The Ministry of Corporate Affairs (“MCA”), on July 5, 2022, has introduced the Companies (Incorporation) Amendment Rules, 2022 (“Rules”) to substitute Form INC-9 as provided in the Companies (Incorporation) Amendment Rules, 2014 with a form with additional declarations. The Rules also amend the Form INC-32 to provide for additional disclosures.
The disclosures are meant to ensure compliance with the amended Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022 (“PAS Amendment”) and Companies (Appointment and Qualification of Directors) Amendment Rules, 2022 (“Director Rules Amendment”).
The PAS Amendment provides that approval should be sought from the government under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 if an offer of securities is to be made to a body corporate incorporated in or a national of a country which shares a land border with India. Further the Director Rules Amendment was introduced to provide that for a person seeking appointment as a director who is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached along-with the consent.
In pursuance of the abovementioned, the Form INC-9 has been amended and it now includes the following additional disclosures –
“…? I am required to obtain the Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares and the same has been obtained, and is enclosed herewith; or
? I am not required to obtain the Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares.”
Furthermore, the SPICe Form INC-32 has also been amended and it now provides a declaration stating the following with respect to the director(s) to be appointed –
“…I, on behalf of the proposed directors, hereby declare that person seeking appointment is a national of a country that shares a land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall be attached with the consent. O Yes O No. (if yes is opted, a copy of the security clearance is to be attached).”
Please find a copy of the Rules, here.
This update has been contributed by Aryan Mohindroo (Associate).
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