I personal a personal restricted firm in India. My son has just lately began an organization in Singapore. I’m eager to reward my stake within the Indian firm to my son, who’s now an NRI. What are the authorized provisions for a similar?
—Name withheld on request
As you’re an Indian citizen, the reward by you to your NRI son can be ruled by the provisions of the Foreign Exchange Management Act (Fema), 1999 and the rules, circulars and insurance policies thereunder. As per Fema, reward of shares by a resident Indian citizen to an individual resident exterior India (together with an NRI) is topic to prior written approval of the Reserve Bank of India (RBI). There are prescribed paperwork that are required to be submitted to the RBI on the time of submitting of the appliance earlier than RBI. There are sure different situations that are required to be adhered to for the aim of such software. Two of the essential situations are
(i) The reward shouldn’t be for greater than 5% of the paid-up capital of the Indian firm;
(ii) The worth of the shares can’t be greater than $50,000 or an equal quantity in rupee through the monetary yr by which the reward is proposed to be made.
We suggest you seek the advice of an advisor in individual to know the whole authorized framework relevant to such presents, and thereafter consider whether or not its legally possible to undertake such a transaction.
I keep in tenanted premises (generally often called pagdi) in Mumbai. I want to make a will, whereby, put up my demise, I would really like this property to be transferred to my son who resides overseas. Is that potential?
—Name withheld on request
Section 7 of the Maharashtra Rent Control Act, 1999 (the Rent Control Act) offers that
(i) Any member of the tenant’s household residing with him on the time of his loss of life and within the absence of such member, (ii) Any inheritor of the deceased tenant as could also be determined in default of settlement by the court docket can step in, within the sneakers of the deceased tenant. It is evident that the opposite relations or third events have been excluded from such safety.
The Bombay High Court has handled the difficulty whether or not the tenancy may be bequeathed beneath a Will. After contemplating varied propositions of legislation, the Court laid down the precept of legislation that the restriction in opposition to the project or switch shall additionally apply to testamentary bequest and therefore no such switch ought to be allowed. In view of the aforesaid, it’s clear that no tenant can dispose off the tenancy rights by Will. Hence within the current state of affairs it is not going to be advisable so that you can bequeath the tenancy rights to your son.
In any case, it’s advisable to hunt authorized consultants‘ opinion, in respect of any particular factual matrix.
Hemang Parekh is associate and Mitali Naik is affiliate associate, at DSK Legal
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