Doing Business in India: The New Companies Act 2013

Sannam S4 Webinar Series 2014June 17, 2014

www.sannams4.com @Sannam_S4 Sannam S4

2

The story so far…

Why Companies Act 2013

Could See More Changes

May 31, 2014

…While no one doubts the intention of the

law, its implementation remains the

priority job of the new government…

CII recommends re-polishing of Co. Act 2013 and Co. Rules 2014June 5, 2014…Due to the hurried pace in which these act and rules were implemented, the industry barely got an opportunity to completely understand the provisions and their impacts…

MCA notifies 183 sections of Companies Act 2013March 26, 2014…Companies Act 2013 comes into effect from next week…

Areas of concern in the Companies Act 2013

Feb 16, 2014

…The ICAI has certain concerns and issues in the Companies Act, 2013 and draft rules…

'Companies Act 2013 to boost

transparency‘

Nov 29, 2013

…The new Act seeks to increase

transparency, provide representation for

women in boards and makes CSR

mandatory…

New era for Corporate Law in India?

3

Political requirements

Initiatives of the previous Government (Congress led UPA)

Long drawn battle since 2004 to replace the archaic law

Constant dialogue with stakeholders for 10+ years

Focus on increasing the bar on governance through:- Increased reporting;- Higher auditor, director & management accountability;- CSR; and- Investor protection

Expected initiatives of the new Government (BJP led NDA)

Reduction in forms and approval levels

Empowering government officials with decision-making

Ensuring smoother transition for Corporates into the new Act

Introducing the long-pending Company Law Tribunal

4

Old v/s new

Companies Act, 2013 (‘new

Act’)

29 Chapters

470 Sections

7 Schedules

Rules corresponding to each chapter

Companies Act, 1956 (‘old Act’)

13 Parts(26 Chapters)

700+ Sections

15Schedules

Rules/orders scattered over 60

years!

5

Impact for foreign companies in India

At least 1 ‘Resident Director’ on the board

Mandatory financial year Women Directors for certain companies Cross-border mergers and

amalgamations Board meetings through video

conferencing Auditor rotation for certain companies Consolidation of accounts Advance receipt of capital to

commence business Prohibition on multiple buy-backs

within a year CSR requirements for certain

companies Related party transactions Reporting responsibilities Board meetings Forms and compliances

6

Burning issues

Grace period for appointing Resident Directors

Appointing a whole-time Company Secretary

Transition provisions for other matters

Form filing

Definition of foreign companies

Layered corporate structure

CSR under income tax

Dual regulations for the interim period

Increased formalities for company incorporation

Inter-company loans for real estate players

Definition of a listed company

Small companies merger

7

To do’s for you

Watch out for changes / amendments and enactment of remaining sections

Compliances through new forms, which are now on the government’s website

Ensure you’re not caught on the wrong side during the transition phase

Speak to experts about possible impacts on your existing business in India, if any, or potential concerns for setting up a corporate subsidiary in India

8

Reach out for more information!

Kapil DuaCFO & Director, Financial Consultingkapil.dua@sannams4.com

Abhinav SoodDeputy Manager, Tax & Regulatory Consultingabhinav.sood@sannams4.com

Adrian MuttonChief Executive Officeradrian.mutton@sannams4.com

9

About Sannam S4

Sannam S4 is a specialist, single window service provider supporting the market entry and ongoing successful business development of international organizations in India, Brazil and China

We provide end-to-end practical support to our clients, helping organizations identify market opportunities, develop news sales leads and local partners, hire staff and build stable and efficiently run local operations.

By combining local technical expertise with practical advice, we deliver low risk and cost effective solutions enabling organizations to succeed in the market

Our mix of international and domestic personnel have a long track record of establishing successful businesses in developing countries. The team is comprised of dedicated local specialists, including accounting, tax, and inward investment advisors, payroll, human resource advisory and recruitment experts, along with market research and validation consultants.

To date, Sannam S4 has supported more than 150 organizations with their India market entry plans. Our clients span across different sectors and range from Fortune 500 companies to start-ups, universities, industry bodies, privately funded businesses and VC backed tech companies.

Sannam S4 has the largest team of market entry experts for the Education sector in India, and has particular strengths in the SME sector.

10

Our Client’s Journey @ Sannam S4

11

Sannam S4 India: Financial Consulting Services

Financial Consulting

Finance & Accounts

Corporate Legal &

Secretarial

Tax & Regulatory Consulting

- Payroll setup and management

- Accounting management- Accounts receivable &

payables- Financial reporting- IFRS conversions- Audit coordination- Foreign exchange

compliances- Monthly / periodic direct

and indirect tax compliances

- Withholding tax compliances

- Company incorporation- Bank account setup- Statutory registrations –

PAN, TAN, DIN, VAT / CST & service tax, professional tax, shop & establishment, excise etc.

- Annual secretarial compliances

- Professional director services

- Registered office services- Filings and liaison with

Ministry of Corporate Affairs

- Filings and liaison with Indian central bank and their authorized dealers

- FRRO registrations

- Business Structuring & Market entry planning

- Corporate tax planning- Moving expats into India- On-going financial, tax and

regulatory advisory- Annual direct tax

compliances- Transfer pricing advisory- Liaison with tax authorities- Audit coordination- Due-diligence & Health-

checks (Financial, tax and secretarial)

- M&A advisory (tax & regulatory)

12

Follow us: @sannam_s4For upcoming Webinars: #sannams4webinar