Section 149 (3) of the Companies Act, 2013 has provided for residence of a director in India (Resident Director in India) as a compulsory i.e. every company shall have at least one director who has stayed in India for a total period of not less than 182 days in the previous calendar year.
So if you are Incorporating a new company that has all the Director who are not Indian Resident, you need to hire one Indian Resident Director.
Duties and Responsibilities of Resident Director in India
Resident Director will be fully responsible as Normal Director of the Company,
Resident Director will not be involved in operational control of the company.
Resident Director will be appointment to fulfill the statutory requirements .
Directorship will be covered under the officers and liability insurance.
Resident Director will participate Board Meetings of the Company, wherever required
The government has extended the deadline for filing income tax returns for assessee whose accounts are required to get audited to 15th of February, 2021 for assessment year 20-21.
While filing the tax audit report have been limited to 15th of January only.
The income tax India Twitter handle announce the extension of the deadline for filing income tax returns, the income tax returns for the individual taxpayers whose accounts are not required to be audited has been extended to 10th of January 2021
In this article, we will discuss the process of hedge fund Registration in India i.e. alternative investment fund in India with securities and exchange Board of India (SEBI)
Securities And Exchange Board Of India (Alternative Investment Funds) Regulations, 2012 mainly regulate the Hedge funds in India.
Meaning of Hedge fund and Alternative Investment Fund :
“Hedge fund” means an Alternative Investment Fund which employs diverse or complex trading strategies and invests and trades in securities having diverse risks or complex products including listed and unlisted derivatives
“Alternative Investment Fund” means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which,-
Is a privately pooled investment vehicle which collects funds from investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors; and
Is not covered under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities:
Provided that the following shall not be considered as Alternative Investment Fund for the purpose of these regulations,-
family trusts set up for the benefit of ‘relatives’ as defined under Companies Act, 2013;
ESOP Trusts set up under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 or as permitted under Companies Act, 2013;
employee welfare trusts or gratuity trusts set up for the benefit of employees;
’holding companies’ as defined under sub-section 46 of section 2 of Companies Act, 2013;
other special-purpose vehicles not established by fund managers, including securitization trusts, regulated under a specific regulatory framework;
funds managed by securitisation company or reconstruction company which is registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; and
Any such pool of funds which is directly regulated by any other regulator in India;
How to Register Hedge Fund or Alternative Investment Fund with SEBI
Choosing Category for Hedge Fund or Alternative Investment Fund with SEBI
SEBI under alternative investment funds regulations has prescribed the three types of the categories for the alternative investment fund for hedge funds registration under which they can seek registration depending upon the activities of the fund
Categories for Hedge Funds or Alternative Investment Funds
“Category I Alternative Investment Fund” which invests in start-up or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable and shall include venture capital funds, SME Funds, social venture funds, infrastructure funds.
Explanation.─ For the purpose of this clause, Alternative Investment Funds which are generally perceived to have positive spillover effects on economy and for which the Board or Government of India or other regulators in India might consider providing incentives or concessions shall be included and such funds which are formed as trusts or companies shall be construed as “venture capital company” or “venture capital fund” as specified under sub-section (23FB) of Section 10 of the Income Tax Act, 1961
“Category II Alternative Investment Fund” which does not fall in Category I and III and which does not undertake leverage or borrowing other than to meet day-today operational requirements and as permitted
Explanation.─ For the purpose of this clause, Alternative Investment Funds such as private equity funds or debt funds for which no specific incentives or concessions are given by the government or any other Regulator shall be included
“Category III Alternative Investment Fund” which employs diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives. Explanation.─ For the purpose of this clause, Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator shall be included
Choosing and Setting up Structure of Hedge Fund or AIF:
Which Fund Investment funds can be formed either of the following:
Limited Liability Partnership
Private Limited Company
Eligibility Criteria for Hedge Fund Registration in India
The memorandum of association in case of a company; or the Trust Deed in case of a Trust; or the Partnership deed in case of a limited liability partnership permits it to carry on the activity of an Alternative Investment Fund
The applicant is prohibited by its memorandum and articles of association or trust deed or partnership deed from making an invitation to the public to subscribe to its securities
In case the applicant is a Trust, the instrument of trust is in the form of a deed and has been duly registered under the provisions of the Registration Act, 1908
In case the applicant is a limited liability partnership, the partnership is duly incorporated and the partnership deed has been duly filed with the Registrar under the provisions of the Limited Liability Partnership Act, 2008
In case the applicant is a body corporate, it is set up or established under the laws of the Central or State Legislature and is permitted to carry on the activities of an Alternative Investment Fund
The applicant, Sponsor and Manager are fit and proper persons based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008
The key investment team of the Manager of Alternative Investment Fund has adequate experience, with at least one key personnel having not less than five years experience in advising or managing pools of capital or in fund or asset or wealth or portfolio management or in the business of buying, selling and dealing of securities or other financial assets and has a relevant professional qualification
The Manager or Sponsor has the necessary infrastructure and manpower to effectively discharge its activities
The applicant has clearly described at the time of registration the investment objective, the targeted investors, proposed corpus, investment style or strategy, and proposed tenure of the fund or scheme
Whether the applicant or any entity established by the Sponsor or Manger has earlier been refused registration by the Board
Information Required for Making Application for Hedge Fund Registration in India
In case the applicant is a Trust:
1. Write-up on the activities of the applicant
2. Whether the Trust Deed is registered under the provisions of the Registration Act, 1908. (Enclose relevant extract of the Registered Trust Deed)
3. Whether the Trust Deed permits the carrying on of the activity of an Alternative Investment Fund
4. Whether the applicant is prohibited by its trust deed from making an invitation to the public to subscribe to its units;
5. Provide details of Trustees/ Trustee Company as below:
a. Whether Trustee is an individual or a Trustee company.
b. Name, registered office address, telephone number(s) and fax number(s) of the Trustees/ Trustee Company.
c. Name, direct line number, mobile number and e-mail of the contact person(s).
d. Identity and Address proof of Trustees/ Directors of the Trustee Company
e. Whether the Trustee Company is registered with Board, Reserve Bank of India or any other regulatory authority in any capacity along with the details of its registration.
f. Brief write up on the activities of the Trustee Company/ Profile of Trustees.
II. In case applicant is a Company:
1. Write-up on the activities of the applicant
2. Shareholding pattern and profile of the directors (Enclose Identity proof and address proof of the directors)
3. Whether the Memorandum of Association permits carrying on of the activity of an Alternative Investment Fund (Enclose relevant extract of the Memorandum of Association)
4. Whether the applicant is prohibited by its memorandum and articles of association from making an invitation to the public to subscribe to its securities;
III. In case applicant is a limited liability partnership:
1. Write-up on the activities of the applicant
2. Beneficial ownership pattern and profile of the partners (Enclose Identity proof and address proof of the partners)
3. Whether the partnership deed is duly filed under the provisions of the Limited Liability Partnership Act, 2008 and permits carrying on of the activity of an Alternative Investment Fund (Enclose relevant extract of the Partnership Deed)
4. Whether the applicant is prohibited by its partnership deed from making an invitation to the public to subscribe to its securities;
IV. In case applicant is a Body Corporate
1. Write-up on the activities of the applicant
2. Shareholding pattern and profile of the directors (Enclose Identity proof and address proof of the directors)
3. Whether the applicant is set up or established under the laws of the Central or State Legislature
4. Whether the applicant is permitted carrying on of the activity of an Alternative Investment Fund (Enclose relevant extract of the relevant Statute/Act)
5. Whether the applicant is prohibited by its memorandum and articles of association from making an invitation to the public to subscribe to its securities;
Details of Sponsor and Manager of Fund :
Name, address of registered office, address for correspondence and principal place of business, telephone number(s), fax number(s), e-mail address of the sponsor.
Name, direct line number, mobile number and e-mail of the contact person(s)
Legal status of the sponsor (whether sponsor(s) is/are individual/company/limited liability partnership/body corporate) and date and place of incorporation/ establishment, wherever applicable.
In case of Sponsor being individual(s), provide a brief profile of the Sponsor including professional qualification. In case of Sponsor(s) being other than individual, write up on shareholding pattern/ Partnership interests and profile of the directors/partners including their professional qualification.
Identity proof and address proof of the Sponsor (if sponsor is an individual)/ directors of Sponsor(is sponsor is a company)/ partners of the Sponsor (if sponsor is an limited liability partnership).
Whether the Sponsor or its director(s)/ partner(s) is/are registered with the Board.
Details of past experience of the Sponsor(s) in advising or managing pools of capital or in fund or asset or wealth or portfolio management or in the business of buying, selling and dealing of securities or other financial assets.
Copies of the financial statements for the previous financial year (i) Whether the Sponsor has floated any Alternative Investment Funds/ Venture Capital Funds previously, which are registered with the Board. If yes, details of the same.
Meaning of Sponsor :
“sponsor” means any person or persons who set up the Alternative Investment Fund and includes promoter in case of a company and designated partner in case of a limited liability partnership
Meaning of Manager :
“manager” means any person or entity who is appointed by the Alternative Investment Fund to manage its investments by whatever name called and may also be same as the sponsor of the Fund
Details Of Business Plan And Investment Strategy for Hedge Fund Registration in India
Investment objective and investment style/ strategy of the fund.
The target investors
The target industries/ sectors, if any
Proposed fees to the Sponsor and Manager
Tenure of the fund or scheme
Details of proposed use of leverage in case of Category III Alternative Investment Fund
Amount To Be Paid As Fees for Hedge Fund Registration in India
Application fee Rs.1,00,000
Registration fee for Category I Alternative Investment Funds other than Angel Funds Rs. 5,00,000
Registration fee for Category II Alternative Investment Funds other than Angel Funds Rs.10,00,000
Registration fee for Category III Alternative Investment Funds other than Angel Funds Rs.15,00,000
Scheme Fee for Alternative Investment Funds other than Angel Funds `1,00,000 Re-registration Fee Rs.1,00,000
Registration Fee for Angel Funds Rs.2,00,000
The fees specified above shall be payable by way of direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI or by bank draft in favour of “The Securities and Exchange Board of India” at Mumbai
Investment Conditions And Restrictions for Hedge Fund in India
Investment in all categories of Alternative Investment Funds shall be subject to the following conditions:-
The alternative investment fund may raise funds from any investor whether Indian, foreign or non-resident Indians by way of issue of units;
Each scheme of the alternative investment fund shall have a corpus of at least twenty crore rupees;
The alternative investment fund shall not accept from an investor, an investment of value less than one crore rupees
In the case of investors who are employees or directors of the alternative investment fund or employees or directors of the manager, the minimum value of investment shall be twenty-five lakh rupees.
the manager or sponsor shall have a continuing interest in the alternative investment fund of not less than two and a half percent of the corpus or five crore rupees, whichever is lower,
In the form of investment in the alternative investment fund and such interest shall not be through the waiver of management fees
For category iii alternative investment fund, the continuing interest shall be not less than five percent of the corpus or ten crore rupees, whichever is lower.
The manager or sponsor shall disclose their investment in the alternative investment fund to the investors of the alternative investment fund;
No scheme of the alternative investment fund shall have more than one thousand investors
provisions of the companies act, 2013 shall apply to the alternative investment fund, if it is formed as a company
Application to SEBI for Hedge Fund Registration in India
The Application for Registration is required to be made in Form A to SEBI along with the Required application Fee and documents
Consideration of Application by SEBI
Once the proper Application is submitted to SEBI, SEBI will examine the Application and may ask for further information and if deems fit will approve or reject the Application
Certification of Registration for Hedge Fund by SEBI
Once the applicant is approved and applicant has deposited necessary fee , SEBI will grant Certificate to Applicant to carry on Activities of Hedge Fund or Alternative Investment Fund.
Any MSME unit which has supplied goods or render any services to any Company or any other person (buyer of goods or recipient of Services ) and the buyer or recipent is delaying in payment or not making due payment as agreed , can make an application for recovery of dues by MSME under MSME Samadhan Scheme.
Where any Micro or small enterprises supplies any goods or render any services to any buyer, the buyer shall make payment therefor on or before the date agreed upon between him and the supplier. Period of payment between the supplier and the buyer in writing shall not exceed forty five days upon from the day of acceptance
Where the buyer fails to make payment to supplier within forty five days the buyer shall be liable to pay the amount with interest thereon.
Who can apply under for Recovery of dues by MSME:
Any Micro or small enterprises having valid Udyog Aadhar/Udhyam Registration (UAM) can make Application for recorvery of dues from Debtors.
How much Amount MSME unit can claim Recovery of dues by MSME under MSME Samadhan Scheme :
The buyer is liable to pay bill amount and compound interest with the monthly rests to the supplier. Interest is calculated on the amount at the three times of the bank rate notified by RBI.
Filing of Application under MSME Samadhan Scheme
MSME units are required to file Application under Msme Samadhan Portal online with all the supporting documents including Invoices, purchase orders etc.
Examination of Application by MSME department
MSME department will examine application filed by MSME unit and if application is complete in all respact than department will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006.
Appeal by Appellant :
If the Appellant (not being the supplier) wants to file an appeal, no application for setting aside any decree or award by the state council shall be entertained by any court unless the appellant (not being supplier) has deposited with it, the 75% of the award amount.
A private limited company is the most accepted and popular business structure in India and is governed by the provisions of the Companies Act and rules made thereunder, to carry out business operations loan from director to company is the main source of debt funding private limited access.
In every type of business structure there are two main sources of funds that an organisation deals with, one is in the form of capital and other is in the form of loan or debt.
In case of a company accepting funds from the capital it has to issue shares, and if the company is accepting funds from loan there should be an agreement with respect to the terms and conditions assigned to the particular loan and the security provided for a given loan.
In this article we will discuss accepting loans from the directors of the company by a private limited company.
Please note that accepting any type of loans or money from any person in a private limited company falls under the provisions of companies acceptance of deposit rules 2014
“deposit” includes any receipt of money by way of deposit or loan or in any other form, by a company, but does not include –
“(viii) any amount received from a person who, at the time of the receipt of the amount, was a director of the company or a relative of the director of the Private company:
Provided that the director of the company or relative of the director of the private company, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others and the company shall disclose the details of money so accepted in the Board’s report;”
Step by step procedure for accepting loans from directors to Company
hold Board meeting and pass necessary resolution approving the limit up to which company can accept loans
The company is required to hold the board meeting and pass necessary resolution in this regard for approving the limit of loan up to which company can accept the loans.
Pass Resolution for Authorising Director to sign Necessary Terms and Conditions /Loan agreement for the loan
Accept at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting loans or deposits from others
Credit of Funds to Company Bank Account
Compliance with Respect to Loan : If the Loan Agreement or Terms of Loan Contains clause relating to the conversion of this loan into equity then the company is required to file form mgt 14 within 30 days from the date of such agreement
Annual Compliance with respect to loan from Director to Company :
As this loan is exempted from the deposit, the company is required to file Form DPT -3 with the amount of loan accepted from Directors of the Company under the column, Items Not considered as Deposits
Loan Agreement is an instrument and Stamp duty is required to be paid while executing the loan agreement as per rates prescribed by the State of Rajasthan in Rajasthan ( Stamp duty on Loan Agreement in Rajasthan) . Loan Agreement is a very important document that confers rights and obligations on lender and borrower (parties to Agreement )
Stamp duty Payable on Loan Agreement in Rajasthan
Amount of stamp duty Payable
0.25% of Loan amount max. Rs. 25 lacs
Loan Agreement to Start-Up, up to rupees ten lakh
Rs.0 after rebate
Loan Agreement to Start-Up exceeds rupees ten lakh
0.25% of Loan amount
Agreement Relating to Deposit of Title Deed/ Equitable Mortgage Deed when Loan repayable in more than 3 months
0.25% of Loan Amount Max 25 lakh
Agreement Relating to Deposit of Title Deed/ Equitable Mortgage Deed when Loan not more than 3 months
0.075% of Loan Amount Max 5 lakh
Loan to set up a Micro, Small or Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, or enhancing credit facility or transfer of loan account from one bank to another by Micro, Small or Medium Enterprises, in the State – Per document in case of loan agreement and deposit of title deed and lease contract Rs. 100/
Loan to set up a Micro, Small or Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006, or enhancing credit facility or transfer of loan account from one bank to another by Micro, Small or Medium Enterprises, in the State – Per document in case of simple mortgage with or without transfer of possession of property Rs. 500/-
In this article we will discuss the amount of Stamp duty payable on power of attorney (POA) in Rajasthan, In India stamp duty varies from state to state and every state has its own rates for payment of stamp duty.
There are different instances where Power of attorney can be executed, stamp duty payable depends accordingly
Stamp Duty on Power of Attorney (POA) in Rajasthan
Particulars (Type of Instrument)
Amount of Stamp duty
When Power of Attorney is executed for the sole purpose of procuring the registration of one or more documents in relation to a single transaction or for admitting execution of one or more such documents
When Power of Attorney is executed authorizing one person or more to act in a single transaction other than the case mentioned above
When authorizing not more than five persons to act jointly and severally in more than one transaction or generally
Power of Attorney executed by Client in favour of Stock Broker registered in SEBI for purchase of securities
When authorizing more than five persons but not more than ten persons to act jointly and severally in more than one transaction or generally
When given for consideration and authorizing the attorney to sell any immovable property
6% of consideration
When given for consideration and authorizing the attorney to sell any immovable property (Female SC/ST/BPL)
4% of Consideration (After Rebate)
when given for consideration and authorizing the attorney to sell any immovable property; (Female other than SC/ST/BPL)
5% of Consideration (After Rebate)
When given for consideration and authorizing the attorney to sell any immovable property; (Disabled 40% & above)
5% of Consideration (After Rebate)
When power of attorney is given without consideration to sell immovable property to the father, mother, brother, sister, wife, husband, son, daughter, grandson or grand daughter of the executant
when power of attorney is given without consideration to sell immovable property to any other person
0.5% of market value of property (After Rebate )
When given to promoter or developer by whatever name called for construction on, or development of, or sale or transfer (in any manner whatsoever) of, any immovable property, (Sale power not given)
1% of market value (After Rebate)
When given to promoter or developer by whatever name called for construction on, or development of, or sale or transfer (in any manner whatsoever) of, any immovable property, (with Sale power)
1.5% on proportionate part and 1% on remaining part of market value
Authentication Power of Attorney (any other Case)
How to Pay Stamp duty on Power of Attorney
Stamp Duty on Power of Attorney in Rajasthan can be paid both in Online and offline Mode, In case of Offline Mode you need to visit to Registered Stamp Vendor office and Purchase the stamp Paper of applicable amount and in case of Online mode , you may purchase stamp paper through registered office of stock holding corporation and authorized stamp vendors.
In this article, we will discuss step by step procedure on how to check if a brand name (trademark) is registered in India or not, checking of brand name registration status is very important for every business entity operating in any jurisdiction whether it is in India or outside.
Make a list of proposed Brand name’s (Trademark)
The first step is to make a list of the proposed brand names, business names or product names that you wish to register or check whether it is registered or not in India, It can be done by simple brainstorming, it is very much possible that if you brainstorm the brand names or the trade names for some time you will get some great names in your mind,
now what you have to do is you need to to know whether the said name is already available or not the best thing to do now is to check the same name on the search engine like Google or Bing if anything is available in this world with the same name or not it is a much higher possibility that if the same name is available you should skip that name as soon as possible because someone else is making some efforts on that name and it is better to leave that to the person or company, this is in a general sense if you have any specific requirements you may consider that name also.
Find the exact class of the product or services
In Trademark search there are 45 classes for different category of products and services, these 45 classes are based on a different type of categories like if you say your product falls in agree culture or agro-industry it will come under class 1 as all these products related to the agriculture of our underclass 1 of trademark, you are selling pharmaceutical medicines it will come under class 5 in TM also if you have electronic products mobile accessories and other items related to the electronics it will come under class 9 of the trademarks 2534 related products also under the class 35 normal business advertisement in business services a cover.
On the official website of the trademark search you will be getting the columns for the search and the first column you need to check whether you want to search for the exact match or it contains a search for searching the start word with the word so it depends on this search mark that you are going to do so it is advisable first to search with contains and then go with the start and exact match.
Now you need to write the brand name (trademark) in the next column
now come to Ganesh from which you need to put the class you simply put the class of your products or services discuss the home and like a if you are a searching for products relating to the readymade garments and put out class 25 simply put 25 in the next column.
Now you need to click on the search button and if you are finding some of the trade marks you need to go through and check them to see if these are relating to your mark if you find some confusion on that just simply don’t use tgis mark as it is not available to you.
If there is no mark available on the search page you need to search it again for the next process and in all that processes if you find more results it is beat her and most probably the mark is available for registration.
As per the information available on the flair portal of RBI for submission of the foreign asset and liabilities returns for the entities holding foreign investment and liabilities is now been extended to 31st July 2020.
All entities can file a return to the RBI for Foriegn Assets and Liabilities on or before 31st July 2020