A) VCFs like YourNest permitted to invest upto 25% vs 10% in offshore startups.
Guidelines on overseas investments for AIFs/VCFs circular dated October 1, 2015 (CIR/IMD/DF/7/2015) issued by SEBI as under:
Key changes with respect to overseas investment by VCFs
- VCFs are, from the date of this circular, permitted to invest in Offshore Venture Capital Undertakings which have an India connection upto 25% of the investible funds of the VCF;
- VCFs shall not invest in Joint venture/ Wholly Owned Subsidiary while making overseas investments;
- VCFs shall adhere to FEMA Regulations and other guidelines specified by RBI from time to time with respect to any structure which involves Foreign Direct Investment (FDI) under Overseas Direct Investment (ODI) route;
- VCFs shall comply with all requirements under RBI guidelines on opening of branches/subsidiaries/ Joint venture/ undertaking investment abroad by NBFCs, where more than 50% of the funds of the VCF has been contributed by a single NBFC; and
- The VCFs desirous of making investment in offshore venture capital undertaking shall submit their proposal for investment to SEBI for its prior approval.
B) Fund Tenure period to start from close date:
Guidelines on other issues/clarification circular dated October 1, 2015 (CIR/IMD/DF/7/2015) issued by SEBI as under:
Tenure of any scheme of the AIF shall be calculated from the date of final closing of the scheme (fund launched with effect from 1st October, 2015).
C) Startup Act in Works To Crank up Innovation: Govt plans to simplify rules to unleash entrepreneurial energies & create jobs:(ET, November 3, 2015)
The Narendra Modi government wants to provide a powerful launched for start-ups by drastically simplifying the rules and ensuring that innovators are able to take advantage of such an enabling environment, thus unleashing entrepreneurial energies and creating jobs.
At the heart of the initiative is distilling the cumbersome process of compliances under 22 different laws into a two-page Startup Act, a senior government official told. The Department of Industrial Policy and Promotion (DIPP) is looking to turn India into a startup haven.
On the Agenda of Startup Act:
- One simple Start Up Act replacing multiple laws.
- Focus on reducing compliances & speed up setting of businesses.
- Limit the law to “innovative” product/technology service
- Idea should push manufacturing and generate jobs.
D) New Bankruptcy Bill to Speed up Shutdown of Cost (ET, November 5, 2015):
The Bankruptcy Law reforms commission headed by former secretary TK Viswanathan has proposed insolvency resolution within 180 days and a new regulator oversee the process. It’s also laid down clear and speedy systems for early identification of financial distress and revival of companies.
E) Relatives excluded from definition of “Deposits”
MCA amended the Companies (Acceptance of Deposits) Rules, 2014 on 15th September, 2015 that:
- The definition of “deposit” has been amended to exclude any amount received from a relative of the director of the private company, provided such relative furnishes a declaration that such amount is not out of funds acquired by him by borrowing or accepting loans/deposit from others;
- The company shall disclose the details of money so accepted in the Board’s report.
F) Firms can claim Income-Tax deduction on expenses for IPR acquisition
The Supreme Court on 28th October 2015 (Mangalore Ganesh Beedi Works vs CIT) has held that a firm can claim deduction or depreciation in income tax on expenses incurred for acquisition of intellectual property, such as patent and trademarks rights, copyrights and know-how, as they are capital in nature.