Doing Business in India - RSM Austria

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The meetings of the board are required to be held at least four times a year, with a maximum time gap of four months. A director shall not be a member in more than 10 committees or act as Chairman of more than 5 committees across all companies in which he is a director. Furthermore it should be a mandatory annual requirement for every director to inform the company about the committee positions he occupies in other companies and notify changes as and when they take place. The board is required to lay down a code of conduct for all board members and senior management of the company and the annual report is required to contain a declaration of its compliances duly signed by CEO. The Board of Directors should set up two mandatory committees to be called Audit Committee and Shareholders Grievance Committee. Audit committee is required to be set up with minimum three directors as members and two thirds of the members of audit committee should be independent directors and chairman of the audit committee is necessarily required to be an independent director. The Chairman of the Audit Committee shall be present at Annual General Meeting to answer shareholder queries. The audit committee should meet at least four times in a year and not more than four months should elapse between two meetings. Broad term of reference has been set out for the working of the audit committee. At least one independent director on the Board of Directors of the holding company is required to be director on the board of directors of a material non listed Indian subsidiary company. A summary of transactions with related parties in the ordinary course of business is required to be placed periodically before the audit committee. Where in the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements, together with the management’s explanation as to why it believes such alternative treatment is more representative of the true and fair view. The company is required to lay down risk assessment and minimization procedures. Remuneration paid to directors and all other pecuniary relationship of director with the company is required to be disclosed in the corporate governance section of the annual report. Corporate governance section has to include a section of management perception and analysis of the threats, opportunities, risks, concerns, outlook, etc. A board committee under the chairmanship of a non-executive director shall be formed to specifically look into the redressal of shareholder and investors complaints like transfer of shares, non-receipt of balance sheet, 46 DOING BUSINESS IN INDIA
non-receipt of declared dividends etc. This Committee shall be designated as ‘Shareholders/Investors Grievance Committee’. The CEO i.e the Managing Director or Manager appointed in terms of the Companies Act, Chief Finance Officer has to certify that they have reviewed financial statements and these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading and these statements present a true and fair view of the company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulation. The company has to obtain a certificate from either the auditors or practicing company secretaries regarding compliances of conditions of corporate governance as stipulated in the listing agreements and annex the same to the director’s report which is sent annually to all the shareholders. The same shall also be filed with the stock exchange along with the annual report filed by the company. The company shall submit a quarterly compliance report on corporate governance to the stock exchanges within 15 days from the close of the quarter. 5.1 Winding Up Companies registered under the Companies Act, 1956 can be dissolved in the following manner: Winding up; Being declared a defunct company. A company may be wound up in the following manner: Voluntarily (by the shareholders/ by the creditors) by passing a special resolution and with the approval of High Court; Voluntarily by the High Court. Winding up is a means by which a company is dissolved and its assets are realised and applied to payment of its debts. Once the debts are satisfied, the balance amount is paid back to the members in proportion to their contribution to the capital of the company. In case the ROC is of the view that a company is not carrying on business or is not in operation, he may strike off the company’s name from the ROC, only after providing the company with an opportunity to be heard. Where a body corporate incorporated outside India (which has been carrying on business in India) ceases to carry on business in India, it may be wound up as an unregistered company. DOING BUSINESS IN INDIA 47
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International global excellence in
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Doing business in India
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Marine Drive, Mumbai
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Contents Hawa Mahal, Jaipur
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Education .........................
Page 12 and 13: SIGNIFICANT COMPANY LAW REGULATIONS
Page 14 and 15: ANNEXURE 1 Sectors Prohibited for F
Page 16 and 17: Chapter 1 India - A Profile Golden
Page 18 and 19: 2.2 Language India is a land of man
Page 20 and 21: 5.2 Communication The Indian teleph
Page 22 and 23: 7.5 Public Holidays The statutory p
Page 24 and 25: CHAPTER 2 INDIAN BUSINESS AND INVES
Page 26 and 27: This resulted in a fall in the Bomb
Page 28 and 29: 4.3.3 Designs After expiry of three
Page 30 and 31: non-banking finance activities viz.
Page 32 and 33: trading in derivative based on BSE
Page 34 and 35: same as those where concessional fi
Page 36 and 37: 10.3 Low Research and Development C
Page 38 and 39: CHAPTER 3 BUSINESS ENTITIES 1.0 FOR
Page 40 and 41: Sr. No. Criteria Requirements 1 Tra
Page 42 and 43: The project is funded by inward rem
Page 44 and 45: cause the disassociation of the par
Page 46 and 47: 2.1.2 MOA 2.1.3 AOA Companies for r
Page 48 and 49: paid up equity capital can be less
Page 50 and 51: The requirements for public and pri
Page 52 and 53: 3.0. STATUTORY REQUIREMENTS FOR COM
Page 54 and 55: 3.4 Online Filing System Ministry o
Page 56 and 57: Section Nature of default 168 Defau
Page 58 and 59: 4.0 SIGNIFICANT COMPANY LAW REGULAT
Page 60 and 61: 4.7 Audit Committees For better cor
Page 64 and 65: Chapter 4 Human Resources Kathakali
Page 66 and 67: Employee benefit What is it? Applic
Page 68 and 69: Employee benefit D e p o s i t L i
Page 70 and 71: 2.5 The Equal Remuneration Act, 197
Page 72 and 73: The Factories Act safeguards agains
Page 74 and 75: CHAPTER 5 FOREIGN INVESTMENT IN IND
Page 76 and 77: 2.3 Prohibition on investments 2.3.
Page 78 and 79: ii. Subject to compliance with the
Page 80 and 81: ii. iii. iv. The NRI investor has t
Page 82 and 83: ii. On repatriation basis An NRI ca
Page 84 and 85: Indian company can issue ESOPs to e
Page 86 and 87: ii. iii. iv. The foreign equity aft
Page 88 and 89: vi. Branch Offices have to submit A
Page 90 and 91: ii. ECB up to US$ 20 million or equ
Page 92 and 93: 3.2 Approval Route 3.2.1 Eligible B
Page 94 and 95: 3.2.6 End Use not permitted i. Util
Page 96 and 97: issued by Reserve Bank from time to
Page 98 and 99: Sr. No. Sector/Activity FDI Cap / E
Page 100 and 101: Sr. No. II C POWER Sector/Activity
Page 106 and 107: Sr. No. 29. Sector/Activity Telecom
Page 108 and 109: Chapter 6 Taxation System India Gat
Page 110 and 111: Entity Domestic Company Financial y
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**** Mutual funds, other than equit
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interest deductible is restricted t
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2.4 Tax Relief In order to encourag
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Section Details of Exemption / Dedu
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Section 35 DDA 54G 54GA 54EC 10(34)
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Sr. No. Nature of activity and loca
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Sr. No. xviii Nature of activity an
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No deduction under 80IA, 80IB, 80IA
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Tax is payable in advance on income
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3.1.2 Other Non-corporate Entities
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the Finance Act 2010, 'bullion' is
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Rs. 40,00,000. The scheme is applic
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4.5 Income of Offshore Funds Income
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7.3 Advance Rulings The Indian gove
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9.0 INDIRECT TAXES 9.1 Goods and Se
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on goods manufactured and vice vers
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Annexure I Double Taxation Avoidanc
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Sr. No. Country Dividend [Note 1] T
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ANNEXURE II: TAX DEDUCTION AT SOURC
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NOTES 142 DOING BUSINESS IN INDIA
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RSM International Executive Office,
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