Patent office issues guidelines for startups

Patent office issues guidelines for startups 

Indian Patent Office has issued guidelines for facilitators and startups with respect to filling and processing of applications for patent, designs and trade marks aiming to encourage budding entrepreneurs and boost innovation. 

As per the guidelines, a startup willing to file a patent application for an invention will have to select a facilitator who would help in preparing the request and also assess the patentability of the invention as per acts and rules, the Controller General Patents, Designs and Trade Marks said in a public notice.

"If the startup is unable to select a facilitator, it should contact the head office of the respective Patent Office as per jurisdiction, who shall provide 3 names of the facilitator and the startup will finalise the name" the notice added. 

It said the fee for filing the application and other statutory fees would have to be borne by the startup.

The facilitator shall also have to monitor and perform further steps of proceedings of startups patent application, prepare the reply to any query from patent office. 

The office has also released a list of about 280 facilitators in such regard. 

Further, it said for filing and processing applications for designs, the patent facilitators would provide their services.

In the action plan announced for the budding entrepreneurs the government has decided to bear the entire cost of facilitation for filing of patents, trademarks or designs. 

The move is aimed at promoting awareness and adoption of intellectual property rights by startups and facilitate them in protecting and commercialising those rights .

(Economic times)

INDIAN STARTUPS HAVING OVERSEAS SUBSIDIARIES MAY OPEN FOREIGN CURRENCY ACCOUNT WITH OVERSEAS BANKS

INDIAN STARTUPS HAVING OVERSEAS SUBSIDIARIES MAY OPEN FOREIGN CURRENCY ACCOUNT  WITH OVERSEAS BANKS

An Indian startup or any other entity as may be notified by the Reserve Bank in consultation with the Central Government, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to it foreign exchange earnings out of exports/ sales made by the said entity and/ or the receivables, arising out of exports/ sales, of its overseas subsidiary.

Provided that the balances in the account shall be repatriated to India within the period prescribed in Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 dated January 12, 2016, as amended from time to time, for realization of export proceeds.

Explanation: For the purpose of this sub-regulation a ‘startup’ means an entity which complies with the conditions laid down in Notification No. G.S.R 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India.”

(SOURCES: Notification No. FEMA 10(R)/(1)/2016-RB Mumbai, the 1st June, 2016)

DIPP issues FAQs on Start-up India scheme

FREQUENTLY ASKED QUESTIONS (FAQs) ON STARTUP INDIA

PRESS RELEASE, DATED 5-4-2016

1. For Startups

	Question	Response
1.	What qualifies as a "Startup" for the purpose of Government schemes?	An entity (Private Limited Company or Registered Partnership Firm or Limited Liability Partnership) shall be considered a "Startup" – (a) Upto 5 years from the date of its incorporation/ registration, and (b) If its turnover for any of the financial years has not exceeded INR 25 crore, and (c) It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property. The entity should not have been formed by splitting up or reconstruction of a business already in existence. A proprietorship or a public limited company is not eligible as startup. A one person company, being a private limited company is entitled to be recognized as a 'startup'. For additional information, refer notification G.S.R. 180(E) dated February 17, 2016.
2.	How does a Startup obtain benefits under various Government schemes including the ones announced in the Action Plan on January 16, 2016?	For availing various benefits (except tax and IPR related benefits i.e. action points #4, #9, #10 and #11 of the Startup India Action Plan), an entity would be required to be recognized as a Startup by applying on Startup India Mobile App/ Portal. In order to obtain tax and IPR related benefits, a Startup shall be required to be certified as an eligible business from the Inter-Ministerial Board of Certification.
3.	For how long would recognition as a "Startup" be valid?	An entity would cease to be a 'startup' upon expiry of: (a) 5 years from the date of its incorporation/ registration, OR (b) If its turnover for any of the financial years has exceeded INR 25 crore; OR Startups would be required to intimate DIPP of any such cases within a period of 21 days.
4.	Can an existing entity register itself as a "Startup" on the Startup India Portal and Mobile App?	Yes, an existing entity that meets the criteria as indicated in response to Question 1 can visit the Startup India Portal and Mobile App and get itself recognized for various benefits. The tax benefits proposed under the Finance Bill 2016 will be available from 01-04-2016.
5.	What is the timeframe for obtaining certificate of recognition as a "Startup" in case an entity already exists?	The process of registration in such cases shall be real time and the certificate of recognition would be issued immediately upon successful submission of the application.
6.	An entity is yet to be registered/ incorporated. Can I visit the Startup India Portal and Mobile App to register/ incorporate my entity as either a Private Limited Company or Registered Partnership Firm or Limited Liability Partnership?	There are two options available in such cases. (a) Option 1: An entity can register itself through MCA or Registrar of Firms using the existing processes and subsequently register itself on the Startup India portal and mobile app as a "Startup" to avail the benefits. (b) Option 2: An entity can register itself through the Startup India portal and mobile app using a seamless process. This facility would be made available in the second phase of the Startup India portal and mobile app launch.
7.	What documents would qualify as a supporting document to the application to register as a "Startup"?	One of the following documents is required to be uploaded along with the application for registration as a Startup on Startup India portal and mobile app: (a) recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any Incubator established in a post-graduate college in India; or (b) letter of support by any Incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or (c) recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any Incubator recognized by Government of India; or (d) letter of funding of not less than 20 percent in equity by any Incubation Fund/ Angel Fund/ Private Equity Fund/ Accelerator/ Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or (e) letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or (f) patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of business being promoted. The list of incubators recognized for the purpose of (a), (b) and (c) are published on the Startup India portal for reference. The list SEBI registered funds for the purpose of (d) is also available on the Startup India portal.
8.	Do I need to print an application form and submit the physical copy of the same to complete the process of Startup registration?	No. The application has to be submitted online only.
9.	Once my registration is successful, would I obtain a certificate for it? If Yes, would I be able to download the certificate?	Yes. On successful registration, you would be able to download a system generated verifiable certificate of recognition.
10.	If an incubator rejects an application, can the entity apply again to the same incubator or would it be required to apply at a different incubator?	Yes. In such cases, an entity can apply again to the same incubator that rejected the application, as well as any other incubator.
11.	If during the Registration process, an applicant marks the response to "Do you want to avail Tax and IPR benefits" as "No", would I be allowed to change the response to "Yes" later?	Yes. In such cases, option to opt for such benefits may be indicated at a later stage as well. Once a user opts for availing the benefits, his/ her application would be evaluated by the Inter-Ministerial Board. Once certified by the Board, the benefits may be availed.
12.	If an entity does not have a PAN. Would I be allowed to register my entity as a "Startup"?	Yes. An entity without a PAN can be registered as a Startup. However, it is advised that a valid PAN of the entity is provided at the time of registration, as each entity is separately taxable person.
13.	Can I provide two mobile numbers in the registration form?	It is advised that only one mobile number of the authorized representative of the entity is provided at the time of registration. The portal and the mobile app would be sending an OTP on the mobile number provided for the user to complete authentication and registration process.
14.	Is there any specified format for obtaining a recommendation letter?	Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup India portal.
15.	If an entity has filed for a patent that has been published. In this regard, which document would suffice as a supporting document to register the entity as a "Startup"?	In such cases, valid copy of the published patent would suffice as a supporting document.
16.	What will be the constitution of the Inter-Ministerial Board?	The Inter-Ministerial Board of Certification would consist of: (a) Joint Secretary, Department of Industrial Policy and Promotion; (b) Representative of Department of Science and Technology; and (c) Representative of Department of Bio-technology.
17.	How would the Inter-Ministerial Board review the applications received for the purpose of tax/ IPR benefits?	The Board shall review the supporting document(s) provided to ascertain if the entity qualifies as an eligible business for availing tax/ IPR benefits.
18.	What is the timeframe for obtaining certification of Inter-Ministerial Board for availing tax/ IPR benefits in case an entity already exists?	An application for a certificate from the inter-ministerial board shall be processed within a period of 10-25 working days.
19.	Can entities that do not have any of the other evidences like incubator certificate, funding from registered VCs or patents still apply to Inter -Ministerial Board for tax exemptions?	No. One (1) of the six (6) prescribed supporting material is mandatory to make an application to the Inter-Ministerial Board.

2. For Incubators providing Recommendation/ Support/ Endorsement Letter to Startups

#	Question	Response
1.	Which incubators are authorized to provide a recommendation/ support/ endorsement letter?	As per the notification no. G.S.R 180(E) dated February 17, 2016, an incubator must fall in one of the following categories to be authorized to provide a recommendation/ support/ endorsement letter to an entity: (a) Incubator established in a post-graduate college in India (b) Incubator funded by Government of India or any State Government as part of any specified scheme to promote innovation (c) Incubator recognized by Government of India With regards to (c), an incubator shall be recognized by DIPP on application.
2.	Our incubator does not feature in the list(s) of incubators published on Startup India portal. How can we get it included in the list(s)?	In such cases, you can make an application at Startup India portal. Once an incubator application is found eligible, the name of the incubator shall be included in the appropriate list(s) by DIPP.
3.	What are the aspects that need to be reviewed before issuing a recommendation/ support/ endorsement letter?	An incubator is required to validate if the entity under review is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize: (a) A new product or service or process; OR (b) A significantly improved existing product or service or process that will create or add value for customers or workflow. The following activities are not considered as a valid case for issuing a recommendation/ support/ endorsement letter: (a) Products or services or processes which do not have potential for commercialization; OR (b) Undifferentiated products or services or processes; OR (c) Products or services or processes with no or limited incremental value for customers or workflow.
4.	Is there any specific format in which an incubator would be required to provide recommendation?	Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup India portal.
5.	Is there any prescribed fee(s) that can be charged from the Startups for providing them with a recommendation/ support/ endorsement letter?	No. fee is prescribed by the Government. However, the incubators may considering the efforts involved in the process charge a fee.
6.	Can we recommend/ endorse an idea that has not been incubated at our incubator?	Yes. An incubator featured in any of the lists on Startup India portal, can endorse an idea/ Startup not incubated in such incubator. The objective of the recommendation is to validate that a Startup is involved in an eligible business.
7.	Do we need to designate someone to sign/ issue the recommendation/ endorsement letter?	An incubator is encouraged to designate its officer(s) to sign/ issue the recommendation/ support/ endorsement letter to entities, and share the same with DIPP.
8.	What process needs to be followed for receiving applications from entities not incubated at our incubator?	There is no prescribed format for receipt of application. It is expected that incubator will capture the process and innovative nature of business before making a recommendation.
9.	Who will upload the recommendation/ support/ endorsement letter on the Startup India portal and mobile app?	The entity receiving the recommendation/ support/ endorsement letter will upload the relevant documents at the time of applying for recognition.
10.	Is there any liability on a recommender/ incubator?	Where a recommendation is issued by an incubator without proper examination or without itself satisfying about the innovative nature of the business it shall be blacklisted from giving any future recommendation or receiving any benefit from Government. Any such action shall, however, be taken only after a due opportunity is given to the incubator.

3. For Funding Bodies providing Recommendation/ Support/ Endorsement Letter to Startups

#	Question	Response
1.	Which are the bodies and agencies that fall under the category of "Funding Bodies"?	As per the notification no. G.S.R 180(E) dated February 17, 2016, Alternate Investment Funds, Venture Capital Funds, Angel Fund and Seed Funds registered with SEBI will be eligible for providing recommendation/ support/ endorsement letter to entities in which not less than 20 percent equity is taken up by such funds. A list of SEBI registered VCFs and AIFs has been published on Startup India portal (http://startupindia.gov.in)
2.	Is there any specific format in which a funding body would be required to provide recommendation?	Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup India portal.
3.	What are the aspects that need to be reviewed before issuing a recommendation/ support/ endorsement letter?	A funding agency is required to validate if the entity under review is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property if it aims to develop and commercialize: (a) A new product or service or process; OR (b) A significantly improved existing product or service or process that will create or add value for customers or workflow. The following activities are not considered as a valid case for issuing a recommendation/ support/ endorsement letter: (a) Products or services or processes which do not have potential for commercialization; OR (b) Undifferentiated products or services or processes; OR (c) Products or services or processes with no or limited incremental value for customers or workflow.
4.	Can we recommend/ endorse an idea that has not been funded by our funding body?	No. Only those ideas/ Startups can be recommended in which not less than 20 percent of the equity is funded by recommending fund.
5.	Do we need to designate someone as a recommender or anyone from our staff can be a recommender?	A funding agency is encouraged to designate its officer(s) to sign/ issue recommendation/ support/ endorsement letter to entities, and share the same with DIPP.
6.	Who will upload the recommendation/ support/ endorsement letter on the Startup India portal and mobile app?	The entity receiving the recommendation/ support/ endorsement letter will upload the relevant documents at the time of applying for recognition.
7.	Is there any liability on a recommender?	Where a recommendation is issued by a fund without proper examination or without being satisfied about the innovative nature of the business it shall be blacklisted from giving any future recommendation. Where a recommendation is given without actually funding equity (not less than 20 percent equity) of the Startup, DIPP may initiate criminal proceedings against the principal officers of the fund for providing wrong information.

■

Startup India action plan 2016: Part 3:

Startup India Hub

Objective

To create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding

Details

Young Indians today have the conviction to venture out on their own and a conducive ecosystem lets them watch their ideas come to life. In today’s environment we have more Startups and entrepreneurs than ever before and the movement is at the cusp of a revolution. However, many Startups do not reach their full potential due to limited guidance and access.

The Government of India has taken various measures to improve the ease of doing business and is also building an exciting and enabling environment for these Startups, with the launch of the “Startup India” movement.

The “Startup India Hub” will be a key stakeholder in this vibrant ecosystem and will:

• Work in a hub and spoke model and collaborate with Central & State governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions

• Assist Startups through their lifecycle with specific focus on important aspects like obtaining financing, feasibility testing, business structuring advisory, enhancement of marketing skills, technology commercialization and management evaluation

• Organize mentorship programs in collaboration with government organizations, incubation centers, educational institutions and private organizations who aspire to foster innovation.

To all young Indians who have the courage to enter an environment of risk, the Startup India Hub will be their friend, mentor and guide to hold their hand and walk with them through this journey.

Rolling-out of Mobile App and Portal

Objective

To serve as the single platform for Startups for interacting with Government and Regulatory Institutions for all business needs and information exchange among various stakeholders.

Details

In order to commence operations, Startups require registration with relevant regulatory authorities. Delays or lack of clarity in registration process may lead to delays in establishment and operations of Startups, thereby reducing the ability of the business to get bank loans, employ workers and generate incomes. Enabling registration process in an easy and timely manner can reduce this burden significantly.

Besides, Startups often suffer from the uncertainty regarding the exact regulatory requirements to set up its operations. In order to ensure that such information is readily available, it is intended that a checklist of required licenses covering labour licensing, environmental clearances etc. be made available. Currently, the Startup ecosystem in India also lacks formal platform(s) for Startups to

connect and collaborate with other ecosystem partners.

Towards these efforts, the Government shall introduce a Mobile App to provide on-the-go accessibility for:

•Registering Startups with relevant agencies of the Government. A simple form shall be made available for the same. The Mobile App shall have backend integration with Ministry of Corporate Affairs and Registrar of Firms for seamless information exchange and processing of the

registration application

•Tracking the status of the registration application and anytime downloading of the registration certificate. A digital version of the final registration certificate shall be made available for

downloading through the Mobile App

•Filing for compliances and obtaining information on various clearances/ approvals/ registrations required

•Collaborating with various Startup ecosystem partners. The App shall provide a collaborative platform with a national network of stakeholders (including venture funds, incubators, academia, mentors etc.) of the Startup ecosystem to have discussions towards enhancing and bolstering the ecosystem

• Applying for various schemes being undertaken under the Startup India Action Plan

The App  is available on link http://startupindia.gov.in/download-app.php w.e.f.  April 01, 2016. 

The Startup portal shall have similar functionalities (being offered through the mobile app) using a richer web-based User Interface.

Startup India action plan 2016: Part 2

Simplification and Handholding

Compliance Regime based on Self-Certification

Objective

To reduce the regulatory burden on Startups thereby allowing them to focus on their core business and keep compliance cost low

Details

Regulatory formalities requiring compliance with various labour and environment laws are time consuming and difficult in nature. Often, new and small firms are unaware of nuances of the issues and can be subjected to intrusive action by regulatory agencies. In order to make compliance for Startups friendly and flexible, simplifications are required in the regulatory regime.

Accordingly, the process of conducting inspections shall be made more meaningful and simple. Startups shall be allowed to self-certify compliance (through the Startup mobile app) with 9 labour and environment laws (refer below). In case of the labour laws, no inspections will be conducted for a period of 3 years. Startups may be inspected on receipt of credible and verifiable complaint of violation, filed in writing and approved by at least one level senior to the inspecting officer.

In case of environment laws, Startups which fall under the ‘white category’ (as defined by the Central Pollution Control Board (CPCB)) would be able to self-certify compliance and only random checks would be carried out in such cases.

Labour Laws:

• The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996

• The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979

• The Payment of Gratuity Act, 1972

• The Contract Labour (Regulation and Abolition) Act, 1970

• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

• The Employees’ State Insurance Act, 1948

Environment Laws:

• The Water (Prevention & Control of Pollution) Act, 1974

• The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003

• The Air (Prevention & Control of Pollution) Act, 1981

Startup India action plan 2016: Part 1

Action plan January 16, 2016, Startup India


What if your idea is not just an idea?

What if it sees light?

What if it’s really born?

What if you can get someone to believe in it?

And help you nurture it?

What if you can set a clear path for it?

What if it can actually travel?

What if it grows and blooms?

What if the whole world embraces it?

What if your idea is not just an idea?

Introduction

Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design.

In order to meet the objectives of the initiative, Government of India is announcing this Action Plan

that addresses all aspects of the Startup ecosystem. With this Action Plan the Government hopes to accelerate spreading of the Startup movement:

• From digital/ technology sector to a wide array of sectors including agriculture, manufacturing, social sector, healthcare, education, etc.; and

• From existing tier 1 cities to tier 2 and tier 3 citites including semi-urban and rural areas.

The Action Plan is divided across the following areas:

• Simplification and Handholding

• Funding Support and Incentives

• Industry-Academia Partnership and Incubation

Start up Eligibility for taking various benefits (including Tax Exemptions) under  Startup India action plan

it should satisfy Point No 1 to 5 AND any of the Point 6 to 10 from below :‐

1. It should be either Private Limited Company/Limited Liability Partnership/Partnership Firm

2. It should not be older than 5 yrs

3. It’s Turnover is less than INR 25Cr

4. It should develop an Innovative product which should add to the Value of customers and should be of commercial use

5. It has applied and got approval from DIPP (Dept of Industrial Policy & Promotion) that the firm has Innovative product (i.e Certification from DIPP)

6. Get Validated/recommendation letter from Incubator in Post Graduate Indian College

7. Get Validated/Recommendation letter by Incubator funded by Govt of India

8. Get Validated/Recommendation letter by Incubator recognised by Govt of India

9. Funded by any Incubation fund/Angel fund/PE Fund/Accelerator/Angel Network

10. Has Patent granted by Indian Patent and Trademark Office related to business

Regulatory relaxations for start-ups(Clarifications acceptance of payments & Issue of Shares)

Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments Regulatory Relaxations for Startups- Clarifications relating to Issue of Shares

Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments

RBI/2015-16/318 A.P. (DIR Series) Circular No. 51 February 11, 2016 To, All Authorised Dealer Category – I Banks Madam/Sir, Regulatory relaxations for start-ups- Clarifications relating to acceptance of payments Attention of Authorised Dealer Category - I (AD Category-I) banks is invited to the Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2000, notified by the Reserve Bank vide Notification No. FEMA. 10 (R) /2015-RB dated January 21, 2016, as amended from time to time. 2. Pursuant to paragraph 14 of the Sixth Bi-Monthly Monetary Policy Statement for 2015-16, Reserve Bank of India vide Press Release dated February 2, 2016, had announced that in case of start-ups, to facilitate ease of doing business, certain permissible transactions under the existing regime shall be clarified. One of the issues relate to the start-ups accepting payment on behalf of overseas subsidiaries. 3. In this connection, it is clarified as under: A start-up in India with an overseas subsidiary is permitted to open foreign currency account abroad to pool the foreign exchange earnings out of the exports/sales made by the concerned start-up; The overseas subsidiary of the start-up is also permitted to pool its receivables arising from the transactions with the residents in India as well as the transactions with the non-residents abroad into the said foreign currency account opened abroad in the name of the start-up; The balances in the said foreign currency account as due to the Indian start-up should be repatriated to India within a period as applicable to realisation of export proceeds (currently nine months); A start-up is also permitted to avail of the facility for realising the receivables of its overseas subsidiary or making the above repatriation through Online Payment Gateway Service Providers (OPGSPs) for value not exceeding USD 10,000 (US Dollar ten thousand) or up to such limit as may be permitted by the Reserve Bank of India from time to time under this facility; and To facilitate the above arrangement, an appropriate contractual arrangement between the start-up, its overseas subsidiary and the customers concerned should be in place. 4. Authorised Dealer banks may bring the contents of this circular to the notice of their constituents and customers concerned and advise them to refer to the above notifications for further details. 5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (B. P. Kanungo) Principal Chief General Manager Regulatory Relaxations for Startups- Clarifications relating to Issue of Shares RBI/2015-16/319 A.P. (DIR Series) Circular No. 52 February 11, 2016 To, All Authorised Dealer Category – I Banks Madam/Sir, Regulatory Relaxations for Startups- Clarifications relating to Issue of Shares Attention of Authorised Dealer Category - I (AD Category-I) banks is invited to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, notified by the Reserve Bank vide Notification No. FEMA. 20/2000-RB dated 3rd May 2000, as amended from time to time. 2. Pursuant to paragraph 14 of the Sixth Bi-Monthly Monetary Policy Statement for 2015-16, Reserve Bank of India vide Press Release dated February 2, 2016, had announced that in case of startups, certain permissible transactions under the existing regulatory framework shall be clarified. One of the issues related to issue of shares without cash payment by the investor through sweat equity or against any legitimate payment owed by the company remittance of which does not require any permission under FEMA, 1999. 3. Accordingly, the following is clarified: a. Issue of shares without cash payment through sweat equity: Reserve Bank of India vide Notification No. FEMA.344/2015 RB dated June 11, 2015 has permitted Indian companies to issue sweat equity, subject to conditions, inter-alia, that the scheme has been drawn either in terms of regulations issued under the Securities Exchange Board of India Act, 1992 in respect of listed companies or the Companies (Share Capital and Debentures) Rules, 2014 notified by the Central Government under the Companies Act 2013 in respect of other companies. b. Issue of shares against legitimate payment owed: Reserve Bank of India vide Notification No. FEMA.315/2014-RB dated July 10, 2014, has permitted Indian companies to issue equity shares against any other funds payable by the investee company (e.g. payments for use or acquisition of intellectual property rights, for import of goods, payment of dividends, interest payments, consultancy fees, etc.), remittance of which does not require prior permission of the Government of India or Reserve Bank of India under FEMA, 1999 subject to conditions relating to adherence to FDI policy including sectoral caps, pricing guidelines, etc. and applicable tax laws (cf. paragraph 3 of Schedule 1 to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2015). 4. Authorised Dealer banks may bring the contents of this circular to the notice of their constituents and customers concerned and advise them to refer to the above notifications for further details. 5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (B. P. Kanungo) Principal Chief General Manager