SCP II a Mauritius body corporate intends to transfer all its shares in System Automation India Private Limited, Hyderabad to Orchard III, a body corporate having its registered office in Singapore. Please advise steps t

This proposal involves the transfer of shares of an Indian company from one foreign body corporate (SCP II, Mauritius) to another foreign body corporate (Orchard III, Singapore). The steps to be followed under the Companies Act, 2013, and the Foreign Exchange Management Act, 1999 (FEMA), and rules/regulations therein are as follows: Under Foreign Exchange Management Act (FEMA), 1999: As per Foreign Exchange Management (Transfer or Issue of any Security by a person resident outside India) Regulations, 2000, a person resident outside India may transfer shares of an Indian company to another person resident outside India without prior permission of the Reserve Bank of India (RBI). Unless the proposed transfer is by way of gift, approval of the Reserve Bank of India is not necessary. In case of such transfer of shares by way of sale from a person resident outside India to a person resident outside India, only reporting will be in the form of an annual return on foreign liabilities and assets (FLA) to be submitted to the Reserve Bank, Department of Statistics, Information & Management, Mumbai by July 15th every year. Under Companies Act, 2013: The transferor and transferee have to execute a share transfer form in Form SH-4. They must comply with the provisions of Section 56 of the Companies Act, 2013, which deals with the transfer and transmission of securities. Applicable provisions of the Articles of Association of the company regarding share transfers must be adhered to. Every transfer will require approval of the Share Transfer Committee (or Board of Directors, as per AOA). Entry in the register of members and endorsement of the share certificate must be done.