The Ministry of Corporate Affairs (MCA) introduced the LEAP-1 Form on January 24, 2024, under the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. This electronic form makes it easier for the process for unlisted public companies to list their equity shares on stock exchanges in approved foreign jurisdictions. By amalgamating data from different forms, the LEAP-1 Form reduces administrative burdens and promotes transparency for investors by imposing tough disclosure conditions. The LEAP-1 Form is to be filed by companies within seven working days of filing a prospectus with the concerned international stock exchange. The move will ease access for Indian companies to global financial markets and enable them to achieve their growth and expansion goals.
What is the LEAP-1 Form?
The Ministry of Corporate Affairs (MCA) has introduced the LEAP-1 Form on January 24, 2024, as a mandatory electronic form under the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. The key purpose of this move is to enable unlisted Indian public companies to list their equity shares in permitted foreign stock exchanges and thus enter international financial markets.
Who Needs to File the LEAP-1 Form?
Unlisted public companies which plan to list their equity shares on recognized foreign stock exchanges need to file the LEAP-1 Form. This filing must be done within seven days of the completion and filing of the prospectus with the concerned foreign exchange.
Eligibility and Applicability
The LEAP-1 Form is especially meant for unlisted public companies. But some entities are not allowed to file this form:
- Section 8 companies (non-profit companies) or Nidhi companies are exempted.
- Companies Limited by Guarantee with Share Capital need not file the LEAP-1 Form.
- Companies having outstanding public deposits are not eligible.
- Companies having a negative net worth are not allowed to file.
- Those companies that have defaulted in their financial commitments to banks, public financial institutions, non-convertible debenture holders, or other secured creditors are also not eligible. However, if the default has been settled for more than two years, the company becomes eligible again.
- Those who are under winding-up or insolvency proceedings are disqualified from making applications.
- Those companies that fail to file their annual returns as per Section 92 or their financial statements as required under Section 137 of the Companies Act, 2013, within the time limits set are not qualified.
By meeting these eligibility criteria and filing requirements, the LEAP-1 Form provides a supervised and open architecture for Indian unlisted public companies to access foreign equity markets.
Documentation and Pre-Requisites For LEAP-1 Form
The LEAP-1 Form, or the “Form for Submission of Prospectus with the Registrar,” is a prescribed form by the Ministry of Corporate Affairs (MCA) under the Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024. The form shall be filed by unlisted public companies in India seeking to list their equity shares on approved international stock exchanges. Adherence to these documentation standards and procedural instructions ensures Indian companies are compliant with regulatory requirements when they intend to list equity shares in recognised foreign markets.
Documentation and requirements for filling up the LEAP-1 form are:
- Corporate Identity Number (CIN), which is a distinctive identifier for the corporation.
- Company details like the official name of the company, registered office address as per records of MCA, official email address for communication.
- Application Purpose: It should clearly mention that the application is for submission of the prospectus.
- Approval dates: Date when the prospectus was approved by the Securities Regulator or Stock Exchange.
- Prospectus Submission Date: Date when the prospectus was submitted to the securities regulator or stock exchange.
- Legal Matters: Report any current inspections, investigations, or inquiries concerning the company.
- Attachments: A copy of the prospectus that has been approved and submitted to the foreign stock exchange. A certified copy of the board resolution authorising the filing of the prospectus. Copies of any permission letters obtained from securities regulators or stock exchanges. Any additional documents required as specified in the instructions kit for the form.
- Certification: The form should be electronically signed by a professional, e.g., Chartered Accountant, Company Secretary, or Cost Accountant, to confirm the correctness and completeness of the information furnished.
Filing Procedure:
- To download the form, go to the MCA website and find the “Company Forms Download” link. Download the LEAP-1 Form and the Instruction Kit.
- Preparation: Collect all necessary information and documents. Complete the form electronically with accurate details.
- Digital Signature: Ensure that the documents are digitally signed by an authorized professional.
- Submission: Register or log in to the MCA portal. Upload the completed form and all attachments. Pay the filing fee using the available payment options.
- Acknowledgment: Once successfully submitted, an acknowledgment receipt will be issued.
How to File Form LEAP-1 Online?
Submission of the LEAP-1 Form is a critical procedure for Indian unlisted public companies that want to list equity shares on recognised international stock exchanges. It is an elaborate procedure involving several detailed steps to meet the established requirements of the Ministry of Corporate Affairs (MCA). By strictly following these details, Indian unlisted public companies can effectively submit the LEAP-1 Form, thereby opening doors to listing equity shares on international stock markets.
The other considerations are:
1. Providing true and up-to-date information in your submission so as not to have any of these rejected or delayed.
2. Checking the MCA website for changes and messages from time to time regarding your submission status.
- Download the LEAP-1 form. Visit the official MCA website. Navigate to the “Forms & Downloads” page. Find the “Form for Submission of Prospectus with the Registrar” (LEAP-1) and download the ZIP containing the e-Form and instructional documents.
- Fill out the LEAP-1 Form. Gather all the information and documents needed. Mention the Corporate Identity Number (CIN) of the company. Enter the registered office address and official email ID.
- Specify the prospectus details, such as approval and submission dates. Make public any current legal actions against the company.
- Fill in the form. Use proper software to open the LEAP-1 Form, as detailed in the instruction pack.
- Enter all the necessary information accurately, consulting the instruction pack if necessary. Include supporting documents, such as – a copy of the approved and filed final prospectus with the foreign stock exchange, a certified copy of the board resolution approving the filing of the prospectus, letters of approval from applicable securities regulators or the stock exchanges and any other documents outlined in the instruction package.
Why is Filing Form LEAP-1 Important?
The LEAP-1 Form is an essential report for Indian unlisted public companies that want to venture into international expansion through overseas listings on foreign stock exchanges. It is important in regards to ensuring compliance, transparency, and investor protection while also facilitating access to global capital. With the submission of this form, companies are able to successfully deal with the intricacies involved in cross-border equity offerings and, in the process, improve their financial prospects and image in the international market.
1. Compliance with Regulatory Norms Established by MCA and SEBI
The LEAP-1 Form is a formal lodgement of the company prospectus with the Register of Companies (RoC) of India, enabling the company to comply with the regulatory framework instituted by the Ministry of Corporate Affairs and the Securities and Exchange Board of India. The submission shall act as a deterrence to unauthorized foreign listing and govern Indian companies operating in the international capital market.
2. Encouragement of Legal and Financial Transparency
The LEAP-1 Form encourages transparency through mandatory disclosures on the financial condition, governance standards, and record of compliance of the company. The companies are mandated to submit:
• Financial reports that prove stability and solvency.
• Details of any pending litigation.
• Verification of listing approvals from a foreign stock exchange.
3. Facilitating Global Capital Access for Indian Businesses
One of the main aims of the LEAP-1 Form is to enable Indian businesses to raise funds from global financiers. Listing on overseas stock exchanges can offer:
- Exposure to a wider investor base.
- Improved corporate valuation and liquidity.
- Multiple sources of funding outside domestic markets.
Without the filing of the LEAP-1 Form, an Indian company cannot pursue an international listing legally, thus restricting its prospects for financial growth.
4. Protection of Investor Interests
The filing of the LEAP-1 Form guarantees that firms meet fundamental governance and regulatory requirements before they list on foreign exchanges. This procedure protects the interests of both local and foreign investors by ensuring that only financially healthy and compliant firms are allowed to list overseas. This reduces investment risks through proper disclosures and also helps to avoid fraudulent international listings.
5. Evading Legal and Regulatory Penalties
Failure to submit the LEAP-1 Form can have serious legal consequences for the company, such as:
- Monetary penalties and fines for non-compliance.
- Global stock exchanges can refuse a company’s listing request in the absence of an approved LEAP-1 Form.
- Failure to comply with MCA or SEBI rules can lead to financial curbs, investigations, and legal proceedings.
6. Building Credibility and Market Reputation
Filing the LEAP-1 Form and the international listing procedure helps a company build its credibility in international markets. It shows that the company is following both Indian and international regulations, thus gaining more investors and strengthening the position of the company in the market.
Conclusion
LEAP-1 Form is one of the key regulatory requirements prescribed, under the regulations, by the Ministry of Corporate Affairs (MCA) for Indian unlisted public companies that may wish to list their equity shares on International Stock Exchanges recognised by them. This requirement has been introduced to encourage compliance, increase transparency, and safeguard investors as well as make it easy to access the world capital markets. The process of filing includes gathering information about the company, seeking appropriate regulatory clearances, preparation and submission of the required documents, and lastly submitting the form on the MCA portal. Following this systematic route provides an opportunity for the companies to maximize their financing possibilities while complying with the regulations. Timely completion of the LEAP-1 Form is extremely essential in the case of a successful and legally compliant offshore listing.
