Related Party Transactions: Section 188 Compliance Guide Featured Answer: Related party transactions (RPTs) under Section 188 of the Companies Act, 2013 require prior Board approval (or shareholder approval if thresholds under Rule 15 are exceeded). For listed companies, SEBI LODR Regulation 23 imposes additional Audit Committee approval and shareholder approval for material RPTs. At Virtual […]
Category Archives: Income Tax Company
Private Placement Under Section 42: PAS-4 & PAS-3 Complete Guide Featured Answer: Private placement under Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 allows a company to issue securities (equity shares, preference shares, or debentures) to a select group of not more […]
Post-Incorporation Compliance: The First 30 Days Checklist for Indian Companies (2026) Quick Answer After receiving your Certificate of Incorporation from the MCA, you must complete at least 12 mandatory compliance steps within 30 days — including opening a bank account, allotting shares (INC-20A/PAS-3), appointing auditor (ADT-1), obtaining GST registration if applicable, applying for MSME/Udyam registration, […]
Indian Subsidiary Registration for Foreign Companies: FEMA, FDI Policy & Companies Act Compliance (2026) Quick Answer A foreign company entering India typically sets up a wholly owned subsidiary (WOS) or a joint venture subsidiary as a Private Limited Company under the Companies Act, 2013. The investment is governed by the Foreign Exchange Management (Non-debt Instruments) […]
Cross-Border Gift of Shares: FEMA & Tax Implications 📌 Quick Answer: A cross-border gift of shares — whether from an Indian resident to a non-resident, or vice versa — must comply with both FEMA Non-Debt Instrument (NDI) Rules, 2019 and the Income Tax Act. Under FEMA, gifting of shares of an Indian company by a […]
Sweat Equity Valuation: Section 54(1)(d), SEBI SBEB & Tax 📌 Quick Answer: Sweat equity shares are shares issued by a company to its directors or employees at a discount or for consideration other than cash, in recognition of their contribution through intellectual property rights or value addition. Under Section 54(1)(d) of the Companies Act, 2013, […]
Slump Sale Valuation: Section 50B, Ind AS & Net Worth Computation 📌 Quick Answer: A slump sale is the transfer of an undertaking as a going concern for a lump sum consideration without assigning individual values to assets and liabilities. Under Section 50B of the Income Tax Act, the capital gain on a slump sale […]
Distressed Company Valuation: IBC, Liquidation & Going Concern 📌 Quick Answer: How are distressed companies valued under India’s IBC framework? Under the Insolvency and Bankruptcy Code, 2016, distressed companies are valued at two levels: fair value (going-concern basis) and liquidation value (piecemeal-sale basis). The resolution professional must appoint two IBBI Registered Valuers under Regulation 27 […]
Valuation for Stamp Duty: State Rules, DLC Rate & Challenge Process 📌 Quick Answer: Stamp duty on property transactions in India is computed based on the higher of the actual transaction value or the government-prescribed value (variously called the circle rate, DLC rate, ready reckoner value, or guideline value, depending on the state). Under Section […]
AIF & PMS Portfolio Valuation: SEBI Guidelines & NAV Computation 📌 Quick Answer: Alternative Investment Funds (AIFs) and Portfolio Management Services (PMS) in India are required to value their portfolio investments at fair value in accordance with SEBI guidelines and applicable accounting standards. AIFs must compute and report Net Asset Value (NAV) at least once […]