Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022
Effective Date: May 5, 2022
Applicability: Every Company
Summary of the amendment Rules:
1. Amendment in Private Placement Rules: The amendment has inserted new proviso in Rule 14, in sub-rule (1):
A Company shall not make any offer or invitation of any securities under this rule to a body corporate incorporated in, or a national of, a country which shares a land border with India, unless such body corporate or the national, as the case may be, have obtained Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and attached the same with Form PAS-4 (the private placement offer cum application letter).
From reading the above provisions, it is evident that for allotment of Shares or Securities under Private Placement Rules, to a body corporate incorporated in, or a national of a country which shares a land border with India (i.e. China, Bhutan, Nepal, Pakistan, Bangladesh and Myanmar), such body corporate or the national, as the case may be, must obtain prior Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and attach the same with Form PAS-4 (the private placement offer cum application letter).
2. Amendment in format of Form PAS-4 (the private placement offer cum application letter) : The amendment has inserted below Checkbox(s) in Form PAS-4:
(a) The applicant is not required to obtain Government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 prior to subscription of shares:-
(b) The applicant is required to obtain 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:-
Link of Notification: Companies (Prospectus and Allotment of Securities) Amendment Rules, 2022
Link of revised format of Form PAS – 4 : Form PAS – 4 – Private Placement Offer Cum Application Letter
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