The Ministry of Corporate Affairs on 24th March, 2021 has amended Schedule III of the Companies Act, 2013 with effect from 1st day of April, 2021. The amendment provides that where company has advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
- Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
- Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;
The company shall disclose the following:-
- Date and amount of fund advanced or loaned or invested in Intermediaries with complete details of each Intermediary.
- Date and amount of fund further advanced or loaned or invested by such Intermediaries to other intermediaries or Ultimate Beneficiaries along with complete details of the ultimate beneficiaries.
- Date and amount of guarantee, security or the like provided to or on behalf of the Ultimate Beneficiaries.
- Declaration that relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering act, 2002.
