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    FLA is required to be filed in case of issuance of convertible notes to a foreign shareholder

    Posted By : KAMAL / Published on : 29-Sep-2022 10:35 AM / View : 406 / Comment : 1

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    Can any one guide whether FLA is required to be filed in case of issuance of convertible notes to a foreign shareholder?

    CN holder doesn't hold any equity share. He has invested only in CN on non-repatriation basis.
    Read more on : notes foreign shareholder convertible issuance filed case required

    • Yes, if an Indian company has issued convertible notes to a foreign shareholder, it is required to report the same in the Foreign Liabilities and Assets (FLA) return.

      The FLA return is an annual return that is required to be filed by all Indian companies that have received FDI or made FDI abroad in the previous financial year (April to March). The FLA return is used to report all foreign liabilities and assets of the Indian company, including details of FDI received, ODI made, and external commercial borrowings.

      Convertible notes are considered as a form of foreign borrowing, and hence, the details of convertible notes issued to a foreign shareholder should be reported in the FLA return. The FLA return should be filed by July 15th of every year.

      It is important to note that non-compliance with the FLA reporting requirements may result in penalties and other legal consequences. Therefore, it is advisable to ensure timely and accurate reporting of all foreign liabilities and assets in the FLA return.

      13-04-2023 / 12:12:13 PM
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