprised the Board that the Company has received subscription money from the subscribers in full against the equity shares subscribed by them and the following resolution was passed:

“RESOLVED THAT the particulars of the signatories to the Memorandum of Association be placed on the appropriate register as per the details envisaged below:

Name	No. of Shares	Folio No.	Serial No.	Value in Rupees

RESOLVED FURTHER THAT Mr. _______________ and Ms. _____________, Directors be and is hereby authorized to issue Share Certificates to the Subscribers in accordance to the shares taken by them as per the Companies (Share Capital and Debentures) Rules, 2014.

RESOLVED FURTHER the common seal of the company be affixed thereto and accordingly be signed thereof by Mr. ______________ and Ms. _____________, Directors and hereby further authorised Mr. _________ to sign as Authorised Signatory on the Shares Certificates.”

13.              APPLYING FOR PAN

The Chairman informed the Board that the Company needs to apply Permanent Account Number (PAN) and other tax registrations for purpose of smooth business operation and various tax compliances. The matter was discussed and the following resolution was passed:

RESOLVED THAT Mr. ______________, Director be and is hereby authorized to apply PAN before the Income Tax Department in the name of the Company.”

14.              VOTE OF THANKS

There being no other business to be transacted the meeting ended with a vote of thanks to the Chair.

Date: __________

Place: New Delhi                                                                                            

(CHAIRMAN)

Extension of Financial Year permitted or not in case company is registered in October 2015?

Question: One of our group company was incorporated in the month of October, 2015 and we wanted to close the financial statements for the First Financial Year either on June 30, 2016 or March 31, 2017.

Request you to kindly let us know if the same is possible

Answer:

As per Section 2(41) of Companies Act 2013, 

"Financial Year" in relation to any company or Body Corporate, means the period ending on the 31st day of March every year and where it has been incorporated on or after 1st day of Januray of a year, the period ending on the 31st March of the following year, in respect whereof financial statement of the company or Body Corporate is made up.

Provided that on an Application made by a company or Body Corporate, which is a holding company or Subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its Financial Year, whether or not that period is a year.

Conclusion; the financial year of the company can only close on March 31^st every year with no gap in any year. However with an exception, in the event the company has its subsidiary or holding company outside India with financial year ending on June, then we can keep the financial year ending June but with the order of the Company Law Board under section 2(41) of the Act.

For more queries, contact CS Neha Seth at csnehaseth@gmail.com or call us at 9871903449

Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016

RESERVE BANK OF INDIA
FOREIGN EXCHANGE DEPARTMENT
CENTRAL OFFICE
MUMBAI 400001

Notification No. FEMA 22(R)/RB-2016

March 31, 2016

Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016

In exercise of the powers conferred by sub-section (6) of Section 6 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in supersession of Notification No. FEMA 22/2000-RB dated May 3, 2000, as amended from time to time, the Reserve Bank of India makes the following regulations to prohibit, restrict and regulate establishment in India of a branch office or a liaison office or a project office or any other place of business by a person resident outside India:-

1. Short title and commencement

a.       These Regulations may be called the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016.

b.      They shall come into force from the date of their publication in the Official Gazette.

2. Definitions

In these regulations, unless the context otherwise requires –

a.       'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999).

b.      ‘Authorised Dealer’ means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act.

c.       'Foreign company' means a body corporate incorporated outside India and includes a firm or other association of individuals.

d.      'Branch Office' in relation to a company, means any establishment described as such by the company.

e.      'Liaison Office' means a place of business to act as a channel of communication between the principal place of business or Head Office or by whatever name called and entities in India but which does not undertake any commercial /trading/ industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel.

f.        'Project Office' means a place of business in India to represent the interests of the foreign company executing a project in India but excludes a Liaison Office.

g.       'Site Office' means a sub-office of the Project Office established at the site of a project but does not include a Liaison Office.

h.      ‘Stand-alone basis’ means such branch offices would be isolated and restricted to the Special Economic Zone alone and no business activity/ transaction will be allowed outside the Special Economic Zones in India which includes branches/subsidiaries of its parent office in India.

i.         The words and expressions used but not defined in these Regulations, shall have the same meanings respectively assigned to them in the Act.

3. Prohibition against opening a branch office or a liaison office or a project office or any other place of business in India

No person resident outside India shall without prior approval of the Reserve Bank open in India a branch office or a liaison office or a project office or any other place of business by whatever name called except as laid down in these Regulations.

Provided that

a. A banking company resident outside India shall not require any approval under these Regulations for establishing any office in India if such company has obtained necessary approval under the provisions of the Banking Regulation Act, 1949.

b. An insurance company resident outside India shall not require any approval under these Regulations for establishing any office in India if such company has obtained approval from the Insurance Regulatory and Development Authority established under section 3 of the Insurance Regulatory and Development Authority Act, 1999.

c. A company resident outside India shall not require any approval under these Regulations to establish a branch office in the Special Economic Zones (SEZs) to undertake manufacturing and service activities, subject to the conditions that:

         i.            such branch offices are functioning in those sectors where 100% FDI is permitted;

       ii.            such branch offices comply with Chapter XXII of the Companies Act, 2013; and

      iii.            such branch offices function on a stand-alone basis.

4. Approval for opening a branch office or a liaison office or a project office or any other place of business in India

a. Eligibility

A person resident outside India can establish a branch office or a liaison office in India provided it meets the following criterion:

         i.            For Branch Office — a profit making track record during the immediately preceding five financial years in the home country and net worth of not less than USD 100,000 or its equivalent.

       ii.            For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country and net worth of not less than USD 50,000 or its equivalent.

Provided that a person resident outside India that is not financially sound and are subsidiaries of other companies may submit a Letter of Comfort (Annex A) from their parent company subject to the condition that the parent company satisfies the prescribed criterion for net worth and profit.

b. Permissible activities

A person resident outside India permitted by the Reserve Bank under these Regulations to establish a branch or liaison office in India may undertake or carry on any activity specified in Schedule I or II (Annex B), as the case may be, but shall not undertake or carry on any other activity unless otherwise specifically permitted by the Reserve Bank.

c. Application form

A person resident outside India desiring to establish a branch office or a liaison office or a project office or any other place of business in India shall submit an application in Form FNC (Annex C) to an Authorised Dealer Category-I bank who may, subject to the provisions of Regulation 5, grant approval as per the directions and/or guidelines issued by the Reserve Bank in this regard. In case no office is opened by the person resident outside India within six monthsfrom the date of approval letter, the approval for establishing the office in India shall be cancelled. In cases where the person resident outside India is not able to open the office within the stipulated time frame due to reasons beyond their control, the Authorised Dealer Category-I bank may consider granting extension of time for setting up the office by a further period of six months. Any further extension of time shall require the prior approval of the Reserve Bank in this regard.

d. Extension of the validity period for liaison office

I. A person resident outside India may establish in India under these Regulations a liaison office for a period of three years subject to the provisions of Regulation 4 d (III). The non-resident entity may apply to the Authorised Dealer Category-I bank concerned for extension of the validity period of approval, and upon receipt of such an application, the Authorised Dealer Category-I bank concerned may extend the validity period of approval for a period of three years from the date of expiry of the original approval / extension granted, subject to such directions issued by the Reserve Bank in this regard.

II. The application for extension of the validity period of the liaison office of banks and entities engaged in insurance business has to be directly submitted to the Department of Banking Regulation (DBR), Reserve Bank and the Insurance Regulatory and Development Authority (IRDA) respectively.

III. Entities engaged in construction and development sectors and which are Non-Banking Finance Companies are permitted to open a Liaison Office for two years only. No further extension would be considered for liaison offices of entities which are Non-Banking Finance Companies and those engaged in construction and development sectors (excluding infrastructure development companies). Upon expiry of the validity period, the offices shall have to either close down or be converted into a Joint Venture / Wholly Owned Subsidiary in conformity with the extant Foreign Direct Investment policy.

e. Additional offices

A person resident outside India desiring to establish additional branch office or liaison office may submit to the Authorised Dealer Category-I bank a fresh FNC Form along with the justification for the need for additional office/s.

f. Project office

I. A foreign company may open project office/s in India provided it has secured from an Indian company, a contract to execute a project in India, and

         i.            the project is funded directly by inward remittance from abroad; or

       ii.            the project is funded by a bilateral or multilateral International Financing Agency; or

      iii.            the project has been cleared by an appropriate authority; or

     iv.            a company or entity in India awarding the contract has been granted term loan by a Public Financial Institution or a bank in India for the Project.

Explanation:

For the purpose of this Regulation,

         i.            'a bilateral or multilateral International Financing Agency' means the World Bank or the International Monetary Fund or similar other body.

       ii.            “Public Financial Institution” is a public financial institution as defined in Section 4A of the Companies Act, 1956.

II. A person from any country other than Pakistan who has been awarded a contract for a project by a Government authority/ Public Sector Undertaking may open a bank account with an Authorised Dealer Category-I bank without any prior approval from the Reserve Bank.

g. Registration with State Police Authorities

A person from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau opening a branch office or a liaison office or a project office or any other place of business in India shall have to register with the concerned State Police Authorities. Copy of approval letter for ‘persons’ from these countries shall be marked by the AD Category-I bank to the Ministry of Home Affairs, Internal Security Division-I, Government of India, New Delhi.

h. Fund/non-fund based facilities

Authorised Dealer Category-I bank may extend fund and/or non-fund based facilities to branch office and project offices based on the guidelines issued by the Reserve Bank in this regard.

i. Remittance of profit or surplus

I. Branch office may remit outside India profit of the branch net of applicable Indian taxes, on production of the following documents to the satisfaction of the Authorised Dealer Category-I bank through whom the remittance is effected:

i. A certified copy of the audited Balance Sheet and Profit and Loss account for the relevant year.

ii. A Chartered Accountant’s certificate certifying

1.       the manner of arriving at the remittable profit;

2.       that the entire remittable profit has been earned by undertaking the permitted activities and

3.       that the profit does not include any profit on revaluation of the assets of the branch.

II. Authorised Dealer Category – I bank may permit intermittent remittances by project offices pending winding up / completion of the project subject to submission of the following:

         i.            certified copy of the final audited project accounts;

       ii.            the statutory auditor’s certificate showing the manner of arriving at the remittable surplus and confirming that sufficient provisions have been made to meet the liabilities in India including Income Tax, etc.; and

      iii.            An undertaking from the project office that the remittance will not, in any way, affect the completion of the project in India and that any shortfall of funds for meeting any liability in India will be met by inward remittance from abroad.

j. Acquisition of property

Acquisition of property by branch office/project office shall be governed by the guidelines issued under Foreign Exchange Management (Acquisition and transfer of immovable property outside India) Regulations.

k. Transfer of assets

A person resident outside India permitted under these Regulations to establish a branch office or liaison office or project office may apply to the concerned Authorised Dealer Category-I bank for transfer of its assets to a Joint Venture/Wholly Owned Subsidiary or any other entity in India. Authorised Dealer Category-I bank shall be guided by the instructions laid down by Reserve Bank in this regard.

l. Annual Activity Certificate (AAC)

The branch office/liaison office may submit the Annual Activity Certificate (Annex D) as at the end of March 31 along with the audited financial statements including receipt and payment account on or before September 30 of that year. In case the annual accounts of the office are finalized with reference to a date other than March 31, the AAC along with the audited financial statements may be submitted within six months from the due date of the Balance Sheets to the Authorised Dealer Category-bank and the Director General of Income Tax (International Taxation), Drum Shape Building, I.P. Estate, New Delhi 110002.

AAC from a Chartered Accountant showing the project status and certifying that the accounts of the project office have been audited and the activities undertaken are in conformity with the general/ specific permission given by the Reserve Bank may be submitted by the project office to the designated Authorised Dealer Category-I bank.

m. Closure of office and remittance of winding up proceeds

I. Requests for closure of the branch office/liaison office may be submitted to the Authorised Dealer Category - I bank along with the following documents:

i. Copy of the Reserve Bank's/Authorised Dealer Category-I bank’s approval for establishing the office.

ii. Auditor's certificate :

1.       indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets;

2.       confirming that all liabilities in India including arrears of gratuity and other benefits to employees, etc. of the office have been either fully met or adequately provided for;

3.       confirming that no income accruing from sources outside India (including proceeds of exports) has remained unrepatriated to India.

iii. Confirmation from the applicant/parent company that no legal proceedings in any Court in India are pending against the office and there is no legal impediment to the remittance.

iv. A report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 2013, in case of winding up of the branch office/liaison in India.

v. Any other document/s, specified by the Reserve Bank/Authorised Dealer Category-I bank while granting approval.

II. Remittance of winding up proceeds of branch or liaison office established in India shall be governed by the guidelines issued under Foreign Exchange Management (Remittance of assets) Regulations.

5. Approval of the Reserve Bank in certain cases for establishment of branch office, liaison office or project office or any other place of business in India

Any application from a person resident outside for opening of a branch office or a liaison office or a project office or any other place of business in India shall require prior approval of Reserve Bank in the following cases where

a. the applicant is a citizen of or is registered/incorporated in Pakistan;

b. the applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a liaison, branch or project office in Jammu and Kashmir, North East region and Andaman and Nicobar Islands;

c. the principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting:

Provided that in the case of proposal for opening a project office relating to defence sector, no separate reference or approval of Government of India shall be required if the said non-resident applicant has been awarded a contract by/ entered into an agreement with the Ministry of Defence or Service Headquarters or Defence Public Sector Undertakings.

d. The applicant is a Non-Government Organisation, Non-Profit Organisation, Body/ Agency/ Department of a foreign government.

Such applications shall be forwarded to the Reserve Bank, Foreign Exchange Department, Central Office Cell, New Delhi by the Authorised Dealer Category-I bank and be considered in consultation with the Government of India.

(Indira Nanu)
Chief General Manager

External Commercial Borrowings (ECB) – Revised framework dated 30th March 2016

RBI//2015-16/349
A.P. (DIR Series) Circular No.56

March 30, 2016

                                                                                                   External Commercial Borrowings (ECB) – Revised framework

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No.32 dated November 30, 2015 and paragraph no. 1.8, 2.2, 2.4.1, 2.4.2, 2.4.5, 2.4.6, 2.5, 2.16 and 2.16.xiii of Master Direction No.5 dated January 1, 2016 on External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers.

2. Taking into account prevailing external funding sources, particularly for long term lending and the critical needs of infrastructure sector of the country, the extant ECB guidelines have been reviewed in consultation with the Government of India. Accordingly, it has been decided to make the following changes in the ECB framework:

i.            Companies in infrastructure sector, Non-Banking Financial Companies -Infrastructure Finance Companies (NBFC-IFCs), NBFCs-Asset Finance Companies (NBFC-AFCs), Holding Companies and Core Investment Companies (CICs) will also be eligible to raise ECB under Track I of the framework with minimum average maturity period of 5 years, subject to 100 per cent hedging.

ii.            For the purpose of ECB, “Exploration, Mining and Refinery” sectors which are not included in the Harmonised list of infrastructure sector but were eligible to take ECB under the previous ECB framework (c.f. A.P. (DIR Series) Circular No. 48 dated September 18, 2013) will be deemed as in the infrastructure sector, and can access ECB as applicable to infrastructure sector under (i) above.

iii.            Companies in infrastructure sector shall utilize the ECB proceeds raised under Track I for the end uses permitted for this Track. NBFCs-IFCs and NBFCs-AFCs will, however, be allowed to raise ECB only for financing infrastructure.

iv.            Holding Companies and CICs shall use ECB proceeds only for on-lending to infrastructure Special Purpose Vehicles (SPVs).

v.            The individual limit of borrowing under the automatic route for aforesaid companies shall be as applicable to the companies in the infrastructure sector (currently USD 750 million).

vi.            Companies in infrastructure sector, Holding Companies and CICs will continue to have the facility of raising ECB under Track II of the ECB framework subject to the conditionalities prescribed thereof.

3. The companies added under Track I should have a Board approved risk management policy. Further, the designated AD Category-I bank shall verify that 100 per cent hedging requirement is complied with during the currency of ECB and report the position to RBI through ECB 2 returns.

4. On the ECB framework announced vide aforesaid Circular dated November 30, 2015, it is further clarified that:

i.            The designated AD Category-I banks may, under the powers delegated to them, allow refinancing of ECBs raised under the previous ECB framework, provided the refinancing is at lower all-in-cost, the borrower is eligible to raise ECB under the extant ECB framework and residual maturity is not reduced (i.e. it is either maintained or elongated).

ii.            ECB framework is not applicable in respect of the investment in Non-convertible Debentures (NCDs) in India made by Registered Foreign Portfolio Investors (RFPIs).

iii.            Minimum average maturity of Foreign Currency Convertible Bonds (FCCBs)/ Foreign Currency Exchangeable Bonds (FCEBs) is 5 years irrespective of the amount of borrowing. Further, the call and put option, if any, for FCCBs shall not be exercisable prior to 5 years.

iv.            Only those NBFCs which are coming under the regulatory purview of the Reserve Bank are permitted to raise ECB. Further, under Track III, the NBFCs may raise ECBs for on-lending for any activities including infrastructure as permitted by the concerned regulatory department of RBI.

v.            The provisions regarding delegation of powers to designated AD Category-I banks is not applicable to FCCBs/FCEBs.

vi.            In the forms of ECB, the term “Bank loans” shall be read as “loans” as foreign equity holders / institutions other than banks, also provide ECB as recognized lenders.

5. All other aspects of the ECB policy shall remain unchanged. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers.

6. Master Direction No. 5 dated January 01, 2016 is being updated to reflect the changes.

7. The directions contained in this circular has been issued under section 10(4) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.