Revival of Companies

The revival of companies with respect to the Foreign Exchange Management Act (FEMA) primarily pertains to the revival of companies that are involved in foreign exchange transactions, have foreign investments, or engage in cross-border business activities. Under FEMA, companies that face financial distress or have been inactive for a period may need to undertake certain procedures to revive and regularize their foreign exchange-related activities.

Revival of Companies under FEMA:


Regularization of Inactive Companies: If a company has been inactive or has not carried out any foreign exchange transactions for an extended period, it may need to seek RBI approval to reactivate its foreign exchange operations. The company should submit the necessary documents and declarations to the RBI through an authorized dealer to regularize its status.

Compliance with Reporting Requirements: Revived companies must ensure that they comply with all reporting requirements related to foreign exchange transactions as per FEMA regulations. This includes timely reporting of foreign investments, borrowings, trade transactions, and remittances.

Resolving Non-Compliance Issues: If the company had faced any non-compliance issues related to foreign exchange transactions during its inactive period, it must address and resolve these issues as part of the revival process. Any violations should be reported to the RBI and corrective actions should be taken.

Adherence to FEMA Regulations: Upon revival, the company should ensure strict adherence to FEMA regulations while conducting foreign exchange transactions. It should follow FEMA guidelines related to foreign direct investment (FDI), external commercial borrowings (ECB), trade, and other cross-border activities.

Revival of Companies and FEMA Compliance:

Reviving a company under FEMA involves ensuring that all foreign exchange-related activities are conducted in accordance with FEMA regulations and guidelines. This includes adherence to sectoral caps, valuation norms, pricing guidelines, and reporting requirements. Non-compliance with FEMA regulations can lead to penalties and legal consequences.

Revival of companies with respect to FEMA involves reactivating and regularizing their foreign exchange-related activities. Companies must comply with FEMA regulations, reporting requirements, and adhere to guidelines while conducting foreign exchange transactions. Seeking professional advice and guidance will help companies navigate the revival process effectively and maintain compliance with FEMA regulations.

G Akshay Associates