2DA. (1) An application for approval shall be made
in Form No. 56AA by a venture capital fund or a venture capital company to the
Central Government.
(2) Every application
under sub-rule (1) may be made in any previous year in which any income by way
of dividend or long-term capital gains of a venture capital fund or a venture
capital company from investments made by way of equity shares in a venture
capital undertaking shall not be included in computing the total income of such
venture capital fund or venture capital company.
(3) Every application
for approval under sub-rule (1) shall be accompanied by the following
documents, namely :—
(a)
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a copy of the trust deed registered under
the provision of the Registration Act, 1908 or a certificate of incorporation
under the Companies Act, 1956 (1 of 1956);
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(b)
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balance sheets and profit and loss accounts
for three previous years immediately preceding the previous year in which the
application is made;
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(c)
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Forms 56BA and 56CA duly filled in and
signed by the applicant; and
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(d)
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a copy of the certificate of registration
issued by the Securities and Exchange Board of India under sub-section (1) of
section 12 of the Securities and Exchange Board of India Act, 1992 (15 of
1992).
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(4) The Central
Government may approve the venture capital fund or the venture capital company,
as the case may be, subject to the following conditions, namely :—
(a)
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a venture capital fund or a venture capital
company, as the case may be, is registered with the Securities and Exchange
Board of India established under section 3 of the Securities and Exchange
Board of India Act, 1992 (15 of 1992);
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(b)
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a venture capital fund or a venture capital
company, as the case may be, shall not invest more than twenty-five per cent
of its total monies raised or total paid-up share capital in one venture
capital undertaking;
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(c)
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every venture capital fund and venture
capital company, shall maintain books of account and get such books audited
by an accountant, as defined in Explanation to
sub-section (2) of section 288 of the Act and, furnish the report of such
audit duly signed and verified by such accountant to the Central Government
before the due date of filing of the return under sub-section (1) of section
139 of the Act.
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(5) The Central
Government may pass an order in writing granting approval or refusing approval
to the venture capital fund or venture capital company, as the case may be :
Provided that no order refusing the approval shall be
passed unless an opportunity of being heard has been given to the venture
capital fund or the venture capital company.
(6) The approval of
the Central Government under sub-rule (5) shall at any one time have effect for
such assessment year or years, not exceeding three assessment years.
(7) The Central
Government shall withdraw the approval granted under sub-rule (5) in the
following circumstances :—
(a)
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if the venture capital fund or the venture
capital company—
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(i)
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fails to make investments in the manner
specified in sub-rule (4);
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(ii)
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invests more than twenty-five per cent of
the monies raised by a venture capital fund or twenty-five per cent of
paid-up share capital of the venture capital company, as the case may be, in
one venture capital undertaking;
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(iii)
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fails to maintain books of account and get
such accounts audited by an accountant or fails to file the audit report
required in clause (d) of
sub-rule (4);
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(iv)
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violates the provisions of the Act or rules
made thereunder;
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(b)
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if the certificate of registration granted
under section 12 of the Securities and Exchange Board of India Act, 1992 (15
of 1992), to a venture capital fund or a venture capital company is suspended
or cancelled by the Securities and Exchange Board of India.]
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